Should you start a nonprofit? Close one?

by Urban Views RVA January 9, 2019

The new year brings good intentions, some of which include starting a nonprofit organization. Another less talked about intention is closing an existing nonprofit. With this column we share thoughts on the large number of nonprofits. We provide a list of questions that individuals, board members, and community leaders can ask of themselves, their organizations, and philanthropists and funders.

If you want to start a new nonprofit. If you are considering starting a nonprofit you have good reasons and intentions. Unfortunately, these are not enough to launch and, most importantly, to sustain an organization. A few years ago, we wrote a column called 12 things to consider before you start a nonprofit. These include researching the need for your nonprofit, identifying board members who will serve in more than “name only,” creating a business plan to assess financial viability, and determining whether or not you need to create a new nonprofit, or can instead become a program of an existing nonprofit.

Of the 12 considerations, the last one is critical. Think of all the local, regional and national nonprofits. Each has their own infrastructure including administrative, legal and financial services, technology, and fundraising. And, each has their own board. Infrastructure is expensive, time consuming and requires constant investments. You have to pay salaries or contract fees for most of these items, and you have to invest time in developing, managing and growing these. You have to be involved with all of these elements, and if you don’t keep your eye on fundraising, there won’t be anything to keep your eye on!

Importantly, you will have to develop and sustain a functioning and engaged board with the community relationships and technical and professional skills required to provide guidance, oversight, and ensure financial viability. In every community there are only so many “ideal board members.” Who will your organization attract to serve? What will they be willing to provide and how are you prepared to work with them?

Consider the pool of existing resources and ask yourself: What is the best way to provide the services or advocacy our community – or nation – needs? Is establishing an independent nonprofit the best way to accomplish these goals? How will our entry into the marketplace affect other nonprofits? Is the “pie” really large enough to support another organization? Where will the money come from?

If you are engaged with an existing nonprofit. We believe you work for or volunteer with a nonprofit because you are committed to its mission. At the same time, we ask you to encourage conversation within your nonprofit if you believe it is facing challenges that are consistent over time and are not being addressed by management and the board. Ask the hard questions: Are we doing what we say we are doing? Are we making an impact? Are others offering similar services? Should we continue as a nonprofit? Should we consider merging? Should we radically downsize?