Starting an NGO can be a very time-consuming process. It requires a strong vision and dedication from an individual or group that share a common concern about a community. If initiated correctly in an organized and strategic way, the services implemented to benefit the community can be very helpful and resourceful.
The following presents ten steps, in general chronological order, that are useful in the formation of an NGO.
This presentation acts as a broad “how to” guideline and these issues may vary depending on each CSO/NGO in each country. It is important to realize that these situations also vary from country to country, as each one has its own specific requirements and recommendations.
1. Establish Purpose/Vision/Goals
The first essential step in starting an NGO is to determine the purpose of the organization. Do so with a clear and concise written statement that describes the charitable mission of the organization. The statement must be broad enough to reflect the values of the NGO and why it exists. It is important to remember who the target community of the organization is and why it is important to reach out to this community.
It is also necessary to envision what the organization will become and what the long term goals and objectives are.
This should be done through short-term planning (an annual plan) as well as long-term planning (a strategic plan).
2. Establish an Initial Board of Directors
When setting up an NGO, the founder(s) must recruit the initial board of directors. It is helpful to start with a small group of committed individuals because the first board is the foundation of the NGO. The members must have strong legal, financial, and technological skills and should know that they are expected to serve on the basis of the public’s best interest. People who clearly understand the mission and goals of the organization and who have new and progressive ideas to contribute are essential. Most importantly, the initial board should be able to work as a team in order to help the organization get started and gain acceptance from the community. The size and structure of the board and /or general assembly, as well as the people who make it up, may change based on the size and needs of the organization once the NGO becomes officially
Because there are many legal matters that an NGO must deal with in first starting up, it is sometimes helpful to seek a lawyer. A lawyer can help with
• Registering the NGO
• Filing articles of incorporation /article of association.
• Filing reports
• Tax issues
• Securing licenses.
Even though many of these matters may be simple, a lawyer who specializes in this area is timesaving and assuring. If money is an issue, it may be possible to provide the NGO with inexpensive legal services through a legal assistance program. Checking with the board members to see if they have any connections or contacts may be useful.
Before registering an NGO, it is important to choose a name. It is essential to research local government agencies and state offices to make sure that the proposed name is not already being used. This also applies to the logo if the NGO is going to have one.
5. Write Articles of Incorporation/ Articles of Association
The articles of incorporation/ articles of association should provide a legal description of the NGO assigning power to the board. Once drafted, they should be submitted to the board for final approval before registration. The information that should be included in the articles varies between local state governments and also from country to country. Depending on what country the NGO is being formed in, it is important to check with local and federal governments to see what kind of forms need to be filled out and what should be included. The following are general examples of what is often expected:
• Name of the NGO
• A statement declaring the NGO is nonprofit
• Location of the NGO
• Number and names of the board members
• Extent of personal liability
• How long the NGO is expected to exist (this may be declared as everlasting).11
While the articles of incorporation prove the accountability of the organization to the external world, the bylaws represent the responsibilities of the NGO to itself. The bylaws of an NGO specify how it will run. They act as a rule book determining structure, power, and organization.
The bylaws are self-imposed by the NGO and therefore, should conform to the needs of the specific organization.
Though it varies depending on the individual needs of an NGO, some general information included in the bylaws may be:
• Registered Office of the NGO
• Members and qualifications and length of memberships
• Board size, responsibilities, structure
• Structure of board meetings
• Committee Structure
• Officer Duties.
If the NGO decides to incorporate, some of what would usually be included in the bylaws is outlined in the articles and it is unnecessary to duplicate these rules in the bylaws. Therefore, it is essential to have both the articles of incorporation and the bylaws drafted before the NGO officially registers.
The bylaws, like the articles, must also be sent to the board for final approval.
7. Register the Organization
After a name is chosen and the bylaws and articles are written, it is necessary to register or incorporate the organization within its local government. In most countries, there are specific people in governmental departments that work in registering an NGO and distributing the compulsory forms in which to do so. The documents to be submitted vary between countries, but in most cases information about the board members, mission statement, and staff members is required and the articles and/or bylaws are essential.
8. Hold an Initial Board of Directors Meeting
Once the NGO is legally incorporated (through an issued charter in most cases) an initial board of directors meeting should be held. The board members should officially adopt the bylaws in the first meeting because they should explain how the board functions. (In some countries the bylaws will already be established at this point by the incorporators depending on the governmental requirements.) The first meeting is important in establishing officers, committees, and discussing preliminary projects.
9. Set Up An Accounting System
All NGO's need a system for recording where money comes from and how it is used. Because NGO's finances tend to be closely scrutinized, it is important to put an effective accounting system into place to deal with the nuances of nonprofit bookkeeping and reporting. Seeking the help of an accountant who can help set up a bookkeeping system and explain how to use it is highly recommended. Board members or networking organizations may be helpful in finding a volunteer accountant or an inexpensive one specializing in helping nonprofit's get started. Often times NGO's have an accountant on the board who is familiar with these systems, which is also a useful option.
Lastly, once the NGO decides what the bookkeeping system should be, it is essential that all financial transactions are documented and recorded into financial journals by the bookkeeper. Transactions should be numbered and put in chronological order and thank you notes are essential for every donation received.
