6 Steps Before You Start a Nonprofit

Do Market Research to find out if Your Nonprofit is Needed


#1: Does your nonprofit fill a gap?

Yes ______                        No _______        Not Sure _____


#2: What other nonprofits exist in my geographic area?

Search for nonprofits online or maybe you already know some by name.

The other resource you can use is Guidestar.org and put in your state or geographic area to find different nonprofits. Sometimes your city or region may also have a nonprofit resource center. This is great as they will often include the nonprofit members on their website.

Another good old place to find out what registered nonprofits are in your community is to go to the Taxation authority, such as the Department of Revenue and Taxation. To be a tax-exempt nonprofit, these entities need to file with the taxation authorities. In a nonprofit research project that I am currently working on, I went to the Guam Department of Revenue and Taxation to find out the number and types of nonprofits registered on the island. This was interested as about 45% of all registered nonprofits were rejected nonprofit status.

In any case, these are resources to show you what nonprofit organizations already exist. I cannot tell you how many times that I have had individuals come to me with their ‘great idea’ of wanting to start a nonprofit because they see a need in the community and for me to let them know that they should partner with an existing nonprofit that is already doing that work. Sometimes they may have a twist on what is being done, but a lot of times they just are not aware or they may think that the current nonprofit is not doing a good job so want to compete. In the latter case that can be fine as competition in markets – even nonprofit markets – can be good at times.

#3: What gaps do they fill?

Now that you know what nonprofits are out there in your community, it is important for you to see what gaps they fill. You can do this in two different ways. First, do a large sweep and break down the organizations into categories, such as arts, conservation, education, and so forth. Next, pick the category or categories that you want your nonprofit to be under, such as homelessness. Take that specific category and check out what other nonprofits are doing under that specific category; such as:

City Homeless Shelter provides transitional housing, daily lunches, and work programs.

#4: What activities do I want my nonprofit to fill?

List out what you really want your nonprofit to do. Maybe you want to provide certain work skills for homeless people that are not being provided. Maybe you want to serve homeless families and only homeless individuals are being served.

#5: Do I know of any statistics, case studies that meet the need?

Find out if your nonprofit will fit a unique gap. Maybe you want to serve homeless cats but there are none in your community. Do some research. Find out if there is actually even a need for what you need to do.

These are some quick questions, and not-so-quick research to do when thinking about forming a nonprofit. Take the time to do this if you have a great idea. I know, it seems like the best idea ever and maybe it is, but as Mark Twain said, “There is no such thing as a new idea. We simply take a lot of old ideas and put them into a sort of mental kaleidoscope.” Sometimes that kaleidoscope casts a new light into creating a nonprofit, but other times it means you can partner with an existing nonprofit.

#6: File all the correct documents

  1. Identify your Nonprofit Organization’s Mission and Vision
  2. Formulate a Nonprofit Founding Team
  3. Write your Articles of Incorporation & Bylaws
  4. Create Goals and Activities
  5. Create a Projected Budget
  6. Secure Initial Funding to File Your Nonprofit
  7. Apply for 501(c)3 nonprofit status
  8. Build your Strategic Network
  9. Grow your Nonprofit

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