Starting a nonprofit can be challenging—just because there’s so much information out there, you can easily become overwhelmed. But if you stick with it long enough, you’ll figure out that there are 9 basic steps to starting a nonprofit, and either you’re going to try and take on the process yourself or hire someone to help you file the required paperwork and incorporate your organization. But the hard work starts once you’ve been approved by the IRS, and that’s why it’s important that you get really clear about why you want to start a nonprofit BEFORE you make that time-consuming, very expensive leap.

Do this . . . grab a journal or piece of paper and write the answers to the following questions: 

Why do you want to start a nonprofit organization?

It’s the first question I ask a client when they come to me looking for direction on how to start one. Having been in the nonprofit sector for over 30 years now, I know the ins and outs of the nonprofit—and it ain’t for the faint of heart. So, I always ask the question to try and get a feel for what the individual knows about nonprofits versus what they think. And I have to tell you, most of the time, these beautiful beings have no idea what it is they think they’re about to get into.

What was the defining factor for your decision to start a nonprofit?

Was it a personal experience? Were you the recipient of a service that helped you through a trying time in your life? Were you desperately seeking assistance but couldn’t find any support? Did someone in a leadership role impact you in such a way that you want to emulate them and do the same?

I’ve had more than a few Founders tell me the reason why they wanted to start a nonprofit is that they were sick of their jobs and wanted to start their own business. One gentleman said it was going to be his retirement plan: he had heard that he could start a nonprofit and get free money to help kids learn how to play music (his passion)!

Another person said they wanted to start their nonprofit because nobody else was doing what it was they wanted to do. But after a little probing and a quick Google search, I showed her just the opposite. There were over 20 organizations within a 25-mile radius of where she wanted to start her organization doing exactly what she planned on doing. Her response? “Yeah, but they aren’t doing it the way I wanna do it.” Even though she couldn’t clearly articulate what was unique about her programs.

It’s important that you are clear about why you want to start a nonprofit because it can lead you down a path you had no intention of traveling. Take the person who wanted to start a nonprofit because he believed free money was waiting on the other side. When the reality is he will invest between $800 - $3,500 when it’s all said and done to start that nonprofit.

More than likely, he didn’t start his organization with a seasoned board, so he’s going to struggle to cover the costs associated with running a business and end up paying out even more of his personal funds. He decides he needs a grant. After a few weeks of trying to decipher multiple “How To” grant writing books he gives up and starts his quest to find a grant writer. Two thousand dollars later (the grant writer’s fee), his proposal wasn’t funded. 

Now what?

That’s just one scenario. What about the woman who started her nonprofit in a saturated area? Without being able to articulate her competitive advantage, she will struggle with funding her organization as well.

Why am I sharing these stories with you? To emphasize how important it is that Founders have a clear understanding of why they want to start a nonprofit. Thinking through the personal reasons why you want to start a nonprofit may help you get clarity around the situation you are about to create.

Next question to answer: What personal benefit will you get from starting a nonprofit? 

Then, think about what benefits your target audience will get from your nonprofit.

The final question, and the best reason for starting a nonprofit organization, What is missing in your community?

Describe how your organization will fill that need. If there are other organizations in your service area, ask yourself:

1. Why do you need to start a new nonprofit (that will compete for the same pot of funding)?

2. Why can’t you volunteer with that organization, either on a program or serve as a board member?

Your answer (that only you will know) will provide you with the underlying reason why you want to start a nonprofit.

If you want to be more intentional about starting your nonprofit organization, consider going through the process of “Validating Your Nonprofit Idea”. This guide walks you through pertinent questions that will help you define, refine, and validate your reasons for starting a nonprofit, and put you on the right path should you decide to move forward.

If you have validated your nonprofit idea and are ready to take the next steps, check out my 90 Days to a Profitable Nonprofit course, where you will get a step-by-step guide to start and grow your nonprofit (and then some).