We need more nonprofits like we need more restaurants

A great restaurant is a community gem. So is a great nonprofit. The problem is, most restaurants fail. And many nonprofits should fail.

A small business owner I met while consulting to a nonprofit in South America.

A small business owner I met while consulting to a nonprofit in South America.

And yet, people start nonprofits (and restaurants) every day. I once consulted for an organization that does fabulous sustainability work with indigenous communities along the Amazon River. The founder started the organization with the best of intentions. She had lived in-country for many years. She had a board of directors in the U.S. and in South America. But she didn’t have enough support, education, or resources to adequately fundraise. Neither did her board. As a result, she lost most of her life savings and the organization is going bankrupt. She is passionate about her cause but, unfortunately, passion isn’t enough.

The Huffington Post recently posted an article entitled: Passionate about a Cause? Start a Nonprofit. The author shared 5 tips for starting a nonprofit which came from Wasil Nilan, founder of the Get In Touch Foundation. Paraphrased, her five tips were:

  • It’s hard work.
  • Hire the right people.
  • The Girl Scouts of America’s Bylaws are “perfect.”
  • Use a strategic plan.
  • Think big.

In many ways, she’s absolutely right.  However, the reality of starting a nonprofit is not as rosey as it may sound. I have a few more tips to add to the list.

Reasons to Start a Nonprofit
First, just because someone is passionate about a cause does not mean they should start a nonprofit. There are a lot of things people don’t often think about like: fundraising laws, filing annual tax forms, organizing and training a board, liability insurance for volunteers, and so much more.

Some of best reasons to start a nonprofit are:

  • There is a documented need.
  • There are no other organizations already fulfilling that need.
  • There are no other organizations interested in partnering with you or starting a new program.
  • There are funding opportunities which either exist or can be developed to help you meet that need.
  • The founder(s) understand the legal, fiduciary, and long-term requirements.
  • The founder(s) are at a place in their lives where they can dedicate the time and resources needed to the task.
  • The goal is to fulfill the mission, not to be a founder

Writing Bylaws
Second, nonprofits are not a “one-size-fits-all” type of organization. The Girl Scouts bylaws may be perfect for them. That does not mean that they will be perfect for your organization. Bylaws should be written specifically with your mission and your organizational structure in mind. The bylaws for a Temple will be different from the bylaws for an animal rights organization which will be different from a human service organization.

Templates don’t work. They may be an easy way to get things going but as soon as the organization hits rough waters (which all do), templates fail miserably.  The bylaws, articles of incorporation, major policies and procedures, and all other founding documents should be written individually for each nonprofit.

Other Options
If you are passionate about a cause, it is important to help. Starting a nonprofit might be a good idea. More than likely, it would be better to find other ways to participate such as:

  • Volunteer
  • Donate money
  • Join a board
  • Start a new program at an existing nonprofit
  • Help a nonprofit friendraise to gather support
  • Talk to your elected officials about any laws affecting the cause

There are more than 1.5 million nonprofits in the United States. The annual giving and annual volunteer rate of the US and of various cities doesn’t change much over time. This means that as more nonprofits are added, more nonprofits are competing for the same amount of resources. Rather than add to the feeding frenzy of nonprofit startups, I would encourage you to first strengthen one of the many wonderful organizations that already exist. Volunteer. Donate. Join a Board. Then, once your feet are wet, you can make a more informed decision about whether or not to start a nonprofit.


One response to “We need more nonprofits like we need more restaurants

  1. Thanks, Jenny! What a thoughtful blog post – I really appreciated it. Juxtaposed with the picture of the young woman in her shop, it reminded me of the advice often given to women microentrepreneurs (present company excepted, I’m sure) – to start a business marketing product X, until the market gets saturated because so many other women microentrepeneurs were given the same advice.

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