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Speaker 1: What are the steps? Can you walk us through the

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Speaker 1: steps of how to start a nonprofit? Five toho one

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Speaker 1: ced three yep?

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Speaker 2: Okay, So the first thing is you don't have to

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Speaker 2: have a five on one C three.

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Speaker 1: Can you just explain what a five oh one C

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Speaker 1: three is?

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Speaker 2: So a five on one C three allows you, according

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Speaker 2: to the IRS, to be tax exempt, which then allows

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Speaker 2: all donors to write off anything that they contribute to

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Speaker 2: your organization. It's very important if you need large amounts

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Speaker 2: of funding. If you don't and what you're trying to

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Speaker 2: do can get by on like a fifteen hundred dollar

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Speaker 2: budget or a two thousand dollars budget, you don't need

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Speaker 2: the five oh one C three.

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Speaker 1: That budget be monthly or annually annually.

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Speaker 2: There's you know, it just depends on what you're budgeting for.

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Speaker 2: You know, some people have a plant project and they

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Speaker 2: just want to plant things a couple times a year.

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Speaker 2: It just depends on what you're doing.

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Speaker 3: Yeah, I was told something like that. The process is

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Speaker 3: very long, like in dependent on how much you need.

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Speaker 3: So like you can apply for the five O one

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Speaker 3: C three if you're making if you're anticipating having ten

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Speaker 3: thousand dollars or less, yeah, that's the initial one, but

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Speaker 3: if you're planning more that that process takes a lot longer.

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Speaker 2: It does, and I actually so we incorporated the organization

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Speaker 2: and then we filed for the five on one C

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Speaker 2: three at the same time, and it was about three

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Speaker 2: or four months later I planned our first annual fundraiser

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Speaker 2: because we needed the funding to really get started on

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Speaker 2: what we were trying to accomplish. And in my mind,

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Speaker 2: I'm thinking, if you look online, it tells you you

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Speaker 2: can get approved for a five on one C three

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Speaker 2: between two to twelve months. So of course I'm always thinking,

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Speaker 2: I'm always being optimistic, and I'm like, well, three to

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Speaker 2: four we might make it. We didn't, so we did

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Speaker 2: the first fundraiser, and of course people are going to

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Speaker 2: get very minimal amounts because they can't write it off,

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Speaker 2: and it's a it's a huge incentive for any donor

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Speaker 2: to know that not only am I helping this cause,

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Speaker 2: but I can also it'll help me with my taxes.

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Speaker 2: So we didn't get it approved in time, but we

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Speaker 2: ended up getting it a year later.

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Speaker 1: So, all right, what's the process to get a five

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Speaker 1: on one C three, Like, what do you have to

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Speaker 1: do together?

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Speaker 2: There's a long application. There's a long application, and you

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Speaker 2: have to be organized and have everything you have to

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Speaker 2: answer with as many details as possible if you want

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Speaker 2: to get approved without questions first from the IRS. So

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Speaker 2: mission statement. You need a mission statement, You need the

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Speaker 2: name everything that you would need to do to start

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Speaker 2: a business. You have to be very clear about what

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Speaker 2: you're doing. And when I say mission statement, it's funny,

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Speaker 2: I'm remembering this now. We the IRS actually came back

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Speaker 2: and said that our mission statement was too broad and

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Speaker 2: that's why we didn't get approved the first time around.

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Speaker 2: I think the initial mission statement was to help foster

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Speaker 2: and homeless you self comfort, that could mean anything. So

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Speaker 2: then we had to go in and revise the mission,

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Speaker 2: apply with the state to change that and then resubmit

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Speaker 2: the application for the five oh one C three.

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Speaker 4: Is something that you did yourself or did you have

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Speaker 4: lawyers involved?

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Speaker 2: I hired help. Yeah, definitely hired help. And I would

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Speaker 2: recommend if anybody doesn't already have that experience in the

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Speaker 2: nonprofit sector, hire where you need, especially when it comes

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Speaker 2: to accounting. Get the support so that the first time

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Speaker 2: around you're not making those mistakes.

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Speaker 1: So when you had the narrow value mission statement, like

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Speaker 1: what was your revised mission statement?

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Speaker 2: So now the mission statement is helping foster and homeless

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Speaker 2: youth self comfort by providing comfort items for bedtime and

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Speaker 2: programs that inspires them.

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Speaker 1: To self soothe.

