Episode 5: Alternatives to Starting a Nonprofit: Starting with the End in Mind
There are many ways to support your community without starting a nonprofit.
Learn how to make a difference, make an impact, and help people in need without making the financial and time commitment required of starting a nonprofit business.
Link to resource in the podcast: Sexy Alternatives to Starting a Nonprofit
Podcast Transcript
Speaker 1 (00:05):
Welcome to On Air with Amber Wynn, where nonprofit leaders learn to fuse passion and commitment with proven business strategies to create long-term funding, impact, and sustainability. And now here's your host and resident Philanthrepreneur Amber Wynn.
Speaker 2 (00:27):
Welcome everyone to On Air with Amber Wynn. It's your girl, and I'm so excited to be here. Today we are covering the nonprofit success path. And for those of you just joining me, I want you to go back to some of the previous episodes where I explain what the nonprofit success path is. In a nutshell, it's the opportunity for you as a founder or an executive director to stage your nonprofit. In staging your nonprofit, you understand exactly where you are on the nonprofit success path, and it's gonna reduce the amount of time that you spend spending your wheels trying to figure out what to do. Because if you're at a certain stage, then you won't be focusing on things in other stages. So right now we are in stage zero. And Stage zero is you're thinking about starting a nonprofit. And if you're thinking about starting a nonprofit, you are in the most powerful position that you could possibly be because that means you haven't committed any money, you haven't committed any time.
Speaker 2 (01:27):
And typically when you commit time and money, you're gonna be stay in the race. Well, before you even get into the race, we're gonna talk about other things that you can do besides starting a nonprofit because I'm just gonna keep it real. We have so many nonprofits right now. There's not anything novel out there. Can you do something differently? Yes. Does it mean that you should? No. And if you are seriously committed to making a difference in your community, then it should not be about starting a nonprofit. So this is the time that you're gonna be able to take and just really sit with yourself and say, is it really about what I wanna do in the community? Or is it about me wanting to start a company or an organization or call something that's mine? And if that's the case, that's perfectly fine. I am just gonna advise that you start a for-profit and not a nonprofit because there's a whole different beast when we step into the nonprofit sector. But we're gonna jump into all of that. You are on air with Amber Wynn Philanthrepreneur, and I provide nonprofit founders with the roadmap to long-term funding and sustainability. And right now we're gonna pause and hear from one of our sponsors, and then we'll come back and we'll talk about the alternatives to starting a nonprofit.
Speaker 3 (02:44):
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Speaker 3 (03:10):
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Speaker 2 (03:56):
Welcome back to On Air with Amber Wynn, Philanthrepreneur. Today we are talking about alternatives to starting a nonprofit, and we are in stage zero of the nonprofit success path. We're staging nonprofits so that you have a clear understanding of the work that you need to do in your specific stage. This is gonna save you tons of hours of work and thousands of dollars. You stage yourself, you go through the checklist of all of the things you're supposed to have in this particular stage, and then you move on to the next stage. This is the system that I've created to help nonprofit founders wade through all of the information, wade through all of the overwhelm because there's so much information out of there, just giving you the opportunity to focus on where you are and then understand what the next steps are for where you wanna be. So today we're talking about alternatives to starting a nonprofit. And people ask me as a nonprofit consultant that my livelihood is based off of supporting nonprofit founders and executive directors. Why would you encourage people not to start a nonprofit?
Speaker 2 (05:09):
I do that because two reasons. One, I really want nonprofits to make a difference in our community. And if you're starting a nonprofit, you don't understand what you're supposed to be doing. That means you're not gonna get funded. That means that the work that needs to happen in the nonprofit in the community is not gonna happen. So if you're in it for the wrong reasons, then you're not gonna do what you need to do to be successful. So that's one reason. And then the second reason is I really want you to be successful. And the way that you're successful is being informed. If I tell you all of the things that it takes to run a successful nonprofit and you're still on board after all of that, then I know that you're gonna be successful because that means you're committed to doing the work because you understand all that it takes to be a successful nonprofit.
Speaker 2 (05:59):
So at the end of the day, I'm gonna get work. I mean, I produce a quality output, so I'm not worried about that. I'm really not. I am more concerned about you as a nonprofit leader being equipped with the knowledge and skills that you need to be successful. So that, number two, the work that needs to be done in the community can be done at an accelerated rate with long-term consistency. Cuz statistics tell us that 40% of all nonprofits close their doors after two years. And I don't want that to be you. So let's talk about why I'm encouraging people to really look into alternatives to being starting a nonprofit. Number one is because a nonprofit is a business. You're gonna hear me say this all day today, tomorrow, next week and next year. It is a business and it requires that you have money not only to start it, but to run it.
