Last Updated:

April 11, 2023

How to Start a Charity in 9 Simple Steps

How to Start a Charity in 9 Simple Steps

So you want to change the world. You’re not alone.

However, starting a charity is not for the faint of heart—there’s a lot of work on the backend, what with filing for tax-exempt status, honing your mission, recruiting a board, and more preparation work. The good news is we’ve broken down how to start a charity into nine steps below. You should be able to follow these steps for success so that you can start making an impact.

Let’s take a look.

What Exactly Is a Charity?

Food for the Hungry

The Internal Revenue Services defines charities as “organizations that are organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, educational or other specified purposes.”

What does that mean? In plain English, a charity is an organization that’s established for the public good. Take for example Food for the Hungry, which provides food, water, medical assistance and more to children around the world living in extreme poverty.

The term “charity” comes originally from the Latin word caritas, meaning “dear” or “expensive”. The term evolved into becoming a recognized theological value in early Christianity and eventually took on the meaning that we understand today.

With that definition in mind, it’s important to note that not all not-for-profit organizations are truly charities. Take, for instance, a homeowner’s association which is considered a “mutual benefit organization.” While technically a not-for-profit entity, a homeowner’s association only benefits a small group of people—homeowners—not the entire community. So while the IRS grants such a group a tax exemption, it is by no means a charity. For more on this topic, visit check out this post.

Private foundations are another example of a tax-exempt organization that are classified differently than charities.

Rather than raising funds to help the needy, private foundations distribute funds (usually from a single wealthy donor or a corporation) to charities actually doing the work. Other tax-exempt organizations can include houses of worship and religious organizations, political organizations, and other nonprofits such as social welfare organizations, social clubs, and labor unions. As you can see, not all of these meet the definition of “charity.”

Now that you understand what a charity really is, let’s go on to tackling our main subject: how to start a charity.

How to Start a Charity in 9 Simple Steps


1. Decide on the Type of Charity You Would Like to Start

What’s a cause that’s near and dear to your heart? What’s an unmet need in your community that you’re passionate about meeting?

Answering these two questions should help you start your journey of starting a charitable organization.

For example, perhaps you learn that many children in lower-income neighborhoods depend on their school lunch to provide their primary nutrition. What happens to these kids during the summer, or on long breaks?

Maybe you decide to team up with your local Rotary Club to start providing weekend and holiday food backpacks. After a year or so of doing this, the Rotary is wanting to move on, but you’re more passionate than ever. So, you start Backpacks of Hope, your new nonprofit.

2. Work on Your Charity Name, Mission, Vision, and Values

Once you’ve determined the type of charity you want to start, it’s time to define your charity’s mission, vision, and values. In other words, you need to carefully define your organization’s reason for being.

Writing a compelling mission statement takes some work. So don’t rush through it. Your mission statement is there to guide your daily work and outlines your organization’s objectives.

You can check out this post to find some great tips on creating a compelling mission statement as well as some outstanding examples.

When it comes to writing your mission statement, vagueness is not your friend. For instance, if you want to create a charity to fund research for a rare genetic condition, you’ll need to be specific. What’s the condition? What difference would your charity make in moving research forward?

Defining your mission will also guide you in establishing your charity’s core values, or the fundamental beliefs of your organization. Core values are the deeply ingrained principles that guide your charity.

For instance, the charity PETA (People for the Ethical Treatment of Animals) believes strongly that animals are not ours to eat, to wear, to experiment on, or otherwise harm or abuse. Because of these values, all of PETA’s staff members are all practicing vegans.

And what about your vision statement? A vision statement is different from a mission statement because a vision statement is aspirational. Do you want to stop the deforestation of the Amazon rainforest? Are you passionate about eliminating plastic waste in oceans? Do you dream of a future without human trafficking? Once you articulate your vision in a clear, compelling manner, you’ll be that much closer to bringing your charity into reality.

