Strategic Considerations Before Starting a Nonprofit

I recently spoke with a Financial Advisor whose client wanted to start a nonprofit. She suggested we discuss it, but I warned her that the client might not appreciate my perspective. With over 12,000 nonprofits in Kansas City alone, I believe it's crucial to question the necessity of starting another one.

If an existing nonprofit is already addressing the cause this individual is passionate about, wouldn't it be more effective to collaborate and support their efforts? This approach could save significant energy, financial resources, and potentially create a larger impact.

Why Collaboration is Key

• Energy Conservation: Launching a nonprofit is as demanding as starting a business. While obtaining tax-exempt status might be straightforward, the remaining aspects, like board recruitment, policy development, and fundraising, can be daunting. Partnering with an established organization allows individuals to channel their energy toward impactful work rather than administrative burdens.

• Amplified Impact: Successful nonprofits have existing infrastructure and programs. By collaborating, individuals can leverage these resources and contribute meaningfully without reinventing the wheel. This approach can lead to greater efficiency and a more substantial impact on the cause.

• Financial Prudence: Starting a nonprofit requires substantial financial investment. Instead of spending tens of thousands of dollars on a new venture, supporting an existing organization ensures that resources directly benefit programs serving the target community.

The Risks of Duplication

While I deeply value the work of nonprofits, it's essential to acknowledge the potential downsides of creating a new organization without thorough research.

• Competition for Funding: If a new nonprofit duplicates existing services, it may compete for the same grants and donations, potentially hindering the fundraising efforts of both organizations.

• Strain on Human Resources: Time and talent are precious commodities. A new nonprofit might inadvertently draw volunteers and staff away from established organizations, fragmenting efforts and potentially diminishing overall impact.

Before You Launch, Consider This

Starting a business necessitates demonstrating market viability to secure funding. Unfortunately, nonprofits often bypass this crucial step. It's alarmingly simple to tell a compelling story, obtain an EIN, and launch a nonprofit without proving its necessity.

My advice? Exercise caution, conduct thorough research, and explore collaboration opportunities with existing organizations. By investing time, talent, and resources strategically, you can make a more significant contribution to the causes you hold dear. Remember, a new nonprofit should fill a genuine gap in services rather than duplicate existing efforts.