Tips on running a successful nonprofit for the first couple of years?
November 25, 2013 2:57 PM Subscribe
I'm federally incorporating a nonprofit in the next few months. I've heard that most nonprofits fail within the first couple of years. How can we plan for success? We are Canada-based and our focus is on wildlife, but any general nonprofit advice would be welcome.
I'm developing a nonprofit that has been in the works for over a year now. It's finally time to put my initial plans into action. I'm incorporating, getting a lawyer on board, and reading everything about nonprofit management that I can get my hands on.
It's a hobby, but it's a hobby that I expect to dedicate a very significant amount of time to. I don't expect the organization to make any net earnings in the first year, and probably not much in the second year. I expect to spend lots of time networking and fundraising. I know that volunteers can help significantly with the latter.
If it helps, we're a wildlife nonprofit. We're advocating for an Ontario species that very few people know about, understand, or know how to work with. The physical basis of our nonprofit will be a small rehabilitation facility and sanctuary that takes in Ontario native species, but that focuses on the species we're named after. The rest of our advocacy will include a website, a newsletter, a social media presence, and different programs or educational materials for municipal governments, for police, for Animal Control, for landowners, and for city-dwellers who want to know more about our urban wildlife.
I expect to fundraise to cover these costs and to contribute money out of pocket. I was advised to look for corporate sponsorship, but how do I go about doing that?
Plenty of people have volunteered to work with us in different capacities. It's certainly a learning experience and it will continue to be. Our timeline is flexible in terms of setting up the wildlife rehab facility, but we want to set out the legal foundations and directives, along with the website and newsletter, in the next few months, at which point we will consider community outreach and program development. We'll also need a reasonably reliable funding source by that point, probably in early 2014.
Does anyone here have advice on how to operate successfully in the first two years of nonprofit management? How can we strengthen our plans and prepare for the pitfalls that most nonprofits allegedly run into? Thanks in advance.
I'm developing a nonprofit that has been in the works for over a year now. It's finally time to put my initial plans into action. I'm incorporating, getting a lawyer on board, and reading everything about nonprofit management that I can get my hands on.
It's a hobby, but it's a hobby that I expect to dedicate a very significant amount of time to. I don't expect the organization to make any net earnings in the first year, and probably not much in the second year. I expect to spend lots of time networking and fundraising. I know that volunteers can help significantly with the latter.
If it helps, we're a wildlife nonprofit. We're advocating for an Ontario species that very few people know about, understand, or know how to work with. The physical basis of our nonprofit will be a small rehabilitation facility and sanctuary that takes in Ontario native species, but that focuses on the species we're named after. The rest of our advocacy will include a website, a newsletter, a social media presence, and different programs or educational materials for municipal governments, for police, for Animal Control, for landowners, and for city-dwellers who want to know more about our urban wildlife.
I expect to fundraise to cover these costs and to contribute money out of pocket. I was advised to look for corporate sponsorship, but how do I go about doing that?
Plenty of people have volunteered to work with us in different capacities. It's certainly a learning experience and it will continue to be. Our timeline is flexible in terms of setting up the wildlife rehab facility, but we want to set out the legal foundations and directives, along with the website and newsletter, in the next few months, at which point we will consider community outreach and program development. We'll also need a reasonably reliable funding source by that point, probably in early 2014.
Does anyone here have advice on how to operate successfully in the first two years of nonprofit management? How can we strengthen our plans and prepare for the pitfalls that most nonprofits allegedly run into? Thanks in advance.
I've worked with or advised a number of US-based non-profits over the years. I don't know anything about Canadian non-profits and any unique challenges they may face. To be frank, in my experience non-profits struggle because their founders and insiders don't know how to run a business, and they let their passion for their "exempt purpose" (in US speak) cloud their rational decision making.
It's something I can completely understand and sympathize with. My experience has been mostly with arts groups and small-scale social service groups, and their founders have great ambitions. These are people who would never in a million years dream of starting their own for profit business--but the skillsets of balancing a budget, creating multi-year plans, marketing and corporate outreach are equally important to the non-profit as the for-profit. And most of all, they overspend, on the assumption that the public will be as energized by their charitable purpose as the founders are, which is not always the case (particularly in our rough economic climate--though maybe it's better up north).
