To Start Or Not To Start a Nonprofit

Dear Kim:

I’d like to start my own nonprofit to help people. I am very people oriented and willing to work hard. What should I do?

-Eager but Clueless

Dear Eager:

There are two big questions you need to answer before you start a nonprofit:

1. Does the community want it? There are many examples of good ideas that just have too few followers. There has to be a need, which is recognized by a broad cross section of your community. The definition of community varies from geographic, such as a neighborhood, to identity-based, such as youth or gay/lesbian, to affinity-based, such as health professionals, to issue-based, such as pro-choice. In any case a nonprofit has to be bigger than you and your five friends.

2. If the answer to #1 is yes, then consider this question: Is no other organization doing anything like this that you could tag onto? Sometimes people think starting their own nonprofit is the only way to get something done, when in fact it would be more effective to become part of an existing organization. Conduct a survey of existing nonprofits doing anything similar to what you want to do. Are they interested in having you work with them? Have they tried your idea before? What happened?

In fact, not to put too fine a point on it, when I hear someone say, “I’d like to start my own nonprofit,” I feel the hairs go up on the back of my neck. A nonprofit is a publicly subsidized entity—it is not going to pay taxes the way a person or a corporation does, it is going to raise money from the public, and it is to be managed by a board of directors drawn from the public. All nonprofits exist to do something for the common good and no one actually owns them. A person who wants to start his or her “own” organization should consider doing just that as a sole proprietorship, a partnership or a hobby.

I raise these questions not to throw a wet blanket on your idea, but because I see hundreds of tiny nonprofits really struggling, spending most of their time raising money just to stay open. They are not particularly effective in doing their work, yet they take up precious time and the time of volunteers and donors. Sometimes the experience of working for one of these groups is so difficult that people are turned off from giving or volunteering to any organization.

After study and research, if the answer to #1 is yes and #2 is no, then start something. And know that I wish you all and only the best with such an endeavor.

–Kim