This is the third post in Cadence’s four-part series on starting your own non-profit or charity.
You’ve decided that starting a new benevolent venture is right for you. Great!
You’ve figured out what type of organization to start. Woohoo!
Now it’s time to get moving.
We’ve helped hundreds of new ventures get started, and over the years, we’ve become aware of a few major pitfalls new organizations can fall into.
By avoiding these mistakes and getting your benevolent organization set up on a strong foundation, you’ll be saving yourself money, time, and headaches down the road.
Not consulting an expert
Do you know the difference between the word beneficial and the term charitable at law? Does the alphanumeric T3010 mean anything to you?
The language and regulations of the Canadian benevolent sector are not for the faint of heart. By working with an expert to help you write bylaws that meet regulatory requirements, set up your books and records, and make a solid financial plan, you can spend less time trying to decode a new language and more time focusing on making a positive impact on the world.
(Of course, we would love to be that expert for you: let us know if you need some help! If we can’t answer your question, we probably know someone that can.)
2. Not adhering to the rules and regulations in detail
We hate to be the bearer of bad news, but there are a number of rules to follow when setting up and running a charity, and not sticking to them, even to the seemingly insignificant ones, can cause headaches in the long run. Take the time to really understand what your obligations are before you get started so you don’t face (quite so many) unwelcome surprises along the way. (Again, working with an expert can help you here a lot.)
Some great resources for understanding the rules and regulations are:
Basic charity guidelines from the Government of Canada
Charity and Not-for-profit tax filing requirement
Key differences between the BC Societies and Federal Not-for-profit Corporations
Basic bookkeeping training for the benevolent sector
3. Not preparing for the long-haul
Successful charities and non-profits need to balance two things: the energy and momentum that comes from the belief in a cause with the tedious timelines that dreams-turning-into-reality can follow.
As we said in the post that started this series, the most important trait for a benevolent entrepreneur is patience, especially when dealing with the CRA and especially if you intend to register as a charity.
It isn’t always fun – we know. Often our passion moves more quickly than bureaucracy. But if your vision is clear and your people are patient, we guarantee that your good work will bear fruit.
4. Ineffective board members
Boards are the backbones of organizations: you can still walk with weak ones, but you might find yourself slumping.
A tendency for new organizations is to build their boards out of family and friends. Of course, we know your family and friends are amazing people, but it never hurts to take a step back and evaluate what group of people will, as a whole, make up a high-impact board that serves your mission well. Instead of choosing based on personal relationships, we recommend choosing based on:
Specific skills: build your board to include diverse skill sets such as financial literacy, executive leadership, communication savvy, fundraising finesse, and community building abilities
Representation: choose individuals that represent a multiplicity of perspectives – consider gender, class, and ethnicity and make sure you include people who understand the groups your organization is serving
Networking and fundraising capacity: make sure you include both people who can give monetary gifts and who can offer invaluable non-monetary gifts like advice or perspective, as well as people willing to ask others for both those things
Diversity of board experience: consider a mix of newbees who bring fresh perspectives and board veterans who can offer leadership and mentorship to other members
5. Thinking donors will readily donate
You have an amazing cause and one that is sure to inspire others. Unfortunately, the sheer fact of the merit of your vision won’t necessarily get people to donate.
People with money (whether regular people, super rich people, foundation boards, or government officials) have a lot of requests for their attention – and their dollars.
Many outside the non-profit sector don’t realize that fundraising is a world unto itself, and figuring out how to strategically ask for donations or grants is a delicate balance of marketing, asking, stewarding past donations, and more.
Your cause is inspiring, and fulfilling your mission deserves its place in the economy. Figuring out how to best fund your mission is just as important as designing and running your programs; in fact, it’s the thing that will allow you to continue having an impact in the long-term.
6. Waiting around for the big money to show up
That being said: A client recently reminded us not to wait around for Oprah’s budget to pull the trigger on your benevolent goals.
You can make a difference on a small budget. By starting with a small and realistic fundraising goal and budget for your charity or non-profit, you can start doing good work right away and grow from there. Fundraising dollars often follow credibility, so starting small and showing your impact instead of waiting until you have the “big cheque” to enact your “big dreams” is a much more effective – and sustainable – way to start doing good.
If you’re an established charity or non-profit, what do you wish you had known when you were starting out? Let us know in the comment section.
