A not-for-profit organization does not earn any profits for its owners. Instead, the organization donates the money it receives to help fund the organization’s objectives and goals. A not-for-profit might also use received donations to stay up and running. A nonprofit is based on the simple premise that none of the corporation’s net profit from donations, membership fees, or business activities will benefit any individual.
The not-for-profit sector in Australia is large and diverse, with more than 600,000 not-for-profit organizations including approximately 5,000 trusts, foundations, and ancillary funds, nationwide. In 2021, the not-for-profit sector in Australia was expected to generate a revenue of 174 billion Australian dollars.
Steps on How to Start a Not-for-Profit Business in Australia
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Conduct Market Research
The first step in the market research process for your not-for-profit organization is to develop market-based research questions in line with your overall business goal and objective.
In this regard, you should source information that will help you maximize your not-for-profit organization, information that will give you easy access to reliable marketing techniques and resources that will help you operate your not-for-profit organization with less stress and of course, build the organization to be self-sustaining.
a. Who is the Target Market for Not-For-Profit Organization?
The target market for not-for-profit organizations will depend on their type of service offerings and the problem they intend to solve in society.
It could be;
- Drug addicts
- Women and young girls
- Homeless people
- Victim of abuse
- Less-privilege people
b. Is Not-For-Profit Organization a Profitable Business?
No, the not-for-profit organization is not a profitable business because they are operated as non-profit organizations hence requires that no profits be pocketed by the owners or board of directors. Any profits must be reinvested back into the facility or program.
c. Are There Existing Niches in the Industry?
Yes, there are several niche ideas when it comes to not-for-profit organizations, and here are some of them;
- Charity Auction Service
- Opening animal adoption organization
- Health care advocacy and free medical
- Remodeling houses for people with disabilities.
- Saving animals.
- Helping the homeless.
- Helping and supporting veterans.
d. Who are the Major Competitors?
- Transparent Hands
- Transform Aid International
- Australian Himalayan Foundation
- Care Australia
- Child and Family Focus SA (CAFFSA)
- Association of Children’s Welfare Agencies (ACWA)
- Action on Poverty.
- ActionAid Australia.
- Adventist Development & Relief Agency (ADRA)
- Anglican Board of Mission Australia (ABM)
- CARE Australia
- Caritas Australia
- ChildFund Australia
- Engineers Without Borders Australia (EWB)
- Family Planning NSW (FPNSW)
- Habitat for Humanity Australia
- International Needs Australia (INA)
- World Education Australia Limited (WEAL)
- The Fred Hollows Foundation (FHF)
- Oxfam Australia.
e. Are There County or State Regulations or Zoning Laws for Not-For-Profit Organizations in Australia?
No, there are no county or state zoning laws for not-for-profit organizations in Australia. But states, territories, and local governments have their laws regulating the fundraising activities of NFP organizations. The information about state and territory fundraising is provided by the regulators of that state or territory – you should check with the regulator to make sure the information is current.
f. Is There a Franchise for Not-For-Profit Organization?
No, there are no known franchise opportunities for not-for-profit organizations.
g. What Do You Need to Start a Not-for-profit organization in Australia?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- Australian Business Number (ABN)
- Goods and Services Tax (GST)
- A Corporate Bank Account
- Startup Capital and Community Support
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for not for profit business are;
Creative Not for Profit Business Name ideas
- Royal Foundation®
- Mary Orphanage®
- Save The Planet Foundation™
- Blessed Hands Foundation™
- Doris Greenish Foundation®
- Pro-Lifer Charity®
- Destiny Helpers Foundation®
- Helping Hands Foundation®
- Comfort Care Foundation®
- Synergy Care Outreach®
- Youth Anchorage®
- Pauline George Memorial™
- Humanity Vangaurd™
- Inner City Youth®
- Support a Child®
- Universal Care Foundation®
- Love and Care©
- Ready Care Outreach™
- Veterans Support Foundation™
- Good Times Outreach®
Register Your Business
a. What Type of Business Structure is Best for Not-For-Profit Organizations in Australia?
The two most common structures for a not-for-profit organization or a charity in Australia are an incorporated association or an Australian public company limited by guarantee.
A Public Limited Liability Company is a Pty with more than 50 non-employee shareholders and whose shares are available to the public by being listed on a financial market. It must have at least three directors and at least one secretary.
b. Steps to Form a Public Company Limited by Guarantee in Australia
- Choose a Company or Business Name
- Choose Your Company’s Rules
- Choose Your Shareholders and Directors
- Choose Your Share Structure
- Choose the State/Territory To Register Your Company In
- Choose the Principal Place of Business and Registered Office.
c. What Type of License is Needed to Open a Not-For-Profit Organization in Australia?
