If you do decide to start a nonprofit, you will not be alone. The number of U.S. nonprofits has grown at twice the rate of for-profit organizations. There are an estimated 1.6 million nonprofits in the US, and it is quite likely that someone already has your idea. So, before you go ahead, try answering these questions:
Am I cut out for this?
Starting a nonprofit is very much like starting a business. However, you’ll have to find donors and maybe even investors who are interested in making a difference, rather than a profit. However, nonprofits are expected to be run as well as businesses. And yes, nonprofits are allowed to make money. The NFL, for example, is a nonprofit and brings in more than $9 billion a year.
You will need to create a functional business plan which will yield measurable results. You will, just like a business owner, have to put in long hours, probably without pay, until you can get the new enterprise up and going. Some people who start NPOs have to keep their paying jobs during the startup period, and some organizations are even completely run by volunteers. You will need not only passion for your cause but a big dose of entrepreneurial spirit.
Do you have the necessary skillset to start a nonprofit? Running any organization requires good management and administrative skills, and a nonprofit is no exception. You might be driven by your passion for a particular cause, but passion alone will not make up for lack of skill and leadership experience. You can augment your own skill set by bringing together supporters who have the experience and skills you may lack. Those early supporters could become your board members or your first staff members.
Can you inspire others? You’ll need to convince donors to support your endeavor, and inspire staff to work hard under sometimes difficult circumstances. As such, being a genuine leader is a must for any aspiring nonprofit founder.
When the Chronicle of Philanthropy asked readers about the qualities that people who work in nonprofits need, the top ones were passion, creativity, persistence, vision, and the ability to collaborate. Do you have these qualities?
Do I have an original idea for a new nonprofit?
With so many nonprofits already in existence, it is likely that there is one, or even a few, that are already providing the programs/services or addressing the particular needs that you have in mind. Do your research and locate other NPOs that are similar to the one you propose. If there are organizations out there that have the same mission and they do a good job, it is going to be very difficult for you to attract donors, foundation grants, or any other type of support. You may be passionate about your cause, but the nonprofit “market” will not bear much redundancy.
Is a new nonprofit necessary?
You don’t have to start a new NPO to make a difference. There are alternatives to founding your own nonprofit. You might be able to use your program idea to work with an existing organization to establish a new focus for that NPO. You might, also want to consider volunteering with an existing organization to gain the clarity and insight about how the nonprofit sector works and determine if you have what it takes to head your own organization. Another option is to establish a for-profit enterprise that serves a social good. to start, you should take the time out to perform a needs assessment to make sure that your organization is really needed.
Will my organization fit the legal qualifications for a nonprofit?
If you are thinking of establishing a nonprofit just because you don’t want to pay taxes on your business enterprise, forget it. To qualify as a 501(c)(3) charity, your organization must serve the community.
A 501(c)(3) nonprofit cannot be operated for anyone’s private benefit, support or oppose a political party or candidates for office, or have as its mission the achievement of something that is only possible by passing some kind of legislation. Examples of charitable purposes include:
· relieving the poor, distressed or underprivileged
· advancing education or science (distinct from instruction which would be an educational purpose)
· erecting or maintaining public buildings, monuments or works
· lessening the burdens of government
· eliminating prejudice and discrimination
· promoting and developing the arts
· defending human and civil rights that are secured by law
Do I have a clearly stated mission?
Your new organization must have a clear and easily understood mission statement. Too often founders of nonprofits have a vague mission such as “help humanity.” But a great and truly usable mission statement needs to answer these questions:
Why? What is the purpose? What change will happen? What? What are the services that will be provided? Whom? Who will be helped, who will receive the services? Who? Who will do the helping, provide the services? Where? What will be the geographic service area? How? How will the services be delivered? What methods will be used?
Can I identify individuals who will support my new organization?
Many founders of nonprofits have only the vaguest idea about how they will finance their new organization. Startup funds are hard to come by for a nonprofit. You might have to fund the development of the organization out of your own pocket, and you will certainly need to depend on the kindness and support of individuals who also believe in your cause. Do you know who they are?
Familiarize yourself with where nonprofits get their income and think hard about where those startup funds will come from before you start the hard work of starting your own nonprofit.
Have I thought about forming a partnership with an existing nonprofit?
If you’ve done your research, you already know there may be other nonprofit organizations that are working on your social issue in your area. Now ask yourself: are none of those organizations adequately addressing that issue? Is the need really going unmet? Be honest in this assessment. Don’t reject the efforts of others just because they might not be addressing that cause in the same way that you would, or if they are doing it in a slightly different way.
Consider the possibility that it might be better to join forces with another group. Maybe you could serve your cause better by becoming a staff member, a board member, a volunteer, or a donor to another organization. You could even bring your proposed project to the attention of that organization to see if yours can be incorporated into its activities.
If you do decide that you have to start your own nonprofit, are you sure that you can make a compelling case to grant makers and donors to fund your organization and divert funding away from existing organizations servicing the same or similar purposes? It is a tough competitive environment when it comes to charitable funding. Is it really better to start a new nonprofit, or would it be better to help channel those funds to an established organization?
If you have done your research and are convinced that your idea needs to find its life in a new nonprofit, go ahead. But, make sure you are prepared for the tough road ahead, have the energy for the first steps, and the passion to get you over the hard spots.
Research existing nonprofits at www.guidestar.org
Find organizations that provide funds for NPOs at www.foundationcenter.org