Nonprofits are born from passion, and passion is a powerful motivator. My commitment to the mission of ensuring more kids have the opportunity to play youth sports makes running our organization incredibly fulfilling. But we must not forget that a nonprofit is also a business, and passion for your mission isn’t enough to run a successful nonprofit unless it’s supported by a savvy business plan and excellent day-to-day management skills. Because of this, when I get requests for advice on how to start a nonprofit, I often first ask them to take a few steps back to determine whether building a nonprofit makes sense.
Over the last 14 years of running Good Sports with my co-founder, Melissa Harper, I’ve found four key questions that help potential founders consider their options before deciding to embark on the long, sometimes arduous, but ultimately rewarding path to building a nonprofit.
Is the problem you’ve identified one that needs solving?
It’s easy to get a great idea that could have a positive impact and want to jump right in. While the impulse comes from a good place, it’s important to confirm there is an actual need -- and a need you can back with data.
Like many would-be nonprofits, Good Sports began with a solution in mind. A friend was looking to donate some extra sporting equipment and we wondered whether we could harness similar, individual donations to help provide for all kids in need. We then had to conduct a good deal of research. When we learned that the youth living in the lowest-income households were about half as likely to participate in sports than the youth of wealthier households and that low-income youth are four times more likely to quit a sport due to cost, we were able to identify a clear need for the service Good Sports would provide. Our business model evolved from there to focus on developing partnerships with sports equipment manufacturers for large-scale donations.
If this is a problem that needs solving, is it a problem that others are already adequately addressing?
Just as you would before you start a for-profit company, it’s important to look at your competitors. Are there other nonprofits already trying to solve this problem? If there are, you should consider whether you can address the need in a more successful way. If not, you might only be creating competition for resources, and your organization may fragment the very problem you’re trying to solve.
When we founded Good Sports, there were a number of localized efforts to help individuals donate used sports equipment to those in need, but there wasn't a larger nonprofit working with bigger corporations and manufacturers in a centralized way. The sports industry welcomed Good Sports as an intermediary, helping manufacturers make impactful large-scale donations rather than having to respond to an overwhelming number of one-off requests.
Is a nonprofit the best way to solve this problem?
We initially tested the concept behind Good Sports locally in Boston. Once we determined there was a tremendous need there, we expanded to new cities and found a lack of sporting equipment was a problem for underprivileged communities across the country, especially in inner-city and high-poverty areas.
Because creating a nonprofit can be an extremely complicated way of addressing a problem, it’s usually helpful to test the waters first. If the problem you are trying to address is local rather than widespread, it might not require all of the administration that building a 501(c)(3) requires. Try a volunteer group, peer-to-peer fundraising, a giving circle or a donor giving fund first. If you determine the need is great enough for an official nonprofit, your intimate knowledge of the demand for your solution from your trial runs will only bolster your launch.
If a nonprofit is the best way to address this issue, are you the right person to create that nonprofit? Is your passion matched by your business sense?
The difference between a nonprofit and a for-profit is really just tax code. Excellent business acumen is just as important when running a nonprofit as it is when running a for-profit company. You need to be skilled at bringing in hardworking employees, loyal donors and board members with wide networks. You need to sell your cause and your company -- and you need to continue to sell them. You need to be a generalist, but you also need to know what you don’t know and when to bring in outside specialists.
As Good Sports works to reach our goal of doubling the number of kids we impact each year, we are constantly evaluating how to address new challenges. Just as I did before establishing my organization, it's important to ask yourself if you're the right person for the job: Is your unwavering passion and commitment, balanced with your business sense, enough to get things up and running for the long haul?
While those who are seeking to launch nonprofits often have goals in mind, it’s important to ask the right questions -- the hard questions -- to set yourself up for success and determine if launching a nonprofit is the best way forward.