Finally, you will need to choose a name for a charity. Think of something that’s clear and descriptive, and also not too long. You don’t want to have to rebrand in a few years. Search your state’s business registration records to make sure your new charity’s name isn’t already taken.

3. Prepare Your Organizing Documents

Now that you’ve articulated your mission, your vision, your values, and your name, it’s time to prepare your charity’s organizing documents.

Organizing documents include nonprofit by-laws, board committee charters, conflict of interest policies, gift acceptance policies, and more. You may also need to create program-specific documentation. And you’ll also need documents like an independent contractor agreement, a volunteer agreement, liability waivers, and licensing of your logo, trademark, and website.

All this may require the services of an attorney, but you can also find sample documents online. One of the best resources we’ve seen is from Stanford University’s law school.

4. Register Your Charity as a 501(c)(3)

The next major step, after solidifying your mission and vision and finalizing your organizing documents, is to apply for your 501(c)(3) tax-exempt status with the Internal Revenue Service. If you’re a small organization, you can probably use the Form 1023-EZ which has a much faster turnaround time.

You’ll also need to register with your state’s Secretary of State. The state registration process is generally much faster than dealing with the IRS, so get the state registration done while you’re waiting for the federal government. The IRS claims it gets close to 100,000 requests for tax exempt status every year.

You’ll also want to apply for an Employer Identification Number (EIN). An EIN is a unique nine digit number that identifies your charity for tax purposes.

Wait, what? Why would a tax-exempt charity need an EIN? Despite your tax-exempt status, the IRS does require charities to file their tax return each year, called an IRS Form 990. The EIN helps the IRS to identify your charitable organization, and once you’ve hired staff, it will identify your charity as their employer.

The IRS provides step-by-step guidance on becoming registered as a tax-exempt charity, as well as instructions on how to keep that exemption.

5. Recruit Your Board

As you wait for your tax-exempt status to be granted, it’s time to start thoughtfully recruiting your board of directors.

You probably already have a few ideas about who some of them might be. In general, you need a combination of young talent with specialized skills (law, financial management, graphic design, marketing, fundraising), a few community leaders, and some folks who have deep pockets to help fund your cause. All should have an interest in and passion for your cause.

Do yourself a favor and create a board job description that each candidate should sign and return.

Here are some other board recruitment tips:

  • Create term limits—two to three years is pretty standard, with a maximum of two full terms on and one off before coming back onto the board
  • Keep your eye on your board pipeline—who are new and promising potential new members
  • Don’t recruit your family or close friends—that includes spouses

6. Create a Brand Identity for Your Charity

You want your charity to stand out from the crowd, right? That’s why developing your brand identity is essential.

Think about Nike’s swoosh logo. Or Starbucks’ mermaid. Or Apple’s apple. These logos are a huge part of their brand identity. So is the color palette you’ll use on everything from your website to your letterhead to your marketing materials. The typography you choose, and even the tone you use in your written and online materials is part of your brand identity.

Other important factors to consider in creating a brand identity include:

  • Data visualizations
  • Infographics
  • Photographs
  • Illustrations
  • Icons

Unless you’re a marketing expert yourself, you will likely need to hire someone for this step (that is, if you didn’t find a marketing guru to be on your board!).

Having a great brand identity doesn’t just identify your charity—it helps you rise above the “noise” and defines you to your supporters. Believe it or not, it will even help you raise more money for your charity. For a complete guide on nonprofit branding, check out this post.

7. Create a Website for Your Charity


Your charity needs a website. Whether you hire a professional web designer or choose to use one of the do-it-yourself web page templates is up to you, your board, and your budget.

When designing your website, don’t stint with pictures. People resonate more with pictures than they do with words. So don’t let your website be too copy-heavy. Tell your charity’s story with pictures and data visualizations or infographics. Canva and Piktochart are two go-to free infographic generators. You’ll be surprised how easy it is to create dramatic visuals with these tools.

