If you are seeking to start a nonprofit, you must decide how your nonprofit will function before anything else. You can choose to operate as an informal group of individuals bound by the agreements. The disadvantage of doing this is that there is a specific number of individuals that can partake in the agreement. Furthermore, you will not enjoy the privileges and rights that an organization enjoys, in terms of trust from the potential donors. There is no organizational structure and bears no responsibility like the structured nonprofit organizations. This arrangement reduces responsibility to an organizational structure beyond what is needed to keep the nonprofit running.
There is also an unincorporated association, charitable trust, and nonprofit corporation, which are all types of nonprofits. An unincorporated association is the simplest form of nonprofit that allows a founder to have tax-deductible contribution and a bank account in their name. A charitable trust is a common form where charitable organizations are used to make grants. A nonprofit corporation unlike the charitable trusts are common in the US and are a legally recognized form of nonprofits. They must report to their states and IRS and adhere to the formality requirements. As you start a nonprofit, you need to understand all these types of birthing options for nonprofits.
- Understand the vulnerability of young nonprofits
Nonprofits, just like other organizations encounter all types of threats as they negotiate with the new environment. As a nonprofit, you need to prepare for this challenge. It is understood that startups have high rates of failure. The failure among nonprofits is caused by a misunderstanding of the market, a faulty model of attracting donors among other issues. While people may think that failure for-profits are the only ones affected by the failure, the truth is that nonprofits also suffer. Therefore, you must understand the market properly before starting a nonprofit of your choice.
Surviving as a nonprofit
- Establish the reason for forming a nonprofit.
You need to begin by establishing the need to form a nonprofit. Think about your intended demographic or the population you would wish to serve, understand the needs of the population you want to serve and think about the solution and think if you will be adding value.
- Build a solid foundation for your nonprofit
Your nonprofit needs a firm foundation and clarity from the beginning. This includes creating a good vision and mission that is suitable for the cause you are championing. Choose a good name, identify the problem, devise the solution, and define your population of interest. Also, determine the vision and values and come up with a catchy vision statement.
- Create a business plan and stick to it
Some nonprofit founders jump into recruitment and seeking money before writing a business plan that documents what you need to do and how you will do it. However, it is always a good thing to write a business plan before starting your operations. It is only after coming up with a business plan that you will be able to estimate your incomes, costs, and employees you will need and what you can afford. Invest time in the development of a detailed business plan. This will give you the discipline to think critically about important strategic and operational issues.