How to Start and Run a Successful NFP

A Not For Profit (NFP) is an organisation that focuses solely on achieving its mission, rather than on financial profit or gain. It is typically either a charity providing services to those in need or an organisation such as a sporting or social club.

Starting a NFP is very like launching any new business. The ground rules are different, but there are similar processes for setting things up. So if you’re thinking of starting a NFP, here are 5 boxes to make sure you tick.

Identify a need

You may already have an idea of what your new Not For Profit will be focusing on. But be sure to do your homework, as you would with any new business venture.

Who is your target audience?

Are their needs already being met by another group?

Will your NFP fill a gap or niche in the market not currently being catered for?

The last thing you want is to set up an organisation that competes with an existing NFP. So do some research and if your chosen sector is already being well catered for, consider offering your idea and/or your services to the existing NFP(s) instead of starting a new one.

Or if you discover there’s definitely an unfulfilled need for your idea out there, then launching a new Not For Profit could be the best way to ensure it becomes a reality.

Create a board or committee

If you decide to move ahead with your NFP, be sure to set it up for success rather than failure. That means surrounding yourself with a group of like-minded and enthusiastic people who can share the workload, rather than shouldering all the responsibility and trying to do everything yourself.

Establish a board or committee of people who are committed to the cause and delegate responsibilities in accordance with each person’s particular talents and preferences. And make sure you welcome newcomers, whether staff, volunteers or board members, so that fresh blood (and enthusiasm) is constantly being introduced into the organisation.

Create administrative processes

Just like a for-profit business, your NFP will need systems and operating procedures in areas such as accounting, HR and marketing. You will also need to draft policies on everything from your company mission to a code of conduct.

And if you’re planning to become a charity, you’ll need to register with the Australian Charities & Not For Profits Commission (ACNC) and obtain various licences and permits to be able to access concessions and comply with your tax obligations.

Hire passionate people as you grow

Not all your members will be volunteers and indeed, you will want to recruit outside the organisation from time to time to attract the best and most effective people for your cause.

And staff members can be paid for their work, as long as it is considered a reasonable amount. If your NFP is in the social and community services sector for example, the Social, Community, Home Care and Disability Services Industry Award 2020 (SCHADS Award) lists the modern awards for employees in this sector; a summary of which can be found here.

It's important to remember that whether your employees are paid or unpaid, the most important thing is their passion and dedication for your cause. And all staff should be treated as equals, regardless of salary considerations.

Network to advocate your cause

If you were running a for-profit business, you would be competing with others in your sector, but as a non-profit, you should welcome the presence of other charitable organisations and encourage their input and support.

Collaborating with other non-profits is a way to promote the mission of your organisation to others. It can also be a useful way to create efficiencies by sharing resources when money is tight. And collaboration can increase the odds of acquiring much needed funding, especially from government, by presenting a more professional and unified business front.

Non-profit vs for-profit

As a non-profit, you’ll receive benefits that don’t apply to for-profit businesses. You’ll enjoy tax concessions that will allow you to allocate more of your funds towards accomplishing your goals. And on a personal level you’ll enjoy an enhanced sense of job satisfaction, knowing you are working for the betterment of society.

On the flipside however, your finances and business decisions will be under constant public scrutiny, you’ll be fighting every day for grants and donations and like it or not, you will be competing fiercely for that funding with other NFPs in a rapidly expanding non-profit marketplace.

So is starting a Not For Profit organisation really worth it? If you’re able to stand up to all the challenges and your idea can help improve lives in some way, then surely the answer has to be yes. And if it is, we thank you for what you’re about to do! (and put us down for $20).