Alternatives to Starting a Charitable Nonprofit

More Than One Way to Do Good

Serving the greater good can be accomplished in many ways. And most don't require setting up an IRS approved charity (501c3), a complicated task that many people underestimate. Starting a charity is as difficult as starting a business, and you might end up competing with other charities that chase the same donors.

Instead, if you are thinking of starting a new charity, consider one of the many other ways of applying your passion for a cause. You might decide that another nonprofit is not needed at all and that you can do more good in another direction and receive as much satisfaction. Here are several alternatives to consider.

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Seek Fiscal Sponsorship

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Look for a fiscal sponsor instead of becoming a tax-exempt organization yourself. Fly under cover of an existing nonprofit so that you can accept donations and apply for grants before being registered as a tax-exempt organization. Fiscal sponsorship is often used while a nonprofit becomes organized, or it can be used for a single project. Fiscal sponsors cover a lot of the back office expenditures you'll need as you set up shop and may be able to help you get grants that are only given to 501c3 charities.

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Volunteer for a nonprofit that is doing something similar to what you have in mind. Consider joining that group's board, or even taking a job there. Even if you later decide to start your group, the experience with an existing nonprofit will help you hone your ideas and learn what is realistic rather than just idealistic.

Volunteering can afford many benefits, from better health to gaining experience. Plus, you can adjust volunteering to fit the time you have available and the skills you have. Volunteer positions range from the very easy such as spending one day helping with kids or the very absorbing such as raising funds or serving as board chairman.

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Start a Local Chapter of a National Nonprofit

Many large nonprofits extend their reach through affiliates or chapters. The chapter or affiliate is somewhat like a franchise in the business world and shares the primary organization's mission, trademark, and name. If there is a national nonprofit doing the work you are interested in, check to see if it is interested in having an affiliate in your area. Some well-known charities that have affiliates include Habitat for Humanity, the Boys and Girls Club, and the Girl Scouts of America, and it may be more affordable than starting a nonprofit from scratch.

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Set up an Unincorporated Nonprofit Association

Put together an unincorporated association to fulfill your mission without seeking tax-exempt status. Not all charitable organizations are incorporated, and IRS registered. Many small groups that have lower incomes do just this. The drawback is that your donors cannot get a break on their income taxes, and your group might not be able to forego paying taxes on purchases. If your charitable goal is a limited or temporary one, this may be the way to go.

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Form or Join a Giving Circle

Giving circles are rapidly becoming a popular way for individuals to channel and amplify their philanthropic impulses. Giving circles can be small and informal, something like a neighborly potluck, with a few people pooling their money and giving it to a chosen charity. Or they can be highly organized, require contributions of thousands of dollars, and a commitment of many years.

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Set up a Donor-Advised Fund

Even with relatively modest resources, you can set up a donor-advised fund. DAFs are mini-foundations but without the hassle. Donor-advised funds can be set up with as little as $5000. You can then contribute to the charities of your choice through the fund. Many charities even have a DAF button on their sites for your donation. When you use that button, the contribution will be paid out of your donor-advised fund.

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Become a Social Entrepreneur

Become a social entrepreneur by forming a for-profit social venture to accomplish your social goals, or set up a small business with the aim of contributing some or all profits to a charitable cause.

A traditional nonprofit is not the only business structure that can be set up to do good; consider other business structures, such as a B Corporation. Many of the businesses we love are hybrids of business and charity. Examples include Ben & Jerry's, TOMS, Warby Parker, and Patagonia.

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Become a Peer-to-Peer Fundraiser

Yes, you can be an organizer, marshaling the help of many people to aid the causes you care about. Do it all online and magnify your efforts many times over.

Peer-to-Peer fundraising (aka crowdfunding) through social media is immensely popular, and most charities provide lots of support for their best fan/fundraisers. If you've ever participated in a charity run or walk and raised funds from your friends, then you have already done this type of work.

Pick your cause, check out the charity's website for how to join in, and get started. If you love social media, this would be an excellent choice.