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Speaker 2: And that was okay, all right, So you have that.

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Speaker 1: You have to set it up as a business like

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Speaker 1: you have like.

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Speaker 2: An LLC setup, not an LLC. But it's the same

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Speaker 2: steps of like having to you don't have to trademark,

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Speaker 2: but I highly recommend it because the work of a

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Speaker 2: nonprofit easily inspires someone else to want to do similar work,

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Speaker 2: and they can They can take your name and do

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Speaker 2: it in another state if they want to, so trademarking,

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Speaker 2: I highly recommend filing for the setup for the nonprofit

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Speaker 2: the same way you would with the LLC for your state,

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Speaker 2: and then applying for that five on one C three

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Speaker 2: early if you expect or if you want to receive.

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Speaker 1: Large funds, and it's like a fee for that.

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Speaker 2: Yes, there's a fee. There's a fee for every application,

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Speaker 2: so you have to have some fund to get started.

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Speaker 2: When I applied in twenty twelve, I think that the

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Speaker 2: five on one SET three application was like eight hundred dollars.

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Speaker 2: I'm not sure if it's increased since then, but yes,

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Speaker 2: you definitely need something in order to get started.

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Speaker 1: Okay, so you do the application, you get well as

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Speaker 1: the five oh one C three is going through the

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Speaker 1: process because they could take up to a year. What

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Speaker 1: what else do you need to get off the ground

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Speaker 1: to start the actual charity?

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Speaker 2: Everything?

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Speaker 1: Explain that.

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Speaker 2: So you need a website, okay, you need a marketing plan.

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Speaker 2: You need a business plan.

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Speaker 1: Marketing plan? Can we can we talk about that? Yeah?

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Speaker 3: Because all right, how do you before you even go

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Speaker 3: into that, like this is you and someone up like

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Speaker 3: the COVID, Like who.

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Speaker 1: Else is doing this?

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Speaker 2: So the co founder was my mother, but no she

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Speaker 2: she was living her best life in Florida. So my

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Speaker 2: mom was not involved in, you know, actually getting the

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Speaker 2: organization started. I was doing this on my own with

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Speaker 2: the help of friends who believed in me and the organization.

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Speaker 2: So that's the next step in and I'll get back

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Speaker 2: to marketing. But you need you need a marketing plan,

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Speaker 2: you need a business plan, you need a board of directors,

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Speaker 2: you need people that are going to hold you accountable,

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Speaker 2: which most people don't know. So when you're applying for

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Speaker 2: this paperwork. You can't just put your name on it.

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Speaker 2: If people are giving donations, the IRS wants to know

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Speaker 2: who else is tracking these dollars to make sure that

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Speaker 2: you're not out here spending these these funds in the

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Speaker 2: wrong way. So when I first started, and I think

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Speaker 2: most people when they start nonprofits, it's usually people that

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Speaker 2: are very connected to you as well as the mission,

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Speaker 2: and so they'll sign on to support you. And that's

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Speaker 2: usually how the board starts, and then eventually it grows.

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Speaker 1: You have to have a board of director, yes, how

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Speaker 1: many people?

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Speaker 2: Three?

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Speaker 1: Non Negultimately you have to you have to they have

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Speaker 1: to have titles or just board a director.

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Speaker 2: Yes, and they need titles. So you need a president,

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Speaker 2: you need a treasurer, you need a secretary.

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Speaker 4: And that's New York State's the end of a federal

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Speaker 4: New York state.

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Speaker 1: Okay, so all right, you have those three people. Those

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Speaker 1: people have to actually be active.

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Speaker 2: They should be active. So here's the thing. It's like

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Speaker 2: it kindly recommended because they're putting themselves on the line

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Speaker 2: by signing that paperwork. Right, So if you have someone

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Speaker 2: signed as a secretary and it's your cousin, but they're

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Speaker 2: not actually doing the work. If you get audited or

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Speaker 2: there's an issue, they're going to come looking for you

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Speaker 2: and your cousin. So everybody should understand how serious it

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Speaker 2: is when they are signing that paperwork.

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Speaker 1: Okay, can we talk about marketing?

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Speaker 4: Yeah?

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Speaker 1: So how do you put together marketing plan for a nonprofit?

