Starting a nonprofit business that has early success and begins to meet long-term goals is just as difficult as launching a business that’s for-profit. Thinking that it’ll somehow be an easier path because you have your heart in the right place is a big mistake.
As a nonprofit startup, you’ll need to meet specific and objective goals for your foundation, charity, trade association or league. As such, it’s a necessity to set up some key indicators of performance and success that help you manage the organization while attracting additional corporate, governmental and public support.
Here, we’ll take a close look at how you can experience early success with your nonprofit startup.
1. Have a Mission That’s Well-Defined
It all begins with your mission statement. A vague or general mission statement that doesn’t accurately describe the details of what your nonprofit is there to accomplish will not garner the attention that you need.
To achieve your goals, make sure that your missing statement is well-defined and specific. Blanket statements such as “to work with animals” or “helping children in the community” are too general to gain early traction.
Craft your mission statement, or your statement of purpose, so that you can proudly present it to the general public, the secretary of state, and the IRS (if your organization is actively seeking tax-exempt status on the federal level.
Within your state of purpose, make sure to include in the bylaws a specific list of the activities you do not intend on pursuing, such as political contributions or lobbying efforts. This will help narrow your scope of activities.
2. Plan for the Long Haul
In the early stages of your nonprofit, it’s important to create highly targeted three-year plans that thoroughly outline the goals you’re trying to achieve. Although you won’t want to change your mission statement as the years move forward, you’ll need to regularly increase your goals for fundraising, include new populations to target, add activities, expand committees, and update your newsletters and website.
Starting with year one, plan a retreat for your board of directors or the executive committee so they can conduct a review of each year’s annual plan and overall three-year planning activities.
3. Turning a Profit
As a nonprofit, it’s important to note that you can generate revenues that are in excess of the organization’s spending. However, you can only generate a profit provided that it’s not the main purpose of being in existence. In addition, it’s required that the majority of your profits are disbursed in charitable ways.
To achieve early nonprofit success and maintain financial stability, work toward operating your nonprofit just as you would a business. Start by getting a nonprofit payment processing system to help easily collect donations and money from fundraisers. Disburse excess cashflow near year-end once you’re confident that the organization has plenty of resources to cover all bills and other requirements.
Or, consider using the extra funds toward planned activities for the upcoming year, such as creating an endowment that can be used to generate interest income for the funding of future planned activities.
4. Keep on Top of Required Paperwork
Your paperwork requirements will depend on how you decided to incorporate your nonprofit. If you have a 501(c)(3) status, you’ll have an array of forms that you’ll need to file every year, starting with year number one. This includes records that are freely available to the public.
If your nonprofit isn’t federally tax-exempt, you may be taxed on revenues that are classified as “unrelated business income.”
By keeping up with all your records and paperwork, you’ll avoid problematic issues down the road.
5. Communicate Your Successes
It’s important to keep sponsors, donors, volunteers and the public in general up-to-date on the things you’re achieving. This will help maintain the level of support you’ve already built while increasing the potential for future levels of support.
When good things are happening, send out press releases to your local media, write articles in your newsletter, keep your website updated and send out direct mail.
Early Success for Your Nonprofit Is Possible
Many folks who launch nonprofit startups make the mistake of thinking that success could be several years away. This simply isn’t true. It’s possible to achieve success in year one by following these rules and keeping your eye squarely on your goals.