12 Steps to Starting a CharityJun 06, 2023
How to Start a Charity
I want to tell you about someone I love who has made a difference. My good friend, Toni Kramer, started her own charity. Toni was a coffee lover. I tease her because she got me started drinking Starbucks (They should give her stock options) years ago. I am now a huge Black Rock Coffee fan but I thank Toni for my love of coffee. Anyway, we would constantly meet up at a local Starbucks for business meetings, to talk about real estate ventures, or just to get together. Toni would always comment on all the plastic jugs the Starbucks would go through while she would be sitting there. Mind you, this was years ago. Way before the straws thing. So, anyway, Toni decided, one day, that she would collect all these plastic jugs that were just being tossed out into the trash and she would take them down to be recycled. She talked to the manager and they allowed her to pick them up. She couldn’t believe how many there were. She did it every day, twice a day, and there was like a truck bed full of these plastic jugs. Toni called some other stores and added them to her “route.” Next thing you know, she’s driving all around picking up plastic jugs, dropping them off, and then going back and starting all over again. She knew she needed help because this was only a few stores. Phoenix only had like a couple of dozen stores in the valley at that time but she still couldn’t do it alone. And…whoever agreed to help her would want gas money and maybe even want to be paid for their time. Toni was on a mission. She was dedicated. She was determined to stop filling the landfills with jugs and she was going to go above and beyond her part. She created a nonprofit of her own so she could get the job started. It was her passion. What’s yours?
Do you have a great idea for a charity? Are you thinking about setting up one of your own? Knowing what steps to take can be tricky. So, before you move ahead, there are a few things you might find helpful in getting you started.
Below are some easy steps to guide you on how to start a charity.
- Come up with your vision and mission: A vision is regarded as an inspiration and aspirational destination on the horizon. It should have clear descriptions of what you want to create without the inclusion of quantitative measures. When we talk about mission, it is regarded as a more concrete description of purpose and intent. It is a clear and brief expression of what the organization basically stands for: what it does, for whom, and also what the basic service is. The mission should go together with specific, measurable, achievable, and challenging goals. It should also come up with a set of values, the beacon by which your organization will be piloted. It also needs a why. I suggest reading, “Start with Why,” by Simon Sinek. He has some brilliant insights in this short and easy read that I’m certain you will find useful.
- Come up with a name: Charities are designed as organizations but need philanthropy for support. As we all know, people like to donate to people. An organization’s functions are being described by its name. When coming up with a name, make sure it has a mission to help others, because this encourages donations.
- Differentiate your charity: There are more than 1.5 million nonprofit organizations in the U.S, according to the National Center for Charitable Statistics (NCCS). We see organizations competing with one another for funding to support the same cause. So it’s important you differentiate your organization clearly and hopefully stimulate the same kind of passion you have for your charity in potential donors. What makes you different and why? You want to stand out.
- Come up with a plan: Your vision, mission, name, and point of differentiation are what constitute your plan. But you should then design a five-year plan of strategies and tactics which include fundraising strategy, operational strategies, budget, and so on. Get it out of your head, onto paper, and then organize it so that others can see the picture clearly of exactly what your vision is and why you are doing it. Remember, the story, your story, is going to be what makes the difference, so get it in there and make it clear.
- Register as a 501(c)(3): This is the IRS code that permits you to function or operate as a nonprofit, tax-free It is advisable that you have a lawyer and an accountant with experience in nonprofit organizations who will work with you and put you on the proper path to register and operate, so you don’t go against government rules. You can find more information online but wait until #12. Lots of great information coming up.
- Create a website: Your inspiration, intentions, plan outlines, and so on can be announced on your website. Also, you can begin fundraising using the site as the primary tool. You can, as well, seek contacts for donations via the site and link up donations right to a Paypal or Stripe account fairly easily. Don’t have your complete business plan or financials posted on the site, however. Anyone who needs more information can contact you.
