Should You Start A Nonprofit in Today’s Economy?

This is hes important uestion.eprofit community are asking important question that many in the nonprofit community are asking today. What do you think? If this question was asked of you as a consultant what would be your advice? With all the media talk and analysis of the world declining economy, the nonprofit community continual to strive to stay focus and achieve its missions. In spite of all the dismal talk and as bad as the future projections are, there is a lot of optimism and desire in the nonprofit sector.  However, is this optimism realistic enough to use precious and scarce resources on a new start-up nonprofit venture? Some people will suggest that maybe you should volunteer with an existing organization offering the same services. The establish organization will say, that they are already providing the service, but need more funds to be successful. There are various opinions on this question. In this post I will share my perspective on this question.

Everyone is talking about the economy, most believe it’s screwed and will remain so for some time. On January 30, 2009, the Associate Press wrote that the Commerce Department Report stated, “The economy shrank at 3.8 percent pace at the end of 2008, the worst showing in a quarter-century, as the deepening recession forced consumers and business to throttle back spending”. The report further suggested that the figure is likely to be even lower in the months ahead. The AP stated, “The report provide clear evidence of the economy rapid deterioration as housing, credit and financial crises… the worst since the 1930… feed on each other. It’s a vicious cycle that has proven difficult for Washington policymakers to break”.

The total job loss in 2008 was above 2.6 million or the highest level in more than six decades. In February 2009 over 260,000 American lost their jobs.

The experts refuse to use the term “Depression”. I really don’t understand the proper economist definition of a “Depression”, but I do know that to most Americans this economy is very “Depressing”. President Ronald Regan once stated “A recession is when your neighbor loses his job. A depression is when you lose yours.” Unemployment is around 8 percent and projected to exceed 10 percent. Remember, the unemployment figure only represent those that are receiving unemployment benefits and do not include those whom have exhausted their benefits or have been unemployed for a time period whereas the government has define them as unemployables and therefore not counted in the figures.

Foreclosure is at the highest level since the Great Depression. Some figures states, 40 % of the mortgages in the U.S. are worst less than the debts owed on it”. Also, 10 % of Americans are either on or applying for food stamps. The government figure show a 7.1 percent annualized cutback in spending on “Nondurable”, such as food and clothing was the deepest since the end of 1950.

Our families, friends and neighbors are struggling to make ends meet. Maybe you were fortunate because you haven’t lost your job, home or saving. However, there are many people that are less fortunate and suffering, but the poorest communities and the poorest countries are the ones who will suffer the hardest. Many experts around the world are predicting that this crisis will get worst and last well beyond 2009. Giving the present situation, where millions of Americans are struggling to pay for basic necessities and millions of people around the world are starving, I believe that starting a nonprofit may be a good decision.

Many experts also, believe that now is a great time to start a nonprofit organization. President Obama in his inauguration address called on all Americans to better their communities through community service. “What is required of us now is a new era of responsibility. A recognition on the part of every American that we have duties to ourselves, our nation and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.”

It’s great that there is hope and optimism in the nonprofit sector. However, starting a new organization is going to be tough, but tough time require tough action. I once received an email that said “Hope without sincere effort is a pipedreams. A person’s hope is manifested according to the strength of his efforts. A dream is of no value if insufficient energy is not put forth to bring the dream into a reality”. Starting a nonprofit today without a full commitment is not only a bad decision, but it’s also detrimental to the nonprofit sector.Your failure will only support the arguments regarding wasted and unnecessary resources used by new nonprofits.You should and must start on a solid foundation with a good plan for success.

During tough economical time, do you give less, turn you back on those in need or do you step up to the plate, dig deeper and give even more to those who need the most help? Ironically, history has shown that Americans get tougher and are at their best when times get tough. It’s during tough time that Americans are more generous and stronger as a people. I have heard and read many leaders in the nonprofit community say, that despite these tough time, donors are coming forward as they have often have done during times of crises. Some donors may not be able to give as much as usual, but they are still giving, especially individuals whom are giving small donations, time and other resources.

If you are considering starting a nonprofit, don’t be afraid of these tough economical times where millions of people are losing their jobs and their homes, they are the ones that need your help. I encourage you to start a nonprofit if you have the real desire to achieve your vision of helping others, because the needs for help are much greater during tougher times.

Many national charities such as Salvation Army and Goodwill Industries International are saying that donations are declining while people seeking help are increasing. During tough times, people turn to their local charities for help with basic necessities. Charities are also requesting help. The demand for help come at the same time that many nonprofits see their own fund declining because of the economy. Food Banks are seeing their supplies dwindling because of growing demands and the high prices for food. Nonprofit leaders are going to have to become more created in their fund raising activities and engage in asset-based activities.

You have heard all the negative reports and reasons you shouldn’t start a nonprofit in these tough economical times. A brief summary of reasons why you should not start a nonprofit in tough time will usually boil down to a lack of available funds from corporate donors and individuals or there already enough nonprofit. Most of the critics focus mainly on monetary help and with very little consideration to the other resources and assets that are available in our communities. In my opinion, these critics have either forgotten or overlooked the will and determination of the American people.

If you really believe in your dream, write it down, it will then no longer be a dream, it will then become a goal. You must then act on your goals. First, do your research to determine if the services are needed or already being offer by other organizations. Gather resources on “how to start a nonprofit organization”. Seek professional advice. Starting a nonprofit is just the first step. Take the proper actions and steps necessary for success and you can make your vision happen, even in these tough times. The need for all type of supported services is at an alarming rate. If you stay focus on your vision, set obtainable goals, continual to learn, share resources and utilized all of your assets (particular non-monetary), your nonprofit corporation can thrive during these tough time.

It’s not going to be easy, but you must hang in there, don’t give up your vision. “Don’t Quit”. This philosophy is especially applicable in today’s tough economical times when starting a nonprofit.

Do to the important and length of this discussion, I have decided that it’s best to discuss this topic in several parts. I will be sharing more of my though and tips about starting a nonprofit and how nonprofit organizations can survive in these tough time in future blogs, postings or editions of my newsletter located on my website.

I would be interesting in knowing your opinion on this question. It will be interesting to see if you agree or disagree with me. Maybe your comments or suggestions will appear in my next post.

Please take a look at my newsletter for other tips, resources and valuable information.

If you know of resources that you think would be helpful to other please forward so that we can share it. Keep checking back here for more ideals, information and comment as we moved forward in these tough time.

My first couple of post may be longer than normal because of the important and complexity of the issue, later posts will be much shorter. See you soon!


Doing these tough time, we all need to give thanks for what we have, but also need to look around and ask ourselves,”What can I give today?” Donations can be given in all form, money, time, food, prayer and even a smile. A simple gift of love and a helping hand will be greatly appreciated.

If you know of any nonprofit organizations doing great work, please sent me an email. The organizations may get mention in a later post or may even get listed as a resource on my web site. Please take a look at my newsletter for other tips, resources and valuable information.

If you know of resources that you think would be helpful to other, please forward their contact information so that we can share it. Keep checking back here for more information, ideals and comments as we moved forward in these tough times.

See you soon!


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