Chances are your church ministers to people in need inside and outside the church walls. But the growing need for help can outpace your church’s resources. At that point, you might consider the option of launching a charitable nonprofit.
Launching a nonprofit is not something to tackle lightly, partly because churches often have a different way of working than nonprofits do. But I can tell you at least 4 good reasons to do it. Take a look and see if any of these fit your church.
You’ve probably seen a steady increase in the people coming to your church for help. It’s common for social services agencies and houses of worship to receive far more requests for help than they can answer. If your church plans to meet the growing need, in your community, expansion may be your best option.
And expand is another word for “more.” More materials, more supplies, more space, more people. More money!
Let’s admit it; in most churches, a few members do most of the work. The dreaded Pareto Principle–known as the 80-20 Rule–pops up in the church, too!
You DO NOT want to burn out or drive away that faithful 20 percent by asking too much of them. But you’ll need more people to deliver more services. So your church’s ability to expand is limited, in part, by the size of your volunteer pool.
By launching a charitable nonprofit, your church would create a vehicle for raising funds for more materials, supplies, space, and people. Everyone loves the fact that churches help people in need. But many grantmakers and donors will NOT contribute to programs operated by churches. Creating a nonprofit lets your church compete for grants, contracts, and donations for which your church does not qualify.
So reason #1 to say yes is the ability to serve many more people.
Sooner or later, you might want to deepen your services. For example, as you feed hungry families, you may realize the parents need help with job readiness training, résumé development and, interview skills. They need social supports because they’re unemployed or underemployed.
So you decide to deepen the scope of your services to answer those needs, too. To do that, you’ll have to create one or more new programs.
Volunteers May Not Be Enough
Your new programs will likely call for workers with advanced skills, licenses, or specific professional expertise, too. And you may not have people with these credentials inside your pool of volunteers. By creating a charitable nonprofit, your church can raise funds so that you can recruit and keep highly qualified staff.
So Reason 2 to say yes is to gain the ability to serve more deeply and avoid burning out church volunteers.
It’s no secret that serving people in need is costly. If your church needs tens of thousands or hundreds of thousands of dollars to serve your community, you probably need a funding base that goes beyond family, friends, and church members. By design, charitable nonprofits receive funds from multiple public sources.
Having a nonprofit would allow you to pursue grants, contracts, outside contributions, partnerships, and program fees. So while you still want support from family, friends, and members, your program won’t be limited by the funds they can contribute.
Reason 3 to say yes is to become eligible for funds from a wider variety of sources.
Whenever you work with people, you run the risk of legal challenges. Someone slips on your front step, and they sue. Someone doesn’t like the advice they got from a program volunteer, and they sue. A volunteer feels discriminated against, and they sue, too. With a separate nonprofit, that nonprofit–not your church–would likely be the target of a lawsuit filed by someone who received your services. (An exception might be a physical injury suffered on church property.)
Yes, I know. The idea of getting sued is rotten, but it’s a 21st-century reality, so you want to be ready for it.
Now, I’m not a lawyer; so I can’t promise you your church WON’T be sued. If your church board is automatically given the role of governing the nonprofit, your nonprofit will look like a “puppet,” and your church might vulnerable in the case of a lawsuit. But if you create an independent board that’s committed to your mission, I think you’ll be fine.
No one can legally own a nonprofit, though, so be thoughtful about the way you set it up and operate it so that it stays on mission for the long haul!
Reason 4 to say yes is to protect your church from legal liabilities related to your charitable services.
IS IT TIME TO CREATE A NONPROFIT?
So there you have 4 good reasons for your church to launch a separate nonprofit.
Now, I’m not saying having a separate nonprofit will make everything easier. Smarter, yes. Easier, probably not.
Based on my work with houses of worship, I believe running a nonprofit will feel different from running your church. That’s especially true if you’re used to either having power centralized in one individual who makes “leisurely” decisions or a board who spends weeks debating every proposed change. This 21-century world won’t hold still for that.
So your church should weigh the pros and cons before deciding if you’re ready to create a charitable nonprofit.
Are You Ready?
If starting a nonprofit to carry out your church’s charitable programs sounds like a good idea, I’m here to support you. I can help you assess whether your congregation is ready for this, and I can help you through the startup process. An easy way to learn more about this process is by requesting Your Nonprofit Startup Guide, my free ebook. Click the image below to request it.
If you’d like to book a 15-minute exploratory call to learn how I can help your church with nonprofit startup, you can request that HERE.
What Do You Say?
Is a new nonprofit the answer for your church? What’s holding you back? Please share your thoughts in the Comments. Meanwhile, if you know someone who might like this article, please use your favorite social media button below to share it. I look forward to hearing your thoughts!