Worst Practices for Starting a Nonprofit
Continuing our series on “worst practices, “ below are just a few of the things you should avoid in starting a nonprofit organization.
Failing to investigate whether existing organizations or projects are already doing what you hope to do. (Starting and running a nonprofit is a lot of work. Chances are someone else has already acted on your idea.)
Failing to think through whether you can join forces with that similar organizations before starting your own nonprofit. (Consider partnering with others before going it alone.)
Failing to think through what structure you want to have (tax structure/board structure/program structure). Will you be a grant making foundation? A public charity? A chapter? A local chamber? Membership based? Tax status, NTEE Codes and how you describe your organization at the outset, will determine how you are treated under the law.
Failure to think through revenue sustainability. It’s easy to think others share your passion. But even if you are right, they won’t all share your priorities. Raising money is hard. A lack of planning dooms many nonprofits.
Assuming that tax exempt status is easy or fast. It can take 11 months or longer to secure federal tax exemption. Filing the paperwork can be intimidating for some. Think about this and consider using an attorney or expert to help, especially if you plan to work in advocacy.
Building your initial board without any consideration of fundraising, skill sets, diversity or board experience. It is tempting to grab friends and family to populate your board. This leads to groupthink, a lack of diversity and sometimes…dysfunction.
Forgetting to see if your preferred organization name or URL is available.
Failing to think through your mission and how you will reach it. Very often people have an idea in their head of good work they want to do, but they haven’t carefully thought through the problem they hope to solve and if others share that vision.
*Check out this additional resource from Mandy Pearce at Funding for Good about how being a nonprofit is a tax status, not a business model.
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