Hey, welcome back! If you're thinking of starting a non-profit, you might be
wondering what it's really like to start and run a nonprofit that you built from
scratch. So in this video I'm going to debunk 9 of the top myths that I hear
about starting and running a nonprofit organization. Woo, I need a hair cut. Welcome
back to my channel - if we haven't met before, my name is Amber Melanie Smith,
and I make videos here on YouTube to help aspiring changemakers with tips and
strategies to help you change the world and live a life of impact and purpose. So
many years ago, I started a nonprofit organization that I now am able to work
for full-time, and I get so many questions about how I got started, how I
was able to build up the organization to be able to make it my full-time career,
and follow my passion. There's so much work to be done out in the world and I
hear from people all the time who just have the same passion that I did to make
a difference and get started and see nonprofits as a potential path for doing
so, but at the same time there are a lot of misconceptions that I have heard from
people about what it's like to start a nonprofit and run a non-profit and
about nonprofits in general - so I'm going to spend some time talking through those,
and hopefully help you out. Let's jump right in! Myth number one - you can't make
a living running a non-profit you can I do there is a catch though which I'll
cover a little bit later in this video but the fact is that not only can you
have a paying job working for a non-profit but the nonprofit sector
employs about 10 percent of the American workforce according to the Bureau of
Labor Statistics so that's pretty huge but the other part of this question is
whether or not you can actually make a decent enough salary to earn a living
working in the nonprofit field the answer is it depends
unfortunately many people working in the nonprofit sector are still underpaid
it's been kind of an going discussion in the nonprofit world
about how the sector should be paying more competitively and more fair wages
to its workers especially because nonprofits themselves are fighting for
economic security and freedom for in the very people that they serve so they've
got to walk the talk and pay their own folks a fair wage and competitive wage
as well that said there are many nonprofits who do pay competitively and
many positions in the nonprofit world where you can make a pretty significant
and decent living according to the 2019 guidestar nonprofit compensation report
which I'll go ahead and link below this video if you're interested CEOs and
others in management level positions and nonprofits could expect to make anywhere
between 40 or 80 thousand dollars a year depending on the nonprofit's annual
budget myth number two the executive director also known sometimes as the CEO
is the top position in a non-profit the executive director or CEO is the top
staff position in a nonprofit organization but in terms of power and
the ability to control the direction of the nonprofit that title goes to the
nonprofit board of directors a nonprofits board members are the unpaid
leaders of an organization that are elected by the public essentially they
have the power to create and amend the organization's bylaws or hire or fire
the executive director and other staff that's right my nonprofit board of
directors could fire me any time they want even though I'm the founder of the
organization that's something that you usually surprises people but having this
balance of power is actually a good thing it helps keep the nonprofit
organization accountable to the public and that's what it's there for anyways
to serve the public this is a great segue into the next myth myth number
three is you can own a non-profit when people talk about wanting to start a
non-profit they often say my nonprofit but technically once you start a
non-profit and get that tax exempt status from the government the nonprofit
to the public not any one person then as I talked about in the last myth the
nonprofit's unpaid Board of Directors sets the direction and the policy of the
organization and can hire an executive director by having a voting Board of
Directors it means no one person can control the outcomes and direction of
the nonprofit which ideally is designed to make sure that the nonprofit is
always serving its social impact mission and not the personal interests of any
one person founder board member or anyone else so I always say if you're
interested in creating an organization that you'll have complete control over
you might want to consider starting a business instead of a non-profit you can
still help people and do good with a business structure it's just that you
won't be able to get tax-exempt donations from the public and their
other trade-offs myth number four you can hire yourself previous myths that I
just talked through when you start a non-profit it becomes the property of
the public essentially as directed by your volunteer board of directors that
means you can't hire yourself for a paid staff position and if you're a paid
staff person you also can't have a vote you either get paid and our staff or you
have a vote but it's not both if working full-time for the nonprofit you started
is your dream then the board of directors will have to be the body that
hires you it is totally possible to have a great relationship with a board and
encourage them and ask them to hire you so that you can do this work full-time
that's what I did the other thing is often if you are hired as the executive
director of a non-profit you can potentially be in control of other
staffing decisions for people working under you it's not necessarily true that