10. Come Up With a Fundraising Plan
Money required for an NGO to operate primarily goes into their educational and social programs, the overall operation of the NGO (administration, utilities), and projects (surveys, giving programs). Both the board of directors and the executive director should be active participants in fundraising and it is important that writing grants, seeking contributions, and other fundraising skills are acquired skills early in the NGO's development.
In order to come up with the best fundraising strategy, it is important to identify what the needs are of the NGO and what sources can best fulfill these needs. Professionalism, communication, and accountability are crucial for building trust with a potential donor.
Also, understanding why a person or group is supporting a program, activity, or the NGO as whole is useful in soliciting them to contribute for a second time or even continuously.
Once the previous ten steps have been completed, the foundation of an NGO has essentially been established. There are only a few miscellaneous tasks that must be completed before the NGO can fully operate. Some of these include:
• Hiring staff and volunteers
• Reaching out and becoming known in the community
• Seeking office supplies (furniture, computers, machinery)
• Insuring the NGO
• Holding orientation.
After this point program activities can be discussed and implemented. It may take about a year before these prove to be successful. Finally, at the end of the first year, it is important to review the mission, goals, and vision to make sure the NGO has stayed on track. Critiquing programs and activities to see what can stay or be changed is also beneficial.
How to Establish an NGO's in Ethiopia
Both International and local NGO's can be established and be operational in Ethiopia. However, knowing the requirements for establishment is necessary in order to speed up the process of registration with the Government of Ethiopia which will enable them to operate legally. It is also helpful to understand what type of organizations are defined as NGO's and what do they do? This will help one to see if the intended organization to be established falls within the defined category and if so how to go about establishing and running the ‘NGO’ within the country.
Establishment of NGO's within Ethiopia
Both Foreign and Local NGO's can be established in Ethiopia by registering with the Ethiopian Government. However, the requirements for registration of each differ slightly.
(A) Registration Guideline for Local (indigenous) NGO's
Any local NGO, which intends to carry out activities, shall produce its written application to the NGO Registration Agency.
If established in Ethiopia and is led by Ethiopians and operates in more than one Region of the country or its donor (s) supports programs found in more than one Region, the applicant NGO will require the following:
1. Three copies of the applicant NGO's’ memorandum of association and bye-laws signed by the founders of the NGO.
2. One copy each of the Curriculum Vitiate (CV) of each founding member.
3. Along with each CV, one copy of the latest evidence of educational level, letter of confirmation from the Kebele upon being an inhabitant of that particular Kebele and two photographs should be attached.
4. Three copies of a project proposal the applicant NGO intends to carry out upon registration.
5. Letter of confirmation from the financier (donor) of the applicant NGO of continued support upon registration.
6. If the applicant NGO is already operational it should, Present an agreement letter with the relevant government body; and Three copies of the last annual and audit report together with current operational report.
(B).Guideline for Foreign (international) NGO's
Any foreign NGO, which intends to carry out activities, shall produce its written application to the NGO Registration Agency.
The Agency will provide four copies of an application form to be filled by the applicant (applying organization).
The applicant ought to fill out carefully all the questions and in addition, is expected to produce:
1. An authenticated certificate that shows the applicant is registered in its country of origin as a non-profit making organization.
2. An authenticated memorandum of association (constitution or article of association of statues or by-laws) of the applicant organization by which its contemporary activities are governed.
This authenticated memorandum of association shall be produce to the Agency together with three copies of an Amharic version of the memorandum.
3. An authenticated letter of authorization for the country representative.
4. An authenticated boards decision to operate in Ethiopia.
5. A project proposal, in three copies, showing the intended project to be performed.
6. Documents showing the applicant’s (applicant NGO's’) work experience and performances in other countries (if any).
7. Awards and letter of good performances from recognized organization(s) (if any).
8. Letter of confirmation from its financiers (donors) explaining that they would finance the applicant if registered.
9. In case the applicant NGO has made an agreement with any government body, it has to produce activity and financial report of a previous year in three copies.
10. An agreement document, if the applicant has previously entered any such agreement with the government.
Notice: Whenever the need arises, the NGO Registration Agency has the right to request the applicant further information necessary to effect registration.
(C) Operational with DPPC
Following registration with the Agency and obtaining of Certificate, NGO's are required to sign Operational Agreement with the Federal Disaster Prevention and Preparedness Commission. The applying NGO is required to:
• Produce copy of the certificate of registration with the Agency. The DPPC is also informed of the registration of an NGO by the Agency.
Upon submission of certificate of registration, the applying NGO will be provided with three copies of Operational Agreement forms along with Basic Information on New NGO's by the DPPC to be filled, signed by the head of the
organization (the person acknowledged by Ministry of Justice) and sealed and returned to DPPC.
The Deputy Commissioner of DPPC will sign the Agreement form on behalf of the DPPC. One copy of the Agreement signed and sealed both the NGO and the DPPC will be given to the NGO.
Following the signing of Operational Agreement with DPPC, an NGO is expected to enter into specific project agreement with the concerned regional government offices depending upon the type and the nature of the project prior to the implementation of a project.