Starting a nonprofit organization

There are a lot of fantastic and in-depth articles about what one requires to start a business but very little about charities. That places those passionate about a cause at odds. While they wish to begin their venture, they are restricted to affiliating with others instead. The first steps are not as straightforward as most assume as is the essence of this article.

Identify the problem

There may be a food shortage in a local shelter, or there is no personal injury lawyer Ottawa has catering for the poor in a specific community. Starting a charity requires having a singular cause. Being passionate about ending world hunger and believing no one should get left behind leaves room for an individual to be swayed by public opinion. As a result, those wishing to join, those they served and other stakeholders will be unable to trust the nature of the organization given the conflicting narratives that may appear.

The next step is to answer who, what, where, when and how. You also ought to specify the scale. Are you community-based or do you wish to work across the entire Sub Sahara region? Remember to cite the cause of the problem, its extent and the actionable steps possible in creating that change.

Know your “why.”

When operations become difficult, one needs to tap back into the reason for wishing to begin the charity in the first place. Obstacles are a guarantee and therefore having a clearly defined ‘why’ keeps one anchored as they navigate the landscape. It also helps keep the mission focused with the team around a person understanding the intent behind the objectives and goals hoped to achieve.

Having the ‘why’ to the charity also makes it easier to win over support. Media attention will likely cause a sensation upon the realization that, for example, a person wishes to offer pro bono services to process personal injury cases to minorities in the community because they believe in equal right for all or because of an earlier incident that ignited the passion.

Be clear about the solution

Throwing money issues is not always the best solution as you might be likely treating symptoms and ignoring the cause. A homeless shelter may be short of funds due to embezzlement claims or a lack of awareness by the local community of the needs of those around them. While providing food is crucial, dealing with problem concurrently is vital. Identify the steps that need taking and communicating them clearly to stakeholders is critical to the success of one’s endeavors. The reason for the approach and why it is will be laid out as it is likely that others have tried previously and failed.

Research

A person should look into the entities around them tackling similar concerns. That could be a college, local groups, INGOs, charities, statutory bodies and other firms with CSR initiatives. At this stage, if there is an organization undertaking the same efforts, consider offering support or partnering with them.

If at this point a person notes that their establishing their charity would be a duplication of efforts, they are advised to consider working with those in existence. They are likely to do more in the short run. Alternatively, one can consider shifting their focus and offering complementary services whereby others could potentially benefit from a partnership. However, if the concerns are not being addressed, it is a clear indication to move forward. If they are and one still wishes to set up a charity, the distinction ought to be present to attract donors in a competitive market.

An overlooked part of setting up non-profits is initiating interviews and focus groups with potential beneficiaries. Many nonprofit organizations fail to meet needs of their states demographic due to a lack of understanding of what the problem is, especially if one is not part of the stated community. With time and interactions with them, one can identify the problem area and come up with context specifics approaches to solving instead of using generic approaches.

Mission and vision

Part of the “why” should have a vision and mission. The former is a destination that one would like to arrive; the ultimate goal, while the latter details the intention, the demographic served and how the company goes about helping them. Both should be challenging yet achievable, and that solves a need for the greater good. A list of core values should be in place as they detail the approach with which the undertaking will be made.

Have a plan

A commonality that sometimes those starting businesses and charity have is that they get into the business without a plan. To drastically increase the chances of success one should have a strategy laid out. It should highlight the steps taken in 3-10 years, including timelines, who is in charge of what activities and budgetary needs. There are templates available that can act as a guideline.

Part of the plan is creating a team to run the cause. It is advised that one should have a team around them that a qualified to work in an area. An administrator or lawyer ought to have a background experience is the same as well as the person handling HR matters. The purpose of this is for persons to run efficiently and effectively, saving time. As the charity grows, those present in the initial stages are more likely to take up leadership roles and develop with the company.

The brand

Though one ought to have a name for a charity in mind when starting out, it is after the company gets to set up (before registration and approval by the Charity Commission) that one can understand the brand. From the information gathered with regards to the strategy, roles, cause, and intentions, what logos, colors, fonts, etc. best depict the brand? From here, all marketing collateral, both online and offline should get streamlined. The approach should be platforms specific, looking at best practices for each before adoption.

Tip: the name of the registered company can differ. That is an aspect to keep in mind who wishes to have a formal name for the charity and a catchy name for relating to the public.

