04/03/2026
I see questions constantly across social media and even get asked them myself about wanting to start a nonprofit business and that the potential founder doesn't like the advice they've been given so I thought I might briefly talk about this subject.
After more than three decades of nonprofit business experience I understand why people get told what they get told to start one or not.
Here is what I usually tell people who are thinking about starting one:
Look around your community and see who is doing something the same or similar to what you want to do in the nonprofit world. Find out what programs they are running. Ask, is what I want to do filling a gap that an existing organization(s) are not filing in our community that is a need?
As far as business running, it is different than a for-profit because of how revenue can come in but no less tough to run one as nonprofit is just a tax status at the end of the day. It is still a business with all of the same business needs and has to make a profit to stay in business ultimately. The big profit difference is the profit does not get distributed to owners, investors, or others it must stay in the company unlike a for-profit company.
Another thing to think about is two myths.
The first is a huge myth in the nonprofit world that donors, corporate, government and foundation funders will give a nonprofit money just because of the mission. This is not true. There is so much nonprofit business competition now than when I started that competition for funding is fierce. Donors usually give not because of mission but because they either support the person asking or want a tax write off. Corporations give because they want the marketing exposure to the nonprofits donors and the community. Foundations give because they feel the nonprofit program that is being funded will increase their (the foundation's) impact in the community. Governments give because they use nonprofits to run community based programming and services to accomplish community determined goals.
The other myth is that the nonprofit business founder is in control of the business. Also, not true. A nonprofit business is a full-blown corporation governed by a board of directors as soon as it is formed. The founder (usually also doubles as the board chair and first ED) does not have control. They only have the authority that the board as a whole delegates to them. The board is the entity legally responsible in a nonprofit for its governance, policies and ultimately the operations. The board as a whole can decide that the founder, even though they started it and put their heart and resources into it, needs to go and vote them off the board and out of ED role or any role if they want too at the end of the day within the by-laws of course.
Many times it is better to either form a for profit business that can accomplish what one wants to do and give back into the community or to volunteer with an organization that is already doing what one is thinking about as a mission.
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