Before Starting a Nonprofit

So, you’ve identified a need in the community and are looking for a way to serve? Great news! Our community needs visionaries like you now more than ever. We applaud your vision and want to do what we can to help with your efforts. Starting a nonprofit can be a challenge, so before you fill out that paperwork, be sure you conduct an assessment of community needs and resources for the populations you want to help. You should start by knowing how your idea and future work fits with others, because no nonprofit works best in isolation. Here are a few simple steps anyone looking to start a nonprofit can begin with:

Step 1: Conduct a market survey

Vital to any entrepreneurial effort (social or otherwise), a good market survey allows you to determine potential start up and engagement risks. Sample considerations include:

  • Will you be providing a service that is unique to the community (or a segment of it)?
  • If not, who else does what you plan to do? How many organizations are doing it? Where are they doing it? And is there room for collaboration/partnership?
  • If your service is not unique but you still plan to proceed, what is different about the way you will be providing services that will allow you to attract new clients?
  • What skill sets/program elements are you planning to incorporate that other current service providers do not have?

Step 2: Conduct a funding analysis

The fund development process has become increasingly competitive, strategic and focused and those looking for institutional support need to understand what donors are interested in and how nonprofits can best partner with funders to help them reach their goals. Solid nonprofits understand that being financially healthy means being diverse. So, a strong nonprofit will have a mix of planned, corporate and individual gifts, private and government grants, earned income and special event income in its coffers to ensure its livelihood. Questions to ask:

  • What’s my fundraising strategy?
  • How am I going to cover the cost of salary and expenses during start-up?
  • Can I reasonably expect to receive a grant award for start up costs?

Step 3: Identify a diverse and influential group to serve as your board of directors

A nonprofit’s success begins and ends with a board’s ability to understand its roles and responsibilities and carry them out well. It is important to remember that among other things, each and every member of your board will need to serve as your primary fundraising and public relations agent.

Finally, it is important for you to understand that while your goal is not to earn a profit, you still need to have a certain amount of business acumen to effectively manage the organization’s activities. Here are a few things to consider:

  • What are my staffing and volunteer needs? What policies do I need to put in place to manage what this nonprofit does?
  • How will we manage our finances? What financial structures and practices should be established and when? Who will handle tax filings and salary and benefit payments?
  • What are my capital, office and administrative needs and how will those resources be acquired?

For more information on board governance, fund development, financial management, staffing, program evaluation, advocacy, marketing, and technology visit the Effective Nonprofit Management section of our website!