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Who Owns a Nonprofit? The Truth About Four Common Nonprofit Myths



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Many nonprofit founders establish an organization out of a passion for their cause. They feel a sense of ownership over the organization and its operations. 

In a true startup phase, this can be a boon to the organization as a whole! That passion helps founders find the time, energy, and resources required to get a new nonprofit up and running.

But over time, it can be difficult for a founder to let the nonprofit grow beyond the initial vision. That difficulty can manifest as resistance to change, even for the better. This is called Founder Syndrome.

Founder Syndrome isn't unusual, but it can ultimately be harmful to the success of an organization.

And it often starts with these common nonprofit myths.

Myth #1: It’s Easy To Be a Nonprofit Founder

There’s a common misconception that there are no specific skills required for nonprofit work. But this couldn’t be further from the truth.

Nonprofit organizations are businesses. Programs are products, and community members are customers. You must shepherd funds responsibly, pay bills, and care for the facility. Employees will need paychecks, personal time, health care benefits, and more. Your programs and money handling will be, in some ways, more closely scrutinized than your for-profit peers because you're accepting donations from others for a particular purpose.

Like anything else, nonprofit work requires knowledge and skill, especially during the startup phase.

Myth #2: Founders Can Own a Nonprofit

Who owns a nonprofit? The answer is simple—no one!

Nonprofit organizations don’t have any owners. They have only stewards who see the organization through its various lifecycle stages.

As a founder, when you serve on the board, you’ll make decisions in tandem with organizational leadership and other board members. As the CEO, you'll run the daily operations of the organization but report to the board of directors. They become your “boss,” to some degree, and can remove you from the position if appropriate.

In either case, you’ll have limited power to make decisions. Nonprofits exist to serve a public good, and shared responsibility is the legal structure used to ensure that happens as much as possible.

Myth #3: Nonprofit Founders Don’t Need a Business Plan

Because nonprofits operate like businesses, a business plan is a necessity. You’ll need to think through your mission and vision, fundraising strategy, programming, and organizational structure. You'll need to outline how you’ll fulfill a specific need in your community. 

A business plan will help you and other stakeholders understand the direction of your organization. It will also help you stay on track and avoid mission drift over time.

Myth #4: All You Need Is Passion 

Many passionate people are looking to begin their own nonprofits—and that’s great! But you can’t run an organization on passion alone.

As a nonprofit leader, you'll need to understand the legal structure of a nonprofit. You'll have an obligation to your community, and you'll need to know how to fulfill it. The organization’s success depends on how well the team at the helm can navigate and thrive in a competitive fundraising environment. That means having a complete understanding of your community’s needs, as well as the ability to meet them and communicate your impact.

Many nonprofit organizations fail because their programs don't match the community's needs. Duplication of services is a common problem, for example. It’s important to ensure there aren’t other organizations in your area doing the same work you plan to do.

True community work benefits the greater good. While passion can help, you’ll need to approach your new organization with an analytical mind to match your big heart!

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