Start Your Own Nonprofit

It takes a lot of effort, but the rewards can outweigh the challenges.

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On a bike ride overlooking San Francisco more than 20 years ago, Marilyn Price was struck with what would become a life-changing idea. She thought, "Wouldn't it be neat to bring kids from that neighborhood up here?" recalls Price, now 68. She formed a nonprofit, Trips for Kids, that has since organized bike trips for more than 45,000 disadvantaged kids.

The number of nonprofits has grown 30 percent over the past decade, a trend driven in part by increasing awareness of global poverty and the Internet's ability to connect people to one another, says Tom Pollak, program director for the Urban Institute's National Center for Charitable Statistics. Creating a new organization enables people to address problems or challenges without being hindered by the rules and culture of existing groups. Many nonprofit founders say it has allowed them to help people they would have never otherwise been able to reach.

But it also takes more work than many first-timers realize. "There are a number of people approaching us who are fueled by the myth of nonprofits," says Tim Delaney, chief executive of the National Council of Nonprofits. Many people mistakenly think it will be fun or easy, he adds.

"Fundamentally, there are too many nonprofit organizations in the United States. Somebody starting his or her own nonprofit ought to ask, 'Am I likely to have the most impact by starting my own organization, or by contributing my services and money to an existing organization?'" suggests Paul Brest, coauthor of Money Well Spent.

Adele Douglass, 62, started Humane Farm Animal Care in Herndon, Va., after deciding that none of the existing animal rights organizations were able to create standards for the treatment of farm animals intended for consumption, partly because many of their members oppose eating meat. Plus, Douglass says, farmers would resist working with animal rights groups because of their different views on the treatment of livestock. "The fact that we're separate and by ourselves makes them more willing to work with us," she says. Since she started her organization in 2003, 44 million animals have been raised under its standards.

Increasing interest in giving back among baby boomers motivated Marc Freedman to start San Francisco-based Civic Ventures, which promotes social entrepreneurship. The organization's Purpose Prize, awarded to Douglass, invests in social entrepreneurs over age 60 and ranges in value from $10,000 to $100,000. "They're parlaying their life experience to new solutions in the nonprofit sector," he says. Today's boomers can expect to be healthy for decades after retirement, which is "long enough to do something substantial," Freedman says.

Lisa Endlich, who interviewed philanthropists for her book Be the Change, says they often found their own lives transformed by their work. "This gave their life a narrative, a meaning larger than themselves, the way parenthood does," she says.

Reynold Levy, president of the Lincoln Center for the Performing Arts and author of Yours for the Asking, says that while the recession will likely make it more difficult for nonprofit founders to raise money, he still encourages those with "an animating idea" and the "conviction that [it will] solve a problem in a different way."

Another recipient of the Purpose Prize, Robert Chambers, 64, decided to use his business experience to start the Lebanon, N.H.-based Bonnie Clac, which provides low-interest car loans and financial literacy lessons to the rural poor. While working at a dealership, Chambers noticed that lower-income individuals were vulnerable to high interest rates and pushy salesmen when they were desperate to replace a broken-down car.

"Most of our clients have never owned a car before," says Chambers. "Women come up to me and give me hugs and say, 'I never would have done this. I never believed this was possible.'" And that, Chambers says, is why he loves what he does.