As someone who has spent 25+ years working with people who are stuck in unemployment, I’ve seen many people who thought they wanted to start a non-profit. While their visions and motivations are always admirable, they often have no idea where to begin, or what kind of difficulties they are going to encounter.
Most people appreciate my advice to visit the website of the North Carolina Center for Non-Profits to download the document on “How to Start a 501c3.” Imagine their surprise when I show them that the Center advises against starting a new non-profit. Let’s look at three of the main reasons for this.
First, did you know there are literally thousands of non-profits in the Triangle area alone? Grant money has become incredibly competitive, and a young non-profit reconfirmed for me recentlythat a new, unknown organization has the most difficulty trying to acquire grant money. Too many non-profit start-ups end up closing their doors before they barely get off the ground.
Competition for volunteers is a second reason to pause before jumping into starting a new organization. Have you built your own “tribe” of supporters? Running a fundraising event without volunteers can be a truly difficult experience. This begs the question – have you considered trying to collaborate with someone else with a similar vision as yours?
Lastly – how much time, money and energy do you personally have to put into it? Most non-profits are not setting themselves up to develop any ongoing, residual income, which simply means, you will spend all your own time and your own money providing services to others, or, trying to fundraise to pay others to perform the services. In either case, you can put yourself in danger of burning out.
Understanding the pitfalls in this process is not a discouragement in any way – in fact I suggest you look at it as a motivator to go forward. However, there may be better ways to set up the structure and provide the services you wish to provide. An option to seriously explore is the concept of social enterprise.
A social enterprise can be a for-profit business (much lower start-up costs) that has a social mission. A social enterprise can be set up to have multiple income streams, and because it involves the selling of products and services, you can pay the people who are helping you to “fundraise” (create profits). Paid professional fundraisers can help you overcome the challenges of searching for volunteers. And then the profits from the sale of products and services will now allow you to fund your outreach services. The options for “adopting products to sell” go way beyond cookies, candy and donuts – and you may even find some that align with your mission!
Social enterprises also have the flexibility and freedom to develop on-going, residual income streams (without worrying about unrelated business income). They can integrate membership products and monthly buying programs that allow them to “sell once” and receive income every month. The larger the residual income streams become, the more time freedom and money freedom you will have to serve your client base without spending all your time planning your next major fund-raising event.
For more information or to request assistance in getting your social enterprise off the ground, email info@thecityinsight.com or call 919-671-6134.
By Sheyenne Kreamer
