There’s a special breed of social entrepreneur: the Self-Funding Founder. This is a person who has seen something that they believe needs to be addressed. And in their eyes, the shortest route from A to B is to dig in and address it themselves. Self-Funding Founders tend to be energetic, bright, lively, and solution–oriented. They have the creativity and drive to set something up to see that a program is created, an organization built, a need addressed; that something is done. They may fund a new program with an established organization. They may set up their own Foundation to fund a new work. They might take the lead in a community and organize people to join their efforts.

Sometimes, Self-Funding Founders create nonprofit organizations.

The strange thing about this, though, is that it almost happens by accident. More often than not, the decision to set up a nonprofit happens so quickly that it’s gone in a heartbeat. Many times founders are not aware that there are other structures that may be a better fit for their work and so create a nonprofit by default. Yet this decision can define the ultimate success or failure for the Self-Funding Founder’s project. So how is a nonprofit established through the efforts of a Self-Funding Founder? Many nonprofits have their beginnings in a small project – A founder is inspired by an experience which leads to an idea that produces immediate, gratifying results. Like a mission trip or a small project in the founder’s own community.

Self-Funding Founder

The experience is rewarding and suddenly the creativity of the self-funding founder is engaged! The small project blossoms into a series of other projects. Some of those projects become ongoing while others have a definite beginning and ending point.

 

At this point, the Self-Funding Founder is doing just that – they are providing the resources needed to build the projects as they come along. Sometimes the Self-Funding Founder may have a great synergy between their projects and their business’ objectives. The projects are a great way for the self-funding founders to give back, and achieve their personal and professional goals.

 

But what happens when a goal is achieved, a question answered?

Yes indeed, it begets another question and another goal. Success breeds success and the evolution from a small project to a portfolio of ongoing projects eventually becomes a Big Mama Project – the mother of all projects.

 

Self-Funding FounderSo when does the progression of a project turn into a nonprofit organization? Surprisingly, it happens when the founders are considering fundraising.  Early on when the project is taking shape – the initial idea has hatched, the first projects have been launched, and the excitement of seeing the impact of those first efforts is flush upon the Founder. Now that there is some success, it’s time to figure out how to get more people involved. It seems like a natural extension to set up a nonprofit so the cause gains legitimacy and people will be more inclined to give. Many times Founders don’t even realize that there are other options to setting up a nonprofit that may help them achieve their goals. Setting up a nonprofit is more than filing for a tax exemption number, it’s building an organization – a business – around the cause. It means appointing a board of directors, creating by-laws, hiring auditors, consultants, and quite possibly at some point, staff.

And don’t forget… it means ongoing fundraising. Because being a nonprofit does not guarantee funding.

This is where it’s really helpful for Self-Funding Founders to have access to a very rare kind of financial advisor – an advisor who understands the Founder’s overall goals for their business, their personal finances, and their charitable endeavors and helps them figure out how to reach all of those goals. Those advisors are not easy to find. Mosaic Associate and Impact Philanthropy Advisor Mike Searcy is one of those rare individuals who believes in helping people make causes sustainable. Not only does he himself serve on the boards of a handful of causes that are dear to him, but with his special certification as an Accredited Investment Fiduciary Analyst he provides a special level of financial stewardship for nonprofits.

And here’s the kicker: People will give regardless of whether the project is a recognized, 990-filing nonprofit. But they have to be asked.

Sometimes joining forces with an established cause or setting up a foundation, a trust, adjusting a business’ financial structure, or building a new business (maybe a B Corp) are better fits for the Founders’ goals than managing a nonprofit and building the fundraising programs needed to make it sustainable.

Remember, there are many ways to have an impact – setting up a nonprofit is just one.

Self-Funding Founder

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2 comments
Samuel Paulos
Samuel Paulos

I am a founder and director of a newly established NGO called "Gateway 4 Youth. Behind me, I have 26 years of experience in grass root development work. What I have noticed over the years is that, the population of the young is on the increase. However, on the other hand the opportunities and the resources are becoming scarce and in accessible to accommodate the growing needs of this energetic and desperate manpower. The consequence of not paying attention to this problem could be unfortunate. Gateway 4 Youth was established to fill this gap in a small way ie by serving as a link between the need/interest and opportunity. Gateway for the sake of creating good impression and image has invested its own resources to run few programs here and there. Now, it sees it as important to go beyond "self funding" and seek external funding so that the program can be expanded. Any input to help get such support is highly appreciated. Please refer to the website for more details. Thank you. Samuel

Heidi Hancock
Heidi Hancock

Hi Samuel! It sounds like you've got some great work underway with Gateway 4 Youth! It takes a lot of love and dedication to found and develop an organization that provides a much needed link. As a founder you are heading down the right path to making your cause sustainable by focusing on building sound fundraising programs. At this point you will want to take the same focus that you've used to build the organization and its programs and turn that attention to creating deliberate fundraising programs. Some of the hallmarks of those programs are that they are repeatable, they are consistent throughout your cause, and you use them to forecast revenues based on fundraising activities rather than on what you "need" to make ends meet. I see one of your programs is in microfinance - which is great because you can use the same principles you used to build that program to establish your fundraising projections. You can evaluate the risks, assess the possibility of returns, and the budget of time and resources you will need to invest to see the fruits of your fundraising labors. One way we can help you get off to a great start with your fundraising programs at Mosaic is through fundraising coaching. This is where we work with you to help you choose, set up, and execute fundraising activities that are the right fit for your cause. We help you build a solid fundraising foundation upon which you can grow your programs. If you'd like to learn more about fundraising coaching send me an email at hhancock@mosaicnpd.com. You've got a great organization that is well positioned to make a significant difference for many people. Keep up the great work!