Avoid These Missteps When Starting A New Nonprofit

Avoid these missteps when starting a new nonprofit

By Lindsay Jordan, Founder + CEO of Write On Fundraising

When I first founded Write On, I wasn’t aware that startup nonprofits existed. I shaped my career and cut my teeth in fundraising with well-established organizations that boasted national and even international missions. The idea of a local individual with an idea for social change coming to me and asking for fundraising help had never crossed my mind, and yet almost from the beginning, these visionaries have come in droves to Write On to share their dreams for more equitable communities.

Over the years, we’ve developed an entire training program, Rally Point, specifically for nonprofit start-ups, restarts, and social enterprises because there was no “one-stop-shop” we could send folks to. Industrious as we are, we built from scratch a program that helps organizations launch, scale, merge, change, or even retire an idea, depending on interventions already available in their market. Learn more about Rally Point here. 

Since 2019, we have graduated changemakers from nearly a dozen cohorts and many - Brain Injury Recovery Foundation, Permanent Diaper Relief, The STEAM Engine, Urban Coders Guild - have flourished. Some, however, continue to struggle to get their concept up and off of the ground. What differentiates the two groups? I’m happy to share my observations with you:

1. Market placement.

Unfortunately, many passionate, driven individuals fail to first conduct some basic market research around the causes they care most about. Domestic violence and animal welfare are probably the spaces where we see the greatest amount of duplicated effort. 

Now, just because organizations exist and serve the same population you care for does not mean there isn’t opportunity for you to serve in the market as well. However, if your nonprofit concept doesn’t serve this population in a new, innovative way, nor significantly increase the total number of people served in the market, why not support the organizations already in your area and help them scale to serve more people?

Resources in the nonprofit space are finite and decreasing. As greater wealth shifts into fewer hands, individual giving declines, and foundation giving stagnates, consider carefully if the addition of your nonprofit concept will add to the landscape of services available in your community or hurt the local movement at large. 

2. Quick, well-promoted wins.

Organizations that are able to rack up some quick programmatic wins - number of people served, new innovation introduced to a market, notable community partnerships, etc. - and follow those wins up with visibility in the media seem to have an easier time attracting and retaining early critical resources like board members and funders.

For organizations with abstract or poorly articulated mission statements and programs, and for those whose outcomes are longitudinal, this creates a unique challenge. It is of great importance, therefore, that newer organizations invest time and energy into nailing programmatic language and concepts like your Theory of Change and using tools like the Logic Model or Case for Support (and those offered in Rally Point). 

Capital needs are also very difficult to fund early in an organization’s development. Often, we see nonprofits barely out of ideation with visions of a multi-million dollar capital campaign. For the majority of start-ups and restarts, this is not feasible. Not only are capital campaign gifts made primarily by individual donors, corporations, and foundations that have years of giving history to a nonprofit, without those early wins, newer organizations tend to have trouble proving that they are a sound investment to prospective funders. 

3. No money, no mission.

Each week, I meet with about a dozen or so nonprofits interested in learning more about Write On Fundraising’s core services. Many are particularly interested in grants. Not only are grants a great scaling tool for many nonprofits, private foundation partners can prove to be valuable mentors and advisors for organizations navigating their way through a new space.

But grants aren’t a fit for everyone, including most start-up nonprofits. Unfortunately, many well-meaning volunteers or nonprofit adjacent individuals pass along the faulty advice that all you need to start a nonprofit is a grant. Some very fortunate and well-connected nonprofits do indeed win an early grant that helps them get off the ground, but this is the exception to the rule. In general, private foundations are looking for at least three years of program impact, operational sustainability, and financial management.

Newer organizations grow early cash flow through individual giving programs. These are undoubtedly more work and a greater investment of resources - volunteer hours, staff management, investment in systems - than simply writing and winning a grant. However, it’s a proven “slow and steady wins the race” strategy that allows you to slowly and sustainably grow your programming, get to the quick wins, and prove to private foundations that your institution is a winning investment.

4. Budget blues.

Another area many new nonprofits struggle with is building a budget. Look, I get it. I struggled in math my whole life until a college instructor snapped into place. I understand the anxiety associated with putting together a budget; the pressure of assigning a dollar amount to people, programs, and materials that might not yet exist; the stress of planning for administrative costs you may not yet have your arms wrapped around.

But this is of critical importance. Without a well-vetted, realistic budget, an organization loses credibility with key stakeholders (potential funders, partners, board members, etc.), lacks the financial clarity needed to make smart decisions about resource allocation, and stifles its own growth. 

While tools like Rally Point are available to help guide nonprofit leaders through this exercise, it is the founder’s or executive director’s confidence in building and maintaining the budget that tends to determine the organization’s success in this area. 

In short: overcome your fear here. Not only are you perfectly capable of knocking this out, the success of your organization and the people you want to serve are counting on it.

5. Leadership matters.

Lastly, one of the most difficult conversations I have with new founders is that while their concept is viable, fundable, and needed in their community, they may not actually be the right person to lead the organization. 

Founders come from all walks of life. While there are clear examples of folks who aren’t going to cut it - like those to come to the nonprofit sector from for-profit specifically because they want to get paid to work in their passion area (these folks are usually pretty disappointed in what the sector has to offer them financially), there are some folks who excel in program development and have absolutely no business dabbling in operations. 

It’s tough to hear that the “top spot” might be better occupied by another, especially when you have invested sweat equity or personal finances into a concept. But here’s the truth of a nonprofit: it’s owned by the people, not a person. Even if you founded it, the organization is not owned by you.

Start-up and restart organizations typically benefit from having a leader who is highly proficient or has the proclivity to quickly learn and master finance; fundraising; external and internal marketing (to include public speaking); board recruitment, retention, and engagement; governance; and developing and managing people.

Many talented nonprofit professionals - absolute subject matter experts in their fields - have the ability to develop innovative programs that can change the lives of the people they serve, but not the skill set required to actually run a company. There is no shame in this. And yet I’ve seen a number of founders fail to recognize their own challenges in this area, letting a viable concept struggle for years before eventually folding, not because of a lack of passion or potential impact, but simply because the wrong person was in the driver’s seat. 

If you’re interested in starting a nonprofit, relaunching an idea that has stagnated, or even hitting “reset” on a concept you’ve been working on, consider your strengths in the five areas above. For more information about Rally Point, our business accelerator for nonprofit start-ups, restarts, and social enterprises, please email director of mission impact Jonathan Weber-Mendez at jonathan@writeonfundraising.com or call 1-888-308-0087.