- Fundraising: Although you can pump your own funds into your charity, you will still need to raise funds from other people. This can be your friends and relatives, but normally you will need broader support from grassroots organizations, individuals, and foundations. Once you complete your plans, you should reach out to grant-making organizations that are focused on areas that go in line with your mission. There are a lot of activities attached which include making a significant number of calls, meetings, and also presentations. Don’t be discouraged. This requires significant time and energy, and it must be carried out in a professional and disciplined fashion. Do the necessary research on the techniques of fundraising, and come up with significant activity through Facebook, Twitter, LinkedIn, and other social media sites you know.
- An Advisory Board should be established: At the start, there should be people who have significant non-profit This includes financial and fundraising experience. These are people who can help you kick-start your project. These people should be available at all times as resources and should meet more formally on a regular basis, preferably weekly or monthly, until operations are established. Once everything falls into place and the charity is up and running, the board should expand to accommodate significant donors, potential donors, and people who have significant contacts which can be helpful in regards to fundraising. You should be careful and vigilant not to let the board get too big. Also, look out for egos that can destroy your organization, including yours. A perfect board size for an established charity is 20 people. And lastly, all board positions should be voluntary.
- Commence operation: It is advised that before committing any cash outflow, you should have raised some cash to fund initial capital requirements and at least operating funds for a year. It is not advisable to use debt when starting a charity. Always treat every dollar you spend as if it’s the last. Be “prudent”. You need to stretch your dollar as far as you can. And also, many organizations disregard that spending should be directed to the mission of the organization and not into the pockets of the people who work there.
- Make sure your spending is efficient: With time, you may need to seek professional help but be very cautious about your spending. One rule of thumb says that nonprofits should spend 80% or more on program expenditures and 20% or less on administration and fundraising. In fact, good organizations have a higher ratio of programs compared to administrative spending and also have the easiest time raising funds. Donors expect their money to be channeled to the ultimate beneficiaries and not the employees. I would listen to Joan Garry’s podcast, Nonprofits Are Messy. She gives away a lot of great information that covers how to run a nonprofit from start to finish. You’ll read more about her in a bit.
- Be patient: Yes, the idea behind starting a charity is to help the maximum number of people possible. If your organization is not wired for longevity, you won’t be able to help for long. Expand only at a rate that is supported by your fundraising. Take your time. Every organization you see out there started from somewhere, but they are what they are as a result of being disciplined. Survival is key and this requires patience.
- Join the Nonprofit Leadership Lab: There is a wonderful woman named Joan Garry who was a professional consultant for many large and successful non-profits for many years. She loved what she did and how all her nonprofits made a difference but she was frustrated because there wasn’t enough of her to go around. Each year, she would be contacted by new and wonderful nonprofits who needed her help. This presented a few challenges. One was that she was so busy, she just didn’t have the time to take them on. Another challenge was that she was extremely good at helping nonprofits become successful. One might argue that she is pretty much the best in the business at what she does. So, not only was she highly sought after, her time didn’t come cheap. Although it would be great for her to donate her time, donating your time doesn’t pay the bills. Well, she came up with a brilliant solution. She would teach everyone! How? She started a Leadership Lab membership site where the heads of nonprofits could learn from her (virtually) and that way start-up nonprofits could afford her services as well as larger organizations. Win–win–win! Check out her course here. We get nothing for sending you there. She’s just the best at what she does and we are members of Joan's group for OUR nonprofit here at Mickey's House Foundation.
Bottom line: Before starting anything, the first rule is to have a passion for what you are doing. As we all know, startups are a lot of work. There will be times when you ask yourself if you are normal or in the right frame of mind for having tried this and all and what carries you through is passion. It will be unwise to start anything with the aim of deriving fortune and fame, especially non-profits. Be prepared to invest significant amounts of time, money, and passion and the only reward that comes with it is satisfaction. So go for what you have a passion for and come up with a legacy while helping others. Go ahead. Change the world! I believe you can.
Michelle R Russell
© The Prosperity Process, LLC
for Mickey's House Foundation