Common Mistakes When Starting a Nonprofit | Bryan Rishforth

6/19/2020

Common Mistakes When Starting a NonproďŹ t | Bryan Rishforth | Community Involvement

a Common Mistakes When Starting a Nonpro t by bryanrishforth | Apr 20, 2020 | Bryan Rishforth, Community Engagement

Passion and altruism are the underlying motivators for most nonpro ts, but these two elements alone are not enough to make a new organization succeed.

Starting a nonpro t is similar to any other business. Still, there are additional challenges faced by founders who wish to establish a long-lasting, impactful charity with the potential for growth.

A charitable (501(c)(3) nonpro t requires nancial sustainability like any forpro t business, but unlike other businesses, money is not the sole motivator for its existence. Although it is founded by certain people, nonpro ts don’t have any particular owner or belong to anyone. They are tax-exempt and belong to

https://bryanrishforth.org/common-mistakes-when-starting-a-nonproďŹ t/

1/3

6/19/2020

Common Mistakes When Starting a Nonprofit | Bryan Rishforth | Community Involvement

the public, but they still require professional management and income to thrive.

Read on to uncover some of the most common mistakes nonpro t startups make and how to avoid them.

Lack of Business Planning Many founders are so inspired by their cause that they fail to consider all of the business logistics involved in establishing a charitable organization. Nonpro ts are required to register with the government and need to develop a business plan before opening. Consider startup costs, donation drives, marketing and products or services that might be needed or even sold.

It’s advised for any potential startup to conduct a “needs assessment” for their nonpro t. Is this idea original, or can it achieve something in a new way? Is the organization providing valuable and in-demand services to a vulnerable population, or are its opportunities to assist and serve relatively limited?

Just as traditional businesses need a target market, so does a nonpro t.

Research and planning will give an organization the best chance of making an impact and staying a oat.

No Financial Planning Nonpro ts need donations, but that is only the tip of the iceberg. There are incorporation fees to pay to the state and tax-exempt application fees. Some charitable startups receive foundation grants, but these are not handouts anyone can apply for and acquire.

A nonpro t needs a surplus of money from the start to give it the best chance of running its rst successful fundraising campaign. The costs of services will vary greatly; from graphic design and web development to advertising and https://bryanrishforth.org/common-mistakes-when-starting-a-nonprofit/

2/3

6/19/2020

Common Mistakes When Starting a Nonprofit | Bryan Rishforth | Community Involvement

labor fees. Operating a nonpro t is time-consuming, and if someone intends to make it their full-time job, they must consider where their source of income will come from and how it will be factored into the organization’s budget.

Not Organizing a Board A nonpro t board is the governing body of a charity. The board organizes all of the activities and e orts of the organization, and they run on a democratic system that involves pitching ideas and voting.

Board members are community or industry leaders who wield enough in uence to bene t the organization. Typically, members pay an annual fee for their position on the board, but startups may consider o ering them for free during the rst year. The board does not handle the day-to-day operations of the startup but rather guides the organization toward achieving its mission.

Without a good board, startups will often lack the vision and structure necessary to thrive. Starting a charity is not simple, but research is the best way for any impassioned soul to bring their dream to life.

Recent Posts Staying Connected with Your Community During COVID Common Mistakes When Starting a Nonpro t Philanthropy Trends in 2020 How To Plan A Successful Fundraising Event How to Give Back to Your Community This Christmas Season

© Bryan Rishforth 2020 https://bryanrishforth.org/common-mistakes-when-starting-a-nonprofit/

3/3