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Starting your own Nonprofit

Bottom Line:   You probably don’t need to start your own non-profit organization.  It’s easier and more productive to work informally or under the supporting umbrella of another organization.  If you decide that won’t work for you, it’s not *that* hard or expensive, and there are useful books to help you out, but don’t go it alone!  Find some committed people to help you.

I had someone ask today about starting a nonprofit organization to support building solar greenhouses in Nepal.  Since I can’t (yet) just suggest that he read it in my book, I’ve included an excerpt of Giving Back that deals with the topic here.

Appendix B: Starting Your Own Nonprofit

When you’re excited about advancing a cause you care about, you might find it tempting to create a new organization to administer the project, collect donations, and recruit volunteers. While setting up a new organization isn’t particularly hard or expensive, it does saddle you with a long-term commitment, and may take away time and energy from working directly on your cause. If you can pursue your plan, at least the initial stages of it, before formalizing your operations with an official organization, you’re wise to do so. You can ensure that your project will be a sustaining interest, and that you truly have the necessary skills to lead, recruit, and fund the operation before getting too deeply committed.

Before you start your own nonprofit organization, here are some things to consider.

  1. Check twice to make sure there isn’t an existing group already doing what you propose.
  2. Review your own prior commitments and leadership experience. Do you have experience leading organizations through challenges for years at a stretch? Do you lose interest and move on to the next thing when you run into hardship? Check with your spouse, close coworkers, or good friends, who can also vouch for your ability to stick with it when things get hard.
  3. Consider the alternatives: Is there a way around setting up another organization? You may be taking on a significant amount of new work that isn’t really necessary. For example:
  • Could you do the work without an official organization? If you don’t need to receive tax-deductible donations to run your operations, you may not need a formal organization at all.
  • Could you locate a fiscal agent to act as a sponsor for your organization, receiving your donations but letting you operate as a largely independent entity?
  • Could you offer to start your program within an existing organization?

If starting a new organization still seems the best way to proceed, I recommend starting two different tasks in parallel:

  1. Start doing the work your organization will do. Make sure you can do the work (or at least as close to the real work as possible), make sure that you enjoy it, and make sure that it’s truly helpful to the intended beneficiaries.
  2. Start developing the legal, financial, and human resources you need for the new organization.
    1. Clearly articulate what you plan to do, and how you’ll be different from existing agencies.
    2. Test out your message on prospective volunteers, donors, and beneficiaries. Do other people get as excited as you are? Do the prospective beneficiaries agree that the service is needed? Are there other people who will help you fund and run the organization?
    3. Find other people who will serve as officers and directors for your organization. Together, they should be willing to commit to giving a significant amount (for example, $3,000 per year) for the basic operating expenses, as well as participating in fundraising at the goal level you’ll need to carry out your plans.
    4. Find an attorney and a CPA who can help you set up the organization and submit the needed forms (like the 990) to the government. Ideally, these professional service providers are so convinced about the cause and potential for this new organization that they agree to work pro bono, without charging you for their time, though you’ll still need to pay filing fees. Nolo Press publishes a great do-it-yourself guide to incorporating a nonprofit (Mancuso, How to Form a Nonprofit Corporation, 2011) with a special version for California residents (Mancuso, How to Form a Nonprofit Corporation in California, 2011). Nolo Press also offers a useful tax guide for nonprofits (Fishman, 2010), among other resources.