How to Start a Non-Profit, Part Two

This is the second of four articles on starting a non-profit enterprise. Read Part one here.

After you have decided on setting up your organization as a legally structured non-profit, you will need to clearly define your mission and how you expect to achieve it. Hone this to the point where you can explain it in a brief paragraph, or verbally in about thirty seconds. Then consider if the mission is important enough that you would be willing to spend the next ten or twenty years of your life to achieve it.

Defining Your Economics of One Unit of Change

My career has been spent in helping low-income children stay in school by means of teaching them entrepreneurship and basic business principles. I've argued that the cost of a child dropping out of school and going on the streets is in the millions of dollars. Of course, the cost in human spirit -- a lost life -- can't be measured, and the effect it has on family and community is almost always tragic. Teaching a young person the full NFTE course takes about 65 hours, and from that experience he or she is more likely to stay in school. The cost per child is slightly over 1000 dollars.

In one of our cities Research on NFTE has shown:

• In math, 51% of the NFTE participants (in a recent study) performed at the Proficient and Advanced levels, compared to 27% of the non-NFTE participants.

• In reading, 74% of the NFTE participants performed at the Proficient and Advanced levels, compared to 52% of the non-NFTE participants.

• NFTE participants also had a better attendance record: an average of 14 days in the 2009-10 school year, compared to an average of 19 days for non-NFTE participants.

Are such results worth a thousand dollars a year per student? To me they are, by far! In some years, we have not been able to raise that amount and have had to supplement our income with revenue from our Endowment and from earned revenue that comes from selling our books and teacher training.

You will need to calculate the "cost per unit of change" -- so you can quantify how well you are fulfilling your stated mission. This will be of the utmost importance in seeking donations. Below, I have listed some other important factors to be aware of as you start your venture.

Understand Your Motivation

It may easily take ten years to develop your concept and conclusively document results, so make sure you know what your motivation is. Is it to make money for you and your team, or is there something else in your psyche, such as fame, or satisfaction from solving a difficult problem, that is more important? Being honest about your motivation is crucial for success.

Know Your Strengths and Weaknesses

A major reason for failure is that the founding entrepreneur does not know what his/her strengths or weaknesses are. There are three categories in your daily activities: what you should be doing, what you are doing, and what you want to be doing. Often the founders of organizations are put in the position of doing things they are not good at and do not want to do. Set up your plan so that, at least eventually, you will be doing what you want to do and are best at, and have others do what you dislike and are not good at.

Define Your Personal and Professional Goals

Write down your professional and personal goals and see if they are in conflict with the goals and time line of your social enterprise. Create a chart that shows your personal and professional goals over a five-year period. Compare it to a similarly designed chart that shows the goals of your non-profit.

Developing a Vision

Begin with describing a vision of the world you would like to live in. Put this up on a wall where you can see it, as it will help you get through some rough days. NFTE's vision is that every young person will find a pathway to success


Your social enterprise should have a mission that moves the world closer to that vision. Look at it every day. NFTE's mission is to provide entrepreneurship education programs to young people from low-income communities.

Include Your Family and Friends

Always talk to your loved ones about what you are planning to do. You will need their advice and support.


Spend a month doing research on your field and be prepared to spend a lifetime in mastering it. Do not assume that because you studied a subject in college or worked in the field for a while that you know all about it.

Delineate Your Strategic Goals

Develop your strategic goals. What do you want to accomplish over the next year? the next five? ten? Your goals should be measureable -- i.e., include numbers and a time frame, so you can tell how you are doing.

Provide for Your Future

Save money systematically and set up a retirement plan. Many non-profit founders never think about their financial future, and are thus unable to retire.

Read part three here.