How much money are you making?

One of the most common reasons people reach out to me is that they want to start a nonprofit.  The first question I ask them is, “Why?” followed by, “How much money are you planning on making every year?”  

Potential clients often raise their eyebrows at that question, perhaps wondering if I am trying to figure out how much I can charge them (I’m not).

Why is it so important to think about what level of income your organization will have when planning to start a nonprofit organization?

1.)  It affects what kind of governmental filings you need, or whether you need them at all.

2.)  It shows your track record if you’ve already been providing services.

3.)  It forces you to do your research:

  • Determine demand for your nascent organization’s work.
  • Identify potential revenue streams and cost of operations.
  • Find cost-effective alternatives so you don’t waste money early on.

4.)  It mentally prepares you for the work ahead.

  • It moves you from the idealistic stage to the facing-reality stage.
  • It sets you up for fundraising by giving you a goal.
  • It helps to keep you from starting something you can’t sustain.

Take the time to think through these issues and you’ll be on much sturdier footing when you get your organization up and running.

Have any questions on this post?  Contact me at abigail@asalisbury.org.

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Please note:  This blog is intended as general educational information only, and should not be considered legal advice or a substitute for consulting a lawyer.