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Speaker 1: Or it's because it's different, right, Like we're marketing. Let's

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Speaker 1: say we want to market our podcast, right, or you're

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Speaker 1: marketing a product. Right, it's a little different than marketing

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Speaker 1: for a nonprofit because it's charity. Yeah, so it's like,

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Speaker 1: you got it. It's kind of in my opinion, it's

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Speaker 1: it's a little delicate because you don't want to make

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Speaker 1: it seem like you're selling something. But obviously you need funds.

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Speaker 1: We don't talk about fundraising, but you need funds, So

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Speaker 1: how do you how do you do that? Like how

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Speaker 1: do you market for a charity?

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Speaker 2: I think the two most important things to consider when

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Speaker 2: marketing is who is your target audience? And then also

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Speaker 2: what are your donors need to see and understand in

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Speaker 2: order to give. So the more your donors know, the

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Speaker 2: more they will give. Period making sure that in everything

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Speaker 2: that you do, whether it's just utilizing social media, that

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Speaker 2: every image, every caption, every meme, everything that you're sharing

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Speaker 2: explains the mission clearly. Transparency is the number one thing,

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Speaker 2: and trying to solicit donors. Marketing, so making sure that

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Speaker 2: you are marketing towards the people that you need to

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Speaker 2: do the service. Right. So when I started this organization,

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Speaker 2: I wanted to market this towards people who run the

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Speaker 2: foster care agencies in New York City as well as

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Speaker 2: the homeless shelters, So figuring out what do they need

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Speaker 2: to see in order to understand what our services are

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Speaker 2: and that sometimes it's simply putting together a kit that

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Speaker 2: explains and breaks everything down. Here's the mission, here's our values,

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Speaker 2: here's our logo, here's our one year plan, here's the

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Speaker 2: program that we can provide or the curriculum, just depending

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Speaker 2: on what you want to do and ironing all of

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Speaker 2: that out so that they can understand it and then

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Speaker 2: they choose whether or not they want to work with you.

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Speaker 3: So you're pretty much I mean, you're not selling in

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Speaker 3: the sense of an item, but you're selling your vision

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Speaker 3: and your passion.

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Speaker 2: Yeah, in a sense, right, yeah, and making it clear.

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Speaker 2: I mean, there's another nonprofit friend of mine runs an

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Speaker 2: organization called Kicks for the City. It's a very simple mission.

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Speaker 2: They give shoes to the homeless. So when all of

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Speaker 2: their packaging, they're showing photos, images of sneakers, images of homeless.

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Speaker 2: So people can just simply connect the dots. Here's the mission,

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Speaker 2: there's a value, and here's what it looks like if

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Speaker 2: you give.

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Speaker 1: It's easy. So all right, So the biggest part of

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Speaker 1: charity nonprofit organization is that you have to have money. Right.

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Speaker 1: It's actually a business. Right. That's something that people need

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Speaker 1: to understand too. If you think about running a nonprofit

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Speaker 1: successful now, yeah, is that you have to run it

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Speaker 1: like a business because it is a business. Right. So

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Speaker 1: we're going to talk about funding. So nonprofits get majority

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Speaker 1: of their funding from donors. Right, how do you really

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Speaker 1: depend what's the other ways?

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Speaker 2: Yeah, it depends. You can get a majority through individual donors,

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Speaker 2: through state funding, through federal funding. Those are the three

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Speaker 2: main ways.

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Speaker 1: Yeah, let's let's let's talk about donors. Yeah, how does

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Speaker 1: how is some what's the one on one blueprint to

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Speaker 1: attract individual donors, real the men so.

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Speaker 2: That they understand the cause and make sure that you

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Speaker 2: are speaking to people who care about that mission, that

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Speaker 2: specific mission. So with Precious Dreams, I had to find

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Speaker 2: a way how do I connect the issue a fostered

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Speaker 2: homeless youth and make it relatable to someone who's never

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Speaker 2: been in those shoes. So the first thing that we

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Speaker 2: did was target parents, because parents understand the importance of

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Speaker 2: comfort items. So I remember my first year, I would

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Speaker 2: have meetings and one of the first questions I asked was,

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Speaker 2: do you have kids, what's their bedtime routine? Do you

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Speaker 2: read to them? What do they do? They sleep in

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Speaker 2: pajamas And it immediately brings them to this happy place

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Speaker 2: of thinking of like what that looks like for their

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Speaker 2: kids and how important it is to them. And then

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Speaker 2: I would help them vision what a typical night looks

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Speaker 2: like in a homeless shelter, or what a night looks like.

