Research, Money, Personal Support Are Key to Successful Charity Start-Ups

IN THE TRENCHES

By Marilyn Dickey

In the past five years, tens of thousands of Somali immigrants have poured into Minnesota seeking housing, jobs, and an escape from the ravages of war in their country.

As the state’s Somali population has grown, and its needs have risen exponentially, many small nonprofit groups have sprung up to provide support. In the process, some of the start-ups sputtered and died, and many of those that currently exist are trampling over one another to provide services.

“I would say we have 50 little Somali organizations, and they all want to do the same thing,” says Folarin Ero-Phillips, who founded the African American Relief and Development Initiative in Minneapolis a year ago to provide support for African-led nonprofit organizations throughout Minnesota. “It’s hard for them to get funding.”

Foundations look at these fledgling groups and see inexperience and duplication of services, says Mr. Ero-Phillips. And when he advises the start-ups to collaborate, they balk. “In some instances, we see the founder syndrome: ‘We founded this organization. This is what we want and that’s not what they want, ‘” he says. “So it sometimes gets a little tough to get them to connect.”

Starting a nonprofit organization can be an exhilarating, rewarding experience, say charity founders, provided that founders have the right ingredients: time and financial resources, in-depth knowledge of the issue at hand, reasonable goals, a workable strategy to achieve them, support from people who can help with the legwork, and the backing of family and friends. And clearly many individuals believe they have what it takes to make a nonprofit group run: The Internal Revenue Service awarded charity status to 865,096 organizations last year. But for some would-be founders, the excitement of creation overshadows the signs that the charity’s basic premise won’t work: The group doesn’t have the capacity to do the job, or its organizers aren’t up to the task. Or maybe its finances are too shaky to sustain it, or it duplicates the work of an existing organization.

Those who assist charity founders say that many nonprofit projects never get beyond the planning stage. Once a month, the Maryland Association of Nonprofit Organizations, in Baltimore, holds a workshop on how to start a nonprofit organization. “Month in and month out, we have 20 people show up,” says Peter V. Berns, the association’s executive director. He estimates that three-fourths of these would-be founders never start their organizations.

For the first of the workshop’s three hours, Mr. Berns says, the speakers challenge the participants’ assumptions about starting a charity. Participants are asked to take a hard look at their reasons for wanting to establish a new organization. When they start looking for money, someone is bound to ask them to justify their group’s existence, he says. And workshop participants are led to consider other ways to carry out their missions: “You can take your great idea to an existing organization and try to find a base from which to pursue your ideas and create a job for yourself in the process.”

Even if all signs point toward starting a new organization, Mr. Berns urges prospective charity founders to consider whether the organization would more likely succeed as a for-profit business. With a nonprofit group, he says, “you don’t have the same control over your destiny as in a for-profit. With a for-profit business, you own it. If you found a nonprofit, you don’t own it. You have founded something that takes on a life of its own. You hire a board of directors that can get rid of you.”

Doing Homework

On the Web site of the Minnesota Council of Nonprofits, in St. Paul, is a list of 10 traditional and 10 nontraditional ways to find a job. Number 10 on the nontraditional list is to start your own nonprofit organization. “That’s what I did,” says Jon Pratt, who began the council 16 years ago.

The nuts and bolts of starting a nonprofit group are the easy part, says Mr. Pratt, who is now executive director of the council, which works to strengthen the state’s nonprofit groups. But long before charity founders reach the point of writing bylaws and applying for tax-exempt status, he says, they need to conduct research. “That’s an important stage, the walking-around stage, which is establishing the bona fides for the organizer as well as for the organization,” he says. “You have this honeymoon, when you can just tell people, ‘Here’s what I’m thinking about doing. What do you think? ‘“

Malaika Edwards is getting ready to inaugurate the People’s Grocery, a supermarket-on-wheels that will use a United Parcel Service truck the organization bought at auction to take organic groceries to neighborhoods in West Oakland, Calif. The grocery will employ youths, she says, and teach residents about healthy eating.

Ms. Edwards has spent the past year collecting data, talking to people, and studying the history of “mobile groceries.” “This is a low-income community of color south of Berkeley and west of downtown Oakland,” she says. “It has 24,000 residents and one grocery store. There are 36 corner stores that have a plethora of alcohol and candy and canned goods but no access to organic foods. It’s not a neighborhood where people are familiar with organic foods or necessarily eating very healthy food.” About 25 percent of residents, she notes, depend on emergency-food sites such as soup kitchens and food banks.