In short: don't spend money you don't have. Don't plan on spending money you plan on getting. Don't assume anyone will care about your mission until you personally give them a reason to.
posted by Admiral Haddock at 3:11 PM on November 25, 2013 [3 favorites]
It's something I can completely understand and sympathize with. My experience has been mostly with arts groups and small-scale social service groups, and their founders have great ambitions. These are people who would never in a million years dream of starting their own for profit business--but the skillsets of balancing a budget, creating multi-year plans, marketing and corporate outreach are equally important to the non-profit as the for-profit. And most of all, they overspend, on the assumption that the public will be as energized by their charitable purpose as the founders are, which is not always the case (particularly in our rough economic climate--though maybe it's better up north).
In short: don't spend money you don't have. Don't plan on spending money you plan on getting. Don't assume anyone will care about your mission until you personally give them a reason to.
posted by Admiral Haddock at 3:11 PM on November 25, 2013 [3 favorites]
Here's my quick advice.
1. Write a sophisticated three- to five-year business plan, that includes funding needs and fundraising abilities, as well as a very specific timelines for funding growth, staff growth, and programming growth. Be realistic and practical.
2. Fundraise based on that business plan.
3. Spend at least half your time directly fundraising, including letters, email, phone calls, and face-to-face meetings.
4. Never be afraid to ask for money. Always ask for money. Always ask for money again.
5. Fundraise from diverse sources, not just one big whale.
6. From the start, recruit and train volunteers.
7. Don't get too clever or spend to long with logos, names, or designs for your materials. Just get something clean and simple and move on.
8. Build in marketing and publicity from the start. Always gather email and postal addresses. Always do mailings. Always build a list of press contacts, and always send them news of your doings.
posted by Mo Nickels at 3:14 PM on November 25, 2013 [2 favorites]
1. Write a sophisticated three- to five-year business plan, that includes funding needs and fundraising abilities, as well as a very specific timelines for funding growth, staff growth, and programming growth. Be realistic and practical.
2. Fundraise based on that business plan.
3. Spend at least half your time directly fundraising, including letters, email, phone calls, and face-to-face meetings.
4. Never be afraid to ask for money. Always ask for money. Always ask for money again.
5. Fundraise from diverse sources, not just one big whale.
6. From the start, recruit and train volunteers.
7. Don't get too clever or spend to long with logos, names, or designs for your materials. Just get something clean and simple and move on.
8. Build in marketing and publicity from the start. Always gather email and postal addresses. Always do mailings. Always build a list of press contacts, and always send them news of your doings.
posted by Mo Nickels at 3:14 PM on November 25, 2013 [2 favorites]
I've worked with non-profits in Canada for about 10 years and have sat on a non-profit board.
The number-one challenge non-profits face is operational funding.
Since grants with no strings-attached are hard to find, the trap that non-profits fall into is accepting project-based funding in some hope of building capacity.
So, to build up headcount in order to address core activities, non-profits seek out project funding that does not always conform with their mission. And then when the project ends, you lose capacity.
The solution with one non-profit I worked with was to be entrepreneurial and increase revenue from membership. But this model will likely not work in your case.\
Another non-profit I worked with received operational grants from the local health authority, because they were delivering a service that was part of the health authority's mandate but the health authority was not actually doing.
However, that funding was cut when British Columbia's Liberal government withheld gaming grants from non-profits in order to divert those back into general revenue.
I would want to look for a good fundraiser, someone who understands your mission and who understands non-profits.
Before that, you may want to do a scan of various grants that are available in Ontario.
posted by KokuRyu at 3:19 PM on November 25, 2013 [1 favorite]
The number-one challenge non-profits face is operational funding.
Since grants with no strings-attached are hard to find, the trap that non-profits fall into is accepting project-based funding in some hope of building capacity.
So, to build up headcount in order to address core activities, non-profits seek out project funding that does not always conform with their mission. And then when the project ends, you lose capacity.
