This afternoon I spoke to my friend, Alexander Días Rios, who was inquiring on Facebook information on launching a nonprofit. I had commented that I’d be happy to share my experience, and lessons learned with Operation Code. We spoke by phone over the weekend, and this is a rough outline of our conversation:

  • Find a problem worth solving. Our problem was simple: re-train veterans to software development careers, provide mentorship and scholarship opportunities. This was a problem I personally faced when I exited off active-duty in that I couldn’t use my New GI Bill to go to The Flatiron School. So I wrote the first line of code to, began curating coding bootcamps, started pairing veterans with software engineers and began asking the open source community for conference tickets. Ruby on Ales was the first to come onboard and from that point on it became obvious we had unearthed something unique, important and worth pursuing. Bottomline, find a problem worth solving despite the odds, and tackle it. It also helps you, and/or someone on your team can launch the URL. Ours was built using Ruby on Rails.

  • Establish a founding board of directors. These directors might at first be friends, supporters of the cause and mission, early creators of cementing mission and values, and somehow connected to your cause. At Operation Code, the founding board was comprised mostly of software engineers, and mostly veterans. The founding board of directors literally launched at a San Francisco bar, 21st Amendment during my visit to the city for SignalConf. When everyone at the bar asked, “What can we do to help?” my response was “Be the founding board and help us secure our 501(c)(3).” It was magic. All that said, ensure early on you have an attorney, a CPA or accountant, individuals with access to high net worth individuals, and willing to share that access to the organization. You can always evolve your founding board of directors to a governing board of directors, but ensure your board early on understands its role is to help it grow by bringing in dollars to operate the organization. The saying is, “Give or Get”. Give money, or get the money and resources to the organization to hire staff and programs.

  • Incorporate as a domestic Oregon nonprofit and file for your federal EIN. This process is really your first step. The application, IIRC was either $50 or $100. Either way, it’s exactly like filing for business, but it’s categorized as a nonprofit. At the federal level, securing your EIN is free. I secured ours after I returned from SignalConf.

  • Secure a bank account. Now the bank will require a minimum deposit, as well as a copy of your state registration and federal EIN document. While there are major national banks to choose from, I asked my long-time friend and former United Way Interim CEO, Jay Bloom, on recommendations. He recommended B-Corp bank, Beneficial State Bank. I met with their leadership and we started a bank account the same day dropping the first personal deposit. While they have mobile banking and a west coast presence, what I like most is their down to earth attitude to help smaller organizations grow and proximity to downtown. Once you have a bank account, use Stripe (or something similar) to accept donations on your website.

  • CPA. Hire a CPA to prepare your 501(c)(3) filing to the Internal Revenue Service (IRS). The cost will range, but don’t try to do it yourself as you might miss something and thereby delay your start date. We tried to do this ourselves, from the narrative to the actual application. There’s pros and cons to this. Obviously you want to consider where your time is better spent. At Operation Code, my buddy and board treasurer Pete Runyon took a first stab at the IRS application, drafting the first narrative and then we committee’d it to the founding board. A word of caution: use your personal CPA or your local CPA to get the best rate and service. That said, there was some good to this, but the process took greater than six months. Once we pulled the trigger to hire a CPA for a flat rate, the process was shortened to 3 weeks.

  • Mail your IRS nonprofit application. The CPA will turn over the completed original copy to you in an pre-stamped envelope (he/she will give you a copy for your records), in an exact order. We were lucky Pete forked out the $850 to file the IRS application. He wired the money and from that cut a cashiers check to the IRS and attached it with a paperclip the application, and 41 days later we were approved by the IRS as a 501(c)(3) nonprofit. The sooner you secure your IRS nonprofit status, the sooner you can stop paying for your Google account (and, attend Google for Nonprofit trainings), buy your technology using TechSoup, and benefit from Amazon Smile, Facebook nonprofit fundraising, etc., and take care of the mission.

  • Build community. When launching a nonprofit, ensure you as the founder have an extensive friends network that you can reach out as you continue to build and scale. When I agonized over making Operation Code, an initiative to a nonprofit I consulted Jay Bloom and he happily sat down with me over breakfast and helped me understand the steps to becoming a nonprofit; when we created the Software Mentor Protégé Program I asked our first contributor to the code base, Dr. James Davis, if he’d be willing to be the first mentor and evaluate the program– and, he did; when we didn’t have a logo, I asked my friends at HackHands, Forest & Geraldo, to mock up something. They happily did and we began using it on the website, flyers and collateral; when I asked my friend Anthony at DNSimple to provide credits so we could host, he happily did; when we needed a place to do our launch party, I asked my friend Michael at Epicodus, and he happily agreed; when Operation Code expanded from a personal project on GitHub to an organization, my friend and rubyist extraordinaire Chris Hough took us there; when we installed Stripe on the website, David Weekly made the first contribution and shared Operation Code with his Google network. Key here is use your personal network to scale early on.

  • Move like a startup. Fail fast, fail forward in everything you do. As the Founder & Executive Director your job is three fold: communicate the vision and mission to everyone you come across, recruit and retain volunteers (this includes new board members), and ensure there’s enough money in the bank at all times to execute on the mission. In summary, move expeditiously.

Hope this list helps anyone considering launching a nonprofit startup. And, good luck Alexander on launching yours!

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