Starting a non-profit organization in Africa requires zeal. Learning.candid is of the view that more than 50% of NGOs fail 5 years after startup and a third of the surviving ones struggle to exist because of financial predicaments.
Do you intend to start a non-profit organization? If your answer is yes, then you must answer this question too- “Am I in this to enrich myself?” If your answer is yes, it will be wise for you to desist from such a venture. But if you answered no, then this article is meant for you.
Those who answered ‘no’ are passionate about humanity and are willing to give back in one way or the other while those who answered yes lack passion, all they want is just to enrich themselves and that’s a red flag. But passion is not enough. This is why I would like to inform you on how to start a non-profit organization in Africa.
Table of Contents
How to Start a Non-profit Organization in Africa
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Engage in a Rigorous Research
Before starting a non-profit organization in Africa, the first step is to engage in rigorous research. You will have to make a list of those NGOs with similar objectives as yours. Both the ones that failed and those still existing. This will help you avoid many mistakes that can make your NGO fail. You will have to investigate why those NGOs failed and how you can improve on the ones that still exist.
Investigating why NGOs similar to the one you are about to start failed will save you from making the same mistakes that led to their failure. Also, improving on the ones that still exist will give you a higher chance of funding. This is because if you just copy them because they are successful, the chances of getting funded will be very slim. After all, you will have to compete with them which will be very difficult because they’ve gained more experience.
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Develop a Solid Business Plan
Just like a profitable business requires a business plan, a non-profit organization needs a solid business plan also. This will serve as a road map for your organization. Whenever challenges arise along the line, consulting your business plan might just serve as a messiah.
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Incorporation
Having a formal structure is very important because it will give credibility to your NGO. It will make those you seek support from take you seriously. Also in the case of governmental policies that have to do with the establishment of corporations. Certain documentation needs to be obtained to legitimize your NGO. This varies from country to country so you should check in with a legal practitioner.
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File for Tax Exemption
Since it is a non-profit organization, it is smart to file for tax exemption. Having the company incorporated is not enough. In fact having the NGO incorporated opens you to pay taxes. But the moment you file for tax exemption, you will be fully recognized as an NGO and will not pay taxes whatsoever.
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Local Compliance
Even after the incorporation and filing for tax exemption stage, you will need to comply with your state’s laws. Depending on the country, there are certain state agencies that require the registration of NGOs with them. So it is essential to register your NGO with such agencies in order to comply with the local laws.
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Prepare for Annual Reporting Requirements
Even though your NGO has been exempted from taxes, it is very important that you track every financial transaction. There will be time, mostly towards the end of the year that reports must be made. Such reports must be transparent for all to see. Also, certain governmental bodies may request for annual reports. You must be prepared to prove that there are no discrepancies.
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Stick to the Rules
It will be in your interest to know that there are certain rules that guide non-profit organizations. When these rules are broken, it could jeopardize your tax exemption status.
These are 5 Activities that Could Jeopardize a non-profit organization’s Tax Exemption Status
- Personal or Private benefit
- Lobbying
- Unrelated Business Income (UBI)
- Annual Reporting Obligation and
- Operation in accordance with a statement of Exemption purpose.
In conclusion, it is essential that you seek the counsel of a legal team on the law aspect of how to start a non-profit organization in Africa because these laws vary from country to country.