Also make sure to make it easy for your donors to support you. Include a “donate” button in your homepage’s menu. Potential donors don’t want to have to search for how to make a gift.

Here are some more website tips:

  • Make sure you have the best possible CRM to keep track of your donors and their gifts.
  • Be sure your payment processor is PCI compliant to maintain security and privacy.
  • Make sure your website is optimized for mobile.
  • Finally, keep your website up-to-date.

Take a look at the ASPCA’s website—it’s really effective. The picture of an older doggo tugs at your heartstrings if you love animals. The big orange “DONATE” button is like the flashing beacon of a lighthouse.

And their Donate page is really effective, with suggested gift amounts and the option to make a monthly donation. There’s also an “Other Ways to Give” page which gives potential donors a variety of ways to give back to help animals.


8. Define a Development Plan for Your Charity

Speaking of donors, you’ll also need to create a development plan and fundraising calendar for the year.

Before you build your plan, you’ll need to have a solid organizational budget in place so you understand your fundraising goals. Take into consideration your fiscal year and use that to create your plan and your activities.

Make sure to set SMART (Specific, Measurable, Achievable, Realistic, Time-bound) goals while building your plan. A vague or general goal does not fit the SMART model.

A good example of a SMART goal would be “we will feed 100 homeless men and women each night between January 1, 2023 to December 31, 2023.”

Another SMART fundraising goal might be “we will acquire 150 new donors between January 1, 2023 and December 31, 2023.”

While building your plan remember the old adage: “under-promise and over-deliver.” Never set the fundraising bar too high. It takes time to cultivate donors-—sometimes it takes several years.

Once your plan is complete, build out a fundraising calendar for the year. Build in any special campaigns you’ll run, whether direct mail or email. When will mailings go out? When will you do email solicitations? Will you participate in Giving Tuesday or your local philanthropy day? What holidays do you want to highlight? Build in time for professional development for you and your staff.

9. Launch Your Fundraising Activities

Finally, get going with implementing your fundraising plan. A plan guides your work, but work requires action. So, first things first.

Solicit your board for donations if they haven’t yet given. As the founder of a charity, you should expect to be giving, too. You and your board are important to get your fundraising jump-started.

Next, look at other interested individuals as potential givers. It can be scary to ask people for money the first few times, but if you’re passionate about your cause, you’ll get used to it.

Consider holding an open house if you’re in a new facility. This will serve as an introduction to the community and be sure to feature your website’s URL with that brightly colored “Donate” button.

Don’t forget you can raise money the old-fashioned way, with direct mail. And you can also run email campaigns to encourage giving.

By the way: don’t fret if you’ve yet to receive your tax-exemption from the IRS. You can still raise money with the help of a fiscal sponsor.

Finally, tap into the expertise of a grant writing professional, either full-time in-house or a contractor or consultant. Foundation and corporate grants can help your young nonprofit begin to grow and gain financial momentum.

Instrumentl can help you and your grant writer find new potential funders who fit well with your newly-launched charity and your cause. If you don’t believe us, sign up for a two-week free trial and see for yourself.

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Wrapping Up: How to Start a Charity in 9 Simple Steps


To wrap up, we’ve discussed nine steps you can take to start your own charitable organization.

Begin by identifying your passion and the need. Next, you’ll have to do the heavy lifting of determining your new charity’s name, as well as its mission, vision, and values. You’ll need to get your organizing documents in order, file for your tax-exempt status with the IRS, and follow that up with recruiting a solid board of directors.

You’ll then need to create a stellar brand identity for your new charity to help it stand out from the crowd, as well as a donor-friendly website. Then, understanding how much money you need to raise, you’ll have to create a development plan of activities, and finally, launch your fundraising activities ranging from individual donors to grants and direct mail.

All of this won’t happen overnight, but step by step, you’ll build a great charitable organization. Good luck!

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