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Speaker 4: For a far earners.

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Speaker 1: What's up?

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Speaker 5: This episode is brought to you by P and C Bank.

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Speaker 2: Poster kid who's sleeping in a room with five other

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Speaker 2: families on a mattress that's on the floor, and immediately

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Speaker 2: they feel connected, you know, and then they want to give,

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Speaker 2: They want to save someone because they can't understand how

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Speaker 2: someone else could be lacking what their child has or

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Speaker 2: what they have that they were taking for granted because

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Speaker 2: they just did never thought about the person who lacks.

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Speaker 3: It's a commonality, like we were all children at some point. Yeah,

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Speaker 3: and we probably all have gone through some experience as

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Speaker 3: a child, whether it was like somebody putting you to

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Speaker 3: bed or the bad time routine. I want to go

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Speaker 3: to the fact of state funding and federal funding, so

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Speaker 3: like how does that work and are there acts or

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Speaker 3: initiatives that the state provides are just like you know,

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Speaker 3: what I should target them or how do you go

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Speaker 3: about it?

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Speaker 2: It depends on what you're doing. Again with the nonprofit,

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Speaker 2: So if you're providing a service for schools or for educators.

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Speaker 2: It's very easy to go after state funding. If you

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Speaker 2: are providing sneakers to the homeless, it's a little harder

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Speaker 2: to get those grants approved because they might not see

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Speaker 2: the importance in that work. So yeah, it just depends

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Speaker 2: on what you're doing. But those applications are available online.

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Speaker 2: There's a full list of the state money that's available,

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Speaker 2: federal money that's available, and you just have to see

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Speaker 2: whether or not you fall along.

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Speaker 1: So okay, So how important is grant writers?

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Speaker 2: Grant writers are very important. They're very very important, especially

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Speaker 2: if you don't have relationships with a lot of individual donors,

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Speaker 2: because you need one of the other grant writers. And

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Speaker 2: also researchers are another a whole other animal because a

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Speaker 2: lot of times, and we learned this the hard way,

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Speaker 2: I thought, you know, let's let's find a grant writer.

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Speaker 2: You find the grant writer and they're like, okay, so

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Speaker 2: who's doing the grant research because that's a whole nother job.

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Speaker 4: Yeah, I'm not even heard of that side. What's their

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Speaker 4: job to do to research everything?

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Speaker 2: Yes, and it takes hours because there are so many

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Speaker 2: grants available, But there could be one small thing in

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Speaker 2: that grant one requirement and your organization just doesn't fall

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Speaker 2: under it. So making sure before you waste anybody's time

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Speaker 2: and they're writing this full proposal that you fall in

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Speaker 2: on all of the requirements that are listed for that

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Speaker 2: one specific grant.

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Speaker 1: And most of these grants government or private, or like

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Speaker 1: a mixture.

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Speaker 2: Of a mix. Yeah, private, public, state, federal.

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Speaker 1: And you could just google and probably find a lot

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Speaker 1: as far as different causes.

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Speaker 2: Yeah, a lot of the are very public. Some are

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Speaker 2: invite only, which are harder to apply for. But so

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Speaker 2: there's a lot of private, especially like family foundations, where

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Speaker 2: they've set up to give finances annually to different organizations,

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Speaker 2: but they don't want to have thousands of applications coming in.

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Speaker 2: There are over one point five million nonprofits in the

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Speaker 2: United States. So if you are a very small, like

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Speaker 2: three or four person run organization where you're trying to

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Speaker 2: just simply give out twenty thousand dollars a year, you

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Speaker 2: don't want one point five million people applying. And so

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Speaker 2: what they'll do is they'll restrict it to a certain

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Speaker 2: county or a certain state, and people will have to

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Speaker 2: know someone in order to get in. It's kind of like, like,

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Speaker 2: I don't want to say mafia, but like you have

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Speaker 2: to know somebody in order to even figure out what

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Speaker 2: their application process is to get in the door.

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Speaker 1: So where does your funding come from?

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Speaker 2: Most of a majority of our funding comes from individual donors,

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Speaker 2: and that is a gift that I've been able to

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Speaker 2: receive because of the work that I've done, so in

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Speaker 2: having that that history, that job history at places like

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Speaker 2: Madison Square Garden, where I've been able to develop relationships

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Speaker 2: with the one percent in New York City, or you know,

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Speaker 2: the athletes and artists that come through and they're invited

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Speaker 2: to sit courtside at our games, the gary Ves of

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Speaker 2: the Internet, like all of those people I developed great

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Speaker 2: relationships with by them seeing my work ethic but then

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Speaker 2: also my character, seeing that I am someone who is

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Speaker 2: responsible but kind. And so when I approach those people

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Speaker 2: about giving to my nonprofit, the answer is yes more

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Speaker 2: than no.

