Are you thinking of starting a nonprofit?
I started a nonprofit before I finished college, before I had all the knowledge I probably needed, and with very little experience. I’ve shared a bit about my personal experiences (and setbacks!) on my nonprofit journey — but, over time, through challenges and small victories, I’ve helped substantially grow the organization’s supporter base, budget, and most importantly, its impact!
I hear from so many other wonderful people who also dream of making a difference by starting a nonprofit, but who are not sure how to begin.
Maybe that’s you!
Here are 3 of the most important things I advise they do before getting started.
1: Seek to deeply understand the need
The first thing you need to do before you start a nonprofit is to really deeply understand the need that you’re trying to address. Many who reach out to me for advice and feedback start by sharing their idea for a nonprofit project or program or event that they have, but this is the wrong approach. You don’t want to start by coming up with an idea, you want to start by studying the need.
If you aren’t familiar with the root causes of the social or community problem that you’re trying to solve through a nonprofit organization, then you won’t know if the idea that you’ve had is going to adequately address that need. You may find yourself spinning your wheels doing something that’s not actually going to make the impact that you hope it will.
In these beginning stages, you want to focus on study and learning. Read all you can about the social or community problem you want to address. Meet with experts on the issue. Meet and involve people with lived experiences with the issue. Do all the research that you can possibly do to truly gain an understanding of the problem that you’re trying to solve in the community — Whether it is homelessness or hunger or improving education — whatever issue is compelling you to want to start a nonprofit in the first place.
You need to become an expert on the issue your nonprofit will address. You can start by looking at a couple of key questions:
Key Questions to ask when starting a Nonprofit
Who is affected by the problem?
Is it children of a specific age? Is it animals? A certain type of animal? Is it the environment? Is it a certain neighborhood in the city? Learn all you can about the target demographic that is most affected by the problem in your community or in the world that you are trying to address.
What are the underlying or root causes of the problem?
Aim to understand the underlying root causes behind that problem that your nonprofit will address. For example, why is there food insecurity in the community, and what other factors are influencing how much food insecurity there is in the community? Is it a lack of access to food? Is it the distance to drive to a grocery store? Is it the cost of the food? What are the other factors that allow that problem to persist in your community?
Are other social or community issues connected to the problem?
Social issues are interconnected, like a big spider web. Using food insecurity as our example, consider how another, seemingly separate issue — academic performance in school — may be connected. Kids who are hungry in school are going to be less likely to be able to focus on studying, among other well-researched connections. What are the issues connected to the need your nonprofit will aim to address?
For folks coming to the nonprofit world from the for-profit business world, I liken this phase to market research — taking time to understand your customer and their needs. The most successful products and services solve a customer’s genuine problems, and were developed after understanding a customer’s life, challenges, and needs. Only when you understand the community or social problem you hope to tackle through a nonprofit will you truly be able to develop a mission and approach that might effectively move the needle on that problem.
2: Study the landscape
The second thing that you want to do before starting a nonprofit is to study the landscape: What other organizations exist in your area who are tackling the same issue?
There are 1.5 Million nonprofits in the USA, with thousands of new organizations formed each year. The good news is that we can hope this is a sign of peoples’ passion to make an impact on the world around them. The scope and multitude of these organizations provides communities with diverse options for services, support, and involvement in civic life.
The bad news is that some nonprofit funders view nonprofits with similar or overlapping missions serving the same area as competitors. This means limited dollars and resources for nonprofits tackling the same issues or taking the same approach to those issues.
I’m personally of the mindset that nonprofits working together can do a lot of good, and that funders should aim to support the wide-ranging ecosystem of causes in their vicinities. Regardless, if you’re considering starting a new organization rather than aiming to support or join an existing nonprofit tackling the issue you are concerned about, it is important to know who else is out there doing what.
Here’s how to do that:
- Search the internet for nonprofit organizations in your service area (city, county, state, region, etc.) tackling the same community issues.
- If possible, meet the leaders of those organizations to learn more about their mission, programs, and overall approach.
- Aim to understand where the gaps in services are. What is not yet being done? Who is not yet being served? Could a new nonprofit tackle a niche area so far being neglected?
- Consider opportunities for collaboration and partnership. Are there ways a new nonprofit could complement and support — and receive support — from others in the same area?
3: Create a business strategy with a financial sustainability plan
At this point, you’ve studied and gathered a great deal of information about the issue your nonprofit could tackle and talked to experts and people with lived experiences. You’ve assessed the landscape to understand the other nonprofit players in your service area, considered how you might meet unmet needs, collaborate, and / or be a great community partner. Now, it’s time to create a solid business plan.
Your nonprofit business plan should include a write up of the market research you completed, your mission and vision statements developed based on that research, an overview of what your activities will be to tackle the social or community issue, and an explanation of how you’ll collect data and feedback to measure your progress. But to succeed as a nonprofit start-up, there’s one critical thing you absolutely can’t leave out: Your financial sustainability strategy. In essence, the answer to these questions:
How will you raise enough funds to conduct your program activities and tackle the community issue you’re focusing on? How will you consistently bring in funds to sustain those efforts, even in tough economies?
Nonprofits — like businesses — need revenue to sustain their services and programs. And there is no universally-successful fundraising method guaranteed to bring in funds for organizations across the spectrum of models and causes.
Despite common misconception, grants are typically an unsustainable and highly competitive source of funds. To ensure success, each nonprofit should develop a fundraising strategy that meets its unique needs, and may include a variety of methods to bring in support, from individual donations, to sponsorships, to earned income or program revenue, and more.
The ultimate goal is to become a financially sustainable organization. That means you have regular, reliable income coming in that you can count on — which means you can plan ahead, choose where to make smart investments to grow your programs or capacity, and have enough support available to weather recessions.
Starting a nonprofit can be intimidating, to be sure. But with some solid research, community building, and planning, I genuinely believe you can get off the ground with confidence!
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