How to Change the World with a 501(c)(3)

Starting and managing a nonprofit can be an extremely gratifying and exciting endeavor, which is why so many of these entities are formed annually. According to the National Center for Charitable Statistics, there are over 1.5 million nonprofits in the United States, with thousands of new organizations created each year. Organizations serving similar needs or causes may compete in some respects for the donations and attention of their communities and the general public, but as the number of charitable organizations in the United States has grown, so too has interest in supporting and contributing to the causes represented by these organizations. You have likely picked up this book because you are considering starting one of your own; however, there is something to be said for learning to walk before you run. To get a sense of the day-to-day responsibilities of contributing to and managing a nonprofit, and to supplement your reading of this book, consider volunteering at an existing nonprofit and try to gain exposure to critical tasks such as fundraising. Once you feel that you are ready, this book will guide you through the process of forming your own organization and will lay out the road ahead. I recommend reading the entire book before initiating your planning process, and then re-reading each chapter at the right stage to remind yourself of useful strategies and address any concerns specific to your current state of progress. Disclaimer: In conjunction with this book, you will need to refer to experienced professionals such as a qualified attorney and accountant who are licensed to practice in your state to ensure that you are fully compliant with local, state and federal requirements and laws. This book has been prepared as a general guide and informational resource for starting and effectively managing a 501(c)(3) organization. It is not intended for use as an authority of legal, tax, or accounting advice. Tax law and the environment in which your organization will operate is always changing, so this book cannot guarantee that the information provided will be advisable or applicable to your specific situation, nor can it guarantee the successful registration and operation of your organization. Force Multiplier Effect: In my experience, I have learned that starting a 501(c)(3) results in a dramatic “Force Multiplier Effect,” providing you with the platform to make a profound difference in the community you are serving well beyond your capacity as an individual. We are all limited in the time and money we can give to a given cause on a personal basis, but if you can connect tens, hundreds or thousands of people to your cause, you have multiplied your effect to better the lives of countless individuals in a way you could never have achieved on your own. That magnified impact is the Force Multiplier Effect. The Force Multiplier Effect does not stop there, because its initial impact can also create a ripple effect that itself is multiplied many times over by its impact on the lives of donors, volunteers and staff involved in your organization, and those your organization helps. For example, suppose you give money to help fund a child’s high school education. In this case, you have helped one child, and perhaps this child will one day be in an economic position to do the same or otherwise contribute or give back to society. While the chain reaction of this single contribution is meaningful, imagine how powerful it would become if you decided to form a nonprofit dedicated to this cause – and instead of educating one child, you educated entire classrooms of children and recruited dozens of volunteers and hundreds of donors. All of these people will be profoundly changed by their involvement, and the Force Multiplier Effect will greatly magnify the downstream impact of your efforts. The Force Multiplier Effect is analogous to the difference between one person using a megaphone to get her ideas across versus starting a television show to convey that message to an audience of millions. For example, from my own personal experience, using a 501(c)(3) organization gave me the credibility to not only collect donations from dozens of people, but to convince the Marine Law Enforcement Foundation to match any money that my organization raised. Instead of donating whatever I could personally afford out of my own money to a wounded Marine, my charity was able to raise $50,000 for his benefit. A 501(c)(3) organization gives you the ability to demonstrate to your donors that you can leverage their donations to accomplish more than you or they could possibly accomplish alone, and this greatly increases the likelihood they will support your cause now and into the future. Lastly, by forming your own nonprofit, you can inspire others to take up their cause in a bigger way by starting their own 501(c)(3) organization. This is the broadest impact of the Force Multiplier Effect. No one charity can address the endless needs of society, but by motivating others to pursue their causes through the use of tax-exempt entities, you can multiply your impact on the social good. Ultimately, that is my goal. By sharing my story with you, I hope to do just that.