Developing a Nonprofit Organization

Introudction

Starting a nonprofit organization in the US, under Section 501(c) 3 is a worthy endeavour but can be difficult. However, effective management of key design and management stages can ensure that the NPO is built upon a solid strategic foundation. Social marketing allows an NPO to portray its benefits in the perspective of its donors, while a volunteer-oriented volunteer program matches specific needs to volunteer abilities. Regular evaluations of the programs ensure that operational programs are well-designed. Financial resources can be built through targeting corporate donors for in-kind donations, thus reducing the costs of fundraising. It can also be developed through enterprise strategies. Finally, the effective management of human capital by through recruitment and retention strategies of volunteers and paid staff ensures that internal operations generate value.

There are many challenges facing a nonprofit. One of these is to successfully enter the market as a trustworthy recipient, manager and distributor of donations and endowments. This research paper will address this issue by examining the start-up strategies that must be undertaken by a nonprofit. For the purposes of this discussion, the nonprofit to be used is an organization that collects and re-distributes pre-owned clothing. The management areas under discussion are operations, financial resources and human resources.

Organizational Theory

To set the fictitious organization into context, a brief summary of its business model will be outlined here. ReNew You! (ReNew) is a charitable organization that collects pre-owned clothing from New Yorkers and then redistributes it among the many needy. Among New York City's (NYC) 8 million plus residents, 19.2% live in poverty (2006) (New York Times, 2007). ReNew is a non-profit organization (NPO) dedicated to creating value for unused clothes in the closets of Americans by distributing them to the poor. Clothing is one material good that people tend to accumulate as fashion trends change, and as the seasons pass, a collection of still-usable, but less fashionable clothes begins to grow. Sitting in the closets of New Yorkers, this collection represents a dormant asset, one that can be converted into goodwill and comfort for many others through the awakening of philanthropy among New Yorkers.

ReNew distinguishes itself from second hand clothing stores through a simple concept: it is non-profit. Under Section 501(c)3, an organization is eligible for tax exemption under the following conditions:

1.It is not organized and operated for the benefit of private interests.

2.None of its earnings inure to a private shareholder or individual.

3.Its primary activities do not attempt to influence legislation, not do they relate to campaign activity.

As a charitable organization as outlined by 501(c)3, ReNew does not have to pay federal taxes and will be able to receive tax-deductible contributions. An application for tax exemption status needs to be made within 27 months of incorporation (IRS).

IRS Submission

ReNew will have two donation drives per year: spring and fall. These coincide with general social trends to changeover wardrobes as well as seasonal changes in the fashion industry. Each drive will consist of canvassing for donations and consignment sales. Donors have one of four ...