the board has to have a hand in hiring your other teammates it all depends on
how your organization and bylaws are structured myth number five you choose
your own salary unfortunately this is lost just like you can't hire yourself
you also can't determine your own salary the Board of Directors votes on that
when they make their annual budget but here's what you can and
do you should research fair compensation for similar roles and other nonprofits
and present that to your board you should ask for the salary that you think
is fair and that you would like the board may not vote to give it to you but
you can try myth number six grants are an easy way to get money that's again I
heard this one a lot a common misconception is that grants are an easy
way to get money to start or grow your nonprofit organization but in reality
according to giving us a grants make up just about 20% of all charitable giving
across the country so what does bring in the most financial support for
nonprofits then the answer is individuals rather individual donors in
your community or your network while less than 20% of all nationwide
charitable giving comes from grants 70% of nationwide charitable giving comes
from individual donors whether they're getting a couple of dollars here and
there or making a large gift so for sustainability you're actually way
better off building in systems into your nonprofit that will inspire people to
donate as individuals to your organization it's also fairly
challenging for brand-new organizations who are just getting started to be able
to get a grant since most grant foundations look for a
track record of success that might take a couple years to build up but if you
are considering trying to get some grants for your nonprofit i've got other
videos on this channel about that topic and how to answer grant questions so
check those out myth number seven nonprofits cannot sell items or services
to generate funding the good news is this is false in addition to raising
money through individual donations event sponsorships and the occasional grant
many nonprofits generate revenue through something called earned income put
simply earned income is revenue for nonprofits that comes from the sale of
items or services that are directly related to your charitable mission if
you attempt to sell items or services that are not directly tied to your
charitable mission you could get hit with IRS penalties here are a few
examples of earned income models that other nonprofits around the country are
doing that dude tied directly to their charitable mission and I
that when I explain them you'll see how one example is how the Boys and Girls
Clubs charge their members a nominal fee for club membership this is a way that
generates income for this organization that ties directly to their mission
because the club and having youth participate in it is their mission other
examples might include charging a discounted fee for legal services or
asking for registration fee for dance or art classes for your art nonprofit or
even how the Red Cross asks for a fee to train you in CPR training people in CPR
is part of their mission but it's okay for them to charge you a reasonable fee
to be able to complete that mission that's earned income myth number eight
if you want to change the world nonprofits are the best way the short
answer is not necessarily and it depends on a lot of different factors keep in
mind that the word nonprofit just means that your organization has a certain
legal and tax structure the nonprofit sector exists because the market
for-profit private businesses and/or the government has failed to meet certain
needs of the community effectively so nonprofits come in to take care of those
unmet needs for example businesses focus on making a profit and the government
might be focused on making policy that leaves a lot of gaps who's gonna feed
people who are hungry or build affordable housing if you want to be
real nerdy you should study how nonprofits in America differ from
nonprofits around the world because it's fascinating to see how they differ based
on the economic and social structure of each country that they exist in in
America though this is how it is all that said though sometimes a business
structure is just the best structure to solve a problem
businesses have certain advantages they can raise capital and investments faster
than nonprofits typically and in some ways they might even be more financially
sustainable because of the built in money making systems and sometimes
working within a government structure is the best if you're advocating for policy
changes that might be the best way to go the government might be slow moving but
it is pretty good at bringing about large institutional changes once it does
move so if you want to change the world think
about which structure and which pathway might be the best for your mission might
be nonprofits it might not be and the final myth myth number nine I talked
about this in one of my past videos about creating social change that sticks
none of us are here because we want to make a temporary change we want to
change the world what does that actually take it could take decades and so you've
got to be committed for the long haul and if you don't think a long-term
commitment to the nonprofit sector is in your future then at least set up a
non-profit that can be sustainable and have competent skilled leadership take
over for when you're ready to move on thanks so much for watching what are
some of the misconceptions that you've heard about nonprofits share in the
comments below thanks again for watching I really hope that this video was
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how we can make a difference together see you next time
you