Getting Your Non-Profit (Start Up) Off The Ground

Start Up Non-Profit

 

Total read time: 7 minutes (approx.)

 

Better Boards recently interviewed representatives from three emerging Australian start up non-profit organisations in order to gauge the types of issues faced by new organisations and investigate some of the dos and don’ts of establishing a new non-profit entity.

 

In this article we will offer an overview of the responses we received in these interviews and pick up on a couple of common challenges experienced by our subjects. We will also share with you some of the advice they had for those hoping to establish their own new organisation.

 

The subjects of these interviews were the founders of three emerging non-profit organisations in the NGO field.

 

Tasman Murray is the Managing Director of Hatch, recently established with the intention of providing developing countries with technology for producing sustainable food sources. Hatch has not yet been formally established as a non-profit organisation and is in the research and development phase with its technology.

 

Adam Everill is the founder and Executive Director of Rugby League Against Violence (RLAV), an NGO established to encourage a reconceptualisation of masculinity in Papua New Guinean (PNG) communities with the intention of preventing violence. RLAV was established in October 2011 and has developed a range of awareness and engagement programs that work with communities and leagues in order to combat family and sexual violence. RLAV is currently in the process of rolling out its services after undergoing extensive research and pilot programs.

 

Stephanie Woollard, is the founder of Seven Women an NGO concerned with the employment of disabled people in Nepal. Seven Women has undergone a long process from Woollard’s original idea to the organisation’s current success in housing and employing over 463 people in Nepal.

 

All three organisations are small and they are at varying stages of progression in terms of legal status, funding and service delivery.

 

Several of prominent themes emerged from these interviews. The importance of strong leadership was stressed, as was the importance being on the ground and engaging with stakeholders. The interviewees had faced challenges with their boards and were perhaps unclear about how the board might best contribute to the genesis of an organisation and to want ends the insights of those with governance experience might be put to work.

 

Regulatory challenges

 

The most significant challenge articulated by two of our subjects related to negotiating the legal and regulatory requirements of establishing an organisation and the difficulty in determining which legal form is most appropriate.

 

Hatch was so restricted by the regulations surrounding non-profit organisations that the team has not yet been able to resister it as a company limited by guarantee as planned.

 

“Due to the slightly different nature of our organisation, the little funding we have received is being used for research and development of the farm, meaning we do not have an office, which means we are unable to register the business,” says Murray.

 

Murray has even considered moving operations to an NGO-hub such as Brussels or Berlin due to their less onerous registration requirements, however, the need for land for developing and testing their technology means that Australia is the better option.

 

RLAV was established as an incorporated association in October 2011, however Everill expressed some dissatisfaction with the restrictions related to this legal form.

 

Everill concedes that in hindsight it might have been better to register as a company limited by guarantee, however, it was “the easiest thing to do at the time” and seemed to be the more expedient option.

 

As an NGO, RLAV needs a wide-ranging capacity to raise funds but it is restricted from fundraising above a certain amount in states outside of Victoria. RLAV has the added complication of functioning as two separate organisations – one in Australia, and a separate one in PNG, which has caused a number of problems to co-ordinate.

 

In contrast, Seven Women functions effectively as a small incorporated association. Woollard is very hands-on in the organisation and is able to communicate directly with its beneficiaries and stakeholders and respond effectively to their needs.

 

This compact model has allowed her to “cut out meetings, approvals, form filling – all the red tape and obstacles that an organisation which was already established would have put in front of me”, however it would not be appropriate for larger organisations.

 

Woollard cites having establishing both arms of the organisation at the same time and having to coordinate it over two separate countries as a significant leadership challenge. Woollard gives credit to a “fantastic accountant and people to talk with who have been there before with great advice” for the relative ease with which she established the organisation.

 

The role of the Board

 

Another theme that emerged from these interviews related to the challenge of understanding the board’s role in the process of establishing an organisation. There was some uncertainty about how boards might contribute to the process, how much input they should have into the early decisions relating to the direction of services and programs.

 

Given their nature as international NGOs, these three organisations found it particularly challenging to orchestrate board meetings and board involvement when the board members have a wide geographical distribution – often over multiple countries and time zones.

 

In some organisations it is acceptable for boards to take a back seat during the early stages of establishment. There can be a danger of boards become too involved with operations and the development of services and lose their perspective of the organisation as a whole.

 

“It is important not to have too many opinions or too much advice in the establishment period,” says Woollard.

 

Although a Board has not yet been appointed to Hatch, Murray explains that they have received some inquiries and that those interested in the role have already “offered support with many aspects both technical and legal, as well as offered contacts with a range of others they know in various groups”.

 

Everill has faced some challenges and experienced some tension in negotiating the role of RLAV’s board. In the early days of the organisation the balance of power between the board and Everill as Executive Director had not yet been clearly established. He shared that he felt that the board had not yet clarified its role in the organisation, but that their role might become clearer as the organisation matures.

 

Advice and tips

 

All three subjects stressed the importance of strong leadership and particularly addressed its capacity to motivate teams, especially in long-term and complex tasks.

 

“It takes a lot of drive to get the organisation where it needs to be and without strong leadership, this process can stall quickly,” says Murray.

 

He also notes that although any business requires motivation, non-profit organisations do not carry the incentive of profits and potential future earnings and require leaders who can who can, as he describes it, “motivate without that innate driver”.

 

Everill and Woollard particularly stressed the importance of engaging with stakeholders and assessing the needs and requirements on the ground. All three interviewees conducted significant research before embarking on the journey of establishing their organisations and relied on this research to inspire and inform their decisions.

 

“It’s important to find other people who are passionate about the same cause or mission – it’s hard to maintain your passion alone,” says Everill.

 

Another tip offered was that organisation founders will benefit from previous experience in or with other non-profit organisations and that they should call on those in similar organisations for advice.

 

“Have experience working for another successful organisation… before starting your own… talk to people who have been in your position and have gone on to lead successful organisations,” says Woollard.

 

New non-profit organisations encounter a range of challenges and opportunities in the process of their establishment. It is important for emerging organisations to be fully aware and prepared for challenges that their organisation might face in its establishment. Alongside conducting research into the best methods and practices relating to the organisation’s services, it is important to also investigate the details and complexities of the business-side establishing and running a non-profit organisations and to ensure that these services can be effectively and efficiently carried out.

About Julia Duffy

Julia is a writer and researcher at Better Boards. She has a passionate interest in the non-profit sector, particularly its legal and regulatory complexities and she follows all news and developments in this area keenly. Prior to joining Better Boards, Julia served as an intern at Philanthropy Australia. Julia has a Bachelor of Arts from the University of Melbourne, majoring in Political Science and English Literature.

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