On Starting A Nonprofit

By Mickey Desai

My intent here is not to offend.  My intent is to preserve. But be forewarned (and please forgive me), I’m going to be plain-spoken and forthright.  If you want coddling, you’ll have to find it someplace else.

Since I’ve become somewhat entrenched in the nonprofit sector, it seems I am frequently asked for advice on starting a nonprofit.  Ninety-nine times out of a hundred, my first response is: “Don’t.”

I do not mean to sound flippant.  It takes remarkable people with truly noble hearts to make the world a better place.  I want to honor that.  Believe me when I tell you I want you to find fulfillment.  I hope to help you find real traction for your passions.  In fact, my own company, The Nonprofit Snapshot, would benefit from having more nonprofits with whom to work.  So in addition to possibly raining on your parade, I am potentially hurting my own business when I say “don’t.”  But no mistake, I do mean to say: “Do not start a nonprofit.”

Very rarely does an individual have a solid understanding of what it means to start and run a nonprofit.  I’ve met people who think that nonprofit boards get paid.  (They don’t.) I’ve met people who don’t know that board members can get personally sued for the actions of their organization.  (They can.)  I’ve met people who wanted to start a nonprofit that would ensure their own family members had jobs.  (What?)  I’ve met people who were nicely grounded in their knowledge and research.  (Hooray!)

No matter who you are, I think EVERYONE should do a few specific things before starting a nonprofit.  These steps will help you take the time to properly think and feel the whole thing out, before creating a headache for yourself and potentially hurting the very people you want to serve.  Try these things to figure out if your nonprofit ideas are in that one-percent of workable, sustainable notions:

Forget the name and the logo.  Before you even go there, articulate your business plan to the nth degree.  In addition to all the usual stuff in a business plan, yours should include a “competitor analysis.”  Who does stuff similar to you?  How are they different?  How much do they spend every year, and where does that money come from?  Be sure your target population isn’t already being served (even in some small way).  You should be able to verifiably illustrate your niche or your methodology is unique.  If someone is doing something even vaguely similar, please consider joining them as a collaborator instead of a competitor.  For example, if you want to serve disadvantaged teen moms with art therapy, and someone else in town is serving the same population by helping them get their GEDs…

As you articulate your business plan to the nth degree, try to include a fundraising feasibility study.  It doesn’t have to be a comprehensive study, but it helps to have some data on how the world will look upon your idea.  Will they give you a smile?  Or will they give you a check?  What does sustainable funding look like?  The IRS will want to know you can publicly fund your endeavor.  Can your funding stream be sufficiently diversified?  You do know that the pool of available funds for all nonprofits continues to get smaller, right?

Here’s my most important suggestion: While you’re documenting this business plan, serve at least two years (or a full term) on an established nonprofit board of directors—especially one that does something similar to your idea.  Solid research for your business plan will take time.  Being part of a board might facilitate that.  Why two years?  Take one year to get accustomed to the culture of the organization and learn everything there is to learn: the financials, reporting requirements, current strategies, relationships between board and staff, relationships between the organization and its stakeholders…  During your second year, ramp-up your passion and activity with that organization.  Become an officer.  Be a stellar one.  (BTW, I do highly recommend board-training series like the United Way VIP program.)

I suggest doing the board-thing for self-discovery and general nonprofit education.  What do you learn about yourself and your ideas during this time?  What makes for good leadership?  Were others receptive to your ideas?  Did you learn that you’re a good fundraiser?  A networker?  An organizer?  Do you understand what a board member does vs. what an executive director does?  Maybe you had some fun planning a silent auction but don’t really want to form an entire organization?  (There’s nothing wrong with that, but it helps to know it in advance.)

As your business plan comes together, include some information on who will be your startup board.  Board members accept fiduciary responsibility for the organization.  Your startup board is critical to your organization’s success.  How much money will they contribute to the cause?  What else do they bring to the table?  Are they your friends?  Are they randomly selected from “Who’s Who…?”  How are they attached to your cause?  Are you on the board or are you the Executive Director?  I’m sure by now you’re aware there is a dearth of funding for existing nonprofits.  Did you also know that current research on nonprofits indicates there is also a dearth of competent nonprofit leadership serving on boards across the sector?

So unless you have a unique niche idea with some real power and planning behind it, please consider collaborating with an established entity, perhaps as a board member, or perhaps as a program volunteer.  You might even find a way to bring your ideas to fruition with their help.  What board wouldn’t welcome you with open arms if you go to them saying, “Here’s why I’m passionate about this cause.  What can I do to help?  And by the way, have you thought about doing this new thing?”

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