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Speaker 1: So do you have because like I think, Deary Ferguson

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Speaker 1: Robin Hoood Dinner is like five thousand dollars minimum, It's

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Speaker 1: like five thousand dollars per plate to end. Yeah, and

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Speaker 1: it sold out. You can't get in and so that's crazy.

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Speaker 1: But like how do you price? How do you ask

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Speaker 1: for money? Like do you do it in galas? How

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Speaker 1: do you know how much to ask for?

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Speaker 2: There's so many ways to fundraise, so many ways. So

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Speaker 2: one thing that's very important we talk We go back

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Speaker 2: and talk about boards, right, your board of directors should

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Speaker 2: be very diverse and they should have a network far

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Speaker 2: beyond your reach so that they can go out as

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Speaker 2: ambassadors and promote your organization to receive funding from anyone

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Speaker 2: that they're connected to. Then you can utilize social media.

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Speaker 2: There's a lot of ways that you can raise money

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Speaker 2: on social media. There's a lot of platforms like get smart.

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Speaker 2: Dot com is a platform that you can pay for

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Speaker 2: where you can set up fundraising pages. But then it

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Speaker 2: also gives you text numbers, so like the Text to

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Speaker 2: Give where you can send out a number and say,

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Speaker 2: if you text this number, you can donate twenty five

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Speaker 2: dollars instantly. That's a platform that allows you to do it.

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Speaker 2: Galas are very important. Selling a ticket to provide an

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Speaker 2: experience for somebody is the easiest way to fundraise. Who

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Speaker 2: doesn't want to come to an open bar experience or

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Speaker 2: to see a performer to go out to have a

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Speaker 2: good time. So galas are honestly probably one of the biggest,

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Speaker 2: the biggest ways that nonprofits are able to generate funds,

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Speaker 2: especially for precious streams. It's definitely our our go to

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Speaker 2: every year. You have an annual gala, yes, every fall.

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Speaker 1: So on the business side, how do you know? All right,

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Speaker 1: you run an organization, not you, but just anybody, right,

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Speaker 1: and that's your job. So you have to make a living.

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Speaker 1: You have to you know, provide for yourself, right, So

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Speaker 1: how do you know or what's the rule of thumb?

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Speaker 1: Like how much money should you be taking for your

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Speaker 1: own personal It never really seems like it's right because

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Speaker 1: it's like a charity you don't want to take, but

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Speaker 1: it's still a job. But you're doing something, you know,

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Speaker 1: and you've got to get compensated for that obviously. So yeah,

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Speaker 1: especially like when you're the owner of it, because it's

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Speaker 1: up to you, Like how do you determine, like how

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Speaker 1: much money you take from that as your personal salary?

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Speaker 2: So I think the most important word when it comes

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Speaker 2: to thriving in the nonprofit space is transparency, and annual

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Speaker 2: reports are important. An annual report is more than just

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Speaker 2: the nine to ninety which you need to fill out

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Speaker 2: every year so that the government knows how you're spending

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Speaker 2: your money. But an annual report will break down exactly

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Speaker 2: how much money went to operational costs, to programming, to

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Speaker 2: office supplies, to everything. And a lot of times big

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Speaker 2: donors want to see where every dollar went last year,

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Speaker 2: and if you can show that, then they will give more.

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Speaker 2: Like I said earlier, the more the more that a

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Speaker 2: donor knows, the more they will give. So we always

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Speaker 2: make sure that we're very transparent about what we give,

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Speaker 2: but then also making sure that they see the numbers

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Speaker 2: that they that they that they'd want to see, right,

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Speaker 2: So like, if I'm giving a dollar, I want to

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Speaker 2: know that at least seventy five cents of my dollar

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Speaker 2: is going to go to the wards the ch children

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Speaker 2: and the images that you're showing me in this deck,

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Speaker 2: to that program and so a precious dreams. It's interesting

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Speaker 2: because I kind of mimicked an idea that I saw

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Speaker 2: from Usher's Foundation. So Usher has the new Look Foundation,

