The 12 Do's and Don'ts Of Starting A NonProfit
Essential tips on starting your own nonprofit.
By Tanya Pinto
Consultant
Shakti Consulting
Consultant
Shakti Consulting
- A pessimist, they say, sees a glass of water as being half empty;
an optimist sees the same glass as half full.
But a giving person sees a glass of water and starts looking for someone who might be thirsty."- – G. Donald Gale
I get asked all the time on how to set up a nonprofit. The desire to do something, be entrepreneurial and take action can be very powerful, especially as the world gets more complex and more and more causes demand our attention. Before you get started on the journey of setting up your own nonprofit, here are some do's and don'ts from my years of experience of running my own global nonprofit, Baal Dan Charities.
Here is a quick list of tips that might be helpful.
Here is a quick list of tips that might be helpful.
The 12 Do's and Don'ts Of Starting A NonProfit
1. Don’t reinvent the wheel.
The best advice that I give to anyone who wants to start their own nonprofit is that before you do that, you must explore and see if you can leverage existing non profits, tools, models, resources and ideas and don’t reinvent the wheel.
If there is an existing nonprofit doing exactly what you want to, or even something similar, then why not see how you can help them first before going through the hard work and expense of creating yet another organization. Do a lot of research on what is out there already first.
If there is an existing nonprofit doing exactly what you want to, or even something similar, then why not see how you can help them first before going through the hard work and expense of creating yet another organization. Do a lot of research on what is out there already first.
2. Ask Yourself…
What is the outcome or ultimate vision you desire?
What is my level of passion to see this vision realized?
Do I have life balance?
Can I make sure I can help myself and meet my needs before I can help others? (e.g. the metaphor of you need to put the oxygen mask on yourself before you can help others)
What is my level of passion to see this vision realized?
Do I have life balance?
Can I make sure I can help myself and meet my needs before I can help others? (e.g. the metaphor of you need to put the oxygen mask on yourself before you can help others)
3. Learn about models that create dependency vs. sustainability
Ask yourself: "If I am creating a new organization, is it one that is creating unhealthy dependencies on aid or is it a sustainable model?" Remember the adage of teaching a man to fish...
4. Do no harm – an essential humanitarian principle
Though well-intentioned, sometimes non profits can do more harm than good. Conduct a deep analysis of the impact of the work you might be doing from all perspectives and make sure you are doing no harm, such as creating unhealthy dependencies.
5. Have an exit strategy
Is this desire to start a nonprofit a life-long passion or a short term commitment?
The time span for your efforts needs to be considered and again using leverage, see if you might be better off adding to the talent and resources of an existing and established nonprofit before starting your own.
The time span for your efforts needs to be considered and again using leverage, see if you might be better off adding to the talent and resources of an existing and established nonprofit before starting your own.
6. Find mentors, encourage learning and development
Study the field you want to make an impact in, learn from the experts and be humble. Chances are there are people who have been doing the same kind of work for years and you can learn a lot from their experience.
7. Pay attention to legal & accounting requirements
Depending on what country you are in, you will have to look at getting a nonprofit organization first registered and then apply for tax-exempt status (e.g. In the US it is called a 501c3 filing). Make sure you research these requirements carefully and that you comply with any accounting regulations as well. Consult a lawyer or CPA to get a better idea for yourself on what is required.
8. Build a team.
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Most non profits have the following structure:
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This article contains some helpful advice, but ALWAYS seek the opinion of legal, accounting and compliance experts before starting a nonprofit and embarking on fundraising.
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9. Fundraising 101
Developing a fundraising model that works for you – try everything and see what works best. Likely you will be using multiple means to fundraise and market your organization. This could one, more or all of the following types of fundraising activities. Remember also that you must make sure you are legally compliant before you start soliciting funds from people.
- Website
- Social Media Marketing
- Events
- Advertising
- Email/Direct Mail
- Meetings with individuals
- Grant applications
10. Learn about the donor pyramid
Most nonprofits have a “donor pyramid” where they might have a few major donors, some recurring and annual donors and then a larger number of occasional smaller donors and event participants. This illustration is to show you how donations usually get categorized and to also show you the profile and volume of each type of donor categorized by size of gift.
Do what works best for you and your ultimate goals but try to remember to have some diversified strategies for fundraising and not to rely too much on a few donors or one particular channel of donors because if they go away your organization could be weakened.
Do what works best for you and your ultimate goals but try to remember to have some diversified strategies for fundraising and not to rely too much on a few donors or one particular channel of donors because if they go away your organization could be weakened.
11. Programs and Implementation
Deciding what to do with the funds you have raised requires careful planning.
You and your Board will need to make decisions as to how and where you spend the funds you have raised so that they will have a maximum impact.
You and your Board will need to make decisions as to how and where you spend the funds you have raised so that they will have a maximum impact.
- General & Administrative: In your budgeting process you will need to allocate funds for staffing, expenses often called “G&A” or “General & Administrative Costs”. This can include office rental, office supplies, staffing etc.
- Fundraising: The next category is “Fundraising & Expenses”. This will include all the costs directly related to fundraising such as venue and equipment rental, food and beverages etc.
- Programs: And then you will need to direct funds for “Programs” – this is the funding that goes to the beneficiaries or to “the field” for the work you are supporting.
- Direct Implementation Costs
- Pass-Through Grants
- A mix of both
12. Have Stringent Financial Monitoring and Planning
Make sure you have processes for: Accounting, Compliance and Record Keeping.
Start where you are. Use what you have. Do what you can."
– Arthur Ashe
If you have started a nonprofit or are running one and need consulting advice on your brand, fundraising, increasing awareness or your programs, email me for a consultation.
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Running a nonprofit can be exciting and challenging. Learn to avoid pitfalls and strengthen your nonprofit through some essential best practices and always consult experts in legal, accounting, compliance and nonprofit development for advice.
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Are you ready to take your nonprofit to the next level in branding, fundraising and program impact?Contact:
www.shakticonsulting.com |
