Checklist for Starting a Nonprofit Business
Starting a nonprofit organization is a life-changing decision. You can make a real difference in people’s lives. And, like any other venture, how you start greatly influences your success or failure.
You must take strategic steps to plan and implement processes. It requires time, preparation, and proper research. And yes, you will need tons of determination and patience.
In our article, we share a must-follow checklist on starting a nonprofit business. Let’s walk this journey together.
1. Start With Research
Research is a crucial part of starting a nonprofit business. The first thing you need to answer is whether there is a need for what you plan to get into.
Look at the landscape and determine how many other nonprofits are already providing the service. You must do so because you do not want to have to compete for funding.
Since you are starting, it would be hard to get an edge over existing nonprofits. Think about it much like you would a business venture. You want to go into a niche area that does not have too much competition.
Are we saying you should give up on an idea because other people are doing it? The answer is no. But, do note you will find it more challenging to find a breakthrough. So, get ready to work to establish a presence.
The research should also give you insights into how other nonprofit organizations work. You can learn a lot from those who have been in the game for some time.
Also, check for tools or resources available to you. Platforms like Google for Nonprofits have a lot to offer such organizations. It is free, but do take the time to check out their eligibility criteria.
All you need to do is sign up and you’ll have access to Google apps for nonprofits. Some of the tools include:
- G Suite for nonprofits for higher productivity, collaboration, and efficiency
- Google ad grants that give nonprofits up to $10,000 worth of advertising value
- YouTube for nonprofits to showcase your work through the use of video content. You also have the option of embedding a donate button on the site. It makes it easy to collect and manage funds right on the platform
- Google Earth and map that allows for mapping of your activities.
There are tons of other excellent tools you can use. Some plugins specific to Nonprofits can help increase the functionality of your website. You get features like donation forms, multiple payment gateways, leads generation, and Search Engine Optimization.
Google Analytics will give you insights that you can use to improve your site. It shows you where your audiences are coming from, and what they interact with the most.
You can improve the content so that you increase engagement and interaction. The result is organic audiences who will support your causes.
To find the perfect name for your business, check out this handy business name generator tool.
2. Decide on Your Goals and Mission
Have clarity on the purpose of your nonprofit organization. It must come from a place of trying to find a solution to a need that you have identified.
The next important step is to work on your mission statement. It should:-
- Communicate to stakeholders what your nonprofit is all about
- Guide your development and growth path
- Communicate the purpose of the nonprofit organization to all the stakeholders.
One good tip is to have a short, easy-to-remember mission statement. It should communicate effectively, without the use of too many words.
3. Speak to Some Experts
It is always a good idea to speak to a few experts when setting up any type of organization. Cover your legal bases by speaking with an attorney. Get financial management tips by engaging the services of an accountant or financial advisors. They will advise on things like:-
- Tax exemptions as applicable under state or federal law
- Benefits applicable to nonprofits from the government
- Separation of personal and nonprofit assets. If the organization fails, you do not lose any of your hard-earned personal property. You also receive protection against debts or liabilities facing the organization
- Succession issues if the founding members leave or pass away
- Eligibility criteria for grants, and so much more
It is critical to adhere to compliance issues. There have been many scandals surrounding some practices. Do you, for example, know that lack of disclosure of funding can land you in hot soup?
One scenario comes to mind. The Clinton Foundation received over $500,000 in donations from the Algerian government. The King of Morocco also donated over $12 million to the foundation.
Receiving the money was, in itself, not a crime. But, they did not disclose the information to the State Department. It opened up the foundation and Clinton to massive FBI probes and talks of an indictment.
As of 2020, the Justice department was winding down the investigation due to a lack of evidence that the donors received any special favors. But the damage to the foundation’s reputation was clear.
Imagine finding out you are under investigation for something you don’t even know you are doing wrong. Let the experts guide you on critical information or processes you need to be aware of.
