Playing to Win:

Starting and Managing a

Nonprofit Business in Illinois

Valerie F. Leonard
Expert, Community and Organizational Development

What We Will Cover

Community Needs Assessment

Selecting Your Team
Developing the Bylaws
Incorporating Your Organization
Filing for Tax Exemption
Nonprofit Compliance
Managing the Organization
Lessons Learned

Community Needs
Assessment
Look at the community through the lens of the
type of program youre thinking of developing
Review trends, news stories, statistics, issues,
organizations that are already providing the
service, quality of the service, gaps

Conduct Your Own

Research
Surveys
Statistical Analysis
Focus Groups

Guiding Questions
Given your research, is your organization
necessary? What services will you
provide? How can you differentiate
yourself from the masses? What resources
will you need?

Selecting Your Team

Choose wisely
The success of your organization is
dependent on the quality of leadership.
The team is as strong as its weakest
member.
Play to win.

Board Members
Duty of Loyalty
Duty of Care
Responsible for the strategic direction of the
organization
Set policies, budgets
Manage the Executive Director

Tips:
Diversify skill sets, ie, financial, legal, program
development, marketing, etc.
Choose people who are committed to the cause,
and will put in the time, donate/raise money and
do homework between meetings.
Do not select family members or people that have
potential conflicts of interest

Educate Your Board

Roles and Responsibilities

Stewardship
Liabilities
Compliance
Fundraising
Understanding of Issues and Programs

Develop Bylaws
By-Laws, Defined: Rules that govern the manner
in which a corporation conducts its business, or
makes decisions
Must be consistent with the state code in which
the organization is located

Get Tax Identification Number

Apply Online
Once the application is completed, the information is validated during
the online session, and an EIN is issued immediately.

Apply By EIN Toll-Free Telephone Service

Taxpayers can obtain an EIN immediately by calling the Business &
Specialty Tax Line at (800) 829-4933. The hours of operation are 7:00
a.m. - 10:00 p.m. local time, Monday through Friday
Apply By FAX
Taxpayers can FAX the completed Form SS-4 (PDF) application to
(859) 669-5760 If the taxpayer's fax number is provided, a fax will be
sent back with the EIN within four (4) business days.

Complete Articles of Incorporation

Make sure you use nonprofit articles of
incorporation form.
Name must be distinct. If you cant tell its a
nonprofit from looking at the name, you have to
add NFP to the end
Select registered agent
List Board of Directors (Incorporators)
List Purpose
Other Provisions
File with Secretary of State

Develop Your Budget

Brainstorm with you board members to identify
issues your organization would like to address,
goals and objectives; the programs youd like to
provide, and the resources it would take to
accomplish your goals and objectives for the first
three years.
Develop budgets for each of the first three years

First Board Meeting

Meeting held after the organization
receives a certified copy from the
Secretary of State
Develop meeting agenda
Send out waiver of notice

Hold Your First Board Meeting

Elect officers
Approve By-Laws and have them certified by
the secretary
Approve first year budget
Select your bank and designate signatories
Write minutes and have them certified by
Secretary

Register With the Attorney

Generals Office
File CO-1 within a year of operating the
organization
Puts Attorney Generals Office on notice that you
are fundraising
Provide basic information about the organization,
its board and finances

Get into Compliance Mode

Review registration and reporting
requirements of IRS, Secretary of
State, Attorney Generals Office,
Department of Employment Security,
Department of Revenue

File for Tax Exemption

Long Form-1023
Short Form-1023-EZ for organizations with budgets of less
than $50,000
These forms allow the IRS to
determine whether or not the organization is doing work
that is charitable,
understand the who, the what, the why and where the
work is being done, and how much it will cost
determine whether there are conflicts of interest, partisan
political activities, whether the organization is benefitting
the community or organizational insiders

File for Exemption from State Sales Taxes

Apply after getting IRS letter of determination (tax exemption) letter

Submit letter of request to the Illinois Department of Revenue, Sales Tax Division.
Attach copies of
The articles of incorporation, if incorporated.
The by-laws.
The IRS letter, respecting federal tax-exempt status, if your organization has
one. Religious organizations do not need to submit a financial statement with
the initial request.
A brief narrative that explains purposes, functions, and activities of your
organization.
Brochures or other printed material explaining the purposes, functions, and
activities of your organization.
Any other information that describes the purposes, functions, and activities of
your organization.

