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Five Reasons Not to Start a Nonprofit

Many people contact us wanting to start a new nonprofit. They have a variety of reasons and motivations for this desire, but more than half the time these folks need to be talked in from the ledge. Committing time and money to a nonprofit idea that is destined to fail can be devastating, and there are any number of other opportunities to do good without jumping into a losing situation. Here are some common problems (and why they are problems) with many nonprofit ideas.

1. Wanting to Create a Job for Yourself

There is no worse way to create a job than to start a nonprofit. First, startup nonprofits tend to run on an extremely tight budget. Just garnering enough cash to get a program or service started, much less sustained, is a feat in itself. Earmarking the first chunk of income to salaries is not only unrealistic, it is perceptibly unethical. Savvy donors will avoid contributing to a nonprofit with an unreasonable overhead, and the public is entitled to see where the money goes. Those nonprofits that require a paid staff to run can be the most difficult to launch, as the money required to get going is significant and, often, unfundable. A better option? Find a viable for-profit business idea, work hard, and donate some of your profits to the causes that are close to your heart.

2. Unfeasible and Amorphous Plans

Every business requires solid business planning, even a nonprofit. Passion for an issue, whether related to people, animals, or the environment, is no panacea for a lack of viability and planning. Nonprofit ideas need to be evaluated in a detached, logical manner to determine whether the cost is worth the benefit. If it looks like it is possible, the real planning work begins. From funding to marketing, programs to recruiting volunteers, every aspect of a nonprofit idea must be torn apart, examined, and reassembled into a justifiable, reasonable plan. A better option? Do a basic needs assessment on your idea -- see who is already addressing the problem and what they are doing. You may find your efforts better spend volunteering with what is already going on is your area.

3. Misdirected Passion

Very often, people affected by a disease or disorder are driven to do something, and the desire to "not let that happen to another family" is a strong motivator. The reality is that most medical issues already have strong, established nonprofit organizations that are doing the work that needs to be done. And, the work and resources it takes to effect change in this area is overwhelming, at best -- even a simple "awareness" program requires significant resources within the medical community. A better option? Get involved with an established organization focused on the particular issue -- give money, give time, and become an important part of a larger, well-established effort.

4. Leaving a Legacy

A common desire among would-be nonprofit founders is to leave a legacy -- either for themselves or for a loved one. While the idea of having your name on a nonprofit providing good to the world sounds gratifying and permanent, the realities of sustaining a nonprofit make it unlikely to happen as hoped. Unless you have at least millions (billions would be better) to endow the program, somebody will have to do the work to keep it going after your contribution runs out. A better option? Look in to established organizations that target your interests -- the best, most reputable nonprofits have memorial programs or other donor recognition programs that will meet the same objective.

5. Free Money and Doing Good -- What Could be Easier?

Launching and running a nonprofit is a complex, all-consuming, and mostly thankless endeavor. Those in the nonprofit world will tell you that you work for every penny that comes in, give all of your own free time and money to the effort, receive very little gratitude or recognition (even from some of those you serve), and experience a level of constant frustration that many folks would crumble under. A better option? Put in some time volunteering with a successful organization before you make a final decision. Talk to those in the nonprofit realm to get a clear picture of how it all works, and consider whether you are willing to commit all that it takes to even get the most basic nonprofit off the ground.

The desire to do good is admirable, but does not always translate into enough to start a new nonprofit. Starting a nonprofit can be exciting, rewarding, and allow you to truly make a difference in the world, but only if you are going into the process with the right motivation and a realistic perspective on how it all works.

About the Author

LaunchX.com is dedicated to training entrepreneurs to turn their good ideas into great companies. The LaunchX System provides step-by-step education in the mindset and skill set entrepreneurs need to succeed. Our program includes intensive seminar training, key business software, and specialized workbooks that teach you the fundamental skills you need to achieve your financial and worklife goals through entrepreneurship. Register today for our introductory course and see what LaunchX can do for you!