How to Start a Nonprofit Part 1: Mission, Board & Theory

Nonprofit Mission

If you’re thinking about starting a nonprofit, you likely already have an idea of what your mission is. Most nonprofits have a mission that does one of three things (1) maintains something that’s already there, like historic preservation, (2) creates something new, like establishing a new museum, or (3) provides an essential service to the community, like a shelter or a food bank.

When you look at those three options, which best fits your nonprofit?

We will go into this in more detail in a later blog post, but your mission statement essentially has two parts: what you want to do and how you want to do it. You definitely need a mission statement, as it is the driving force behind the organization’s work. Also, you don’t need to overthink your mission statement. When you get to developing your theory of change (see below), you can ensure that your mission statement is aligned with your theory.

Nonprofit Board

The IRS requires that all nonprofits have a board of directors that actively participates in the decision making process for the organization. Founders often become executive directors and then find themselves uncomfortable with the idea of working with a board of directors because they feel such strong ownership over the nonprofit.

You NEED a board. They are essential to your organization’s success. That’s why it’s important for you to recruit board members who will be an excellent fit for your organization. Look for people who are already involved in the issue your nonprofit addresses, insider understanding is essential. Every nonprofit can also benefit from people with finance and legal experience, as the financial and legal oversight of the organization is the board’s primary responsibility.

It is important for your board of directors to know that they will be expected to make contributions of their time and skills as part of a working board in the startup phase. The first few years of a nonprofit require all hands on deck to ensure that the organization is set up to thrive for the long term. You need people who show up to meetings, complete tasks, serve on committees, and meet with leadership to share their expertise.

Click here to learn more about how we help nonprofits design efficient, profitable operations.

Theory of Change

Your nonprofit’s theory of change is sort of like an expansion of your mission statement. It’s essentially a hypothesis: “we want to see X outcome and we think we can do that by doing A, B & C.” An organization’s theory of change is almost always displayed and communicated visually, using a map or flowchart to show how the theory is applied.

The theory of change starts with identifying the key goal for the organization and then reverse engineering the design for how to get there. The goal represents the impact you want your organization to have on your community and your theory of change model shows your path to impact.

Your theory of change might be focused on just one specific initiative or program your organization offers. The good news is that you get to decide! What’s important is that developing the theory of change is a collaborative process that includes your fellow stakeholders. This is an important step in defining who you are and how you will show up in your community. It’s worth ensuring that you get it right.

I’ve created a sample theory of change visual for you here. This model is based on the work of a nonprofit small business lender I used to work for. It is what is called a Community Development Financial Institution (CDFI). They work with small businesses who banks won’t work with, usually people with less personal wealth, lower credit scores, a lack of capital, etc.

Most organizations hire an expert to help them develop a theory of change, because it is an important process which usually requires facilitation. Call me if you’d like to talk about how I can help you develop your theory of change.

A Quick Check In

Before you go any further in starting your nonprofit, take a moment to reflect on why and do your research. I’m sure you have a great idea for how you want to serve your community with your nonprofit, just be sure you do a little research first. Do people in your community want the services you plan to provide? Is there someone else already doing this work and can you partner with them? Do you have the time and resources to commit to making this thing happen?

If you feel good after that check in, congratulations! You’re on your way to starting your own nonprofit organization! That is a VERY BIG DEAL!! If you need some help, let’s talk! I’ve helped start several nonprofit organizations and I know what it takes to make it a success.

In part two of this series, we’ll talk about all the legal and administrative things you need to do to make your nonprofit official and real.

In part three of this series, we'll talk about your nonprofit startup and launch strategy.