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If you have to set it up yourself follow the instructions here https://help.salesforce.com/HTViewSolution?id=000005149 or here https://powerofus.force.com/articles/Resource/Install-NPSP
Then go through the post install steps starting here https://powerofus.force.com/articles/Resource/NPSP-Post-Install-Checklist
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See Using the Non Profit Starter Pack for more details.
Upgrading
Many NFPs are probably still using the NPSP Version 2. See which version you are using by following these steps https://powerofus.force.com/articles/Resource/Which-Version-of-NPSP-Am-I-Using