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Speaker 2: and I don't know if they still do this, but

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Speaker 2: years ago their board was covering one hundred percent of

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Speaker 2: the operational cost and so they marketed on the website

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Speaker 2: that one hundred percent of your donation goes to the programming,

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Speaker 2: and that will reel anybody in. So I went to

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Speaker 2: my board. This is actually how I was able to

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Speaker 2: get approved for a salary. I went to my board

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Speaker 2: and said, this is what I saw, and I think

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Speaker 2: that this is a great approach. And because we're only

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Speaker 2: still at like the sixty thousand dollars annual level, would

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Speaker 2: you guys be willing to put together a cost so

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Speaker 2: that this is this is how much would go towards

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Speaker 2: operational costs, and then this is how much that you

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Speaker 2: give to the organization every year. And they voted, because

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Speaker 2: voting is another thing that must happen on your board.

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Speaker 2: They voted, it was approved, and they actually cover my salary.

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Speaker 2: So when people donate to Precious Dreams, none of that

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Speaker 2: money goes to operational costs. My board, my board of directors,

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Speaker 2: they out of their pocket. Out of their pocket, Yeah,

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Speaker 2: which says so much, right, So, like the highest level,

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Speaker 2: the highest level of leadership at my organization believes in

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Speaker 2: this mission so much that out of pocket they pay

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Speaker 2: for my salary.

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Speaker 3: So if rule it thumb, like, if we're starting a nonprofit,

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Speaker 3: what would you say that percentage would be for a

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Speaker 3: nonprofit to have an operational.

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Speaker 2: Cost they're recommended accorded to according to like Charity Navigator,

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Speaker 2: would be forty percent should go towards operational costs and

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Speaker 2: anything outside of programming, everything else should go towards programming.

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Speaker 2: And then if it doesn't, they would they judge you.

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Speaker 2: There's a lot of like grading systems online for profits,

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Speaker 2: so you you will get graded on a lower scale

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Speaker 2: if you are taking that money and putting it.

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Speaker 1: So we have if like a million dollars comes in,

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Speaker 1: four hundred thousand should go to the operational cost, six

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Speaker 1: hundred dollars should go through the product.

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Speaker 3: And then the operational cost always if you have staff

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Speaker 3: WI you obviously just Applaska fall in that list too. Yeah.

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Speaker 2: And also it's like just accountability and being smart about

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00:22:24,480 --> 00:22:27,040
Speaker 2: how you spend that money because there's no rule that

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00:22:27,119 --> 00:22:30,479
Speaker 2: says that you have to. But if you get an

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00:22:30,520 --> 00:22:32,480
Speaker 2: audit from the I R S and they look at

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00:22:32,520 --> 00:22:34,600
Speaker 2: how you're spending, they can pull that five on one

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Speaker 2: C three at any time.

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Speaker 1: Okay, all right, that was good. That was a lot

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Speaker 1: of good information.

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Speaker 6: An illegal alien from Guatemala charged with raping a child

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Speaker 6: in Massachusetts. An MS thirteen gang member from Al Salvador

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Speaker 6: accused of murdering a Texas man of Venezuelan charged with

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Speaker 6: filming and selling child pornography in Michigan. These are just

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Speaker 6: some of the heinous migrant criminals caught because of President

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Speaker 6: Donald J. Trump's leadership. I'm Christy nom the United States

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Speaker 6: Secretary of Homeland Security. Under President Trump, attempted illegal border

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00:23:33,240 --> 00:23:36,800
Speaker 6: crossings are at the lowest levels ever recorded, and over

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00:23:36,840 --> 00:23:40,080
Speaker 6: one hundred thousand illegal aliens have been arrested. If you

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00:23:40,160 --> 00:23:44,000
Speaker 6: are here illegally, your next you will be fine nearly

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00:23:44,080 --> 00:23:48,080
Speaker 6: one thousand dollars a day, imprisoned, and deported. You will

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00:23:48,119 --> 00:23:51,760
Speaker 6: never return. But if you register using our CBP home

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00:23:51,840 --> 00:23:55,200
Speaker 6: app and leave now, you could be allowed to return legally.

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00:23:55,560 --> 00:24:00,000
Speaker 6: Do what's right. Leave now. Under President Trump, America's Law

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Speaker 6: cause border and families will be protected.

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Speaker 4: Sponsored by the United States Department of Homeland Security,