Why Great Ideas Aren’t Enough: What It Really Takes to Start a Nonprofit

Remember those “Choose Your Own Adventure” novels where you could make decisions along the way and customize your own ending? They all started with the same warning label:

“The adventures you take are a result of your choice. You are responsible because you choose! … Remember — you cannot go back! Think carefully before you make a move. One mistake can be your last … or it may lead you to fame and fortune.”

Now that I’m an adult, these lessons have stuck with me — and made me a better entrepreneur. After nearly three decades in the nonprofit sector, I believe every aspiring nonprofit founder needs this warning label as well! When I get a call from someone who wants to start a nonprofit, here is a quick synopsis of the questions I ask — and my best advice in response:

I want to start a nonprofit. How do I start?

I suggest starting at the beginning with what I call the “head check.” You need to research the need and ask yourself these viability and feasibility questions:

• What problem are you trying to solve? What is your unique solution? (HINT: Try to be as specific as possible.)
• What gap are you filling that isn’t currently being served?
• How do you know that gap exists? (HINT: Do competitive research to bolster your claim.)
• Why does this gap exist? (HINT: Sometimes a gap exists because there is no market, unfortunately.)
• What will you do differently — and better — than the competition? Will someone pay for your solution? (HINT: Do a feasibility assessment to test your assumptions on the market, competition and funding.)
• Is someone doing this venture somewhere else? (HINT: This is a good thing — you can learn from them!)
• Is starting a new nonprofit (a legal entity) the only way to solve this problem?

If your answers uncover red flags, don’t be discouraged. Remember that starting a nonprofit is only one way to create social change. You can also address issues through policy or by joining an existing nonprofit as a staff member (a.k.a., a social intrapreneur) or a board member.

Second, ask yourself tough personal questions, which I call the “heart and gut check”:

• Are you passionate about this cause? Are you so passionate that you would do it for free and work 24/7 on it? If so, can you afford to do it for free for a while? If you are doing it for free, do you need another job? (HINT: I tell my students not to take this path unless they are passionate and have savings to live on.)
• Have you ever started an organization before? Do you know what it takes? (HINT: If not, find some mentors or a great consultant to help you jumpstart the process.)
• Are you disciplined enough to be your own boss (i.e., can you balance your intense passion and creativity for the mission with the very real paperwork and fundraising needed for a nonprofit to survive and pay bills)? (HINT: If not, find a co-founder who can balance your skillset.)
• Do you have a strong accountability process to ensure you can manage all the day-to-day activities of running a nonprofit?
• How do you typically manage constructive feedback?
• Are you extroverted and comfortable “selling” your mission?

I recommend proceeding only if you answered “yes” to at least four of these questions. While each of the situations above can be mitigated, they represent the make-or-break issues behind a successful startup. There are lots of good ideas out there, but good ideas fall victim to poor execution all day every day. But if you have a great idea that has been validated in the marketplace — AND you have the passion and stamina to pursue it — I typically encourage you to follow your adventure.

How is it best to get started as a nonprofit?

I always like starting a nonprofit venture under the careful eye of a fiscal agent, which is another nonprofit or foundation willing to sponsor you. First, it relieves founders of administrative burden. Fiscal agents typically have accountants, HR experts and even attorneys. Second, it gives you the opportunity to bounce ideas off experts and learn how to operate your organization. Once you have a strong track record and a solid foundation, you can spin off on your own as part of a strategic planning process.

What are some helpful hints to consider as a start-up nonprofit?

We work with all manner of nonprofits, but startups are unique. They are often run by founders who wear multiple hats and don’t make a lot of money. But while founders may share similarities, there are two distinct kinds of startups:

1. Startups focused solely on a specific agenda and are kept intentionally small and thrifty; and
2. Startups focused on building infrastructure with long-term growth in mind.

Understanding which side you fall on is important. Equally important is knowing the nonprofit lifecycle.

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Most founders begin in the idea phase — where excitement is high and the vision is clear. Typically, the buck starts and ends with the founder. But as the organization gains traction (with proof of concept and hopefully impact measurement), new staff, board members and funders will bring new ideas and perspectives. That’s when things shift. Unfortunately, this shift often comes with growing pains. Founders can feel boxed in, and they may have a hard time letting their original vision evolve with the input of others. This dynamic, commonly known as “founder’s syndrome,” is a major turning point. Our research shows that only about 50% of start-up nonprofits successfully evolve from a founder-driven vision to a shared, community-driven vision. This transition can be navigated successfully, but it requires an open mind and strong EQ skills. We also find strategic planning to be a great way to develop consensus on next steps and help shift the organization purposely from the start-up to the growth phase.

What is the difference between social innovators and social entrepreneurs?

This leads us to a subtle but important distinction in terminology worth highlighting. The difference between a social innovator and social entrepreneur is that innovators create ideas while entrepreneurs create organizations that take ideas to scale with the potential for them to outlive their initial creator. While both roles are valuable, it’s the social entrepreneur who takes on the heavy lifting of turning vision into infrastructure and systems for lasting impact.

If you are a social innovator at heart, consider finding a passionate co-founder with an entrepreneurial skillset who can take your vision to the next level. Or, consider making your first hire a Director of Operations or COO. The social sector needs both innovators — who drive disruptive, yet disciplined thinking in the sector — and entrepreneurs — who build the business models that turn innovative ideas into impact and scalable solutions.

Final Thoughts

Starting a nonprofit won’t likely lead you to fame or fortune, but it can be one of the most rewarding journeys you’ll take. And the best part? The ending is up to you. The more you understand the plot twists and carefully consider each choice along the way, the more likely you are to succeed. Just like re-reading a “Choose Your Own Adventure” book, entrepreneurs can revisit their path more than once — refining their choices and launching new ventures to become serial social entrepreneurs. If you’ve started a nonprofit, we’d love to hear which steps were critical to your success.