Excerpts Series: Forming A Nonprofit In 5 Easy Steps

Forming A Nonprofit In 5 Easy Steps is a training we offer at CDP. Below is a brief overview - an excerpt - from this training. Find out more about this important hour long training by clicking on the image below or the button at the bottom of your screen.

First, we’re going to walk through a few questions to consider as you’re starting the process of forming a new nonprofit. Then we'll walk through the five steps that it takes to form a nonprofit organization. I like to walk through this initial exercise of strategies to consider and questions to ask at the beginning, when you’re thinking about starting a nonprofit.

These questions aren’t only key questions at the beginning, when you’re starting to form a new nonprofit, but they are also key questions that come up, even with organizations that are established. These are questions that investors will ask, funders will ask and donors will ask. These questions are common when nonprofits are in the community seeking funding and seeking collaborative partners. So I think it’s important at the beginning when you’re starting out, to be able to answer these questions. Here are some things to think about.

In the context of “should I get it started?” — one of the first questions that you need to ask is: What need is it that I want to see met?

Nonprofits are charities that are granted tax exemption because they’re serving the community. They offer a charitable service to the public. So as nonprofits we need to be able to define — what is the need that I want to see met?

Secondly, we need to know: Who else in the community is providing this service?

Who else is gathering programs, services, people and doing initiatives that are trying to meet the same need that I’m trying to meet? In the business sector we think about this as being our competition—other people that are in the same industry or market that we are. It’s our job in the business sector to identify those people and those organizations.

The same is true in the nonprofit market. We need to know who else is in the community providing a similar service. Who is in the same nonprofit industry that we plan on being in?

Next, we need to be able to answer the question: Why is another organization necessary or important?

Sometimes we are very passionate about a particular cause and we think the only way to get that passion met is to start a brand new nonprofit. Often we have to look at — what is it I’m trying to do? What am I trying to accomplish? Not always is the answer to form a new organization or a new nonprofit.

One of the things that we need to consider — is there an existing organization that would be interested in expanding their programs to do something new? Perhaps that’s where we need to put our energy — in partnering with someone that’s already in existence to create a new program or service. Or to join with them to expand on a current program or service that they have or offer.

We need to be able to answer the question: Why is a new nonprofit the way to go versus joining a nonprofit that is already in existence? That is an important question at the beginning because we are talking about starting a new corporation and there is a lot of work to that piece.

We spend as much energy developing the infrastructure of a new nonprofit as we spend doing the mission that we feel called to do. I want to make sure that people are educated about that and that they are really committed to starting a new corporation because it’s not necessarily the only way to get the mission accomplished. We want to explore — if there are existing nonprofits that we could partner with — does that make more sense for us moving forward?

So we need to be able to answer the question:  Why is forming a new corporation the way to go here? Because again, that’s not only helpful at the beginning when you’re starting something new, but it’s also helpful to be able to answer that question to funders.

I hear often from the foundation world: “Why is another nonprofit needed? We already have so many nonprofits in the community.” It’s a question that’s going to come back and again and again. So we need to be able to answer — why is another organization necessary or important? In general there are two answers to that question. One answer is — there is so much need that the current organizations can’t meet that need. So while we might be doing something that’s being done elsewhere, a new nonprofit is needed in order to really meet the need in the community. The second answer is that there is no one meeting that need so we need to start a nonprofit in order for the need to be met.

The next question is: What is the vision for the organization?

What is the big picture? What are you hoping to accomplish with the organization that you want to set-about getting started? What is the long-term vision? What’s the big picture?

Another question: What will be the mission of the organization?

The mission statement is critical to organizations. Every nonprofit, whether they’re new, emerging or have been established for a while, runs on the mission statement. It is the crux of everything that you’re doing and it is imperative that you understand the exact mission that you are planning to accomplish as an organization.

Another question to consider is: Why am I the best one to get this organization started?

There are a lot of people with a lot of passion, but not every person with passion is the one to get a new organization up and going. So you need to be able to think through the question — why am I the one to get this started? It has to be more than just passion. You have to have the passion to get it going because that’s what keeps you fueled in the beginning stages.

And lastly, for this round of questions, you also need to think about: What passions, skills and talents do I bring to the organization?

What are the things that you have that are tangible — the nuts and bolts that you bring to get this organization started? If you are the person that has a lot of passion but not a person that brings a lot of organizational skills to the table, you need to find a partner to come alongside you. That’s gonna be really important as you get this moving forward.

After we think through some of these beginning questions, we’re ready to move forward with a new question: What are the steps to get this nonprofit moving?