Whether ’tis nobler in the mind to suffer the slings and arrows of…becoming a 501c3: Part Deux

28 Jun

Alas, poor Yorick did not budget correctly.

Last week I took you to task for thinking of starting your own c3. I questioned motive, intent and frankly–sanity. I do think most people have good intentions when dreaming up the latest way to save the world. So forgive me my skepticism, I just think there is also a healthy dose of naivety that comes with wanting to start a new charity. So let’s talk one more time about hurdles.

M-O-N-E-Y. You’re gonna need money. How much? “Lots” is not the answer. “Eh, probably not that much” also isn’t the answer. The true answer lies in making a realistic budget. It’s a myth that nonprofits don’t run like businesses. They do. They have budgets and financial statements and budget to actuals and people track that stuff monthly and are held to it. Which is more than most people do with their own personal money. So now that you’re wanting to be that top notch charity that operates better than everyone else, you need to start with a realistic line item budget that details all–ALL–the expenses you will incur within a 12-month period. That includes staff (including payroll taxes), rent and utilities, office supplies, mileage, training, advertising (they have to hear about you somehow), phone and internet, equipment (computers, phones and a copier) and whatever inventory or other some such supplies you will expend in direct service to your clients. Add it all up. Wow. That’s a lot. Okay, now start cutting back where you can.

Time. Oh, we don’t need staff! We’ll run it all with volunteers! You sure could do it that way, but I assume you have to eat and pay the mortgage just the same as everyone else. How much of your time will this take? Estimate and then add 30%. Because you won’t just be doing the fun stuff. You won’t just be handing out the food or playing with the kids. Someone has to do bookkeeping, reconcile the bank statements, deal with the IRS to make sure your application for c3 status is okay, recruit and supervise board members and other volunteers and do all the other boring administrative stuff. How will splitting your time between two full time jobs affect your family? Your professional life?

And those volunteers? Where will they come from? You will need more hands than you think you will. Be careful not to expect as much from your volunteer as you do from yourself. This is your dream, not theirs. They may like the services you propose to offer, but the building of a brand new entity to leave a new legacy in your community probably isn’t on their agenda. they just want to make sure all the animals have homes or that all the senior citizens have food. Maybe they don’t want two full time jobs.

Expertise. So you have an adequate cadre of great volunteers–or maybe you do have the bandwith to hire staff. Can they actually deliver the services? Is there anything legally or morally obligating you to deliver services through people who have a certain amount of expertise or even licensure? If you want to have people walk dogs at the shelter, they probably just need a bit or training. If you want to counsel pregnant teens, you’re looking at someone with licensure. Or you better be. What will a licensed social worker run you? Do you need someone bilingual? That’s extra. You don’t want to mess around with this and call it “advising” when it really operates like case management or therapy. Remember? You’re better than everyone else, so act like it.

Data! Mmmmm, good! I love me some client data! It’s the basis of everything you do. So do you have plans for what data you will collect and how you will store and retrieve it? How will you secure it? Data is one of the most important things you’ll spend your time on. It ties directly into money. You have to show what you will track and what outcomes you expect to achieve to be credible to any funder.

Next time? I might just give you some hope.

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