Starting a Nonprofit Organization? 3 Things You MUST do First

Starting a nonprofit and helping it grow so that it can be successful and make a huge impact in the world can be a lot of hard work. So if you're thinking about starting a nonprofit, there are a couple things that you should probably do before you get started that will help make sure that you will be successful and make a big impact. If you've seen some of my other videos, welcome back. If this is our first time meeting, my name is Amber Melanie Smith and I am a nonprofit founder, executive director, and speaker on all things social impact service and leadership. There's really a lot that goes into successfully starting and growing a nonprofit, but in this video I want to talk about three key things that you really need to do before you do any kind of paperwork or even think of a name for your nonprofit to make sure that you can be the most successful at getting it off the ground possible. As someone who started a nonprofit when I was in college and now currently run the organization full-time, I definitely know about the steps that it can take to get something off the ground successfully. And I also know about a lot of mistakes that I made early on that if I hadn't made, we would have been able to progress a lot faster in not only becoming financially sustainable, but making a way bigger impact. If you're interested in hearing about all those mistakes that I made starting a nonprofit, you can check out my other video on that topic, Seven Mistakes I Made Starting a Nonprofit. Hope you enjoy. But getting back on topic for this video, I'm just going to dive right into those three key things that you need to be doing before starting a nonprofit. The first thing you need to do before you start a nonprofit is to really deeply understand the need that you're trying to address. A lot of people start thinking about beginning a nonprofit with some cool idea for a project or program or event that they have, but this is the wrong approach. You don't want to start with your idea. You want to start with the need, and here's why. If you aren't really familiar with the root causes of the problem that you're trying to solve as an organization, then you won't know if the idea that you've had is going to adequately address that need, and then you're going to spin your wheels doing something that's not actually going to make the impact that you hope it will. So in these beginning stages, you really want to be doing all of the reading, all of the meeting with other people in the community who know about this topic, all the research that you can possibly be doing to truly gain an understanding of the problem that you're trying to solve in the community, whether it is homelessness or hunger or improving education. Whatever the problem that you see in your community that is compelling you to want to start a nonprofit in the first place, you need to become very well-versed on the topic. And you're going to want to do this by looking at a couple of key questions. First, you want to know who is affected by the problem. Is it children of a specific age? Is it animals, a certain type of animal? Is it the environment? Is it a certain neighborhood in the city? So thinking about the target demographic that is being most affected by the problem in your community or in the world that you are trying to address. Second, you want to be researching and studying the underlying root causes behind that problem that you're looking to solve. Why is there hunger in the community? What other factors are influencing how much hunger there is in the community? Is it a lack of access to food? Is it the distance to drive to a grocery store? Is it the cost of the food? What are the things influencing that being a problem in your community? And third, when you're trying to understand the problem that you're looking to solve, you really want to know what other issues are interconnected to that problem. In the example of hunger or education, you know that those things are connected. A child who is trying to study in school can't do it very well if they are also hungry. So we find in social change and social impact movements that a lot of the issues we're trying to address are very interconnected like a big spider web. So what are the factors that are most impacting each other and what are the gaps in the different areas that you might want to solve? How do you go about understanding the need? Like I said before, you want to do a lot of research. The internet is an amazing tool, but I highly recommend finding experts in your community or around the world, depending on the geographical scope of the nonprofit that you're trying to start, and talk to them in person. Gain the knowledge that they have gained firsthand doing the work that you're trying to do and learn everything that you can. Only when you understand the problem that you're trying to solve will you truly be able to come up with a mission statement, the actions that your organization is going to be taking to address the problem in a way that will be effective in solving that problem. The second thing that you want to do before starting a nonprofit is to study the landscape of other organizations in the same geographical area that you are hoping to serve. The fact of the matter is there are more and more nonprofits being formed every day in the United States, and sometimes they overlap in mission and compete for the same funding dollars. This means that if you're hoping to start a new organization, you really need to know who else is out there doing the same work because they might be competing for the same donor, grant funding, or earned income revenue that you are competing for. And if you find that you're starting a nonprofit that replicates the services of another organization in the same community, you might discover that it's a really big uphill battle to gain any traction, to raise money, or to make the kind of deep impact that you're hoping to. So you really want to make sure that you're focusing on addressing needs that are not already being addressed by an organization that's doing a good job in the community. Now I'm not saying that competition in every case is bad. In some cases, an organization might be