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Six Reasons Not to Start a Non-Profit Organization

posted Mar 7, 2017, 8:32 AM by Jeane Goforth   [ updated Mar 7, 2017, 8:37 AM ]

This article was written by Kimberly Richardson, author of The Official Federal Grants Prep Guide and President of Kimberly Richardson Consulting, LLC in Birmingham, Alabama. KRC specializes in providing granting writing, grants management, training and technical assistance to non-profits, government agencies and other organizations eligible to receive grant funds. For more info go to: www.kimrichardsonconsulting.com

As a grant writing consultant, I frequently receive calls from individuals who are interested in securing grants for various ideas and activities. As a way of securing support, they often want to start a non-profit organization. Sometimes there’s a legitimate need, but more often there is not. So just in case you’ve been pondering whether you should start one, here are my top six reasons why you should NOT start a non-profit organization.

1.      To Get Grant Funds

By now, everyone pretty much knows that grants are awarded to non-profit organizations for a variety of purposes. Some individuals see this and think it’s an opportunity to “score” cash from organizations that are just “giving it away.” Nothing could be further from the truth! Grant awards are made through a variety of processes, some simple and some extremely complicated.  Any experienced fundraising professional will tell you that grant seeking is a strategic and ongoing process. If soliciting grant funds is your primary motivation, then you’ve got it all wrong!

2.      Others are Already Doing It

Everyday people identify problems and issues in their community that need to be addressed, and this becomes their basis for wanting to start a non-profit. Although this is a legitimate reason, nine times out of ten there is an organization that already exists to address that very problem. Before you attempt to re-create the wheel, do a little research to see if there is an organization that’s already doing the thing you want to do. If so, lend your support (time and/or money) to their efforts.

3.      Organizational and Personality Conflicts

Sometimes people want to create a new organization because there’s been a rift within an existing organization or there’s dissatisfaction with the way that organization operates. Sometimes this can be a legitimate reason for starting a new organization, but most often it is not. It will probably take less work to attempt to resolve the differences and find ways to collaborate than to create an entirely new entity. Give peace a chance!

4.      Job Creation - For Yourself

The basis for the creation of a non-profit organization is that it serves a public or charitable purpose. However, some individuals are motivated by what’s in it for them. They feel that they can create an organization, appoint themselves Executive Director and collect a salary. This is probably the worst motivation of all. Every non-profit must have a mission and your mission cannot be YOU.

 

5.      Your Need Requires an Immediate Solution

Anyone who has gone through the process of establishing a non-profit can tell you that it’s not a quick process. If you have identified a need that requires an immediate response (e.g. disaster relief or a short term need) you’ll definitely be more effective working through the infrastructure of an existing organization which has a mission of meeting the identified need and already has boots on the ground.

6.      Your Planned Activities Aren’t Typically Grant-Funded

Some activities are routinely excluded from receiving grant support from foundations and other funding agencies. They include special events, support for athletic teams, banquets, scholarships, and many other endeavors. If these are the types of activities for which you’ll primarily be seeking support, you’ll be better off seeking out a sponsor to help offset expenses or raising funds through other activities like auctions, raffles, candy sales, or car washes. A non-profit is not the appropriate mechanism for funding certain types of activities.

If you’ve been seriously thinking about starting a non-profit, hopefully none of these reasons reflect your motivation for doing so. If by chance one does, you will definitely want to re-think your plan. On the other hand, if you’ve identified an ongoing need, done your research and found that there is a legitimate gap for addressing the issue, then you just may be on the right path. 

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