What to Know Before Forming a Non-Profit

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From healthier food and beverages we consume, to environmentally friendly cleaning products we use in our homes, Americans are demonstrating that we are increasingly conscious about making better choices. Price is less of an issue and we are loyal to brands that fit the socially responsible lifestyle we strive for.

Smart companies and their brands also know that consumers' changing attitudes caused changes in purchase behavior patterns. Many believe a specially created non-profit group can champion their cause. But brands that want to take the next step in demonstrating their corporate social responsibility, often lack the fundamentals about what to do and how to go about it.

PR expert, Nancy Trent, president of Trent & Company asked philanthropy executive, Joanne Heyman, founder of Heyman Partners, who helps entrepreneurial organizations with a social purpose about proven successful routes in developing or affiliating with cause-related, non-profit organizations, including when to join one, what resources are necessary, how to assure that your non-profit will be successful, and what the latest trends are.

Trent: Why should a company form a non-profit organization? 

Heyman: If a company wants to attract support from others—donations from individuals, other companies, foundations, etc.—the best way to do so is to create a public charity. This would require, among other things, an independent board of directors with governance responsibility. Otherwise, I would advise creating a grant-making foundation that would be controlled by the company's executives.   This is less attractive to outside sources of financial support, but preserves the company's ability to direct the activities.

Trent: How should a company determine whether to form a non-profit or to join one?

Heyman: Forming a non-profit is not for the faint of heart. It requires start-up capital, a significant contribution of time, passion, determination and a very clear sense of mission. Forming a grant-making foundation is far easier, but requires no less vision if it is going to be effective and deliver results. Regardless of which path you chose, do so because you are creating something of value that is in total alignment with your core values.

Trent: How can you determine if your company/brand can form one?  

Heyman: Any company can form a foundation, and any individual (or group) can launch a public charity.  The real question is WHY. Is there a problem you are seeking to address? A gap in a particular market (culture, healthcare, education, etc.) that you are dying to fill? Is there an expression of your brand that practically thrusts you into creating social good and impact? If so, philanthropy can be a great solution and outlet. An underlying issue is, will you meet a need better than others can? Will you create something for which there is a target audience that can benefit from your product or service?

Trent: How can you tell if the non-profit you are thinking of affiliating with is right for you?  

Heyman: First, look at their leadership. Do you like and respect them? Do they have a solid (and verifiable) track record of success? Are their plans credible? And, can your contribution make something happen that otherwise might not? Finally, are their values aligned with yours?  

Trent: What resources are necessary?

Heyman: Money and time. Lots. Willingness to leverage your technical/professional expertise. Buy-in by your leadership and staff. This is critical.

Trent: What are some common mistakes, or essential considerations, when forming an organization or joining one?

Heyman: It is easy to be charmed by a charismatic leader. If you are joining an organization, make sure that it is well managed, has the capacity to deliver on its promises, and can really use your participation.  Look at staff turnover. Talk to beneficiaries and colleague organizations. Check out the board. If you are forming an organization, be willing to go the distance. Board members typically contribute the lion's share of start-up capital. Outside funders will look to see that you have really bought into the concept, and have skin in the game. Know this and plan accordingly. A common mistake is to underestimate how engaged a board is in the early years. They contribute not only money, but also time and expertise. They need to leverage their social capital as well. 

Trent: What are five tips for making your non-profit organization successfully?

Heyman:

1. Address a real need or gap in the market.

2. Gather a great board of people who have the resources—intellectual, financial and social—to help you gain lift off.  

3. Invest early in outstanding communications. If you can't tell your story well you will not be able to get people to support you in the ways you need it.  

4. Invest in human capital—just like in other sectors, you get what you pay for.

5. Be willing to make and admit mistakes.

Trent: What are the most common ways well-meaning people sabotage a non-profit organization?  

Heyman: Don’t assume workers in this sector are happy with sub-standard pay and benefits because they love the work or that others share their passion and belief in the mission. Investments in communications are necessary. You can be doing great work, but if you can't communicate it, you'll have real challenges getting financial support.  

You get what you pay for and trying to get important work done for free for too long will not help you. 

Believing that you have a great idea is not enough. You must have outstanding programs managed by talented staff,  good systems, and be rigorous about evaluating your success (or not) and embracing change when necessary.

Trent: What are some trends in non-profits? 

Heyman: Creating income-generating activities; hiring traditional and social media gurus; moving away from galas to more sustainable forms of fundraising; partnering with companies and other organizations to go to scale (and go way beyond marketing); and embracing innovative financing schemes.

 

Nancy Trent is a writer and speaker, a lifelong health nut, a globe-trotting trend watcher and the founder and president of Trent & Company, a New York-based marketing communications firm. Trent & Company grew out of Nancy’s personal commitment to helping people live longer and healthier lives. A former journalist for New York magazine, Nancy has written seven books on healthy lifestyles, serves on the editorial boards of several magazines and travels around the world speaking at conferences and tradeshows on trends in the marketplace. She is a recognized expert in PR with more than 20 years of experience creating and managing highly successful campaigns. Nancy can be reached at (212)966-0024 or through e-mail at nancy@trentandcompany.com. You may also visit www.trentandcompany.com

 

Published in WholeFoods Magazine Online, 3/27,2012

 

 

 

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