Deciding to start a nonprofit organization is a big decision. While the goal with many startup organizations is to become profitable as quickly and efficiently as possible, nonprofits are more complex. There’s a lot of work to be done for minimal financial reward, and significant intangible rewards that come from helping others.
The decision to start a non-profit shouldn’t be taken lightly. Here are five things to know before taking the leap.
Take Time to Understand the Structure
While nonprofits are similar to profitable businesses in many respects, the core structure is quite different. When starting a nonprofit corporation, it’s important to understand the nuances of the business structure to ensure that expectations are being met.
There are different types of nonprofit corporations: foundations, charities, social advocacy organizations, and trade and professional organizations. The structure you’ll need to make your nonprofit organization effective depends largely on your overall goals. It’s also important to understand the structure when applying for the federal tax exemption status and to ensure you’re remaining compliant to avoid issues down the road.
Define Your Mission
Crafting a powerful mission statement and building goals around that core ideology are essential for success in the nonprofit world. Define success for the organization and identify how your nonprofit will bring value to the lives of others.
Not only will the mission statement drive the actions of the nonprofit, but it will also help achieve buying from investors and donors. A well-written mission statement, especially in the nonprofit sector, will resonate with readers on an emotional level.
Mission statements shouldn’t be fluffy and verbose; they should be direct and impactful so that those reading it are instantly aware of your purpose and passion.
Know Your Market
While the driving force behind what you do may be different from for-profit organizations, your nonprofit will be competing on many levels. Not only will it be competing with for-profit organizations for a piece of the consumers’ disposable income, but it will also be competing with a plethora of other organizations that are collecting funds for other great causes.
Take time to conduct market research before starting your nonprofit. Is there something similar in the area that you could be working with instead? Are you going to be putting in a lot of effort to recreate something that already has the power of brand awareness and emotional engagement? If so, you need to reconsider your approach.
Get Comfortable with the Word “No”
In the world of nonprofits, you’ll be both hearing and using the word “no” a lot. Expect to be rejected by donors on a regular basis, whether it occurs when applying for a grant or holding a local fundraiser.
On the other side of the equation, it’s important to be able to say no to others. As a nonprofit, you won’t be able to handle all of the things you want to do and you won’t be able to help everyone. Focus on doing a few things well and providing quality in all of your offerings.
Create an Excellent Board of Directors
A board of directors is a requirement when starting a nonprofit. However, it should also be viewed as an opportunity to collaborate with intelligent individuals to drive an organization forward. As such, it’s important to find the right assortment of people.
A board of directors should be diverse and inclusive. Look for people who have varied experiences to bring to the table. There should be a balance of business-oriented people who have connections and expertise to help the business grow, as well as representatives of those the organization is designed to help. All board members should be passionate about the cause.
With careful planning and consideration, a nonprofit can be a successful endeavor that adds value to the community. The challenge is not letting the excitement get in the way of the key considerations listed above.
