Several people have reached out to me on Linked In asking for advice on how to start a non-profit. While I don’t know most of them, when I have a few moments, I will sometimes take a quick call. What I generally discover is that people don’t really want advice on starting a non-profit – they’ve made up their mind about that. They want to know how to fundraise. Which is a shame, because after listening to their spiel, my first thought is often – you don’t really need to start another non-profit.
Currently in the US, there are more than 1.5 million non-profits, and each year over 50,000 new organizations apply. It’s a complex and crowded playing field, and according to the latest IRS statistics nearly 275,000 non-profits navigate it unsuccessfully each year, losing their tax-exempt status.
There’s no doubt that most start with the best intentions. Whether an outlet for grief or a genuine interest in helping humanity, nearly everyone I speak to is passionate about their cause. But is a public charity the right outlet for your caring spirit? Here are 6 questions to ask yourself before you decide to start a non-profit.
- Why Am I starting a non-profit? This is where you need to be the most honest with yourself. Go beyond the trite answer of simply “raising awareness”. In today’s environment you can do that through any number of social media outlets. Spend some time thinking about what you are really hoping to accomplish, and how you will measure it. Then determine if it requires an “organization” behind it to be successful, and if so, why? If the answer is because it will require fundraising to achieve your goals, then ask yourself the next question.
- Am I meeting a compelling and unmet need in the marketplace? If you’re going to ask the public to support your efforts then make sure that you’re focusing on areas not effectively addressed by others, and that people other than you are concerned about. Fundraising requires two things: a cause people care about, and a compelling need. That means that if you’re focused in an area people know very little about or perceive that other organizations are addressing, you have a lot of work to do before you can garner support for your mission. In the early days a partnership with a larger organization or an online social campaign may be the way to go. But, if you really want a non-profit let’s go on to the next one.
- Do I want to run a small business? Non-profit founders report that more than 50% of their time can be spent on administration and paperwork. In fact, the first two years is often spent on building the business rather than the mission-centric activities with which you fell in love. For example, to prepare for national fundraising – which is what you do online – registration is required in nearly every state, at least to do it right. Before you go down this path, make sure you get good counsel from accounting and legal experts who understand the ever-changing laws and requirements to maintain a 501(c)3 status. But hold on, before you spend the money to get set-up, let’s make sure your heart is in it.
- Am I passionate about fundraising? Unless you’re establishing a private foundation, fundraising will provide the fuel that drives your mission forward. At first it can seem rather easy. After all, those 100 or so people who encouraged you to start a non-profit will most likely support with an initial gift. But after the honeymoon phase, you find that it’s harder than it looks to raise a few dollars. It’s especially challenging for new non-profits that have no track record for success. Before you ask for your first gift, be sure you’ve developed a strong reason for support. Use your personal expertise and passion, along with market data, to show why your organization makes a good investment. And I highly recommend fundraising for an established organization, before you try fundraising for your own. It’s a great way to test the waters among your network to suss out the givers, and gain some practical insight into if this is something you’re interested in doing going forward. Assuming that it is, here’s your next hurdle.
- How will I pay my bills? If you’re planning to take a salary for living expenses, you might be waiting a while before you live well. The average small business, which is what you’re now running, loses money in its first 5 years. That means after taking care of all expenses and conducting mission related activities – that are required to maintain your tax-exempt status – there may be nothing left for you. Additionally, the pressure to raise enough funds for you and the organization is often overwhelming. The ideal situation is to be personally sustained through outside funding – such as from a spouse, partner, or parents. Or you can work while building the organization. Many great organizations have been built on a part-time basis until they are strong enough to provide financial support. And that brings me to my last question.
- Am I in it for the long haul? Any cause worth fighting for is worth seeing through to the end. Are you willing to stick with it when you get bored, tired, and frustrated? Are you willing to turn over the reins, when the time is right, so that the work can continue even if you can’t actively participate? Part of your legacy should be an organization that is built to last beyond you, because there is a high likelihood that what you set out to achieve may not come to pass in your lifetime. Make a commitment from the start that you’re sticking with it to the end – whether that’s when your goal is achieved, or you pass the torch.
So now, do you still want to start a non-profit? I know it seems daunting, but if you’ve read all this and there is still a burning desire in the depths of your soul to start something new, then do it. Do what you are being called to do, and deliver it with excellence. After all, that’s what a Loving on Me life is all about – doing what you love, and loving what you do!
Just use this as a checklist to make sure you’re heading down the path with everything in order. Then recruit others along the way to help carry the load. You don’t need many. I’ve learned a few passionate souls can change the world!
If you’ve already walked this path, then leave us a note in the comments adding to our checklist of things to consider before starting a non-profit. Let’s swap knowledge and share stories of success.
Loving on Me as I Love You! Hugs and Blessings ❤