Perhaps you see a need in your community and you want to do something about it. What’s the best way of addressing the issue? Many people will start a nonprofit organization to serve through. This takes a significant investment of time and resources and before getting too deep, you should do some research and figure out if starting a nonprofit is the best route.
The first step is clarifying what your mission would be as an organization, and how you would approach your work. What is your goal or purpose for existing, which groups or constituents will you serve, and how will you serve them? Once you have a vision, figure out if there’s demand for this service in your area, and if any other organizations are already doing it. If there is a large need, and a sizeable population of people to be served, it’s easier to demonstrate to funders the impact you will have when you’re applying for grants and soliciting contributions. When there are other organizations doing similar work, you’d be competing for the same money; your work and theirs will be hindered if you’re not able to pull in enough funding to support the number of organizations in your area.
Consider if there are other ways of pursuing your goal without starting a new organization. Can you work with an existing organization that’s already doing the work you’re considering? You may be able to contribute financially, or serve as a volunteer or staff member. If they have an existing infrastructure and stable funding, that will reduce the amount of overhead work you need to do and you can jump right into doing the work, without needing to set up a new organization. Another option is being fiscally-sponsored. A fiscal sponsor is a kind of parent organization that takes on groups doing similar work, covers them under the sponsor’s 501(c)(3) status, and provides administrative infrastructure, allowing you to focus more on your mission-oriented work. You can read more about fiscal sponsorship here and here, and find potential sponsors through the National Network of Fiscal Sponsors.
If you’re leaning towards starting a new organization, write up a business plan and figure out how you would secure funding and other resources to cover the start-up phase, and ongoing work. The business plan will expand on your mission statement with more detail of how you will achieve it. Outline the work you’ll be doing, what services you’ll offer, and the activities and procedures that will entail. Figure out what resources you need –staff or volunteers, office space and equipment, etc. Write out a detailed financial plan budgeting out multiple years’ revenue and expenses, cash flows, and funding needs.
A business plan will give you structure for how you’ll do your work once you start, and will also give you perspective on whether the organization will be sustainable. Will you be able to find staff and volunteers who can do the work well? Will you need outside help from advisors or consultants to guide you through the work of starting the organization, or how to structure the ongoing work? Can you attract enough funding to cover start-up costs and day-to-day operations? You may decide to press play and go ahead with your organization, or you may look at other options such as partnering with someone else, structuring the work differently, or scaling back your operations to make it more manageable.
Once you’ve decided to start a new nonprofit, there are several steps to go through – incorporating and getting tax-exempt status, developing a board of directors, ongoing state and federal compliance, and actually getting your programs up and running. I’ll cover these in an upcoming series of posts on how to get started as a nonprofit.