By Joseph Plummer
It takes a special kind of stupid to start a nonprofit on your own. In February 2011, I was that special kind of stupid. I started a 501(c)(3) nonprofit organization more or less on a whim.
As it turns out, you can actually complete most of the paperwork to create an organization and then apply for 501(c)(3) status without talking to a single person. However, before you are granted nonprofit status, your organization must have a board of directors. This begins the expansion of an individual’s vision to other accepting hearts and minds.
Fast forward to Fall 2011, I received the coveted Determination Letter from the IRS granting my organization nonprofit status. At this point, I began talking to schools, nonprofit leaders, elected officials, corporate representatives and university professors with the hope of spreading my vision: solar panels at every school in America. Now four years later in 2015, I have connected with hundreds of people, raised a modest amount of money, and spread my vision a little bit further. I can honestly say that starting my nonprofit was the best decision of my life.
However, there has always been a lingering question in my mind since starting my organization. I once heard someone say that nonprofits should try to make themselves obsolete. So, the question that lingers is: Does your organization need to exist?
When I asked myself this question in 2011, the answer was indisputably yes. This answer is, of course, a combination of truth and youthful spirit. However, after four years, the question is more difficult to answer now.
If I were to approach a nonprofit leader in 2011 and suggest a new initiative, I would have received at best a response like “that’s an interesting idea, good luck." Today when I approach the same nonprofit leaders, the best responses are more like “how can we help?” or “we’re in.” Likewise, in 2011 potential corporate sponsors would rarely return emails or calls. Today most companies with respectable corporate social responsibility (CSR) departments will take meetings with me, though they are still slow to give financial support. This progress is great, but it doesn’t answer the question of whether or not the organization needs to exist.
In 2011, a significant number of our partner organizations either didn’t exist or were also recently founded. I have seen some great organizations die, for lack of a better word, over the past four years. I have also seen some wildcard organizations grow into thriving nonprofits. In my humble opinion, success in the nonprofit sector is a function of luck more than anything else. Creativity, hard work, smart work and intentional networking are also significant factors. In any case, my organization has had a torturously mediocre amount of success. It has received dozens of letters of support from local leaders, numerous small grants ranging from $500 to $15,000, and a couple of awards for innovative programs. However, this mild success also does not answer the question of whether or not the organization needs to exist.
So, given the preceding five paragraphs, I am now going to answer the question: Does my organization need to exist? My answer is no. I say this with pain in my heart, with pride in what I have been able to accomplish, and with a precise understanding of how to create greater impact.
In short, after four years, my organization has not been able to breach $100,000 per year in revenue. And, for the type and size of my organization, the amount of time devoted to unsuccessful fundraising really does not make sense. Furthermore, the connections I have made allow me to keep the momentum toward impact that my organization has created by diverting opportunities to other organizations that have the capacity to capitalize on them in ways that my organization could not.
It is interesting to read the obituaries of failed nonprofits. They are inherently gloomy and disheartening. It is as if the nonprofit leader is falling on his or her sword, accepting the shame of defeat. They say things like “we had a good run” or “thanks for the memories” or “it was fun while it lasted." These final newsletters only serve to reinforce the understandings, and perhaps realities, that our nonprofit sector is weak and that being an entrepreneur is risky and often ends in failure.
The truth is the American nonprofit sector is easy. There isn’t much funding, but there are a lot of nonprofits that don’t need much money to operate. There are a ton of nonprofits that operate on less than $10,000 a year. And, if that is your annual operating budget, you really don’t have to risk much to keep your nonprofit running. The nonprofit sector in America is almost failure-proof. You might not be very effective, but it is very easy for nonprofits to exist in America. Being an entrepreneur in the nonprofit sector is not risky.
My nonprofit has reached the end of its journey, because I believe more impact can be achieved through the consolidation of efforts. Over the next few months, I will be transferring the momentum that my organization has created. The weight of my organization will be transferred to other organizations. The nonprofit sector will be stronger, because of the life and death of my organization.
I have compiled a short list of lessons learned for anyone who is thinking about starting a nonprofit. This is not an exhaustive list, but this should help young nonprofit leaders with some of the basics.
The name that I came up with for my organization was Three Birds. The idea behind the organization was that we were using renewable energy as a catalyst to address three issues simultaneously (education, environment and economy) -- essentially hitting three birds with one stone. This is a nice idea that is great for long conversations with your significant other in front of a fire with a bottle of cheap wine, but when you are meeting a potential funder or organizational partner for coffee, the explanation of what your organization name is all about eats into what might only be 10 minutes of meaningful conversation time.
Also, when deciding on a name for your organization, stay away from metaphors about killing birds, especially when you are working in an environmentally-related profession. And, make sure you are not unintentionally referring to a Bob Marley song.
Great ideas are different: When you tell someone about a great idea, it will cause them to think about it and in some cases talk about it. And that is a good thing. But it is very hard to convert ideas into money, which is what you need as an organization to survive.
You can sell data, you can sell products, you can sell services, and you can make your ideas part of those things. But you can’t sell ideas alone, because in order for someone to buy an idea, they need to know what the idea is. The nonprofit sector is great at thinking and providing the world with ideas. Most nonprofits advocate, but the great nonprofits are the ones that make themselves obsolete. You can advocate for clean water or you can create a low-cost, portable, easy-to-use water filtration system. Choose wisely.
According to Bloomberg, 8 of every 10 new businesses fail within 18 months. If you are an entrepreneur, this shouldn’t cause you stress. This should give you some relief. What if at the beginning of your endeavor, God were to tell you with 100 percent certainty that you were going to fail and your organization would not exist within five years time? This to me would be an indication that you shouldn’t spend your time and creativity on pitching, but rather on creating great products and solutions. If you are going to be an entrepreneur, recognize that failure is inevitable. Let that give you some peace of mind. And then swing for the fences.
Governance gets difficult when you have a large board. Unless you have a great network of willing fundraisers and advocates, just focus on making governance as easy as possible. This will reduce headaches as the organization grows. Get governance right, and then think about how the board can help fundraise and network.
Image credit: Flickr/yevkusa
Joseph Plummer is a degree candidate in the Executive Master of Natural Resources (XMNR) program at Virginia Tech, expecting to graduate in May 2016. He is the founder of The Three Birds Foundation, a non-profit organization that worked with schools and school districts on renewable energy and sustainability initiatives.