- General Business License
- Social Worker, CareGiver, or County Worker License
- Health and Safety Permit
- Zonal Permits
- Director’s License
d. What Type of Certification is Needed to Open a Not-For-Profit Organization in Australia?
These are some of the certifications you can work towards achieving if you want to start a Not-for-profit organization in Australia;
- Community and Social Worker Certifications
e. What Documents are Needed to Open a Not-For-Profit Organization in Australia?
- Business and Liability Insurance
- Australian Business Number (ABN)
- Goods and Services Tax (GST)
- State Permit and Building Approval (for your office)
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Insurance Policy
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering starting a not-for-profit organization, usually you may not have any need to file for intellectual property protection or trademark. This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Not-For-Profit Organization in Australia?
You would need an estimate of $120,000 to successfully set up a not-for-profit organization in Australia. Please note that this amount includes the salaries of all the staff for the first three months of operation.
b. What are the Costs Involved in Starting a Not-For-Profit Organization in Australia?
- Business Registration Fees – AUS$417 – $506.
- Legal expenses for obtaining licenses and permits – AUS$7,300.
- Marketing, Branding, and Promotions – AUS$5,000.
- Business Consultant Fee – AUS$2,500.
- Insurance – AUS$5,400.
- Rent/Lease – AUS$35,000.
- Purchase of Vans: AUS$35,000
- Operational Cost (salaries of employees, payments of bills et al) – AUS$30,000
- Website: AUS$600
- Opening party: AUS$3,000
- Miscellaneous: AUS$2,000
c. What Factors Determine the Cost of Opening a Not-For-Profit Organization in Australia?
- The size of the not-for-profit organization and the problem they want to solve in the society
- The choice of location
- The required licenses and permits
- The type of facility
- The additional service offerings
- The cost of branding, promotion, and marketing of the organization
- The cost of furnishing and equipping the facility
- The cost of the required insurance policy covers
- The cost of registering the business
- Source of your supplies and ongoing expenses
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
- The cost of the grand opening of the Not-for-profit organization
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
It depends on the type of not-for-profit organization you want to start. For example, if you want to start an orphanage, then you may need to build a facility if you have the resources but it is not compulsory because you have the option of long-leasing a property. On average, it will cost you over two hundred and fifty thousand dollars ($250,000) to construct a not-for-profit facility.
e. What are the Ongoing Expenses of a Not-For-Profit Organization in Australia?
- Cost of toiletries
- Stationery and education supplies
- Cost of food supplies and medications
- Utility bills (internet, phone bills, signage and sewage et al)
f. What is the Average Salary of your Staff?
- Executive Director (President) – $45,000 Per Annum
- House Manager (Administrator) – $36,034 Per Annum
- Nurse’s Aides – $29,660 Per Annum
- Caregivers / Rehab Counselors – $32,878 Per Annum
- Fundraiser – $36,500 Per Annum and based on target
- Account Officer – $35,000 Per Annum
- Cleaners – $18,000 Per Annum
g. How Do You Get Funding to Start a Not-For-Profit Organization?
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from partners
- Applying for a loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Our not-for-profit organization is a standard facility that will be located in the heart of the city in a neatly renovated and secured housing estate. The facility is specifically equipped with the needed accommodation facilities/gadgets to give comfort and security to orphans.
- Boys’ and girls’ residential facilities (e.g., foster homes, ranches, and villages)
- Residential facilities with counseling
- Residential facilities without counseling
- Camps, boot or disciplinary (except correctional) for delinquent youth
- Delinquent youth halfway group houses and boot camps
- Disciplinary camps for delinquent youth.
c. Mission Statement
To join hands with the government and other stakeholders in empowering youths and in creating a haven for orphans.
Our vision is to serve and empower orphans and delinquent youths.
d. Goals and Objectives
The goals and objectives of the not-for-profit organization are to help fill the gap for government in the community and society.
e. Organizational Structure
- Executive Director (President)
- House Manager (Administrator)
- Nurse’s Aides
- Caregivers / Rehab Counselors
- Fundraiser (Grant Officer)
- Account Officer
a. SWOT Analysis
- A well-secured and spacious facility
- Well-experienced and certified caregivers and rehab counselors
- A robust partnership with key stakeholders in our city
- Capacity to attract funding and reliable volunteers.
- Starting as a new not-for-profit organization (stakeholders may still be reluctant to donate their monies to us).
- Lack of capacity for now to attract government support and funding
- Lack of budgeting for robust publicity
- The growing number of youths in our city will allow us to reach out to them
- Robust support and encouragement from the government and key stakeholders.