out there that's not really being very effective, and in that case, maybe it's healthy to have a little competition. I'm all about innovation and making sure that the most important thing is getting done, and that is solving the social issues that we're here to solve. Ultimately, we should be thinking, how can we put our nonprofit out of business? Which means, if you're going to start an organization, have a vision of that end goal. What would it take to create a world in which your nonprofit doesn't need to exist? Whether that's ending homelessness or ending human trafficking, whatever it may be, your goal is to solve the problem and then either disband or move on to solve another problem. The goal is not to perpetuate your organization for all time. If that were the case, then there would be no point in starting at all. So if you've studied the landscape and you have found other organizations out there doing what you are essentially hoping to do in solving the problems that you're hoping to solve, you've got a couple decisions to make. The first is, is there any way that you can partner or collaborate with this organization? Instead of reinventing the wheel, perhaps you could be an asset to them. The second thing is taking a look at, are there any major gaps that that organization is not able to fill? And if you really want to start your own nonprofit, perhaps that gap is what you could focus on to make sure that you're meeting a need without competing for the same funding sources as the other organizations. The third thing that you want to do before starting a nonprofit is to think through your business plan, especially including your plan to be a financially sustainable organization. A financially sustainable organization would be one that has regular revenue coming in that you know you can count on. And ideally you're in a situation where you can not only count on that to survive at a base level, but you have a plan for how you're going to grow and make an even bigger impact over time to, as I mentioned before, ultimately try to solve the problem that you have set out to solve. And when you're thinking about the financial component of your business plan, there's no one-size-fits-all for every solution. A lot of nonprofits think that grants are just kind of a silver bullet and that getting some grants will solve all of your problems, but when in reality, only about one in ten grants can be obtained, even by professional grant writers. So grants are very competitive, they're very difficult to get, and they're definitely not a source of funding that you should probably rely on when you start a nonprofit. If you're interested in more information about the different ways that a nonprofit can fundraise and explore developing that financial sustainability, I've got another video for you, Fundraising Strategies When You're Trying to Start or Grow a Nonprofit, and you can check that out at the link too. So there are two main components of the business plan that you want to really focus on at this early stage. And that is, once you've figured out the what, meaning what actions or activities your organization is going to undertake to inevitably address that big problem that you are setting out to address, you want to know how are you going to measure your progress towards that goal. If it's something like ending homelessness, an obvious way to measure that would be that there are no people experiencing homelessness in the city for X number of years in a row. Measuring these things is called measuring outcomes. So an outcome is basically the difference between where you started before you began your organization and the difference in the world that has been achieved now that you've been working at it for some time. Essentially, how you changed the world. So you want to know how are you going to measure your impacts towards your progress towards the outcomes that you're hoping to achieve. Is it changes in attitude or perception about something? In that case, a survey might be a good way to track the changes in attitudes over time when you survey someone in the beginning and you survey someone at the end of the year. How has it changed? If it's something like the example of homelessness that I just brought up, it could be how many people who were chronically homeless are now no longer on the streets and in affordable housing. The second major piece of the business plan that you want to think through before starting a nonprofit is, of course, that fundraising piece and how you are going to plan to become financially sustainable as an organization, whether that is through some kind of earned income mechanism, charging some very small reasonable amount for items or services that you offer, or sponsorships, thinking through what is going to be the best fit for your specific organization, and again, recognizing that there's no one-size-fits-all solution for all nonprofits. Every organization is different and is going to need a different approach to be successful. There's of course a ton more that should go into a business plan for a nonprofit, from your operations to recruiting volunteers to your marketing strategy, but if I had to pick the top two things, it would definitely be how are you going to measure your outcomes and impacts and how you're going to be financially sustainable as an organization. And I know that when I was first starting a nonprofit, those were the two things that I wish I had put a little bit more thought into in the very beginning. So are you thinking of starting a nonprofit and what stage in the process are you at? I'd love to know. Please share that in the comments below and don't forget to subscribe because I'm making weekly videos on nonprofits, social impact, service leadership, and more. I really hope that you found this helpful. Please if you are on Facebook, check out my Facebook group, Change the World or Bust. We are having conversations there about how to make a difference in the world effectively and it's just really good conversation. So come join us over there. I hope this helped you out. Don't forget to check out my other videos. If you are starting a nonprofit, I've got some great resources on my channel. Check those out and thank you again so much for watching.