Tuesday, October 12, 2010

Recommendation for Starting a Non-Profit: Plan First – Do Good Second

Non-Profit Consultant and Expert Grant Writer, Derek Link, has more good advice for non-profit organizations that want to flourish:

I get about a call a week from people who have formed a non-profit organization recently and want to find grant money to help them get going. Unfortunately, many of these well-intentioned folks are ill-prepared to turn their good ideas into action. As I begin to ask questions about their organization, they have few answers. What they mostly know about what they want to do is based on speculation and assumptions. I find that they have rarely done any meaningful preparation before filing the paperwork to establish their 501(c)(3) status.

I fear that many these good people will fail at their efforts to start a non-profit because they haven’t done due diligence before what is, in reality, starting a business. If these people came to me before they went to the trouble and expense of starting a non-profit, I would recommend that they complete a business plan for the enterprise first. It isn’t that their ideas are bad; it’s just that they never asked the questions that would tell them if the idea is viable.

It is a huge mistake to think that simply because an idea is worthwhile, that it is also going to generate sufficient money to support a viable non-profit entity. Some of the best non-profits I know are in a continual battle for funding - scraping and scratching to make their budgets balance - even with GREAT results over many years.

Creating a business plan for a non-profit will help people craft a viable model or inform them about the lack of viability of the idea. Mind you, I am not saying that people should not start non-profits; I am simply saying that planning any enterprise before launching into implementation is always a wise course of action.

Here are some key questions that a business plan is designed to answer:

1. Are the services needed?

a. Where are they needed?
b. What exactly is needed?
c. Who needs them?
d. How much service is needed?

2. Who else provides these services?

a. Is there room to compete?
b. Who funds the competition?
c. Where are they and who is served?
d. Where are the gaps in their services?

3. What kind of budget will be needed to get it off the ground?

a. Develop a budget detail.
b. Research potential sources of funding
c. Identify potential partners

These and other important questions about starting a non-profit can be resolved through the planning process. Before paperwork and fees are filed for non profit status, a Board of influential and knowledgeable people should be assembled to help guide the process of founding the organization. One person with a great idea can get something remarkable going that does tremendous good in the world, but without comprehensive planning, a great idea may die on the vine. I think that if more people did sufficient planning, they might find that their ambitions to do good would be better served by being on the Board of, or volunteering with, an existing non-profit organization.

A free webinar for non-profit boards - The Law
A free webinar for non-profit boards: Board Member Roles

1 comment:

Non Profit 5013c said...

Starting a non profit organization is very much like starting up a business. It's important to have a plan of action just like a business plan.

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