Speaker 2 (06:59):
Then number two, it requires that you have a certain level of knowledge. People think that because it's a nonprofit, you can get in here and just make things up and you can't because the IRS has already established the rules for running a nonprofit. So it's important that you have the knowledge and skills. It takes skills to run a business. It doesn't take any less skills to run a nonprofit because a nonprofit is a business. So if you think you can get in there and just wing it and all of this grant money is just gonna, oh, miraculously fall into your lap, that's not gonna happen. So if you don't have the skill set to do marketing and accounting and to ask people for money and to do the reports and all of the things that it takes to start a nonprofit, then that's something you really need to pause and think about.
Speaker 2 (07:44):
You can make a difference in your community without starting a business. Cuz listen, you've gotta do board management, you've gotta know how to recruit people, you've gotta keep them engaged and it's a lot of work and it just requires a lot of time and skills that aren't necessarily, necessarily intuitive. So all of that those are the reasons why I'm encouraging you. If you really wanna make a difference in your community, you can do it, but you can do it in a different way. Let's look at what that could look like. Number one, if you're serious about making a difference, you can do that as a volunteer. There are so many nonprofits out there who could use your skill set your innovation, and they already have the infrastructure, they already have the nonprofit, they already have the clients that you wanna serve, step in as a volunteer and offer to strengthen a nonprofit.
Speaker 2 (08:38):
Like if I could create that pathway, that pipeline, I think I could just die happy because we have nonprofits who need other people's talents and skills. And you can be that person. And let me just add as a volunteer, that also means that you can volunteer as a board member because as we know, nonprofit board members don't receive any type of payment. They are volunteers, they just happen to sit in the governing seat. They help to run the organization. And what's exciting about if you choose to become a board member is you get to learn about an organization and how it functions and how it works before you make the commitment to start one on your own. You can see the things that this organization does well and you can see the things that they do crappy so that you don't do it. But more importantly, if you volunteer for a nonprofit organization that's in your same area, you also learn about their funders.
Speaker 2 (09:36):
You also learn about other board members that you can engage for your nonprofit before you start it. I always say it's an amazing opportunity to do a trial run before you actually step into it. So really, really, really, if you're thinking about starting a nonprofit, consider first serving as a volunteer, serving as a board member so that you can get your feet wet and really understand what it is you'll be jumping into. Second, if you're considering starting a nonprofit, then think about forming a giving circle, right? A giving circle is something that you can form really easily. You go down to a community foundation and you say, Hey, I'm interested in giving out scholarships to other nonprofit organizations. They can set up your account, they can help you with distributing your funds to whoever it is you decide you wanna fund. They're doing all of the backroom management.
Speaker 2 (10:32):
You and your circle of friends can meet once a month, once a quarter, once a year, and decide who you wanna give your money out to. That way, you have a group of committed people who donate their money to a cause and you guys decide where that money's gonna go. So you've formed like a group, but it's a loose group. It's not necessarily, you know, gotta go incorporate and all of that. You guys just decide what you stand for and what you wanna fund. And in that space, if you decide to dissolve, you can walk away. There's not a business that has to be dissolved, you know, close the accounts, you say good job and you move on. But the other benefit of a giving circle is that you're not locked in to just funding the same thing. Maybe this month you wanna fund young girls who are going to college and then next month after that you wanna fund young males who are athletes.
Speaker 2 (11:28):
And then the month after that you wanna fund seniors. Like it's limitless. It gives you the flexibility that you could do whatever you want. So think about forming a giving circle with a group of like-minded friends. Another alternative is you can get a fiscal sponsor. Now people are a little uncertain about fiscal sponsors and I'm gonna tell you why. It's because they don't understand the purpose and function of a fiscal sponsor. A fiscal sponsor has a 501(c)(3) tax-exempt status that, how can I explain it? That they loan to people. So if you don't have a 501(c)(3), but you wanna collect grants and you want to get people to donate money to you so that they can get a tax write off, then you would leverage the fiscal sponsor's 501(c)(3). What I love about a fiscal sponsor, and it's not just any old person who has a 501(c)(3), I've had people say, oh, my auntie has a daycare, I'm just gonna use her 501(c)(3).
Speaker 2 (12:29):
You don't want that person to be, don't want that person to be your fiscal sponsor. If they are not formed, set up, have the experience of being a fiscal sponsor, then you don't wanna just borrow someone's 501(c)(3) cuz it's gonna get you in a mess of trouble. A fiscal sponsor is an organization whose task is to assist other either individuals or organizations that wanna serve the community, but they don't have the experience that is their purpose, that is their function. They help you learn how to grow your board, they help you learn how to create reports and track and all of that. To me, I see a fiscal sponsor as an entity that does your back office. So they receive the money, they distribute the money and they also do the reports. You've gotta give them the information, but it would be the same as having an accountant that you pay, except for the fiscal sponsor covers a little bit more of the infrastructure type of stuff, whereas an accountant just does the numbers.
