Are you Considering Starting a Nonprofit?

Americans are known for their pioneer temperament, community spirit, and help-thy-neighbor attitude, so it makes sense that we have nonprofit organizations to address every facet of the society. Americans show social consciousness, concern for the environment, commitment to saving historical sights, and a duty to advocate individual rights and collective benefits. For many, the urgency to do this becomes a vocation to advance a cause. This commitment can lead to a desire to start a nonprofit organization.

Starting a nonprofit requires more than passion or devotion. One needs an understanding of financial and people management, fundraising skills, knowledge of legal requirements, community relations, field expertise, supporters, and more than anything, time, energy and endless patience.

Here are some questions to ask yourself before taking the final step of starting a nonprofit.

Is somebody already doing what I would like to do?

There is no sense in duplicating an effort that already exists. Perhaps there is a possibility of working with an existing organization as a consultant, fundraiser, employee, direct-service volunteer, or board member. A similar organization may exist at the national level, and you could organize a new local chapter.

What is your Theory of Change?

How do you plan to address the issue you seek to impact? BoardSource recommends engaging currently involved constituents in the planning and the leadership of the new program.  In the absence of those with lived experience, how will you know if they’ll be interested in participating or if the idea will be helpful?

Is your idea interesting to an already established organization?

Perhaps your idea could be a new focus for another organization and provide the necessary expertise to create an additional program. If you are not ready to start a permanent enterprise, perhaps another organization could provide office space and administrative help for your cause. Maybe this other organization could act as your group’s ‘fiscal sponsor.’ 

Is this the right time and place for starting a nonprofit?

How will your idea be received by the community? Is there a true need for your services? Have you tested the idea or are you the only one who thinks it is essential? Who are your constituents? Have you involved them in your plans?

Do you have the necessary supporters who would be willing to work with you?

It is impossible to start and manage an organization alone. Above all, a board must be recruited and staff, paid or volunteer, may be necessary from the beginning.

How would you finance your organization?

Do you have the necessary seed money or know where you can get the initial funding? Have you developed relationships with the leaders in your community? How much fundraising will you have to do? Should the services of your organization be free, and if so, how will you pay for it? Will it generate earned income? Should you form a membership organization and charge a fee?

Do you understand the steps of forming a nonprofit organization?

There are a multitude of procedures to complete before a nonprofit organization is ready to function: forming a board, drafting bylaws, developing a strategic plan, incorporating at the state level, applying for a tax-exempt status, developing a strategic plan, securing funding, setting up an accounting system, locating an office, applying for licenses, recruiting staff, and much more.

Are your financial ambitions appropriate for the cause?

Running a nonprofit likely won’t generate income for you in the first few years. Over time, as revenue becomes stable, staff members can be compensated. Board members, on the other hand, serve as volunteers and private inurement is not acceptable: Personal benefit is not allowed. Will you be content and in a position to serve and work for your cause, get satisfaction from the results of your labor, and always put your organization first before thinking of your personal gain?


101 Resource | Last Updated August 8, 2023

Resources: How to Form a Nonprofit Corporation
National Council of Nonprofits, which can provide name and address of local state associations for nonprofits.