Wooden Scrabble tiles arranged to spell 'Press Pause' on a clean white background.
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Before You Start a Nonprofit, PAUSE

People start nonprofits for good reasons. I have been one of those people. I was in my mid-20s and I received an award of $10K. Instead of going on a vacation, I started a nonprofit. Like those other people, I saw a gap. I cared about an issue. Hey, maybe I even had experience in wanting to change the thing and I wanted to do it immediately.

I spend almost every day working with or thinking about nonprofits. Why would an attorney and strategist for nonprofits and other mission-focused entities try to talk you out of it? Sometimes, starting a new nonprofit is what the world needs. Other times, it’s informed by all the wrong things– such as losing a job, being lonely, or not liking structure. Trust me that nonprofits are more structured than small businesses, and unlike the burning desire many founders feel to just be left alone to do their thing, nonprofits come with Boards– that can’t just be relatives and friends if you are hoping to expand the impact. When you make a nonprofit, you are creating a good for others, and that’s what makes nonprofits difficult and meaningful..

Should You Start a Nonprofit? Maybe. Maybe Not. If You Thought of This Yesterday . . .“Not Today.” 

If you’re asking “Should I start a nonprofit?”, you’re not alone. It’s one of the most common questions I get from founders, advocates, and community leaders. On the other side of this lifespan, I also get questions about when people in those same roles will know it’s time to end a nonprofit or merge with another one. That’s the end of the same story about starting one.

Often, that question about starting one is more rhetorical than anything. Minds are made up. Someone is just stuck on picking a name or getting the money together for filing fees. 

Let’s pause, though, because nonprofits were never:

  • Easier ways to be employed
  • Casual structures for meaningful work
  • Funding (or self-funding) strategies
  • Alternatives to working with existing organizations (They will be around– you’ll see!)

Nonprofits have so much structure and regulation that they become overwhelming to most folks who pay attention to the requirements and can have them survive past the first 990 filing. While so much energy is focused on just getting started and figuring it out later, not much becomes easier once you actually have 501(c)(3) status– except allowing any potential donors to get a receipt.

A Quick Reality-Check Before Starting a Nonprofit

I have been working with nonprofits since I was in high school. I’ve heard so many reasons why people start them and I’ve also learned so much from what surprises people along the way, whether it is legally or in terms of community and group dynamics. At first, I thought that I’d develop a bingo card of bad reasons to start a nonprofit, but then, I realized that many first thoughts about nonprofits are just that. I’m always excited by working with people bringing good things into the world, so much so that I have to pause myself.

Rather than offering 25 reasons why you should never form a nonprofit, or a test of someone’s potential success, I created this PAUSE tool, which is more of a reflection or spotting of patterns. The questions are for you and meant to get at motivations, knowledge, readiness, and maybe, some wishful thinking. 

PAUSE (With me or alone)

You can try the tool here:https://wearealigna.com/pause/

What Your Responses Might Be Telling You

Remember, a nonprofit is a structure, not a solution or identity. As you see your responses populate some insights in the tool, think about what scares and motivates you the most. Maybe you’ve noticed a pattern about what you most dread, too. Are there skills you can acquire before starting a nonprofit or others to bring to the initial Board that will make this path sustainable and successful? 

If you want community or connection, but you feel frustrated by how other organizations operate, you hope funding will follow your ideas, and you don’t enjoy planning, logistics, compliance, or quality time with an attorney, then starting a new nonprofit might not be the right answer. Similarly, if you thought you were making something for yourself without having to sell it to others or get their feedback, then you might feel like nonprofits are more of a pain than a small business. 

Alternatives to Starting a Nonprofit

Before you go wild and think downloading some forms online is all you need for 501(c)(3), consider learning about what it will take to keep the nonprofit alive past the first year. There are simpler approaches to making an impact, such as:

  • Partnering with an existing nonprofit doing similar work
  • Piloting your idea informally before formalizing it
  • Finding a fiscal sponsor
  • Serving on a Board (or many)
  • Starting as a business that is mission-focused and pays it forward
  • Building strategy first, then choosing the right structure

If You’re Still Thinking About Starting a Nonprofit

You don’t need to have everything figured out but please don’t take on so much structure and ongoing regulation just because someone else said it would be easy or you don’t want to think about it too much right now. Be clear about the problem you are trying to solve and what comes with structure– more structure. 

Thanks for being the kind of person who wants to make something great for others. Holler if you need a knowing look, a pep talk, or a talking-out-of-it.

→ Book a Strategy Session
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Prefer a Printable Version?

If you’d rather work through this offline or share it with a colleague:→ Download the PAUSE Reflection: Nonprofit Reality Check (PDF)