Speaker 2 (13:35):
So if you're thinking about starting a nonprofit but you're not sure, you know, don't have the experience that you have no idea what you're doing, but you know, wanna go for grants and funding a fiscal sponsor may be the very best option that you have. They charge between nine to 12% of whatever you bring in. And if you think about it, you pay that amount for an accountant, but they're not doing all of your reports and they help you grow. So when you're doing your submissions for your reports and your financial statements, you're learning as you go. And you don't have to stay with them all of the time. You could have a fiscal sponsor for a year, two years, 50 years, it's up to you. But if you have a fiscal sponsor when you first start out, you get to learn the ropes and then when you're ready, you can file for your 501(c)(3) tax-exempt status.
Speaker 2 (14:29):
Now you feel more comfortable you can sever ties because you've learned as you've gone along, now you're ready to go. So I always try to encourage new founders who have absolutely no nonprofit experience to get a fiscal sponsor cuz it helps to get them out of trouble and it helps to keep them on the straight and narrow. So those are some of the opportunities that you can leverage instead of starting a nonprofit. If you are a for-profit and you do things that are supportive of the community and you've had people say, oh, you need to turn your company into a nonprofit, I'm gonna tell you don't do it. Don't turn your for profit into a nonprofit. Instead, what you wanna do is find a nonprofit that you trust that is in alignment with what it is you wanna do and partner with them. That's what you want to do.
Speaker 2 (15:29):
Keep your for-profit company, do what you know how to do. But there may be an opportunity for you to create a program, a training program. Maybe you wanna bring kids in to learn how to do a podcast or run the boards or I don't know, film or photography, whatever it is. And this is your area of expertise. Find a nonprofit who's willing to, number one, write the grant. Number two, serve as the lead. So they'll get funded and you will be written into the grant as a subject matter expert to deliver these services. Why would they do that? Because they don't have the expertise to do it. But if they write you in their grant, then they're gonna look like they have an amazing partnership, which is what this is. And they can provide their clients, their students, or whomever, with these skills that they wouldn't otherwise be able to provide.
Speaker 2 (16:24):
So you would be considered a subrecipient and you would get a sub award and you don't have to be a 501(c)(3) tax-exempt organization to get that money. They basically are going to start what's called a contract. You'll have a contract with this nonprofit and they'll pay you. So there are other things that you can do besides starting a business, a whole new business. You can find other alternatives, as I've mentioned instead of starting a nonprofit. And I say it with so much passion and vigor because starting a nonprofit is a lot of work. I have clients tell me that I didn't know it was gonna be all of this. I didn't know I was gonna have to do all of this. I gotta do all of that before I can even get money. Yes, yes, yes, and yes. So if you are really committed to making a difference in your community, I'm here to let you know you can make a difference. And you don't have to start a nonprofit to do it. So don't let that be the reason that you're jumping into this big old pond without understanding how deep it is, right? All right, so today we are talking about alternatives to starting a nonprofit. I'm Amber Wynn, you're here with On Air with Amber Wynn Philanthrepreneur. And now we're gonna pause for another sponsor, but we'll be back. And we're gonna finish talking about stage zero alternatives to starting a nonprofit.
Speaker 4 (17:56):
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Speaker 2 (19:16):
Welcome back to On Air with Amber Wynn. I'm your girl and resident, Philanthrepreneur, and today we're talking about alternatives to starting a nonprofit because it's a lot of work, and I'm not gonna lie there are consultants out there who will encourage you to form your 501(c)(3) because it lines their pocket. That's how they get paid. And I'm here to let you know, listen, I'm not rich and I'm not just swimming in money, but at the end of the day, my commitment is to communities across the country. And if we have all of these nonprofits popping up, but they don't have the infrastructure, the understanding, the knowledge or experience on how to run a nonprofit, then they're not able to really make the difference in the community that they really wanted to do. So I'm here to tell you, if you are committed to your community and you wanna make a change, you can do it.
Speaker 2 (20:09):
But you don't have to start a nonprofit to do that. And what I wanna do is I wanna provide you with a downloadable PDF of an article that I wrote on my blog, and it's called Six Sexy Alternatives to Starting a nonprofit. Yes, they're sexy. They're sexy because when you read them and you're like, wow, I can make a difference without starting a business, while I think that's sexy. So I am gonna provide that to you free of charge, download it. It's a nice little read, probably about eight minutes. But it outlines in detail not only what the alternative is, but what the commitment is in terms of finances, in terms of time. You can take your time reading it and really just chew on it and see if any one of these six alternatives is something that you can consider so that you can make a difference in your community without starting a business.