4. Create a Team and By-Laws
The best way to achieve success with a nonprofit is to have a strong team behind you. There are many facets to running the business that you would not manage on your own. Finding support consisting of people who share your vision is important.
Your team should, at a minimum, have a board of directors. It should also have an executive director and volunteers. With time and growth, you should add more people to your team, including paid staff members.
Think about bylaws that light the modus operandi of the business. It covers areas like:
- Roles and responsibilities for everyone
- Accountability and other management procedures
- Protocols on how you solicit donations
- Committee structures and membership programs
- Conflict resolution, reporting protocols, and so much more
5. Develop a Business Plan
At this point, you have some fantastic insights from your research and talking to the experts. It is now time to come up with your nonprofit business plan. Think about it like a road map or blueprint of the organization. Salient points to include are:-
An executive summary of everything the organization stands for.
- Your vision, mission, and core values
- Insights gathered from the market research
- Products, services, or programs you will offer
- Different stakeholders including target audiences, volunteers, donors, and potential partners
- Plan of activities including marketing, operational and financial planning
- Timelines for achieving all the above.
Writing a business plan for a nonprofit organization is not a simple process. That is why it is important to take the time to do it well.
Indeed, a nonprofit is not in the business to make money for personal gain or growth. But, successful ones collect and disburse huge amounts of money.
They also deal with different stakeholders who come together to achieve the goals of the nonprofit. So, in many aspects, it will, very much, run like any typical organization.
6. Register Your Nonprofit
You will need to register your nonprofit before you start operations. Check the requirements that are applicable in your country or state. In Australia, for example, you can register your nonprofit as a public or Incorporated Association.
Both operate as separate legal entities from the members. But there are specific requirements you must fulfill. Public companies are more stringent in the requirements.
The organization must, for example, have at least one secretary and three directors. The nonprofit must have a registered office address located in Australia. You must have a constitution, financial records, and so much more.
7. Lay Down the Strategy for Securing Funding and Local Support
Securing funding is the only way your nonprofit organization can sustain its activity. Yet, it remains a major challenge for most.
Start by knowing where you can get donor support. Such could be through donations or grants. It can come from private foundations, city governments, corporations, and even individuals.
Brush up on grant writing skills. Remember it is about convincing potential donors to part with their money. They will want to see where their money is going, and how it will make a difference to society.
So, do the following when looking for funding.
- Have clarity on the goals you want to achieve
- Look for opportunities that you can target. Such include grants, fundraising campaigns, events, or product or service lines you can sell. Take the time to do plenty of research on each potential source.
- If you do not have the expertise, work with a team to help you lay down the proposal
- Have a solid strategy, plan of action, and timelines. Marketing efforts have a big role to play here. Leverage platforms like social media, websites, and PR to get brand visibility. The more people know you, the more they will be willing to part with their money.
- Showcase the benefits of donating to your nonprofit
- Have plenty of patience and develop a thick skin. You will get your fair share of rejection, but persistence wins the day.
One of the strongest resources you need to have is a fundraising team. They have the core responsibility of sourcing for and growing the donor database.
Involve the local community when setting up a nonprofit organization. Building a network is a fantastic way of opening some of the donor doors. Some people to consider are industry leaders, local businesses, and even governmental agencies.
You can also approach religious organizations and other Nonprofits. Show them how you will add value when you partner with them. You can, for example, help out in their corporate social responsibility programs.
When setting up a nonprofit organisation, you need patience and determination to get things up and running. And when the nonprofit is up, the real work begins. Be realistic about what you can achieve within any specific time. Work within the budget you have and avoid any unnecessary expenses that will drive up the overhead costs.
Take advantage of platforms like Google for nonprofits to increase efficiency and productivity. Google Workspace, for instance, allows for remote working. The teams can collaborate online right from the comfort of their homes.
It saves you from having to invest in a physical location and office equipment. Write down the checklist and use it as a guide as you work towards building your nonprofit.
Good Luck with your endeavor to make the world a better place.