The solution with one non-profit I worked with was to be entrepreneurial and increase revenue from membership. But this model will likely not work in your case.\
Another non-profit I worked with received operational grants from the local health authority, because they were delivering a service that was part of the health authority's mandate but the health authority was not actually doing.
However, that funding was cut when British Columbia's Liberal government withheld gaming grants from non-profits in order to divert those back into general revenue.
I would want to look for a good fundraiser, someone who understands your mission and who understands non-profits.
Before that, you may want to do a scan of various grants that are available in Ontario.
posted by KokuRyu at 3:19 PM on November 25, 2013 [1 favorite]
Non-profits fail because they can't raise money. That's it. Now, there are lots of reasons they can't raise money - a useless board, founder's syndrome on the part of the ED, mission drift, or no one is willing to do the fundraising.
Yes, look for corporate sponsors (many corporations have some sort of charitable giving program), look for grants. But bear this in mind - 90% of your money needs to come from individuals. There just isn't that much corporate or grant money out there. Grants and sponsorships should be like icing on the cake, expansion money, or just to show the community you have some support from prominent industry/foundations/whatever. Your bread and butter is your gift donor base. They will be the ones who sustain your organization. So those are the gifts you need to focus on cultivating.
How do you get to these people? There are books and courses and careers dedicated to figuring that out. But the important thing is that as an ED, you are pretty much a full-time fundraiser, in and out of the office. Ask everyone for money. Ask often. Ask your board to ask everyone they know. Ask your volunteers. Call, mail, call. And track everything carefully.
posted by Lutoslawski at 3:42 PM on November 25, 2013 [2 favorites]
Yes, look for corporate sponsors (many corporations have some sort of charitable giving program), look for grants. But bear this in mind - 90% of your money needs to come from individuals. There just isn't that much corporate or grant money out there. Grants and sponsorships should be like icing on the cake, expansion money, or just to show the community you have some support from prominent industry/foundations/whatever. Your bread and butter is your gift donor base. They will be the ones who sustain your organization. So those are the gifts you need to focus on cultivating.
How do you get to these people? There are books and courses and careers dedicated to figuring that out. But the important thing is that as an ED, you are pretty much a full-time fundraiser, in and out of the office. Ask everyone for money. Ask often. Ask your board to ask everyone they know. Ask your volunteers. Call, mail, call. And track everything carefully.
posted by Lutoslawski at 3:42 PM on November 25, 2013 [2 favorites]
Come up with a product or service you can sell instead of just asking for money in the form of sponsorships. Or in other words, don't be afraid to ask for money for the services you provide too.
posted by thorny at 3:56 PM on November 25, 2013 [1 favorite]
posted by thorny at 3:56 PM on November 25, 2013 [1 favorite]
My experience is U.S based - have served on the boards of two non-profits. The second one was just starting, and had one of the same founders as the first one, which was about ten years old when I joined that board. So I had a chance to watch an experienced founder with one successful non-profit under his belt start another one from scratch. All of the advice earlier in the thread seems spot on, so rather than repeating it, I'll just add a couple of things that may be helpful.
#1 Have you ever served on the board of a non-profit? It is a cheap education in what to do, or not to do in running a non-profit. If you are close to launch, it may be a little late, but I just wanted to mention it.
#2 A couple of commenters have mentioned raising money and sponsorships. One way you get that done is through your board. They will be the ones who will open the doors to those foundations or corporations that might give you a large donation. Getting the right composition of board members is tricky, and as an executive director you'll be spending a lot of time with your board.
#3 Not sure if this is universal, but there are a number of foundations in my geography that seem only interested in making a one-shot donation. The implicit message is, don't come back for more next year because we are going to fund something else. So it isn't like all donations are some kind of annuity where you can count on the same organizations in year two.
#4 In my geography, there are several non-profits whose sole mission is to help other non-profits, providing advice, board training, access to shared services, that sort of thing.
Good luck!
posted by kovacs at 4:27 PM on November 25, 2013 [1 favorite]
#1 Have you ever served on the board of a non-profit? It is a cheap education in what to do, or not to do in running a non-profit. If you are close to launch, it may be a little late, but I just wanted to mention it.
