How to Start a Nonprofit Organization
Everything you need to know about starting a nonprofit organization.
Research & Refine Your Business Idea
Nonprofit organizations (NPOs) can pursue a wide array of causes and initiatives. Creating this type of entity, however, is far from simple.
Experts estimate that approximately 50 per cent of newly launched nonprofit organizations are redundant. Thus, to ensure the success of your endeavour, you have to make sure that the idea is original and that nobody else is working in the exact same field.
Regardless of the fact that the structure is not created to generate revenue, basic business principles will still apply.
Come up with a goal and a plan. What will the structure of the organization be? Will it hire staff? Look for volunteers? Will it need partnerships and agreements with business entities? How will funds be generated to support the charity, cause or initiative that the NPO is based on?
These are just some of the questions you will have to answer when setting up your non-profit organization.
You will be creating assets that you will not own – this is the number one thing to understand when getting started. The assets will be distributed to others but the strategy you come up with should be conductive of revenue creation in one way or another.
To pick a nonprofit organization niche, you will have to focus on several key factors – uniqueness, profitability, the potential to find donor support, sustainable impact and putting your current skills to good use.
Some of the most popular niches for non-profit setup include health and wellbeing, community growth, ecology, culture and history preservation, youth development, religion, public safety and venture philanthropy.
Creating your Business Website
NPOs are heavily reliant on internet to reach the right audience, do networking, increase awareness about a cause and connect with donors or supporters.
You should envision the creation of a high quality, responsive website right from the start.
The nonprofit organization’s website should accomplish several key goals:
- Enable donations through functional design and a simple call to action
- Provide information about the cause and why it’s worth supporting
- Provide information about the team
- Give visitors a simple opportunity for becoming volunteers or getting involved with the NPO in another way
- Create a sense of community
- Highlight sponsors and demonstrate the perks of providing financial support
When non-profit organizations have a solid online presence, they’ll even be free from having to rent an office or find a physical space for meetings to take place. Investing in your online presence will make the launch of your organization quite inexpensive because many of the traditional costs will be eliminated.
Setting up a website isn’t as hard as it may sound. In-fact, many hosting providers have tailored their service around small businesses that may not be tech savvy. We suggest going with BlueHost to host your website. Their service is simple and easy to use/setup and they’re currently offering 60% off hosting, including free domain registration.
Additionally, creating a blog on your website is also a great way to attract organic traffic and expand your business. Check out our full guide on the best and easiest way to set up a WordPress blog here.
Get Ideas for your nonprofit organization’s name!
Marketing Your Business
NPO marketing can take place in various ways. You can rely on both traditional and digital channels to get the message across to the right audience.
When crafting your nonprofit organization’s marketing strategy, you have to keep in mind the fact that you’ll be addressing two primary audiences – potential sponsors and those who are a general audience and who can generate some buzz about the cause.
Sponsors can be reached via your website, a well-established LinkedIn profile or through participation in specialised events. Direct contact with your NPO representatives will also be required to get investors, benefactors and other sponsors excited about the idea.
Some of the best marketing approaches in the world of NPO promotion include the following:
- Content marketing that builds the reputation of the NPO and presents the cause in the best possible way
- Video advertising through YouTube – videos have a massive emotional appeal and they’re also the type of medium that has the highest potential of going viral
- Ads and publications in relevant print media like local newspapers or specialised magazines that can reach an audience of interest
- Social media content creation and promotion (once again characterised by a high emotional appeal)
- Speaking engagements and workshops that enable actual contact with interested individuals
- Email marketing – a little bit of old-school internet promotion can be exceptionally beneficial, especially if you have targeted and segmented groups of email recipients
- Mobile-friendly developments (apps and web pages that enable mobile donations)
- Partnerships with influencers to reach their audience
You can accomplish a lot, even if your budget is limited. Very often, influencers and even celebrities will support NPOs free of charge because of their belief in the worthiness of the cause.
It’s also a good idea to focus on the creation of organic social media content. A good hashtag can easily grow your reach and help you launch a viral campaign. All that you need is a little stimulus for people to share your content.
Setting Goals and KPI’s
Since nonprofit organizations work in a different way than profit businesses, the key performance indicators (KPIs) to measure will be unique.
The KPIs give you some information about the development, sustainability and growth potential of your idea. Through the tracking of the right KPIs, you can also identify errors or more effective strategies for accomplishing a goal.