Speaker 2 (21:00):
But at the end of the day, after you've read all of those and you're like, yeah, that's not really what I wanna do, don't worry, I'm your girl, I got you. As I stated at the beginning of the episode, I just wanna make sure that you're informed. If you've read through all of these alternatives and you still are committed to starting a nonprofit, I feel good because at least now you know what you're getting into. A lot of people have been hoodwinked into believing that starting a nonprofit is easy and it is not. So I'm here to tell you, if you're ready to roll up your sleeves and do the work, then I'm here to help you because I provide nonprofit founders with the roadmap to long term funding and sustainability. That's what I'm here for. All right, so right now we're gonna jump into the question of the day, which is how do I get a subcontract with no track record?
Speaker 2 (21:49):
So a little bit earlier before the break, we talked about some of the things that you should be focusing on instead of jumping into trying to get funding. And one of those I mentioned was actually getting a subcontract or being a subrecipient. If you have a for-profit, or even if you're just thinking about starting a nonprofit, but you know that you don't have a track record, the question here is, how do I get a subcontract with no track record? Why would anybody partner with you if you can't demonstrate that you do what you say you do? I'm gonna tell you, as an executive director, we are looking for ways to offset costs, to increase services, and to provide our clients with as many opportunities as possible. Now let's just say as Amber Wynn I've been doing public speaking for 20 years, but I've never created a program, but I have the experience in expertise.
Speaker 2 (22:47):
So what I'm gonna go to a nonprofit and say is, Hey, I'm thinking about starting a nonprofit. I've never done it before. And so what I'm trying to do is really just build up my portfolio. And so I'd like to volunteer to work with your clients, your students, your girls. So I'm going to put together a program, it's gonna be for six months or a year, and I'm gonna deliver these services for free. But with the understanding now, when I'm talking to the executive director, and this is crucial, this executive director understands that after that committed period of time, three months, six months, a year, my expectation is that when they go for grants, they're gonna write me in for a sub-award. So basically we get to get a trial run. We're partnering, she's not putting out any money, I'm putting out everything because I want to build a successful track record.
Speaker 2 (23:41):
So we create a memorandum of understanding, we sign off on what they will provide. I'm gonna ask for things like a building a classroom, so I don't have to figure that out. I'm gonna ask for materials and supplies if they have them, right? And they're gonna provide me with the students, I am just providing them with the service. So they get something, I get something. So let's just say we go through the 3, 6, 9 months. I am gonna document everything. I'm gonna document my successes. I'm gonna document my challenges, because at the end of the day, when I roll out my real nonprofit, I already have this experience, but most importantly, I'm gonna document my wins, my success stories. I've turned five girls into public speakers, or six of my girls were shy and they couldn't speak in public. Now they can, whatever it is, I'm gonna document that because when I go back to negotiate my contract with this executive director, if she says, I love the work that you did, but we don't have the money, it's not a loss.
Speaker 2 (24:43):
Now I have documented proof that I can then go and request grant monies for one year. I served 25 girls and here are my successes. So now it was a win-win. Now, it would be lovely if this organization said, okay, we love the work that you do. We're putting in a grant, we're gonna partner with you. But you gotta go in understanding what your end game is. Your end game is being able to walk away from that partnership with some tangible results, the impact that you made. Now, you may come out with a sub award, but if you don't, you still now have something that you can then write into a grant. So that's how you go about getting a subcontract with no track record. You go in promising that you're gonna deliver. Think about it, you're gonna be floundering out there for two years trying to figure it out anyway, partner with somebody who's already established, partner with somebody who you've done the research for, and they, they're good at getting grants.
Speaker 2 (25:41):
And then you can demonstrate your value and your worth. So that is my suggestion. And yeah, today we've been talking about alternatives to starting a nonprofit. We are in stage zero of the nonprofit success path. I wanna thank you for joining me today. You know, can always reach out to me if you have a question, if you'd like your nonprofit featured on our show. I'm always excited about featuring our nonprofits because you're doing the work in the community and visibility helps to get funding, but it also helps to build collaborations. So check me out on my social media handle. I'm on Facebook, Twitter, and I'm on Instagram. And if you just wanna reach out and say, Hey, you can also reach out to me on my website, it's www.amberwynn.net. Next week we are going to jump into stage one actually starting a nonprofit. So I look forward to seeing you there. And until then, have a great one y'all.
Speaker 1 (26:46):
Thanks for listening. If you enjoy this episode, subscribe and leave a review on iTunes. Head over to www.amberwynn.net/podcast for the links and resources mentioned in today's podcast. See you next time.
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