Focus groups with people who are likely to benefit from the organization
For more details on assessing your community’s needs, see Chapter 7.
Finding people to help you
Your chances of success increase if you begin with support from others, and the more help you have, the better. Sure, you can probably find an example of a single-minded visionary who battles alone through all sorts of adversity to establish a thriving nonprofit, but starting and running a nonprofit organization is essentially a group activity.
When starting a nonprofit, you need to find people who will serve on the board of directors and support your efforts with donations of money and volunteer time. The first people you usually identify as supporters are family and friends. How can they turn you down? In the long run, however, you need to expand your supporters to others who believe in the organization’s mission (and not because you personally created it).
To find people to help you and support your organization, take every opportunity to speak about your idea before civic groups, religious groups, and service clubs. You can pass out fliers or set up a booth at a volunteer fair. Set up a Facebook page and invite your contacts to spread the word. Talk to your friends and coworkers. Put on your salesperson’s cap and convince the community that it needs your program.
Figuring out how you’ll pay the bills
Funding your nonprofit organization is a big issue. Even if you begin as a volunteer-run organization and work from a home office, you still need funds for letterhead, a website, supplies, equipment, postage, and insurance. You also have to pay filing fees for your incorporation and tax-exemption applications. Many nonprofit startups are funded by the founder in the beginning. Are you able to pay all the startup expenses before revenues start flowing to your new nonprofit?
Putting together a budget can help you decide whether the startup expenses are manageable for you. You’ll be creating lots of budgets sooner or later, so you may as well get an early start. Flip to Chapter 11 for details on budgeting and other financial issues.
If you can’t fund the operation by yourself in the early months, you need to make a compelling case that your new organization will provide an important service to the community and then convince donors that you have the knowledge and experience to provide it. You can solicit contributions from individuals before the IRS grants the organization tax-exempt status, as long as you reveal that your exemption is pending (and will be deductible to the donor if the exemption is granted), and you have met state charitable solicitation registration requirements. These contributions become deductible to the donor if you file for your exemption within 27 months of the date you incorporated and receive tax-exempt status. If your exemption is denied, the contributions won’t be deductible and you may be liable for income tax on the money you’ve received. Startup grants from foundations or corporations are rare and next to impossible to obtain before the IRS recognizes your organization’s tax-exempt status, so don’t plan to receive any grants from outside organizations.
You also can try out your program on a small scale before filing for tax-exempt status by partnering with an existing nonprofit organization to test the success and need of your idea. For example, if you want to start a summer arts program for low-income children, talk to a local church or community center that serves that population and ask if you can teach an art class one day a week for a month. This enables you to try out your idea, demonstrate the need, and set up benchmarks for success.
Taking a long, hard look in the mirror
Ask yourself whether you’re the right person to start a nonprofit organization, and try to answer honestly. If your organization offers a service, especially in the health and social-service fields, do you have the educational background, qualifications, or license necessary to provide those services? In addition to being professionally qualified, you need to consider whether you feel confident about your management, fundraising, and communication skills.
When starting and working in a new nonprofit organization, you need to be able to stretch yourself across many different skill areas. You may be dressed to the nines one day to pitch your project to the mayor or to a corporate executive, and the next day, you may be sweeping the floor of your office or unplugging a clogged toilet. In other words, you need to be versatile and willing to take on just about any task that needs to be done.
Planning – and then planning some more
If there were ever a time to plan, this is it. Planning is what turns your initial idea into a doable project. Planning is also a good way to find potential holes in your thinking. For example, you may believe that your community doesn’t have adequate animal rescue services. You may be right, but when you begin to break down the idea of starting an animal shelter, you may find that the project costs more money or requires more staff or facilities than you first thought it would. When armed with that knowledge, you can adjust your plan as necessary or scrap the idea altogether.
To begin planning, write a one- or two-page synopsis of your nonprofit idea. In your synopsis, include why your organization should exist, what you’re trying to do, and how you plan to do it. It’s a good idea to outline both short-term and long-term goals and the resources needed to meet those goals. The list of resources should include money, volunteers, and an appropriate space to carry out your activities. After you’ve prepared your synopsis and list of resources, talk to as many people as you can about your idea, asking for help and honest feedback about your project. The purpose of this planning process is to think through your nonprofit idea step by step. (If you need help in the planning process, take a look at Chapter 7.)
Understanding Nonprofit Ownership
We once received a telephone call from a man who was shopping for a nonprofit. “Do you know if there are any nonprofits for sale in New Hampshire?” he asked. Although this question doesn’t come to us often, it illustrates a misconception about the status of nonprofit organizations. No one person or group of people can own a nonprofit organization. You don’t see nonprofit shares traded on stock exchanges, and any “equity” in a nonprofit organization belongs to the organization
