What are alternatives to starting a nonprofit?
Starting a nonprofit may be the most complicated way to act on your passion to serve your community. It requires much planning, time, effort, and money just to start, but the biggest challenge is to develop and maintain reliable income streams. Estimates vary, but most experts agree that less than half of nonprofit startups survive beyond five years. Of those that survive, perhaps one-third are in financial distress.
You might find that one or more of the alternatives described below will work just as well to help you achieve your charitable dreams, but with far less effort and cost. First, identify nonprofit or for-profit organizations that already are serving the same needs or population(s) that you wish to serve. Use one or more of the following to find them:
- GuideStar, Candid's comprehensive listing of nonprofits. Its free search allows searches by keyword, city, or state.
- 211 directories often are online and searchable. Use these to find local human/social services.
- Internet search for keywords that describe your cause and location (e.g., "anti-bullying Indianapolis IN").
- Foundation Directory tells you who has received grants in your location for the nonprofit mission that interests you. Click here to learn about using Foundation Directory. Subscribe to Foundation Directory or use it for free at our Candid partner locations.
When you find an organization that you'd like to support or work with, consider one or more of the following approaches:
- Propose your ideas to the organization's leaders. If they like your ideas, they might ask you to develop it further, or even ask you to work or volunteer for them to lead the project. Also, national organizations often provide ideas and information on how to help advance their missions. Some even provide toolkits and guidance on organizing your own fundraisers or a local chapter to bring their services to your area.
- Seek fiscal sponsorship. This is a more autonomous arrangement in which a nonprofit with a kindred mission sponsors nonexempt projects so they can qualify for funding opportunities limited to 501(c)(3) organizations, like grants. Projects can stay in fiscal sponsorship indefinitely or eventually get their own exempt status. Learn more about fiscal sponsorship.
- Become a consultant. If you are passionate and knowledgeable about a cause, you can become a consultant in your field and do contract work for existing organizations instead of setting up a new nonprofit. More about becoming a consultant.
- Start a donor-advised fund. If you want to start a nonprofit to give grants or scholarships, community foundations, financial institutions, and some public charities offer donor-advised funds and other philanthropic services. These providers offer a range of services, from managing the funds and paperwork, to advising on organizations and causes that you care about. Learn more about donor-advised funds.
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Joanne Fritz, The Balance Small Business
8 Alternatives to Starting a Nonprofit
Starting a nonprofit is a complicated process that many underestimate in terms of cost and effort. Consider these alternatives instead.
Gene Takagi and Emily Chan [pdf]
Alternatives to Forming a Charitable Nonprofit
This article, written by CA-based lawyers specializing in nonprofit law, includes a box at the end with 10 questions you should be able to answer if you want to start a nonprofit.