Recently this question arrived asking about establishing a nonprofit agency.

“I recently moved into a neighborhood that would benefit from a Community Action Group. I would like to start and manage a not-for-profit, where lower income residents would have access to funds to renovate or update their homes, thereby attracting more business into the area and increasing our property values. I would also like to offer counseling to those in jeopardy of foreclosure or financial ruin.

“The idea is great, but unfortunately I am in the same boat as those I would be helping. Who, if anyone would fund such an idea? I have the experience and skills, and can draw upon the expertise of a family member to help manage the organization, but lack of cash flow is drowning me along with everyone else in our area. How can this idea become a reality?”

Dear Sir or Madam:

I can write volumes on your subject of nonprofit agencies wanting to do good, and not having the funding to begin.

First. Let’s start with you. You need to change your attitude. If you are truly “driven” to make a reality of this vision then start thinking in a positive, ‘can-do’ manner. You can’t act and feel any other way. Oh, there will be times you will be tested, mentally, spiritually, and physically, but your attitude is foremost in this quest.

Second, you need to begin organizing your thoughts onto paper. Yes, a business plan is the first tangible step. And do treat this venture as if it were a for-profit venture in the sense that you must generate income to pay the bills and deliver the services. If you don’t know how to develop a business plan, and you don’t have money, then locate the nearest Small Business Development Center or SCORE chapter. Attend some low-cost and no-cost workshops that will give you the tools to begin organizing this vision. Seek some confidential, free, one-on-one counseling. A very good site on the Internet to find a business plan outline is at the Small Business Administration.

While you are online go to for a sample nonprofit business plan. These are two excellent sources. The SBDC and SCORE can answer questions about content you may not understand. I suspect the financial projections will be the biggest challenge. They are for most people new to the process.

Third, you need to begin identifying those in the community who support your vision and are willing to put in time and their meager resources to help you. In many cases, you can expect that many of those who help will want a “piece of the action” in the sense they may want to be on your board of directors or possibly seek employment in the agency when the funds are sufficient for the payroll. However, do not compromise on the need to hire those who are qualified to perform the work. Showing favoritism simply because the person helped you is an immediate injustice to the cause of the vision you have.

Fourth, you will need to begin contacting and establishing relationships with politicians and appointed officials in your local government. Accessing government grants and other forms of public funding will absolutely require a good relationship with these people and these government agencies. When networking with them you need to pick up on their “agendas.”

Please understand, elected politicians will not align themselves with anything that does not make them look good to the constituents (voters) or the media, and that does not fulfill their agendas. For example, I expect that nowadays anything that results in job creation will receive much attention. Job creation is a very common item on all politicians’ agendas. However, they will want to know what will be the cost per job created. That is where your business plan becomes critical. It will be measured for the number of jobs created and the average cost to create them.

Fifth, you will want to contact and network with existing nonprofit agencies that serve one or more socioeconomic purposes (jobs, health, housing, etc.) in and around your community. Every city of considerable population has them. Some are private sector nonprofits, and others are public agencies from the local to the state and federal level.

This must be done with caution. You need to know that if your vision should duplicate the responsibilities of an existing agency (public or private) you will be seen as a threat to their existence. You really need to do your homework. As they say, you need to “read the political lay of the land.” And believe me when I tell you there is plenty of politics associated with these agencies. They have very strong ties with government, elected and appointed officials.

For you to come onto the social stage seeking funding for your agency is interpreted by others as competition for existing government funds. You are a competitor and many private-sector nonprofits will not help you if they perceive your efforts as possibly taking away from the government pot of money. With the federal government running at an all-time-high deficit, there is much reduction in funding at this time. You will be competing more today than if you had decided to do this four or five years ago.

Sixth, private sector sources of funding will be more difficult to secure. Experience has taught me that you must first secure public funding support before soliciting funds from private foundations or corporations. Yes, they want to be involved with successful, socioeconomic programs, but they also believe the lack of public funding support is not a good sign.

There are many other subjects I can address, but it would require a book. Just begin with these first six steps. You will learn that as you move from the first to the next step the challenges become harder and harder, but that is what separates reality from mere dreams. The vision is yours. The options are yours.

I wish you the best.

Bailey KoharchickBailey Koharchick

I firmly believe in three things: Creativity, dedication and adaptation. I work at the No.1 business planning company in the world.