Starting and sustaining a nonprofit is serious BUSINESS. It takes careful planning, strategy, skill, time and resources (i.e. money!). Like any business startup, many new nonprofits fail. Actually, many established nonprofits are merging or closing their doors as well; so in the spirit of Harlem’s famed Apollo Theater, the message to new nonprofits is more pronounced than ever: Be Good or Be Gone.
Thankfully, there’s more than one way to quench a thirst for making a difference.
Joining a Board. Volunteering. Engaging with a Civic Organization. Launching a social media campaign. Working for a Nonprofit. Philanthropy. Political Activism. Missions… These are all fulfilling ways for a visionary to satisfy their desire to give back to their community. Of course starting a nonprofit is another way, but it is not for the faint at heart.
To date, there are over 1.5 million tax-exempt organizations registered with the IRS. This does not include the hundreds of thousands of small organizations with budgets under $25,000 that aren’t required to file annual returns. Competition is fierce. Resources are scarce and hours are long. Concerned? Good!
Leading a nonprofit is equally as challenging, frustrating and disappointing as it is rewarding, enriching and fulfilling. You’ll want to be prepared.
Three Questions to Ask Yourself When Starting A Nonprofit
1. Is there a compelling community need for the service I’m looking to provide?
2. Is there a gap in coverage or a niche that is currently being unfulfilled by others?
3. Do I have the time, talent and support to bring this idea to full fruition?
If you answered yes to all three questions and you just can’t shake that burning desire to proceed, CONGRATULATIONS!, it sounds like you’re on the verge of something spectacular!
Five Steps to Boost Your Success
Write the Vision, Make it Plain.
Brainstorm and write down your vision. What are you hoping to accomplish through the new venture? Who will be served by the organization? What services will be offered? When and where will they be provided? What’s your timeline? Be specific and provide as much detail as you can think of. List tagline ideas. Sketch out logos. Outline lesson plans etc. Use a binder or journal to keep everything in one place. This will come in handy as you move forward.
Do Your Homework.
Begin to test your ideas. Research the field. Identify the key players in your industry. Conduct informational interviews with others who are doing what you’d like to do. What’s worked? What hasn’t? What are the current trends, opportunities and challenges? Where would your organization fit within the current framework? This step cannot be overstated!
Develop a Business Plan.
Many nonprofit visionaries are so eager to jump in and serve that they neglect this crucially important element. As a startup, your business plan does not have to be overly complicated, but it is essential. At a minimum it should include a needs statement and detailed descriptions about your management and organizational structure, programs and services, a marketing plan and a budget/revenue development plan. As a social impact organization, emphasis should be placed on how you will evaluate the effectiveness of your programs and services.
Build Your Team.
Identify the human resources needed to ensure smooth organizational operations based on your gaps in expertise, industry best practices, your operations plan etc. Identify the roles that must be paid positions and those that could be filled by a volunteer. Develop a position description for each role. Positions may include: Board of Directors, Staff, Volunteers, Advisors, Mentors and Professional Experts. Be sure to avoid the common mistake of assigning family and friends to these key roles without an appropriate vetting process.
Cross Your T’s and Dot Your I’s.
Get familiar with the legal requirements for operating a nonprofit corporation in your area. Know the federal, state and local laws that apply to your organization and develop a system to ensure that you regularly meet all deadlines.
This brief startup checklist may be helpful:
- Choose a Meaningful Business Name that Reflects the Organization’s Mission
- Purchase a Domain Name for your Website & Email Addresses
- Develop By-laws and Select Your Initial Board of Directors
- File Articles of Incorporation with the Secretary of State (Annual Report)
- Develop Basic Marketing Materials including Business Cards, Stationary & Brochure
- File for a Employer Identification Number (EIN)
- Open a Separate Bank Account for the Nonprofit
- Establish a Donation Tracking System
- File for Federal Tax-Exempt Status (IRS Form 1023)
- File for State Tax-Exempt Status
Good luck, and let us know if we can help!