Six Questions to Consider if You Want to Start A Nonprofit (Part I)

More than any other question, as a professional development and fundraising consultant, I probably get this one the most. The conversation usually goes like this…

Them: “What do you do for work?”

Me: “I’m a fundraiser. I help nonprofits strengthen their development functions and raise money for their projects and missions.”

Them:  “You’re exactly who I need to talk to! I want to start a nonprofit.”

Me: “Oh? …”

The conversation will delve into some explanation of the mission and nonprofit that exists in their minds intertwined with questions about how they can make it a reality.  It’s noble. People see a need they’re passionate about, and they want to try to solve it.

If you’re reading this, maybe you’ve considered this too.

Nonprofits come in all shapes and sizes. You may be considering a family foundation to fund an initiative in the community. Maybe you already have a business and considering attaching a nonprofit onto the business to create a hybrid nonprofit /for-profit social impact structure. The possibilities are numerous. Depending on the size, location, and scope of the nonprofit, its needs will be different.

Here are six questions to consider if you’re thinking about starting a nonprofit organization:

1. Is there already an organization with the mission you have in mind?

There are more than 1.5 million nonprofit organizations in the US. That’s enough for every state to hold 30,000 organizations. Not all of these are functioning and viable, but there may be an organization like the one you’re envisioning in your local community that you can support. I recommend starting there to volunteer, learn the sector, and support the existing teams and mission. Volunteering allows you to learn how the nonprofit functions – especially if you haven’t previously worked in one. It also sheds light on the challenges the sector faces in funding, policy, and oversight. If you don’t have time to volunteer at a nonprofit, you may want to reconsider whether you have time to start your own. This will require even more discipline and dedication in time and resources.

2. How will you secure funding for the nonprofit?

There’s a myth out there that once you have an idea, foundations and corporations will be immediately clamoring to fund it! Many existing and new nonprofits wish that were the case, but the truth is, many foundations and corporate donors want to see a history of sound fiscal practices, a dedicated board of invested leaders, and data that supports tangible impact and outcomes. Most nonprofits need some money to function. First, consider what startup costs might be and how it will be paid for. Initial costs include filing and incorporation fees, establishing bank accounts, creating and hosting a website, marketing and ads, legal and tax advice. Depending on the size and mission of the organization, there might also be space rental, insurance, and administrative (salary) costs.

Will you bootstrap (pay for this yourself)? Do you have a ready group of funders who will help you get your nonprofit started? Have you mapped out a plan for sustained funding and budget management?

Speaking of funding…

3. Are you prepared to ask for money?

I prepare people to ask for money as a profession. I love it. I enjoy undertaking research to try and ascertain where a prospect’s affinity might align with an organization’s mission. I enjoy preparing people who will ask by rehearsing and considering push back and follow-up questions. Raising money is my wheelhouse. However, I would venture to say – most people would rather not ask other people for money. It’s my job to make them relatively comfortable doing so. At some point, the overwhelming majority of nonprofits will need to raise money – very likely on a consistent basis. Ask yourself if you are comfortable asking people to help support your organization’s mission and if not, how will you get comfortable with it?                                

Continue with Part II here…