#2 A couple of commenters have mentioned raising money and sponsorships. One way you get that done is through your board. They will be the ones who will open the doors to those foundations or corporations that might give you a large donation. Getting the right composition of board members is tricky, and as an executive director you'll be spending a lot of time with your board.
#3 Not sure if this is universal, but there are a number of foundations in my geography that seem only interested in making a one-shot donation. The implicit message is, don't come back for more next year because we are going to fund something else. So it isn't like all donations are some kind of annuity where you can count on the same organizations in year two.
#4 In my geography, there are several non-profits whose sole mission is to help other non-profits, providing advice, board training, access to shared services, that sort of thing.
Good luck!
posted by kovacs at 4:27 PM on November 25, 2013 [1 favorite]
I started a nonprofit that is small but still growing 10 years later (in the USA). There is good advice above.
My best tips to you:
- Use the free resources on the internet. I highly recommend idealist.org for finding volunteers and their Nonprofit FAQ for more information on various topics. I recommend TechSoup for software needs (not sure it operates in Canada though).
- There are new / social media ways that you can fundraise that basically can provide passive income, not a lot of it but every little bit helps when you run a small nonprofit. Some that I have used successfully include UniversalGiving, GlobalGiving, Google One Today, Paypal's MissionFish (eBay), Facebook's Causes. Most of these work best once you have at least a small group of dedicated friends and supporters who will give to and share your campaigns. My nonprofit has only done actually postal mailings maybe once or twice per year - the return doesn't seem worth the expenditure when there are free electronic ways to reach people. But we also market to young people who are savvy about web stuff.
- Setting up a good, user-friendly website (even if very very basic and minimalist) with an online donation mechanism is KEY. At least it has been for my group. Network For Good has a product called DonateNow Lite that is free to set up and use, and Paypal/Google Wallet also have free services for nonprofits (although I think the NFG product is superior).
I agree, a business plan and close attention to the budget is important. And in addition to Admiral Haddock's maxims, I would add - don't spend all the money you get. That was an error I made for years before we finally established a savings account that could serve as a cushion for urgent needs or to save for big expenditures.
I think even more important than a good business plan is to have a good strategic plan. You don't even have to plan 5 years out, you can start with just 2 or 3 years and then revisit and revise it, but it's important to have this mapped out, with a mission, vision, values that all your board members agree with and believe in. Return again and again to your mission. Ensure your programs are aligned with your mission. Set goals, objectives, and tasks as part of the strategic plan so that you know what you hope to achieve and how you will go about achieving it.
I could say much more but this question is a big one. MeMail me anytime if you have more questions.
posted by treehorn+bunny at 4:28 PM on November 25, 2013 [2 favorites]
My best tips to you:
- Use the free resources on the internet. I highly recommend idealist.org for finding volunteers and their Nonprofit FAQ for more information on various topics. I recommend TechSoup for software needs (not sure it operates in Canada though).
- There are new / social media ways that you can fundraise that basically can provide passive income, not a lot of it but every little bit helps when you run a small nonprofit. Some that I have used successfully include UniversalGiving, GlobalGiving, Google One Today, Paypal's MissionFish (eBay), Facebook's Causes. Most of these work best once you have at least a small group of dedicated friends and supporters who will give to and share your campaigns. My nonprofit has only done actually postal mailings maybe once or twice per year - the return doesn't seem worth the expenditure when there are free electronic ways to reach people. But we also market to young people who are savvy about web stuff.
- Setting up a good, user-friendly website (even if very very basic and minimalist) with an online donation mechanism is KEY. At least it has been for my group. Network For Good has a product called DonateNow Lite that is free to set up and use, and Paypal/Google Wallet also have free services for nonprofits (although I think the NFG product is superior).
I agree, a business plan and close attention to the budget is important. And in addition to Admiral Haddock's maxims, I would add - don't spend all the money you get. That was an error I made for years before we finally established a savings account that could serve as a cushion for urgent needs or to save for big expenditures.
