Having a passion for your cause is important, but remember that a nonprofit is essentially a business and you need to be realistic in starting one.
Is there a need for your organization? Or could you team up with another, existng nonprofit? Another nonprofit can even serve as your fiscal sponsor instead of or until you can become registered. Are you sure that a nonprofit is the best business structure for your idea?
- What Is a Nonprofit Organization?
- How Does a Nonprofit Differ From a Business?
- What Are the Key Characteristics of a Nonprofit Corporation?
- Ask Yourself These Questions Before You Start a Nonprofit
- Before Starting a Nonprofit, Consider Other Business Structures
- Eight Alternatives to Starting a Nonprofit
- Common Nonprofit Startup Mistakes
A nonprofit is simply another version of a business. You need to have at least as much money coming in as going out in order to even survive, much less succeed in your mission. Many nonprofit start-ups are launched on a wing and a prayer rather than a well-thought-out plan.
You might have a great idea but are you sure it will qualify as a charitable cause? There are many types of nonprofits...which one is yours? It may not be what you think.
Nonprofits are heavily regulated, both by the states in which they reside and by the federal government. Regulation is needed to make sure that donors are protected from fraud, and that nonprofits continue to serve the public good. Just because you are "nonprofit" doesn't mean that you can't get into some serious trouble.
Good record keeping is a must, and nonprofits have some reporting requirements that are special to them. Start with good records and you are less likely to run into problems later. Manage risk with safe procedures and good insurance.
Fundraising is a sophisticated, complex, and competitive endeavor. But it is unavoidable for a nonprofit. Don't make the mistake of thinking that all you need is a bake sale or a fancy dinner to raise the money you'll need to properly fund your organization.
It cannot be overstated how important your board is to your nonprofit's success. It is legally responsible for keeping you on track with your mission, helps you to secure the funds you need to accomplish that mission, and provides much of the expertise that you will need. Find the right people, get them on board, and keep them interested.