Wanting to change the world by starting a nonprofit organisation is a very noble goal, and if this is something you are seriously contemplating, then we would like to commend you for what you’re trying to do. With that being said, you should be aware that nonprofit organisations fail just like businesses do, and if you aren’t ready to run your organisation like a business or don’t have basic administrative skills, you are setting yourself up for trouble. You also must avoid certain mistakes that so many organisations make at the beginning. Let’s take a look at a few of them.
Spending too much money
This is probably the biggest and most common mistake that you can make as a new nonprofit. Some nonprofits are lucky enough to have a lot of starting capital or attract big donors right from the start, but that doesn’t mean that you have to squander those funds. Another mistake is assuming that you absolutely need to have tons of money to start a nonprofit. In reality, it’s very possible to start one with little funds.
If you want to learn how to start a nonprofit organisation with no money, check out this guide by Givebutter. They provide all sorts of valuable tips on how nonprofits can keep their operating costs low. They explain things like how you could get legal advice free of charge, assemble a team of volunteers fast and without paying too much, and how to market your organisation more efficiently.
Not researching properly
People often assume that getting behind a major cause means that their organisation will automatically get attention and attract donors. However, people don’t give money to just any organisation. Competition should still be a preoccupation for you, and you need to check if the space isn’t saturated.
We know that it may sound strange to talk about causes like we talk about markets, but this is still how it works in the nonprofit world. If you want to start a nonprofit to fight climate change, for instance, then you’ll have to compete with bigger organisations or brands in the space. This might be difficult as you’ll need to show that you can still make a difference while being much smaller than other organisations tackling the same issue. You’ll also have to work extra hard to gain donors’ trust.
So, do some research on any cause you are trying to tackle and see if there is space for another organisation like yours. If a sector has lots of competition, then one of the things you could do is try to differentiate yourself by using another approach or being more specific with the issue you’re trying to solve.
If you want to tackle food insecurity, for instance, then you’ll have trouble competing with organisations like UNICEF when it comes to food programs. However, you could focus on helping people in impoverished communities be more self-sufficient or focus on communities closer to where you are.
You could create food programs specifically for single parents, for instance, or focus on food education in your community. This will allow you to corner a part of the market that may have been underserved and raise awareness of causes people aren’t aware of.
Thinking that starting a nonprofit is easy
Some people think that, just because a nonprofit doesn’t have to answer to investors or show growth year after year, it’s easy to start one or that it’s nearly impossible to fail. But that could be a disastrous assumption. Running a successful nonprofit is far from easy and comes with a lot of stress. It also requires a lot of planning, and you’ll have to abide by all sorts of regulations. You will have to follow specific rules when fundraising and reporting donations with tax authorities. Make one mistake, and you could end up losing your tax-exempt status and get in serious trouble.
So, make sure that you do your research on the administrative side of running a nonprofit and consider working with a lawyer who’s familiar with all the rules surrounding them before you even start. They’ll be able to tell you exactly what will be required of you and can warn you of some of the legal and tax pitfalls you’ll need to avoid.
You’ll also need to learn how to assemble a board of trustees as they could make or break your organisation. Working with the right people will allow you to fill some of the knowledge or skills gaps you may have.
Starting a nonprofit organisation is hard work and you have to be ready to face all sorts of challenges at the beginning. If you want to be successful, start by doing your homework and having a realistic view of the nonprofit sector. You can then start recruiting a team and actively look for donors.