She and her colleagues have done their homework with care. Two of the three founders are new to the area, and they wanted to work closely with other neighborhood groups. “We approached it very slowly, because we didn’t want to step on anyone’s toes,” she says.

Seed Money

Some otherwise viable nonprofit organizations never begin for a very simple reason: The potential founder can’t give up a paycheck long enough to do the groundwork. “The whole process takes time, so if you have nothing to live on, it’s very hard to start an organization,” says Stephanie Roth, editor of the Grassroots Fundraising Journal.

Usually when people start a charity, the seed money comes from their own sources, Ms. Roth says. They may have wealth of their own, they may be married to someone who is bringing in enough money to support their whole family, or they may have friends and relatives willing to chip in. But some people do manage to keep their jobs and work on their nonprofit effort in their spare time. “One scenario is that someone is really excited about an idea or is upset about a need that no one’s addressing, and usually they don’t get paid for it initially,” says Ms. Roth. “They’re working around the kitchen table and trying to do whatever their job is at the same time.”

Ms. Edwards quit her job working with youths seven months ago to start exploring the People’s Grocery. She lives on savings and a small income from conducting occasional workshops with young people. “I’ve been a volunteer for the past seven months,” she says, “but just last week we got a large grant — $35,000 — that will actually pay my salary for the next few months, so that’s very exciting.”

Last year, when Pamela Johnson was planning to create So.Be.It.Entertainment, in Wyncote, Pa., a nonprofit record label designed to help troubled women find creative outlets such as singing and performing, she paid the label’s start-up costs with money she had saved while working as a program officer at the Robert Wood Johnson Foundation.

It is possible to get some support from foundations, even before a fledgling organization attains nonprofit status, says Mr. Pratt. A foundation may be willing to give enough money to allow someone to spend six months exploring an idea, he says. Or a founder could get a fiscal agent — a charity that will accept donations to an organization until it receives charity status from the IRS. The donor then gets the tax deduction, and the new charity gets the money. That’s what Mr. Ero-Phillips did when he started the African American Relief and Development Initiative. His employer at the time, an umbrella group for Twin Cities charities that is now called Pillsbury United Community, helped jump-start the new charity by paying him a salary, in the form of a loan, during his group’s start-up period. Pillsbury also provided office space and computers.

“It helps when you have somebody providing initial support,” Mr. Ero-Phillips says. “Many new organizations try to use their own money to do their work — to have an office, to pay the utility bills — and at the end of the day if they do not get funded, then they will be down in a hole.”

Leaning on Allies

Charity founders have another important piece of advice: Don’t go it alone. The job and time commitment are huge, and working with other volunteers or with co-founders can ease some of the burden, says Aspen Baker, co-founder and director of Exhale, an Oakland, Calif., hot line that provides post-abortion counseling. The organization was started by four people and a network of volunteers. “We have one person building relationships with the abortion clinics, another person who had fund-raising experience working with us on grants, and a huge network of other volunteers picking up other pieces,” she says.

For Frankie Blackburn, founding Impact Silver Spring, in Maryland, which trains minorities to take on leadership roles, was a labor of love but also a huge undertaking. “What many people miss is what impact it has on your life and your family’s life. It is impossible to really achieve this without support at home,” she says. “And if you’re single, you have to have some other support network. It feeds into every part of your life.”

During the planning stages, Ms. Blackburn put in anywhere from 20 to 40 hours a week of work. Now that the organization is up and running, she works about 55 hours a week as the organization’s executive director. But, she says, a founder should be prepared to wear many hats. “You have to be open to doing everything,” she says. “The first year or two, up till recently, I spent hours in Costco buying supplies. I must have spent half my time packing and unpacking my car. You spend so much time doing nonprofessional work.”

Before starting Impact Silver Spring, Ms. Blackburn spent 10 years working in various nonprofit and government jobs. She had no shortage of innovative ideas for those employers, she says, “but I had to work in a much more limited, less powerful way.” Now that she has founded her own nonprofit group, she says, her proposals are taken more seriously.

Ms. Blackburn, like many charity founders, says she didn’t start out primarily to found an organization. “I started out to help people do something,” she says. “But I love it, because I have freedom and a place to put so much of my creative energy.”

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