4 Reasons Your Church Should Say Yes to Nonprofit Startup

4 Reasons Your Church Should Say Yes to Nonprofit Startup

I grew up in church learning godly values like telling the truth and helping those who are less fortunate. I’m sure your church teaches those same values. And if your church is like mine, you put action behind your values by giving practical help like food and clothing to your neighbors in need.

In some places–especially urban areas–no matter how much help our churches offer, the need never ends. In fact, it can outstrip our resources and leave our church leaders searching for answers. It’s been that way here in the Washington, DC region for a long, long time.

SO WHAT CAN WE DO?

Starting a separate charitable nonprofit is one possible answer. But this is a big decision for a church. One reason is that churches often work differently than nonprofits, and the “clash of cultures” can be disruptive.

4 REASONS TO LAUNCH A NONPROFIT

So even though starting a charitable nonprofit is not the only answer, I can tell you at least 4 good reasons for your church to do it. Take a look and see if any of these feel right.

SCALE

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 that growing need, you’ll have to increase the scale of your program.

Another word for that is “expand.”

Burnout

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. You may want to run your expanded programs with church volunteers, and maybe you can. But with a large enough expansion, count on needing either additional outside volunteers or paid staff. Or both!

You may also need more space and better recordkeeping and program management as you increase the scale. A nonprofit organization can give you the structure you need to manage the expansion and ensure high-quality services without causing your active members to tip out the back door.

So reason #1 to say yes is the ability to expand and serve many more people.

SCOPE

Here’s another common situation: As you feed hungry families, you realize the parents need help with job training, résumé development and, interview skills. They’re unemployed or underemployed and need to solve that in order to pay the rent and buy necessities.

So you decide to deepen the scope of your services to answer those needs, too. “Deepen the scope” is another way of saying you want to tackle the root cause of the problem instead of just patching the problem over and over.

Volunteers May Not Be Enough

For these “deeper” programs, you’ll probably need workers with advanced skills, licenses, or specific expertise. You may not have people with these credentials inside your pool of volunteers.

Churches minister to people in many ways, but the church is not necessarily equipped to address all of these social challenges. So creating a nonprofit lets the church focus on its spiritual mission while ensuring that these other needs are also being met.

So Reason 2 to say yes is to help your neighbors overcome obstacles that keep them chronically dependent upon charitable services.

FUNDING

It’s no secret that serving people in need can be costly. If your church needs tens or hundreds of thousands of dollars to serve your community, you probably need a funding base that goes beyond family, friends, and church members.

Here’s a Reality Check

Everyone loves the fact that churches help people in need. But most US grantmakers and some individual donors will NOT contribute to programs operated by churches. But a separate nonprofit can compete for charitable and educational grants, contracts, and donations that aren’t available to your church.

Of course, you still want support from family, friends, and members. You just don’t want your services to be limited by the funds they can contribute.

Reason 3 to say yes is to attract large enough grants, contracts, and donations to help you transform the lives of the people you serve. 

LIABILITY

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 want to sue. A volunteer feels discriminated against, and they file a complaint.

If you run these programs through your church–you guessed it!–your church is the target. So an advantage of running your social programs through a separate nonprofit it to reduce the likelihood that your church will be named in a lawsuit by an unhappy participant.

I Can’t Promise

Now, I’m not a lawyer, and I can’t promise you your church WON’T be sued. People sometimes look for the deepest pockets around and might still try to target your church. But if your nonprofit has an independent board, and if it doesn’t operate programs on church property I believe legal charges related to the social programs would be filed against the nonprofit.

You don’t want one unhappy client to damage your church’s reputation and strip away some of its assets.

I know. The idea of getting sued is rotten, no matter which organization is the target. But lawsuits are a modern reality, so talk with your lawyer, accountant, and insurance professional about ways to protect your assets. And since rules vary from state to state, ask how a separate nonprofit can protect your church’s assets.

Reason 4 to say yes is to protect your church’s assets from liabilities related to your charitable services.

WHAT’S YOUR VERDICT?

I’ve shared 4 reasons your church should launch a separate nonprofit. But let me be clear: I’m NOT saying it’s easier.

Smarter, yes. Easier? Probably not.

You and your team will go through a transition, and we all know change can be hard even when it’s good.

Setting up a charitable organization would be your first transition. So if you’d like to learn how it’s done, click the image below to request my free ebook, Your Nonprofit Startup Guide. It’s a super quick read.

If you’d like to talk with me about whether nonprofit startup might be right for your church, you can request a free 20-minute discovery call HERE.

Request Your Nonprofit Startup Guide

YOUR TURN!

Did any of those reasons strike a chord with you? I’d love it if you’d tell me about it in the Comments. Nothing fancy, just a quick line or two. I’m eager to hear what’s happening at your church!

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