I think even more important than a good business plan is to have a good strategic plan. You don't even have to plan 5 years out, you can start with just 2 or 3 years and then revisit and revise it, but it's important to have this mapped out, with a mission, vision, values that all your board members agree with and believe in. Return again and again to your mission. Ensure your programs are aligned with your mission. Set goals, objectives, and tasks as part of the strategic plan so that you know what you hope to achieve and how you will go about achieving it.
I could say much more but this question is a big one. MeMail me anytime if you have more questions.
posted by treehorn+bunny at 4:28 PM on November 25, 2013 [2 favorites]
Don't just focus on awareness and your first round of fundraising. Put as much into gathering/analyzing/reporting on data/findings/progress as you do into awareness and development. That's the only way to reach savvy donors and connect with sustainable funding sources.
posted by headnsouth at 4:31 PM on November 25, 2013 [2 favorites]
posted by headnsouth at 4:31 PM on November 25, 2013 [2 favorites]
I co-founded a nonprofit a few years ago, and recently made it my full-time job. Here are a few of the lessons I have learned....
* Define and articulate a culture and set of values for your organization. Articulating these are especially important when you rely on volunteers to deliver programs or services.
* Take risks and fail quickly - Be willing to try new things, and when something doesn't work be willing to leave it and move on to the next thing.
* Fundraising is all about building relationships, especially with big donors and companies. As a new nonprofit, it can easily take three years or more to build your reputation and cultivate relationships with donors to reach the point of large contributions.
* Mind the business side - nonprofit doesn't mean cash flow negative. Do the business plan, financial pro forma, etc. Define a few key metrics to track your service delivery, revenues, and expenses.
* As the leader your time will be consumed with fundraising, strategic planning, and business operations. You will be surprised how little time you get to spend in direct delivery of your organization's services or fulfillment of its mission. Be OK with this and embrace it. Your role isn't to do the work, but rather to build the framework for the work to happen.
posted by erogers at 4:57 AM on November 26, 2013 [1 favorite]
* Define and articulate a culture and set of values for your organization. Articulating these are especially important when you rely on volunteers to deliver programs or services.
* Take risks and fail quickly - Be willing to try new things, and when something doesn't work be willing to leave it and move on to the next thing.
* Fundraising is all about building relationships, especially with big donors and companies. As a new nonprofit, it can easily take three years or more to build your reputation and cultivate relationships with donors to reach the point of large contributions.
* Mind the business side - nonprofit doesn't mean cash flow negative. Do the business plan, financial pro forma, etc. Define a few key metrics to track your service delivery, revenues, and expenses.
* As the leader your time will be consumed with fundraising, strategic planning, and business operations. You will be surprised how little time you get to spend in direct delivery of your organization's services or fulfillment of its mission. Be OK with this and embrace it. Your role isn't to do the work, but rather to build the framework for the work to happen.
posted by erogers at 4:57 AM on November 26, 2013 [1 favorite]
Response by poster: These answers are all excellent. As the last commenter mentioned, I'm working on building the framework. I'm passionate about building a framework that works. It'll involve trial and error, but the more I can reduce that approach by planning well, the better. I wouldn't have thought to develop at least a 3-5 year plan. I'm beginning to see where I need to shore up my experience and skills, i.e. with budgeting, estimating how much money we'll need for various projects, and deciding how to define success in terms of accomplishing our stated outcomes.
This gives me a lot to think about. I'll probably be in contact with all of you with further questions. Thank you for the advice!
posted by quiet earth at 2:38 PM on November 27, 2013
This gives me a lot to think about. I'll probably be in contact with all of you with further questions. Thank you for the advice!
posted by quiet earth at 2:38 PM on November 27, 2013
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It's an awful big leap you're making formalising a hobby, and a massive commitment you're making. No matter how passionate you and the people around you are, it's inevitable people's lives will change and some people will need to step back. Have plans for that now so you don't end up relying on one or two people to keep it going. One small charity I know started planning for it from the beginning and started looking for new trustees as soon as they had got up and running.
Oh and get people excited about your work early, build up a pool of supporters, they will be your advocates and volunteers and fundraisers and hopefully bring fresh energy to your work.
posted by Helga-woo at 3:09 PM on November 25, 2013 [1 favorite]