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Building a new not-for-profit organization

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This is the first in a series of articles to assist people involved in building a new not-for-profit organization. Over the next several months, we will discuss key steps in building a solid organization. The Government of Canada’s online publication entitled Primer of Directors of not-for-profit corporations (Rights, Duties and Practices) offers an important source of information on this topic.

By now, you have received legal approval to establish your new not-for-profit organization. You have a set of approved bylaws that guide how the business of your not-for-profit corporation will be run. The business is managed by an appointed/elected board (of directors or governors) and you may have paid staff to whom the board delegates work (but not accountability). From the documents used to establish your organization, you have an articulated mandate (statement of purpose).

The Drucker Foundation has created an Assessment Tool that may prove helpful to you. It asks five key questions:

  1. What is our mission?
  2. Who is our customer?
  3. What does the customer value?
  4. What are our results?
  5. What is our plan?

In this article, we begin with studying these five questions in the context of using them to build your new not-for-profit organization.

What is our mission?

A mission statement is a brief statement that describes the purpose of your organization. It tells people what your function is. It is very important to have a mission that articulates precisely what you are in business to do. You may want to visit www.missionstatements.com for ideas.

Remember that the fundamental difference between a for-profit and a not-for-profit corporation is your tax status; you need to think of your not-for-profit organization as a business and run it like a business. Once you have a useful mission statement, you must ensure that everything your organization does serves that mission. If it does not, ask yourself why you are doing it. An example would be if your organization is in business to provide essential services to new immigrants in your community, and one of your board members wants to organize a jewellery party. You can easily make the case that buying jewellery is not an essential service to a new immigrant, even if it can raise some money (and not that much) for your organization.

Who is our customer?

Who is your organization set up to serve? Be very clear who you need to exist and thrive. Keep your eye on your target.

What does the customer value?

Like any business, you will only be successful if what you have to offer is what your customers value, what they want. There are many ways to find out what your customers want, the simplest of which is to ask them. Bring together a focus group of potential customers and ask them. This topic warrants another article, but for the purpose of today’s focus, make sure you have reliable evidence that there is a market for what you are offering (that is not absorbed by the competition).

What are our results?

In The 7 Habits of Highley Effective People, one of author Stephen Covey's most memorable pieces of advice is Habit 2: "Begin with the end in mind." Know what results you plan to achieve before you begin. Know each in great detail. This will keep you focused.

What is our plan?

When starting up a new not-for-profit organization, you need to have a very thoughtful and clear written plan. It should answer the five Ws:

  1. Who (are we serving - who are our customers and who do we need on our board to be successful?)
  2. Why (are we in business - what is our mission?)
  3. What (are we expecting as our results - what are we going to offer?)
  4. Where (are we going to offer our services - through the Internet - how will we reach our intended audiences?)
  5. When (what is our timing to achieve our results?)

It is advisable to write a strategic plan (a business plan) for your not-for-profit organization. Information on this process can be found here.

Next month, we will look more closely at what to expect from your board of directors.

Paulette is President of Solution Studio Inc., a consulting practice that serves the not-for-profit association community. Paulette co-authored two manuscripts on risk management & not-for-profit organizations and regularly conducts risk management, strategic planning and board development workshops. She can be reached at 1-877-787-7714 or Paulette@solutionstudioinc.com.

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