Each NPO will have to choose industry and niche-relevant KPIs to track. A few of the viable metrics could include the following:
- Donation growth: this one is an obvious and it demonstrates just how effective fundraising efforts have been.
- Donor retention rate: just like every business out there, a nonprofit organization needs consistency that can be achieved through the retention of already established relationships with donors.
- Fundraising ROI: the return on investment is very important for every organization out there, especially for organizations that generate assets for specific causes and initiatives.
- Social media engagement: if you have a solid online presence and you’re heavily reliant on online donations, you have to measure the effectiveness of your social media marketing campaigns.
- Volunteer rate: just like the donation rate, the volunteer rate is indicative of engagement and it stands as evidence of a communication strategy’s effectiveness.
- Donation conversion by channel: which of your marketing and communication channels are bringing in the most donations? This is exactly what the KPI will aim to identify.
- Website page views and sessions: as already mentioned, the website of a nonprofit organization is one of its most powerful advertising assets. Tracking the performance of a website is important to make sure you’re reaching the right audience and you’re getting these people engaged.
Plan your Finances
You will need financial resources to set up your NPO. The good news is that grants, social initiatives and programs exist to enable the establishment of non-profit organizations. In order to pitch, however, you will need a strong concept and a development plan.
Crowdfunding, establishing relationships with donors right from the start and even your own savings could also be utilised to get the financial side of things going.
When thinking about finances, you will have to account for the costliest and most expensive aspects of the NPO setup.
The essentials to anticipate (apart from the startup cost) include operational expenses like administrative costs, office rents, salaries, marketing expenses, travel, trainings, seminar participation, event planning, bookkeeping and the cost of soliciting contributions.
Some of these costs can be minimised. Going digital and relying on volunteers are two excellent examples of expense minimisation strategies startups can employ. Alternatively, a startup should look for sponsors and business partners right from the start. If you get at least an initial investment secured, you can get things going in order to begin receiving donations as soon as possible.
Adopt an Entrepreneurial Mindset
Regardless of the fact you don’t run a profit-generating entity, you will still need to adopt the entrepreneurial mindset.
Entrepreneurial mindset is about being goal-oriented. You need to have a clear vision of where you are, what you’re trying to accomplish and how you’re going to get there.
Good entrepreneurs know when to risk and when to hold back. They have a realistic idea of the future but they still push themselves pretty hard in order to accomplish their goals.
If you want to develop an entrepreneurial mindset in the field of NPO management, you can rely on various resources.
Getting Things Done: The Art of Stress-Free Productivity by personal and organizational productivity leader David Allen is a great choice. Joan Garry’s Guide to Nonprofit Leadership: Because Nonprofits Are Messy is another excellent resource.
Depending on your background and preferences, you may also want to attend a degree in NPO management. Various universities have such programs and some of them enable the online and remote completion of courses.
Other things to consider when starting your Charity
The legal requirements of starting a nonprofit organization will vary from one country to another.
In some instances, you will have to register a specific business entity in order to carry out fundraising activities legally. Consulting an experienced business law attorney will come in handy and it could simplify the registration process.
If you want to start an international nonprofit that functions in more than one country, you will have to follow a different set of legislative requirements.
Accounting & Bookkeeping:
Nonprofit bookkeeping also comes with its specifics, hence you should hire an accountant that has enough experience in the field.
If you cannot allocate a large budget to bookkeeping, consider working with a freelance professional. Many freelance accountants have an excellent reputation and they know what it takes to partner up with NPOs and keep their financial documents in perfect order.
You’ll also need to consider software programs that will help you handle daily accounting tasks.
There are inexpensive and free of charge options out there. These programs are designed especially for the needs of nonprofit organizations and they can be used to do fund balance tracking, create a donor database, issue donor receipts and statements, manage event registration and ticket sales and create customisable reports.
While you’ll probably be looking for volunteers, you’ll also need to hire employees for some of the key positions in the organizations.
NPOs need communication and fundraising officers. These professionals should have a background in marketing, PR or communications. They will be managing the communication with donors and they’ll also be working on fundraising initiatives. Thus, sufficient experience and knowledge of the respective field will be required.
Nonprofit organizations may also need an HR manager, administrative assistant, social workers and case managers, data analysts, events managers and grant proposal writers to name a few.
A passion for the respective initiative is as important as professional experience. NPOs often face challenges, which is why they need committed employees who will remain with the organization.