- Increase the number of law-abiding citizens (youths)
- Increase in residual income in families
- Lack of support from stakeholders and the government
- Unfavorable government policy and legalization.
a. How Do Not-For-Profit Organizations Make Money?
A not-for-profit organization makes money from;
- Contributions from partners and donors
- Grants from government agencies and charity organizations
- Community support.
b. Payment Options
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
c. Sales & Advertising Strategies
- Introduce your not-for-profit organization for inmates by sending introductory letters alongside your brochure to youth organizations, schools, and other key stakeholders in and around your city.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, and LinkedIn to get your message across
- Create a basic website for your not-for-profit organization to give it an online presence
- Directly market your not-for-profit organization to attract donations
- Join local chambers of commerce and industry to market your not-for-profit organization and attract donations
- Advertise the not-for-profit organization in community-based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word-of-mouth marketing (referrals)
a. How Much Should You Charge for your Service?
Prices vary for staying in not-for-profit organizations, but most of the time it costs about the same as it would cost to live in a modest apartment or home. The rent usually amounts to between $450 and $750 per month, depending on where the facility is located.
But it is important to note that some not-for-profit organizations are free of charge especially when they can attract enough grants and funds from donors.
b. How Much Profit Do Not-for-Profit Organization Owners Make a Year?
Not-for-profit organizations require that no profits be pocketed by the owners or board of directors. All profits must be re-invested into the facility or program to benefit residents.
c. What Factors Determine the Amount a Not-For-Profit can Generate?
- The capacity of the Not-for-profit organization as it relates to attracting funds
- The location the Not-for-profit organization is covering
- The management style of the Not-for-profit organization
- The business approach of the Not-for-profit organization
- The advertising and marketing strategies adopted by the Not-for-profit organization
- The number of years the Not-for-profit organization is in business
d. What is the Profit Margin of a Not-For-Profit Organization?
Not-for-profit organizations are not designed to make profits.
e. What is the Sales Forecast?
- First Fiscal Year (FY1): $140,000
- Second Fiscal Year (FY2): $280,000
- Third Fiscal Year (FY3): $320,000
Set Up your Shop
a. How Do You Choose a Perfect Location for a Not-For-Profit Organization?
- The demography of the location especially as it relates to delinquent youths or less privileged people
- The demand for the services of not-for-profit organizations in the location
- The capacity of the residents to donate to the success of a not-for-profit organization
- Accessibility of the location
- The number of not-for-profit facilities and charity organizations that also offer the same services in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open a Not-For-Profit Organization in Australia?
- Armadale, Victoria
- Adelaide SA
- Burswood WA
- Hawthorn East, Victoria
- Osborne Park WA
- Perth WA
- Sydney New South Wales
- Melbourne Victoria
- Bondi Beach NSW
- Brisbane QLD
- Surfers Paradise God Coast QLD
- Southport Gold Coast QLD.
c. What Equipment is Needed to Operate a Not-For-Profit Organization?
The equipment you would need to open a not-for-profit organization will depend on what you are into or the problem you intend to solve. But in setting up a small office, you will need a computer, printer, software apps, telephones, pager, photocopier, scanner, and fax machine. These machines and instruments can be purchased as fairly used especially if you have limited finance to meet your budget.
When it comes to hiring employees for a standard Not-for-profit organization, you should make plans to hire a competent Executive Director (President), House Manager (Administrator), Nurse’s Aides, Caregivers / Rehab Counselors, Fundraiser, Account Officer, and Cleaners.
Launch the Business Proper
In recent times, no not-for-profit facility opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.
The bottom line is that with a proper launching of the not-for-profit organization, you will officially inform people in your city that your not-for-profit organization is open for services in the community.
a. What Makes a Not-For-Profit Organization Successful?
- Ability to attract grants and funding from the government of your city or state or even the federal government
- Disciplined and dedicated workforce
- The heart to serve
- Good facility and ambiance
- A good relationship with stakeholders
- Good rehabilitation techniques and programs.
b. What Happens During a Typical Day at a Not-For-Profit Organization?
- The facility is open for the day
- The facility is cleaned and prepared for the day’s activities
- Administrative works.
- The facility is closed for the day and inmates go back to their rooms.
c. What Skills and Experience Do You Need to Build a Not-For-Profit Organization?
- Good managerial and human development skills
- Ability to raise funds and attract grants
- Excellent administrative skills
- Visionary Leadership skills
- Team-building & Interpersonal skills.
- Excellent communication and social skills.
- Organizational skills.
- Good counseling and problem-solving ability.
- Experience in rehabilitation
- Experience in the not-for-profit industry
- Experience in working with youths and different classes of the less privileged.