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Starting an NPO — Five tips and a warning

The world is in the midst of what one observer has called an "associational revolution." New nonprofits are being formed for every sort of purpose on every continent at the fastest rate in history. If you are thinking of joining this vast worldwide movement by starting—or helping to start—a nonprofit, here are some crucial things to think about.

Tip #1: All nonprofits are local. Even the globe-spanning, household-name organizations that operate in hundreds or thousands of places must learn about, and live with, complicated rules that differ greatly from place to place. Almost certainly, the second thing you will do when starting a nonprofit is to register with the local government agency that handles new "nongovernmental organizations" in the community where the organization will operate.

For advice about which government agencies will be involved in the U.S., try a nearby nonprofit support organization that you can probably find using the advice in the page that offers ways of looking for one. In other countries, there may be similar organizations or you may want to talk to an established nonprofit organization about the rules and the agencies that enforce them.

Tip #2: Local supporters are necessary. No one starts a nonprofit alone. No nonprofit operates in isolation. All "outside funders"—foundations, government agencies, corporate contributors, major donors—will want to see evidence that the community is involved in, and supports, the plan for the new organization. Big gifts and grants get a lot of buzz, but even in the countries where organized philanthropy is a major factor in the nonprofit sector, big gifts and grants amount to less than 15 percent of the funding that supports nonprofits' work. So, the first thing you will do when starting a nonprofit is to identify the circles of friends who know your work and develop a strategy for earning income from people who can help pay for the services they receive.

There are a lot of different ways nonprofits raise money. See a list with some hints about which method fits best in various situations.

Tip #3: Nonprofits can be — in fact, have to be — "businesslike." If "businesslike" means keeping good records, watching revenues and expenditures carefully, and being committed to thoughtful planning about when and how to grow, then every successful nonprofit has been businesslike at the heart of its operations – alongside its dedication to the community and to the people and causes being served. Without financial and service records, it is impossible to provide the community and other stakeholders with reliable information about the scope and value of the organization's work.

For an introduction to these questions, check out the
Nonprofit Management 101 discussion.

Tip #4: Often not starting a nonprofit at all is the best way to serve. In many communities, a full range of nonprofits are already hard at work. Finding a way to extend and support the work already being done may well yield greater benefit more quickly and at lower cost. The details will be different, of course, but spending time thinking about alternative paths toward the goal is an essential part of the planning for any new organization.

In some places, there are organizations devoted to fostering community service work by providing shared administrative services. In the United States, "fiscal sponsors" help out in this way. Wikipedia offers an explanation of how it works; one way to find out about similar arrangements in other countries is to ask existing NGOs for advice.

Sometimes the best idea is to find an organization whose work you admire and volunteer to help extend it. Idealist's Volunteer Center can help.

Tip #5: Plan for the long term. If your goal is to do something that can be done quickly, that's all the more reason to avoid creating a new organization (see Tip #4). Providing a permanent service or tackling a big problem, though, will require an organization that can be sustained for years, even generations. It's essential to have a clear plan for how the work will be carried on once the initial enthusiasms, and founding organizers, are no longer on the scene. This plan must include both solutions to governance questions (Who will be on the board? Who will lead the staff?) and management issues like where the money will come from and how new services will be designed and implemented. Answering the question, "But what would happen if you were hit by a bus?" isn't fun, but it's really necessary.

A brief sketch of the "nuts and bolts" of starting a new nonprofit organization in the U.S. is at Startup Nuts and Bolts.

Clear mission statements and good strategic planning are the foundation for long-term success. There's advice about these topics at What should a mission statement say? and The basic idea of strategic planning.

And the warning: In every part of the world, nonprofits are subject to regulation, scrutiny, and sometimes outright hostility. Great things have been accomplished by people working together to solve problems, meet community needs, and create valued institutions. But rivalries, suspicions, and limited resources have blocked many a good plan. After the initial difficulties have been surmounted, of course, there are further challenges involved in keeping an organization going. Even under the most favorable conditions, nonprofit leaders are often discouraged by how much of their energy is drawn away from "program work" into the tasks necessary for running an organization—any sort of organization—and dealing with external pressures and demands. In spite of the gratitude we all owe to the people who have built the nonprofits that sustain and enhance our communities, there are no general sources of assistance for that work and no guarantees of success.

The decision to found a nonprofit organization is not one to take lightly.

If you do decide to proceed, we hope you will find the offerings at Idealist.org a big help. You can list your organization for free, announce events, seek volunteers, describe publications, and recruit interns and staff (organizations in the United States pay a fee for job announcements). There are lots of ways to link up with supporters and draw on networks of colleagues and advisors. You can also use Idealist to identify other organizations working in your community, who may be tackling related issues or working toward complementary goals. Idealist's Resource Centers (see list at the bottom right on this page) offer discussions of many of the pressing questions you will encounter; they also point to many rich online sources of information, advice, and techniques available on the Internet. Good luck from all of us at Idealist.

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