As with any business startup, it’s important to get off on the right foot. Most individuals or groups who want to start a nonprofit know that one of the very first steps they should take is to obtain the appropriate insurance coverage for their business, which will often lead them to you. When this happens, it’s important that they are given all the vital information they need; not only about Essential Nonprofit Insurance Coverages, but any other details that may be helpful to them when beginning this venture.
Your prospective client’s mission is essentially going to be the primary purpose of starting their nonprofit; whether that mission is to feed the homeless, provide entertainment for lower income individuals, take part in environmental efforts, etc. However, nonprofit officers can often overlook the fact that they are also running a business, even if unintentional. In order to achieve their mission, they must do a good job of running this business!
The following is a brief rundown of the steps you can provide your prospects and clients with when beginning a nonprofit. This checklist is an abridged version from the Nonprofit Coordinating Committee of New York, but its contents relevant throughout the country.
- Create and brand a mission statement.
- Select individuals to serve on the board of directors and designate officers to serve on the board.
- Establish Board Committees.
- Develop a nonprofit operating plan, much like a business plan; including the nonprofit’s location, staffing, activities, funding, fundraising plan, and budget.
- Retain both an accountant and bookkeeper to handle financial aspects such as accounting records, financial reports, audits, and mandatory government filings.
This is a very brief checklist to provide your clients. Other steps include establishing a system for preparing and filing Form W-2s for employees and 1099s on behalf of independent contractors, and establishing a system to meet both mandatory and recommended insurance requirements. Mandatory insurance policies typically include General Liability, Workers’ Compensation, Unemployment Insurance, Short-Term Disability, and Business Auto Liability and Property Insurance while additional coverages can include Crime Coverage, Inland Marine, Umbrella Liability Insurance, and BOP Products.
Understanding the basics of non-profit insurance policies is essential for your clients, as well as for you. At Charity First, we are committed to helping you place coverage for your nonprofit clients. Our mission is to provide coverages tailored to meet the unique needs of this market segment. Please contact us today to learn more at (800) 352-2761.