The decision to create your own nonprofit organization is a big step. Even when you’ve built businesses in the past, a nonprofit is different. Although thousands of people create nonprofits every year to serve their communities and support important causes, not every organization succeeds. Great ideas alone won’t generate success – you need to create a sustainable organization that can continue fulfilling your mission for the long haul. According to research, 30% of nonprofits fail by the ten-year mark.
Before filing your paperwork, it’s crucial to understand the nuances and complexities about what makes running a nonprofit different from any other entity. Here’s what you need to consider before you take the leap.
Have a unique mission with a clear purpose
Getting inspired by a cause is easy, but if you run out and create a nonprofit for that cause without having a clear purpose or unique mission, you’re likely to fail. The most successful organizations provide value to the communities they serve in a way that nobody else does. For example, the National Police Association (NPA) has a clear mission to support several groups at once – communities, police officers, and anyone who may benefit from their legal work. While they work hard to reduce the anti-police sentiment in society, they also make the effort to enter as a friend of the court in cases where they believe their input can make a difference.
Running a nonprofit isn’t just about having an organization that sells something and donates a portion of the profits to another charity. To be truly successful, you need a mission that puts your team into action. That’s what people want to see, and that’s the kind of organization that gets the most support.
Be ready for constant change
Even though you can offer normal salaries to people who work for your organization, the people who work for you will come and go. So will your board members and volunteers. This is just one of the many things most people don’t tell you about starting a nonprofit.
Change is inevitable, because nonprofits don’t work like regular businesses. On the surface they seem identical aside from the fact that a nonprofit doesn’t pocket the money outside of covering expenses. However, growing a nonprofit and sustaining it long-term requires a different approach. For instance, you’ll be constantly running campaigns to raise funds and generate donations, and that takes a bit of skill. At times, your funding sources will dry up, partnerships will be severed, and you’ll need to find new solutions.
Know your target community
Knowing who you’re going to serve is important, and it takes time to research and define the details of your target audience. Granted, you should always find a group of people in need first, and then build an organization that offers solutions. Creating an organization and then trying to find people who need your support is a recipe for failure
Create a genuine business plan
All organizations need a business plan to stay on target, so don’t skip this important step. Your nonprofit will still be technically considered a business, and you will need a plan to guide your operations and keep your team on track.
Your business plan is a roadmap to achieving your goals, but it’s also going to play a role in how easily you’re able to get funding. Just like for-profit organizations, investors want to know you have a solid plan for how you’ll be using their funds, should they choose to invest.
Get legal
It’s always best to consult with an attorney before creating a nonprofit because you can’t afford to make legal mistakes. In general, forming a nonprofit requires you to create certain documents and meet specific qualifications. You also need to file specific paperwork every year and you don’t want to do this the wrong way. Anyone can file paperwork to form an entity, but if you don’t follow the rules along the way, you could get into legal trouble.
Commitment is the key to success
As with any new project, commitment to your goals is required to have the motivation to push through all of the obstacles, setbacks, and challenges you’ll inevitably meet along the way.
Forming a nonprofit organization is a great way to make a difference for a cause you care about, and it doesn’t need to be difficult. As long as you approach it with a solid understanding of what’s required to succeed, you’ll be able to resolve problems and overcome challenges as you work toward achieving your goals.
