Factors to consider before starting your own charity

Has starting your own charity ever crossed your mind? If it has, you are not alone. Thousands of new charities are started each year by people who are passionate about helping others.



The team at Starved Rock Country Community Foundation would be happy to help you evaluate whether starting a charity from scratch is the best way to accomplish your goals, or if another option is worth exploring.


Here are factors we’ll help you consider:

Consider the cause.

Sometimes people start their own charities to meet needs that are actually already being addressed by programs at existing charities that they’re simply not familiar with. The community foundation team would be happy to share information about nonprofit organizations in the community that are addressing the causes you care about. You might be pleasantly surprised to discover a charity that is doing work that is the same or similar to the work you were planning to take on through your new charity. Instead of creating a new charity, your cause might actually be better and more efficiently served if you were to get involved with the existing charitable program.


The state and the Feds.

If you decide that starting a new charity is indeed the right move for you, your next step is to set up your legal entity. It's just like starting a business, and you file your articles of incorporation with the state. The forms are a little different for nonprofit organizations. And, unlike a for-profit business, to start a charitable nonprofit you need to apply to the Internal Revenue Service for an exemption under Section 501(c)(3). This exemption is what allows your organization to be exempt from paying income tax, and also allows someone to donate to your organization and be eligible for deducting that donation on their own tax return.


Spreading the word.

Most people who start new charities are passionate about causes and enjoy talking about the programs they’re running to help people in need. What some may not anticipate, though, is that starting a charity means you have to get out there and share the news about your cause to raise money–not just explain the programs. It's like selling, only you are asking for donations to support your organization's work instead of promoting goods or services like you would in a for-profit business.


Please give us a call anytime you’d like to discuss the causes you care about. We would enjoy the conversation!


The team at the Starved Rock Country Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.



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