Angie Holzer is a Master of Business Creation (MBC) graduate and founder of various organizations. Her biggest venture is WikiCharities, a nonprofit connecting and validating other nonprofits. WikiCharities has a variety of partners, including the MBC Global program.
She recently led a Lassonde for Life workshop titled “Nonprofit Best Practices,” aimed at helping potential nonprofit founders understand the road ahead.
With over 25 years in the nonprofit sector, Holzer named three things to keep in mind.
Driving factors
Consider why you want to launch your startup.
“Are you purpose and impact driven or profit driven?” Holzer asked. “That’s what differentiates nonprofit and for-profit ventures.”
Holzer stressed that both types of entities can achieve success.
“Both nonprofit and for-profit organizations can drive positive change,” Holzer said. “But different types of people thrive in different environments.”
Intrinsically motivated people, for example, Holzer said do better at nonprofits.
“People motivated internally are more likely to stick it out at a nonprofit,” she said. “There’s less money there, but they care more about the mission.”
Making sure your values align with the driving factor of your venture can help to avoid burnout.
Organizational structure
Once you’re sure a nonprofit is the right fit for your team, it’s time to set up the organization’s structure. The mechanisms that run a nonprofit and for-profit organization are very different.
“Choosing the right structure – nonprofit, for-profit, or a mix – depends on your funding strategies, mission priorities, and long-term goals,” she said.
When it comes to fundraising, nonprofits are reliant on donations and grants.
“For-profit organizations can typically get funding a lot faster from various investors,” Holzer said. “There’s a potential for a return on an investment from for-profits, which helps you raise capital.”
Earning money long-term is also often more difficult for nonprofits.
“Most don’t have a revenue stream at all,” Holzer said. “It was in the MBC that I first thought out a revenue model for the first time – being in the nonprofit world for so long, emphasis is not often placed on financial support systems.”
In contrast, for-profit organizations have a product or service for sale that offers long-term, structured income.
“I think that’s a shift lately – more nonprofits are starting to realize they’ll be sustained longer if they start selling a product or service,” she said.
Registering as a nonprofit can afford your organization section 501(c)(3) status, or tax exemption, which would also benefit any income efforts.
Finally, the process of securing partnerships or launching collaborations varies drastically between a nonprofit and for-profit venture.
“If you’re a nonprofit, this is the number one thing I’d be thinking about,” Holzer said. “As a nonprofit, partnerships and collaborations allow you to make a bigger impact, get more funding, in-kind donations, and volunteers. It also leads to greater innovation because there are more minds involved and brainstorming, expanded reach and influence.”
Holzer said nonprofit organizations are better positioned to enter teaming opportunities than for-profit organizations.
“For-profit collaborations are often taken on for financial reasons, or for credibility,” she said. “They’re money-driven decisions.”
WikiCharities partnered with Orrick law firm, which offered pro bono services to her team.
“This wouldn’t have been possible if we were in the for-profit space,” she said.
Aim for the best outcomes
“All the research points to transparency and trust leading to better outcomes in the nonprofit space,” Holzer said.
She pointed to a flow chart: Transparency > Trust > Collaboration > Better outcomes
“These better outcomes are improved efficiency, increased engagement, and maximum impact,” she said.
“Transparency with financials, leadership, decision-making, and data collection is an everyday struggle for many nonprofits,” Holzer said. “Some organizations can’t be transparent for safety reasons, but many just don’t know how.”
Offering transparency (launching a website, sharing resources) is what helps to build community trust.
“This is where WikiCharities can help,” she said. “We create a profile for nonprofits, which not only validates them but helps them to share their wins and struggles.”
When this trust exists, not only will your efforts get more empathy, but also a helping hand.
“If you’re open and trustworthy, people will often jump in and try to help you navigate roadblocks,” she said.
This gives way to the collaborative efforts that nonprofits need to survive.
“We work better when we work together,” she said. “Anyone going into this space needs to be open to collaboration.”
