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Starting a Non-Profit – How Much Does It Cost?

Do you want to know exactly how much it cost to start a non-profit organization? If YES, here is a detailed cost analysis for starting a non-profit and raising finance.

Having provided you with a:

  1. Non-Profit Industry Overview
  2. Market Research and Feasibility
  3. Non-Profit Business Plan
  4. Non-Profit Name ideas
  5. Non-Profit Licenses and Permits
  6. Cost of Starting a Non-Profit Organization
  7. Non-Profit Marketing Plan
  8. Marketing ideas & Strategies

We will consider how much it cost to start a non-profit or foundation from scratch including the operating costs.

Starting a foundation especially starting a service based foundation is not supposed to be as expensive as starting a business venture. Basically what is needed to start a foundation is an office facility, office furniture and equipment, and the money needed for incorporating the business, opening a website, producing publicity materials, and of course the money needed for overhead and running the office at least for a period of time before donations or grants starts coming in.

In essence, the amount required to start a foundation should be scaled down to the barest minimum except in cases where they can’t do otherwise. It is important to note that the amount needed to start a foundation is different from the amount needed to execute projects.

For instance; if a foundation decided to build and donate a hospital to a community, they don’t have to raise the money needed to execute the project before the foundation is registered, all they need to do is to incorporate the foundation, get an office facility and then set up a corporate structure et al. Thereafter, the fund raising for any project can then follow suit.

How Much Does It Cost to Start a Non-Profit Organization / Foundation?

In view of the above, the amount needed to start a foundation may greatly vary from one location to another and from one niche to another. However, on the average, the amount needed to start a foundation include;

  • Small Scale Non – Profit Foundation is $250,000
  • Medium Scale Non – Profit Foundation is over $1M
  • Large Scale Non – Profit Foundation is over $2M

Financing your Non – Profit Organization / Foundation

The ideal model of a non – profit organization is to reduce overhead cost and increase operational cost – this is the budget needed to execute projects which is why most non – profit organization maintains small staff strength. Non – profit organizations make use of revenues generated to achieve their present and future goals, against labeling it them as profits.

Their goal is not necessarily to be wealthy, but to be able to provide support for a community or certain groups of people in the society through various fundraising methods.

  • First and foremost, Non – profit organizations raise their start – up capital from contributions of founding members and board of trustees

Which is why it is important to woo people who can donate to your cause to be amongst your board of trustees. There are several basic sources of funding in the non – profit industry. The first among the pack is grant.

  • Grants are be given to non – profit organizations by government agencies, donor agencies, and foundations or corporations

In most cases, grants are given to non – profit foundation in order for them to execute specific projects, and accountability is always required from non – profits. It is important to note that grants from government, foundations or corporations are generally provided up front and require a report on program activities and expenditures at the end of the grant period.

  • Non-profit organizations also raise funds by soliciting money from individuals; usually these are generally small donation – ideally from a large number of people

Large cash gifts may come from individuals who are referred to as major donors and friends of the foundation. Besides, most non – profit organization usually hold special events to raise money. It could be the sale of ribbons, flowers or ticketed events.

Basically, there are two factors that can enhance fundraising efforts. One factor is good programs; programs that can address the basic needs in a community. Another factor is the ability of the foundation to create hypes around what they do.

A foundation that is always in the eyes of the press for the good reasons will struggle less to attract grants and donations. Although a good budget for publicity and advertisement must be in place in other to achieve the needed publicity.

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