Nonprofits are inherently inefficient. No matter what, a traditional charitable organization that depends on donations to survive will take double the work, if not more, to accomplish its mission. It’s in the bones of the concept. There are better ways to do it.
So You Want to Start a Nonprofit
Do you want to start a nonprofit? Do you see a need that you think you can fulfill with a creative new solution? I know you’re excited, and you want to start right now, but just wait. Let’s do some working and thinking first.
Do Your Research
Research for hours, for days, for months even! Do not stop until you are 100% sure that an organization doing something even remotely similar does not already exist. If it does, change course. Help them. I’m very sure they would LOVE your help and suggestions, unless they are huge and overly bureaucratic or they’re brand new and the founder still has founder’s syndrome (give them another year, they’ll change their tune).
Stay Away From the 501(c)(3)
Okay, you have researched to the ends of the internet and you cannot find anything even close to what you want to do. You are absolutely sure that your idea will revolutionize the world! Still don’t start a charity. “But, Veronica!” Hear me out.
Start a for-profit business that accomplishes your goal while making money. You may have to change your idea a little or a lot, but I promise if you think creatively enough, you will find a way. Begging for money takes So. Much. Time. Then, once you get the money, you often are very restricted in how you can spend it. This make creative problem solving and changing paths on the fly when issues come up quite difficult.
There’s also the board management, the data collection and management (gotta keep those funders happy with numbers), the extra filing work, the restrictions, the meetings, the events. It all takes so much time — time you could be spending doing the work to solve the problem.
The Example
Let me give you an example. I founded a charity called Project Food Forest. The mission of our organization is to plant public food forests in and near Sioux Falls, SD. We utilize what we call “host sites,” who are private land owners who agree to plant a food forest on part of their property, welcome the public onto that part of their property, and maintain the food forest.
We use donations and grants to fund our projects. I also have done private landscaping designs and consultations. All of that money went straight back into Project Food Forest’s account. I have not taken one penny for salary, and we have not been able to hire any staff. About a year ago, I experienced severe burnout, and I haven’t even remotely recovered. We are stuck at a hump where in order to do the things we need to do next, we need to have more resources, but the board and I are taxed, with nothing left to get over that hump.
Needless to say, it has been exhausting, inefficient, and difficult. I like to be efficient with everything I do and spending so much time asking for money rather than doing the thing I wanted to do seems ludicrous to me.
Necessary disclaimer here: I am eternally grateful for all the donations and grants our organization has received. People love to give money to help solve problems and fulfill needs, and that is awesome. However, if I could start over, I would make it much more efficient and cut out at least 75% of the work. And this is what I am advising to anyone looking to start a nonprofit.
A better way to set up Project Food Forest would have been to start a for-profit low-maintenance edible landscape design and consultation organization that uses part of the income earned to design and implement the public food forests. We should have charged host site property owners for our services to design, coordinate, and help implement the food forest. This would help fund our work and the materials for the project, but it would also help ensure a greater sense of ownership of the food forest. If they have to pay for it, they really want it, and they’re going to make sure they have the resources to maintain it.
From the get-go, we had the charitable ask mindset rather than a sell mindset. Not only would a sell mindset in this example be more efficient and easier, it would be more sustainable. Project Food Forest would be more sustainable as a company (for one, I would have been earning money for the countless hours I worked and probably would have been less likely to burn out) and the food forests themselves would be more sustainable.
I will add that there are benefits nonprofits receive that would be harder to receive as a for-profit. For example, posting on online volunteer boards like volunteer.org would not be possible, and it might be harder to get volunteers as a for-profit. Not impossible, just harder. Nonprofits often receive steep discounts on software, pay less in taxes, and donors’ contributions are tax-exempt. But even accounting for all the benefits we get as a nonprofit, I still think a for-profit would be much more sustainable. Creative thinking will get you around every obstacle you encounter, especially when you have the freedom of a non-charitable business.
For-Profit Can Be For-Purpose
For-profit doesn’t equal greedy, evil, businessmen in suits. All it means is you are earning money to do a thing. The purpose of each organization might differ; many businesses do exist simply to make all the money. But many of them exist to solve problems, and they make money doing it. Do not be a martyr. You’ll get sick of it, and your family will get sick of it. Be efficient. Make money. Love life. Lift yourself up while you are lifting others up. It will all work so much better.
If you’re thinking of starting a nonprofit and don’t think it’s possible to do it as a for-profit, post your idea and situation in the comments! I’ll try to help with some creative thinking, and other readers can lend their ideas as well.