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Thinking About Starting a Nonprofit? Here’s Why You Should Think Twice!
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Here’s my dirty little secret. When people tell me they are thinking of starting a nonprofit, I usually try to talk them out of it. As a nonprofit consultant, I’ve seen it all: the excitement, the dreams, and unfortunately, the harsh realities. So, why would I, someone whose livelihood depends on the success of nonprofits, advise against starting one? Because starting and running a nonprofit isn’t just hard work; it’s an all-consuming commitment, and it’s not always the right choice.

People start nonprofits for various reasons. Some are passionate about a particular cause and want to make a difference. Others believe they can make money while enjoying tax benefits. Some think they’ve hit upon a truly unique idea that no one else has considered. And then there are those who are grieving a loss and see a nonprofit as a way to honor a loved one. While these reasons are understandable, they are often not enough to sustain a successful nonprofit.

A successful nonprofit needs to:

  1. Address a critical, compelling social issue
  2. Have a genuinely unique solution to that problem and/or address an under serviced piece of the problem
  3. Understand that running a nonprofit is akin to running a business (with the added complexity of IRS regulations)
  4. Accept that the board of directors, not you, will ultimately control the organization. 

Mission and Passion: Is It Enough?

Being passionate about a cause is essential, but passion alone won’t sustain your nonprofit. You must have a clear mission and the resolve to stick with it, even when things get tough. Running a nonprofit is a long-term commitment that demands unwavering dedication. 

Consider what happens when a nonprofit is serving a community and helping people, then it goes away. It’s unfair. Both to the people who no longer are being helped, and to the community that has depended on the agency to solve a problem. 

So ask yourself: can you sustain this level of passion over the years it will take to fully establish the organization?

Need and Impact: Is There a Genuine Demand?

Before starting a nonprofit, it’s crucial to determine whether there’s a real need for your organization. Conduct thorough research to ensure another organization isn’t already effectively addressing your cause. The last thing the nonprofit sector needs is duplicated services and direct competition for resources. 

Many of the issues facing our communities are very big, complex problems. Generally, one agency cannot address all the aspects of the issue. Which pieces of the problem need addressing? What are the unique ways you can help solve them? As a new agency, what gaps can you realistically fill and do better than anyone else out there? 

Skills and Resources: Are You Prepared?

Running a nonprofit requires leadership, fundraising, management, and strategic planning; all in addition to doing the thing that the organization does. Do you have these skills, or can you assemble a team that does? Furthermore, consider the financial resources needed. Securing funding is one of the most challenging aspects of running a nonprofit, and you’ll need a solid plan for sustainable income.

Creating a business plan is just as important for a nonprofit as it is for any other small business. Being clear and honest about the skills you bring to the table, and the ones you need to find support for, can help make your plan realistic. 

Legal and Administrative Hurdles: Can You Navigate Them?

Many people launch into creating a nonprofit without the understanding that it is a business and as a nonprofit business, there are legal requirements that need to be followed. These include creating by-laws, establishing articles of incorporation, obtaining tax-exempt status, maintaining financial transparency, and filing of specialized IRS forms. You’ll also need to establish a Board of Directors who share your vision and are committed to leading the organization. 

Alternatives: Is There a Better Way?

Sometimes, the best way to achieve your goals isn’t by starting a new nonprofit. Partnering with or working for an existing organization can be more effective. When visions align, bringing a new program or service to an existing agency may just be the piece they are missing! By combining efforts with existing agencies it’s possible to amplify the impact and better work towards solving the problem. 

Another option is to form a social enterprise, which might offer more flexibility and sustainability. This for-profit business model is less complicated and they give back to the community in unique ways. Bombas is a great example of a for-profit company that is commited to making the world a better place through their business structure. 

Conclusion: Think Twice, Then Think Again

All of this is not to say that no one should start a nonprofit. There are really great reasons to go down this path. It’s intended to ensure that the decision is made thoughtfully and intentionally.

Starting a nonprofit can be an exciting and noble endeavor, but it’s not for everyone. Before diving in, make sure you’ve thoroughly considered whether this path aligns with your goals, abilities, and long-term vision. The answer to “Should I start a nonprofit?” might be “No,” but that’s okay. There are many other ways to make a meaningful impact.

Kim is a mom, lover of being active and the outdoors, and helper of nonprofit leaders.
kim@athena-coco.com 

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