Pebblestorm

do you have a passion to start a non-profit? you may not like them, but you need to watch these videos

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by

aaronross383
in

have you or a friend ever had an idea to start a non-profit?

i have a very serious question for you (if you still have to work for money) – WHY was it going to be non-profit rather than a for-profit business?

i’m really serious, why does it HAVE to be non-profit?

whenever someone comes up with a passionate idea about how they want to give back and make a difference, they always want to make
it non-profit! WHY?

(the hidden assumption/belief is that making money is ‘bad’, that you can’t really help people while you make money.)

did you know there are ways to take ANY non-profit idea and make it for profit, in integrity? (i’m not saying you should, just that you can.)

i’ve been thinking about this a lot since i spoke on a panel at the “Stanford Women In Business” conference yesterday, on the topics of bringing new ideas to the non-profit world.  

i recorded a couple of quick videos afterwards, about how the desire to start a non-profit is a GREAT sign you’re on track with your purpose…but you are probably thinking “non-profit” for the wrong reasons, unless you are already financially free and don’t need to make money.

there’s just as much of a lack of integrity in the non-profit world in as for-profit world.  going non-profit doesn’t give you a free pass to fulfillment or happiness, and in fact can set you back.

in this one i share some thoughts and an example of how you can take your passionate non-profit idea and do it for-profit:

[youtube]http://www.youtube.com/watch?v=LIxxxs5KJs4[/youtube]

if you can’t see the video, click here

actually, many non-profits are started out of just as much fear as much out of passion:  a fear of failure, a fear of not knowing how to start a for-profit company, a fear of being rejected if you’re charging money, or being perceived as “it’s bad to make money from doing good”.

[youtube]http://www.youtube.com/watch?v=qjQvXZsCpdI[/youtube]

if you can’t see the video, click here.

going non-profit also feels simpler at first.  people – usually unknowingly and unconsciously – avoid the hard work at first of “what is the need, who values the solution, who will pay for it?” and go straight towards “i’ll just ask people for money,” with the false assumption that other people will be excited – even if it takes some work – to give you money.

i’m curious…i’m messing with people’s dreams here.  will people appreciate these, or hate them?  leave a comment below and lemme know…

enjoy 🙂

air

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Comments

10 responses to “do you have a passion to start a non-profit? you may not like them, but you need to watch these videos”

  1. jaxi Avatar
    jaxi

    good points. social entrepreneurship models could solve this also. to me, the definition of a non profit is endlessly chasing money. the other problem with a non profit is they aren’t in the business of providing an actual product or service – they aren’t structured to do this. Sometimes, that is actually the necessary thing that is needed in order to really provide sustainable change or make a significant impact.

    1. aaronross383 Avatar
      aaronross383

      @jaxi,

      great points!! especially on the “aren’t in the business of providing an actual product or service…”

      the “endlessly chasing money” part is what people don’t appreciate until they are in it. in for-profit, you still need money, but you have to earn it rather than chase it.

      too many people believe “i’ll do some non-profit work after i make enough money”…which never seems to happen. they don’t realize they can have the feeling of giving back through their day-to-day work.

      air

  2. Andy Halliday Avatar
    Andy Halliday

    My wife operates a 501 (c) 3 for the primary reasons that the work done by the company is for the benefit of disadvantaged youth and is not likely to be a high-margin business nor large enough to create substantial profits, and by being a non-profit it can raise funds from grants and via tax-deductible contributions. So I can see practical reasons for choosing a non-profit structure.

    1. aaronross383 Avatar
      aaronross383

      @Andy Halliday,

      you should watch or have her watch the 2nd video, where i give an example of how you can turn that kind of idea for disadvantaged youth into a for-profit idea with a non-profit arm.

      now, if she doesn’t need to make money, there’s less of a reason to go for-profit. but there is the possibilty.

      i had a conversation with a friend who wanted to help orphans in africa…and showed her how she could start a for-profit around it.

      air

      1. Creative Cathy Avatar
        Creative Cathy

        @aaronross383, I would really like to read about doing a none profit but with the arm of for profit. I hope to earn enough money to re-purchase material for the art supplies I will need after auctioning off some of my work and set up the account with a large portion for the people in Japan. I want to help the children; I want to give the sick little ones/nucular area’s; each a certian type of teddy-bear. Can you help?

  3. Jim Avatar
    Jim

    Having been through this exact quandary, I am very glad I chose not to organize as a non-profit. It’s not hard to go from for-profit to non-profit, but going the other direction would be a nightmare. So unless and until you are sure that you should be organized as a non-profit (because you want tax-free contributions or non-profit “cred”), don’t do it!

  4. John Dering Avatar
    John Dering

    Great points Aaron!

    Having helped to start a 501(c)3, I agree that the objective is not focused on a financial return, but rather a personal incentive to improve the world. The common perception with philanthropic-focused businesses is that if they go for profit, their focus, as well as the funds donated, will be hijacked by other priorities (making money, developing more services/products, etc.). Plus, public opinion and procedures make it far easier to collect donations if you are a NPO.

    That said, running a for profit business has different challenges for generating operating revenue (sales/memberships vs. donations/grants/etc.). In my opinion, as long as the leadership and financial management are conducted with the mission of the organization at heart, there is no issue with seeking a profit as long as its not excessive to the point of hindering the mission of the organization.

  5. Evan Avatar
    Evan

    Nonsense. Those of us who start non-profits don’t necessarily see money as bad at all.

    It may be a quite understandable reaction to not wanting to promote the greedy indulgence of those who promote money as the only good (CEO’s who boast of their disgusting remuneration packages and have no social conscience whatsoever). To distance onself from such people I find entirely understandable.

    I’m not convinced there is as much lack of integrity in the non-profit world as the for profit (though there is surely enough of it).

    You can draw a good salary if you run a non-profit. Some people aren’t interested in astronomical remuneration. Do you really not know this Aaron?

    You attack non-profits on a mistaken basis (that you can’t make money or that is must be due to dislike of money). How about you make a case for why people should value money above all else? This is the reason why people set up for-profits. Not so? An exaggerated position? Yes, like yours on non-profits.

    I guess these kind of posts generate controversy / attention. I don’t see them making much a contribution to helping bring change or make an income.

  6. Yanik Silver Avatar
    Yanik Silver

    Aaron,
    Interesting thoughts and good way to stir up a conversation that most people believe are pretty much black and white only.

    I’m starting my Maverick1Million.org site with the mission of having 1,000,000 young entrepreneur start-ups, ages 13-23, by 2020. And originally I was thinking it was going to be a non-profit portion of our business. But I’m going to build it out and make access 95% free and then see what happens and where the revenue will come. It might be sponsors or it might be more advanced information, etc. I like the flexibility of it not being a non-profit quite frankly and being able to collaborate and support other non-profits in that space.

    Another model many people have seen is the 1 for 1 model where companies like Tom’s shoes give 1 pair of shoes to a needy child for every shoe purchased. They are a for-profit venture that continues to grow and prosper without having to fund raise. Plus, you get the benefit of creating “zealots” you are really engaged in your brand and have a great story to share with their friends.

    So a lot of ways of creating the impact people want.

    -Yanik

  7. Evan Avatar
    Evan

    Yanik, Steve Blank has an interesting site on startups that you may want to check out.

    Also from a different perspective is Ripples from the Zambezee by Sirrolli (spellings may be slightly inaccurate) about job creation.

    Both somewhat different slants from the usual.

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