Do This Before Starting That Arts Nonprofit

Starting a new nonprofit organization is a big undertaking. In many ways, filing the paperwork is the easiest part. I know this is true because so many times I come across questions like this; “I filed my paperwork and just received my 501c3 determination letter! Now how do I fundraise? Where do I find grants? Where do I find board members?” All the questions start.

Ideally, questions about how you’re doing to fundraise or earn revenue for your new organization, or where are you going to find founding board members are topics that need to be thought about, and planned out, well in advance of filing the founding documents. 

There’s certainly a lot to consider before establishing your new nonprofit organization on paper. To get started, here are a few things I recommend planning out before getting starting a new nonprofit organization.  

Nonprofit or LLC? Choose wisely.

Do you really need to be a nonprofit organization? Filing as a 501c3 organization is not the only way to provide arts or cultural programs to a community. Depending on what types of programs you want to offer, it is possible to accomplish your mission as an LLC or some other type of corporation. Plenty of cultural entrepreneurs operate as LLCs. Also consider that while filing as a 501c3 nonprofit does open your new nonprofit up to being able to accept donations, sponsorships and grants, it also means that now you have to work to get those donations. And that takes time, skill and patience. Many grant funders require organizations to be in operation for at least 2-3 years before being eligible for grants. Business sponsors also want to know that your organization is financially sustainable before contributing as well. Developing a pool of individual donors takes planning, coordination and relationship building. 

Are you ready to become a fundraiser?

If you establish your new organization as a for profit entity you have to charge enough for your services to produce enough profit to pay your business costs. In a nonprofit the goal is the same. But in a nonprofit you also have to worry about becoming a fundraiser (I don’t know any creative person excited to jump into that role) until you can hire someone to do it for you. Instead of figuring out fees for your services, you now have to factor in fundraising plans, cultivating and soliciting donors, writing grants, deciding which brand of tequila you're going to drown yourself in when you get the grant rejection letter, creating sponsorship packages, holding fundraising events, actually asking someone to make a donation to your organization.  

Are you willing to give up control?

As a founder of a nonprofit you do not “own” your organization. Founding Executive Directors work for a Board of Directors and your board can let you go at any time in order to hire your replacement. The board also approves your annual budget. If you think that you are going to have a problem giving up some amount of control in the direction and oversight of the organization, establishing a nonprofit is likely not the best route. Establishing an LLC or sole proprietorship puts you completely in the driver’s seat. You own the organization. You make the big decisions and you don’t have to answer to anyone really. 

Look. I’m not trying to scare you away from starting a nonprofit organization. I just really want you to think through what you’ll be dealing with and consider that you may be able to accomplish our passion and mission as a for profit entity instead. 

Don’t Go It Alone. 

Nothing happens in a vacuum, including starting a nonprofit organization. To launch a new nonprofit successfully you need to find your “tribe”, a group of people who believe in your vision and who are on board with helping you get there. This can be your friends and family, but, really, you need colleagues, “movers and shakers” and influences in your community who are as excited about what you seek to accomplish as you are. Those are the people who are going to help provide sage advice on how to start your organization and how to build community relationships that will lead to future donors. 

Create a list of everyone in your various networks (personal, professional, social) that you think should know about your organization. Then get those phone calls and coffee meetings scheduled. Share your vision and business plan. No need for highly crafted paperwork or power points, this is a casual conversation about what you want to accomplish. During these meetings the only thing you’re asking for is feedback and advice on your plan. You’re looking for buy-in from your prospect. You’ll also ask for recommendations on which of their friends or colleagues should hear about your plans as well. You are NOT asking for them to become a board member or donor. This conversation comes later. Right now, you’re just trying to find out who in your circle or community supports your vision and can help you get started.  

Look into small business startup training or resources. 

Check into classes, workshops or training from both your local nonprofit association or small business administration. There are lots of training available that cater to starting a business in your particular area. They will walk you through how to formulate your idea, write a business plan, create a fundraising plan and file the correct paperwork. 

Not sure where to find your local nonprofit association? Google your city or metro region followed by “nonprofit association” Some are stand alone nonprofits themselves while others are affiliated with universities. You can also conduct a search to find any local creative startup incubators or entrepreneur startup up programs in your area.   

Find a Mentor or Work with a Coach.

Starting a nonprofit is starting a business. By doing so you become a small business entrepreneur. If you’ve never started a business before it can be beneficial to seek out the guidance of those who have come before you. A mentor or coach can help you formalize your goals, offer advice and strategy on how to get started, and be a sounding board for all of your questions. Above all, a mentor or coach will help you avoid making the same mistakes they might have made when they were first starting out thereby helping you get on the road to success much more quickly. 

What have been your biggest questions around starting that new arts organization you’ve been dreaming about? Tell me in the comments.