Great Article For Those Thinking of Starting Foundations to Help CDH Families

With so many organizations and foundations helping CDH families there are so many great resources! See our post about the members of ACDHO for a list of groups that are truly helping CDH families.

Starting a non-profit is very hard work! We’ve seen a lot come and go over the years and unfortunately we’ve seen a couple with not so great reasons for starting and they ended up hurting more people than helping them. Starting a non-profit is not a decision to take lightly – it’s a great responsibility and should be embarked upon with only the purest of intentions and a lot of research.

The following article is one of the most candid, realistic and helpful articles on non-profits that I have read in my 14 yrs in this field. We are getting a lot of interest in starting new foundations and organizations for many different services (yeah!!!) and I thought I’d post this article for everyone.

Nonprofit Incorporating – The Business Plan
by Donald A Griesmann, Esq.
http://www.tess.org/misc/080123NP_Biz_Plan.pdf

From this article:

QUESTIONS TO ASK YOURSELF BEFORE INCORPORATING

Take the first question below, “What is the purpose of your nonprofit?” (It is really not
yours, you know; it belongs to the board and the community, not an individual) Your
answer may be to save whales, to overcome AIDS, to work with troubled youth or to
have a community development corporation. Go beyond those answers. Review and
work on the rest of the questions and come back to the first one and see if you have some
additional purposes or reasons for starting a nonprofit. Put your answers down on paper.

1. Are you being HONEST with YOURSELF? What do you want out of this
for yourself? What is it in your character development that makes you the
one to do this? What do you stand for ethically? Are you looking for a job
or control or an organization that will be active the day after you die? Will
you be honest with others and up front about what you are looking for? Do
you have personal knowledge and/or experience with details, budgeting,
managing people and leadership? What are your personal strengths and
personal weaknesses and will you talk about them with others to make this
organization happen? Are you an ethical person?

2. What is the purpose of your nonprofit? Why are YOU starting a
nonprofit? Why are you starting THIS nonprofit? What is your vision,
your mission? Describe the opportunities that are available.

3. Can you partner or join with another nonprofit organization performing
the same or similar mission without incorporating another group? How
will you avoid duplication of mission, services and work?

4. What are your qualifications and experience to open and operate this
nonprofit business?

5. What kinds of activities will the nonprofit involve or sponsor? Who will
be responsible for these activities? When will they be accomplished? How
will you KNOW they were successful?

6. Will you be providing a service? Will that service be limited to certain
customers/clients/others? Who? How? Why? When? By whom? What
will be the proximity of your office and service to your
customers/clients/others?

7. Will you have membership? If so, who will be eligible and what duties,
obligations, authority and dues will members have?

8. What will be the name of your organization? Have you reserved that
name with the State?

9. Where will you be opening and operating this nonprofit? Do you intend to
use property you or a family member owns?

10. Who will you have on your board of trustees? Will they and other people
provide money and assistance? Why will you have them on the board?
What part will they have in decision-making? What part will they play in
the organization? Please note that some states call the board “trustees” and
some call them “directors”. Be consistent with your state. Your state law
may also list the required officers.

11. What are the advantages and disadvantages to incorporating THIS
organization? Make two columns and list both advantages and the
opportunity and the disadvantages and risks. Talk to others who are
working with you to add to both lists. Do the advantages outweigh the
disadvantages?

12. What are your resources? What are your talents, experience or education
to operate this organization? Will the board contribute financially to the
organization annually?

13. Will you have paid staff and personnel? Will you have volunteers? What
are their responsibilities and authority? What roles will they play in the
organization? What are the responsibilities of the organization to its employees and volunteers? Who will handle those responsibilities? What
written policies, procedures and forms will be required?

14. What is your experience in managing a nonprofit organization or other
endeavor? How good are you in writing and maintaining records, policies,
procedures and forms? Do you know what reporting you will have to do,
when and with whom?

15. Will your organization or personnel require licenses, registrations,
approvals, certificates or permits? Will your staff require licensing,
professional degrees, criminal background checks, or drug testing?

16. Do you own equipment or other forms of property? Do you plan on
acquiring property and equipment? Will you purchase or lease the
equipment and property? How will you acquire these resources? How
will you pay for renovations, furniture, equipment and signs at an office?
How will you pay for the continuing maintenance and improvements?

17. How and where will you keep supplies, stock and inventory?

18. What are your financial needs? Does the organization have a bank
account? What are your financial skills? What kind of grants or funds will
you need? How much money will you need to begin to open this
organization and sustain it – for 1 to 6 to 12 months, or for three years?
Where will that money come from? How will you assure fiscal integrity?

19. What potential liability and risks does this nonprofit have? What insurance
protection will you need? How will risk management assessed and be
handled?

20. Have you received any training, education or technical assistance to
operate a nonprofit business? If you have not received any training,
education or technical assistance, will you need that kind of help? Where
will you find that help? How will you pay for it?

21. Have you developed a business plan? Do you know what a business plan
is and why you need one?

22. How will you keep financial records and other important records such as
contracts, orders, wage payments, vouchers, bills of lading, bank accounts,
tax information, personnel records, annual reports, audits and so on?

23. Are there other nonprofits or for-profit groups – competition – like yours in
the community where you will open? How and why is your nonprofit
different than they are?

24. What are the major impediments for you to start this organization? What
are the barriers? How will you overcome these impediments and barriers?

25.How will you advertise or market the nonprofit’s service? How will you
get customers/clients/supporters? What will be your niche or specialty in
the community you serve, the market place?

26. Have you or other members of your family and friends operated a business
or another nonprofit? Will they help you in this enterprise? What will
that help be? Are you aware of rules on conflict of interest and
intermediate sanctions?

27. Does your group plan on dissolving after a period of time or is it a long-
range project?

28. Do you believe the organization will be involved with lobbying, advocacy
and/or political activities?
Do you have the right stuff to create, maintain and sustain this dream?

REASONS NOT TO INCORPORATE A NONPROFIT ORGANIZATION

This is the start of the questions. Jot down your answers as you read this and the next
several sections.

1. You do not have a group of people who share your mission, passion and sense of
vision who will work with you to create this nonprofit tax exempt organization.

2. You are not sure whether other people will work with you on the project.

3. You left a similar organization and you want to compete with them.

4. You really do not know how much work it will take to incorporate in the State
and file with the Internal Revenue Service.

5. You do not expect to raise money or seek grants, at least no more than two to
three thousand dollars a year.

6. You are not sure what kind of work goes into operating a nonprofit corporation
after it is incorporated and recognized by the State as a nonprofit organization and
by the IRS as a tax exempt organization.

7. You know there is a need for this service but you have not documented the need
and do not know how to go about assessing and meeting the need.

8. You believe it is easy to incorporate a nonprofit tax exempt organization.

9. You believe it is easy to operate, sustain and maintain a nonprofit organization.

10. You believe it will be easy to raise the money to accomplish your goals and
objectives.

11. You like to be independent.

12. You have a great idea, this is a great opportunity and you are concerned that other
people who become involved will change the programs and activities you want.

13. You and your family want to control the organization so that it will be run right.

14. You want to be the chief executive officer such as the executive director for a
salary and sit on the board as chairperson.

15. You are going to aggressively seek grants because it is easy.
Please rethink why you want to start a nonprofit. There are many great reasons and
motivations but those are not among them. Nonprofits as with for-profit businesses can
fail. The reasons listed above will help you along the path to failure. Nonprofits can fail
when they are not mission-driven with a business-sense but driven by some other force.

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