Here are some questions I was recently asked regarding starting a nonprofit. I didn’t address the fact that this economy also presents a very, very challenging landscape in which to start a nonprofit and to attain solid funding. However, anyone with true passion will find a way to bootstrap their vision, at any time. Anything is possible!
What are the right and wrong reasons to start a non-profit?
Starting a nonprofit must come from the head and the heart. It’s a true balance. Most people think you need to have strong passion and loyalty to a cause, and you do. But one must also have a strong desire for effective business planning and operations in order to ensure you deliver your product, in this case service to the community, effectively. At the same time, you can’t be ‘all business’ but we are compassionately serving others in very dire circumstances; in the case of UniversalGiving (http://www.universalgiving.org), we are helping people who live on $800 annually, which is 70% of the world.
This balanced viewpoint of head and heart is often more identified along the lines of social entrepreneurship. It’s also often tied into revenue (see answer to the other questions below.)
The wrong reason to start a nonprofit is because you think it’s a ‘cush’ job or comes with less demands. Your responsibility increases. Fundraising is tough. And, if you fail to deliver, you are dealing with people’s lives, and the fact that they might not receive truly dire services. Your job can become one of helping others through life and death. It’s not just that your product line failed; here, a lifeline could have failed.
How do you determine your salary?
The board determines the CEO’s salary.We take into account whether the position is fulltime or part-time; qualifications (past entrepreneurial experience); results; fundraising success; and business qualifications. We also look at comparative compensation across similar size nonprofits, in similar locales with cost of living.
Are there other ways to raise money for your non-profit besides grant writing and fundraising?
Absolutely. In fact, I believe nonprofits should be able to monetize some part of their service, in order to demonstrate market interest and increase and diversify your funding. For example, UniversalGiving (http://www.universalgiving.org) allows people to give and volunteer with the top-performing projects across the world. We vet all organizations and projects with a 10-stage Quality Model. 100% of your donation goes to the nonprofit. So this service is free to the public, because we want people to give with trust and transparency, and to get as much funds to deserving people as possible.
So how do we do this? We also have a customized service, UniversalGiving Corporate, which helps companies launch their CSR programs. We help them lead and manage their international giving and volunteer programs. We set up programs in the cities where their employees live and work; vet nonprofits; market out to their employees to increase giving and volunteer results. All of this helps companies operate on the global level, increase their brand, increase employee and client loyalty. UniversalGiving is paid to perform these services, which also meet our mission.
Therefore I highly recommend nonprofits provide both services, which support their mission and their longterm financial viability.
Do you need to have an attorney set up your NP or can you do it yourself?
You can set up the 501(c)3 structure yourself. You can find a book which will help you walk through the process. It’s not difficult, but does take some time. I did do it myself for UniversalGiving. However, you can pay an attorney to do it for about $3,000-$5,000; some attorneys who are friends will do it for you for free. It’s not a bad idea to get this probono attorney support early on. As a nonprofit professional, you should consider probono services as a constant part of the mix and your resources.