Manage the Organization

Organizational Structure
Ongoing Board Development
Strategic Planning
Program Development
Proposal Writing and Fundraising
Marketing and Communications
Human Resources

IT
Legal
Financial Management
Volunteer Management
Operations and Administration
Compliance
Program Evaluation
Performance Management
Risk Management and Insurance

Lessons Learned
Focus on compliance first
Develop strategic plans and programs that are
community-driven, taking into account stakeholder input
Transparency and accountability can enhance program
operations as well as the ability to attract volunteers and
funding

Lessons Learned
Maintain open and honest communications at all levels
Being a nonprofit doesnt mean you dont make money
or cannot be entrepreneurial
Plan for program evaluation and performance
management while youre developing programs
Organizations go through growth stages, and different
leaders and strategies may emerge over time

Develop a Strong
Program Logic Model
Goals and Objectives

Inputs

Macro
Big Picture
Policy
National

Micro

Local
Community,
Organization
Clients

Situation
Analysis

Who We
Reach
Target Market

What We Invest
Money
Staff Time
Equipment
Supplies

What We Do
Programs
Services

What We
Acquire
Additional Staff
Expertise
Training

Outputs

Ongoing Evaluation
*Adapted from the University of Wisconsin Extension Program Action Model

Outcomes
How will our
clients or
community
be impacted
by our work?
Short Term
Intermediate
Long Term

Sample Mentoring
Program Logic Model
Goal:

Reduce the rate of recidivism among clients in Second Chance Act-funded programs by 50% over the next 5 years

Situation Analysis

Inputs

Over 650,000 inmates are

released per year in the U.S.
and return to their families
and communities

Hire case manager, recruit

and train mentors, hire
VISTA volunteer

Without intervention, 40% of

returning inmates will return
to prison within 5 years

Purchase software to track

program outcomes

Outputs

Outcomes

Target nonviolent offenders

18 years or older that have
been released from prison
within the past 180 days

Outcome: Clients secure

employment

Provide case management

and mentoring programs

Outcome: Clients establish

consistent work history

Indicator: # clients entering

employment

Indicators: # clients
remaining employed
18,377 inmates were
released to Cook County in
2001. 15,488 (84.3 percent)
were released to the city of
Chicago.

Provide professional
development opportunities
for staff; develop pre-release
orientation and learning
opportunities for prisoners.

Provide job training and

placement programs.

The Second Chance Act of

2007 was passed in April
2008.

Provide matching funds and

in-kind donations up to 50%
of grant amount

Make referrals to supportive

services

Outcome: Clients earn living

wages
Indicator: Average earnings

Outcome: Increased public

safety
Indicator: Rates of
recidivism among program
participants

Evaluation:

What is the power of the mentorship model to reduce recidivism? Utilize data from intake process, and other
program documents to conduct ongoing program assessment and quality improvement. Hire outside evaluator to provide
evidence-based program evaluation.

*Adapted from the University of Wisconsin Extension Program Action Model

Sample Program Flow Chart*

Recruitment

Job Placement

Intake

Mentoring

Case
Management

Job Training

Follow Up

*Adapted from U.S. Department of Labor

Ready4Work Program Model

Questions?
Questions regarding this presentation may be addressed to
Valerie F. Leonard
Expert, Community and Organizational Development
Consulting@Valeriefleonard.com
773-571-3886
Visit: http://Valeriefleonard.com
Follow: @Valeriefleonard.com on Twitter