Entries For: March 2008

Statement #10 - I have a great idea for a new program - I’ll start my own nonprofit.

It’s the last time we’ll say it – just don’t!  Or certainly make it your last option. There has been a proliferation of non-profits over the last 10-20 years, some of them quite valid and needed.  This also means there are more and more small organizations struggling to get enough resources to reach some level of sustainability and organizational capacity.

In short, it is much easier to start a non-profit than a for-profit company, but it is much harder to effectively sustain a non-profit over the long-term. When you have a new idea, please be sure to look around to see if anyone is already doing the work you care about; or if there is someone to partner with or someone that might want to take on a new “line of business.”

Paul S.

Lesson #9 - “I want to be sure our family foundation is around for a long time to come so I need to be sure to spend only as much as I have to every year”

There is nothing wrong with that approach, but you might want to consider what more and more philanthropists and foundations are doing now ( i.e. giving away their full corpus within a stated time frame.) Bill and Melinda Gates said 50-100 years, Warren Buffet said 10 years! Whatever the amount, the decision is driven, in part, by the good ol’ time value of money--a dollar spent today often has more value than the same dollar spent in the future.  If that economic concept applies anywhere, it should really apply to the application of philanthropic funding to social needs and problems.

Some causes and non-profits  might deliver more positive good in the world if they had the same amount of money sooner vs. spreading it over a longer period of time.  Again, this certainly is not a “mandatory,” but it is worth your strong consideration if you are creating a family foundation or some kind of permanent corpus.

Paul S.