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Starting a not-for-profit organisation is not an easy task. It requires manoeuvring, creative thinking and the ability to create relationships, but the payoff will make all of the hard work worth it. If you have a burning desire to help a marginalised sector or encourage a community, this guide on how to start a non-profit organisation will guide you through the process. Read on to find out how you can get started.
The Australian Taxation Office (ATO) defines a not-for-profit organisation as one that provides services to the community and does not operate to make a profit for its members. Any profit that the organisation makes has to be used for the organisation's services and must not be distributed to members.
Starting a non-profit organisation requires some additional planning compared to a regular business. Your organisation will need to carry out its activities effectively while in compliance with the law. As you will not be making any profit, your organisation must minimise the chance of running into legal difficulties as it grows or changes. Hence, it is essential to formulate a business plan. It should cover all of the organisation's bases, from its vision and mission to money and resources.
Starting a non-profit begins with the desire to make a difference. One has to be resilient and believe in the cause they are championing when working in a resource-constrained environment. You will also need the skills to translate data into emotional stories that will grab people's attention. Conveying your organisation's uniqueness and need is an essential marketing tool. You will rely on being empathetic and sensitive in communication as you work with stakeholders.
Starting a not-for-profit organisation requires a head for business management and marketing that effectively manages organisations with a social purpose. If you have the time and opportunity, you might benefit from investing in a qualification like the Graduate Diploma in Not-for-Profit and Social Enterprise Management offered at the University of Technology Sydney (UTS). This course helps students with business management, fundraising and revenue streams for events and not-for-profit organisations, volunteer management and more. The course should take one year of full-time study or two years of part-time study. Other similar courses include:
Additionally, you can also complement your diploma with a short course in business or marketing. Doing so will help you develop the skills for business management and an understanding of the sector.
Once you have leased office space, you will need furniture for staff and volunteers, a meeting with donors and clients, and a refreshment area. Your office space will need the following:
If your organisation has a small kitchen, you might want to have a coffee machine and kitchen essentials. If you have a waiting room, it might be nice to display some art.
As for software, you may want to consider setting up a website to introduce your not-for-profit organisation, your goals, upcoming events and what you have achieved so far.
Your not-for-profit should also have reliable software to facilitate easy donations such as:
These tools can help with fundraising, event management, customer relationship management (CRM) to build and maintain relationships with donors, data collection and campaign analytics.
Of course, you will also need a bank account for your donations. When setting up one, it is vital to compare banks on interest rates, fees, accessibility and fund growth. Read our guide, which compares different bank accounts.
Since you are starting a business from scratch and might need a sizeable investment, you could consider applying for a loan. There are several grants available that can help cover one quarter or two-thirds of your organisation's annual running costs. To apply for a grant, your organisation will need to first be endorsed by the ATO. Once you have received the endorsement, you can browse through the websites below to help you apply for grants:
However, your not-for-profit organisation cannot rely forever on grants. Some other ways to get funding would be through fee-for-service work, community fundraising and corporate partnerships.
Depending on your organisation's mission, the legal structures to be aware of are:
The documents you will need for starting a not-for-profit organisation are:
One good way to find your target audience is to read up on case studies from similar not-for-profit organisations. Find out their methods and services, and then consider how you can adapt this to your locality. It is important to run your products and services through volunteers from your target audience. Their feedback will provide invaluable knowledge on the core issue and how you can respond to them. Remember that your resources are limited, so you will need to be efficient and smart with how you provide your services. Speak to prospective donors to get an idea of their motivation to donate, causes they are interested in and some background information.
Take to social media to spread your message and mission statement. Having an online record also communicates that you are transparent. Gaining more exposure can help you reach out to more people and donors. Collaborate with different companies and corporations that would help give your not-for-profit a boost.
Allocating a small budget for promoting content can go a long way. Consider advertising on Facebook or Google Ads, which are generally affordable. If you have a Facebook page, you can add a call-to-action or Donate Now button on any of your posts.
What is the difference between a not-for-profit and an NGO?
A not-for-profit organisation is one that uses any profits it makes into pursuing its missions. Though these organisations can make profits, founders or members cannot claim the profits. A not-for-profit is smaller than an NGO and is run by paid staff and volunteers. Some examples are CARE Australia, Save the Children and more.
An NGO, or non-government organisation, is set up and operated independently from local, state or international governments. Generally, NGOs address more extensive and widespread issues like natural disasters, famine and so on. Some examples of NGOs in Australia are the Australian Red Cross, Habitat for Humanity and more.
What challenges do non-profit organisations face?
The biggest challenge for a non-profit organisation is the unpredictability of fundraising and operational costs. Other challenges include changes to government policy, uncertain economic environment, escalating demands and regulatory changes.Back to top
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