Form a board

Mentorship is an overlooked yet essential part to businesses. With charities as well, one should consider having a board of directors well versed with the landscape and can advise against industry pitfalls. One is equally likely to benefit from connections they can tap into. Remember too, however, vet for conflict of interest. An aspect of personal gain at the expense of the company, for example, becoming a media celebrity and drawing attention to one’s one business, is an indication that one should consider sourcing for a new board member.

Know where the money will come from

Depending on what works best, a person can source for funding in some ways. They include corporate sponsorship, fundraising, subscriptions, direct sponsoring and crowdfunding among others. With a solid plan in place, one can approach potential investors to fund initial start-up and running costs. Before the end of every financial year, it should be clear where the budget finance comes from. One should consider annual initiatives or get into long-term contracts with sponsors. Research is an easy way of knowing what others in the industry are doing and what works.

Know your role

There are two roles one can play; either taking a paid position that makes them the executive director, or a non-paid position whereby one will be a trustee. Looking for information in the Small Charities Coalition is an excellent place to start, along with talking to others, both past and present charity holders to know the implications of both.

Registration

Register with 501(c) (3) as it is the code that IRS give to those operating nonprofits given they get tax exemptions. Acquiring the assistance of an accountant and lawyers with a background in nonprofit ensures a person works within the regulations. There are other resources available that can help with the registration process.

Streamline communication

Whether through in-house volunteers or staff or by getting a third party, acquiring the services of a communications expert is crucial to effectively communicating with one’s audience. A communications professional’s services are required in every step of the way including when engaging with fundraisers, staff, supporters, and volunteers. They are best placed to direct the approach to communicate with all stakeholders in an effective manner that produces the intended results.

Launch a website

Online presence ought, to begin with, a site where visitors can gain information about the charity. It should be well designed and continually updated to reflect changes in projects or have progress reports. It should also act as the primary funding tool with the integration of social media sites assisting in the quest to spread the word. Contacts should be in the website should anyone reach out with the wish to access financials and business plans are these are part of the public domain.

Be active on social media

Being and remaining relevant requires an online presence. Here, a charity can share information about activities and ultimately drive traffic back to the site. Social media tools can also be used to date stakeholders of events, fundraising activities or project updates. It is likely that charities should use more images than words as there needs to be proof of the undertaking or the success of their endeavors.

Mind the spending

Donors ask for financials with gain insight into the money’s use. After the initial fundraising, the charity should spend as a rule of thumb more than 80% of the funds on projects while the other 20% percent from administrative duties that include campaigns for the next fundraiser. That means the team will have to be frugal in their spending. Anyone spending more will likely raise eyebrows especially if the costs cannot be justified as essential to operations.

Cultivate patients

Not everyone buys into causes around them, and it is likely to take time for a charity to grow and be steady. The money will likely be a constant worry, and there’s, therefore, the pressure to spend wisely and excel in programs in place. One will not always get it right the first time, and this is normal in the NGO industry. Plenty of INGOs spend millions of dollars in programs that after a three or five-year cycle cannot continue because the preliminary research was inaccurate. The aim is to learn from mistakes.

Involved the beneficiaries

Ownership or projects by locals, also known as participatory development, increases the chances of programs succeeding. Given they are part of the problem; they are likely to take the assistance and necessary steps to solve issues for the sake of those around them and future generations. Though there is a need for monitoring to ensure funds are not misused, giving some staff positions to locals means that the beneficiaries have someone who is one of their own that they can approach for feedback. With that, necessary changes can get implemented.

Evaluate

Having a business plan requires that a monitoring and evaluation process be in place to ensure objectives get met. That means annually, or for shorter projects, quarterly, there is a feedback process in place to check the results of programs in place against set targets. Those that add up give morale to participants while those that need course correction steps can be made to avoid long-term losses.

Wrap up

The core of running a winning charity is similar to that of a business. A purpose needs to be in place and with it a well thought out plan of how the achievement of the same will be brought about. Market research is equally essential as it dictates your strategy and best practices. With a team in place qualified in their roles and a board to provide expertise in the industry, the person or group of people starting the charity can work together as part of the dream team. As always, beneficiaries should play a role in problem-solving. Lastly, evaluation is the tool that lets a nonprofit company if they are on the right path or need to rethink their strategy.

Author: Kar

Dr. Kar works in the interface of digital transformation and data science. An alumni of XLRI, he has extensive experience in teaching, training, consultancy and research in reputed institutes. He is an Editor and Regular Contributor of Business Fundas. Note: The articles authored in this blog are his personal views and does not reflect that of his affiliations.