Monday, January 4, 2010

Interest in homegrown charities on the rise

The Orlando Sentinel featured an interesting article on nonprofit start ups and the increasing popularity of the idea. As the article relates:

Starting your own charity has been a popular idea in these recessionary times, spurred both by downsized workers re-evaluating their career choice and what some have called the Compassion Boom.

"There's a high interest right now, tied to fact that the economy has people thinking about what they want to do," said Margaret Linnane, executive director of the decade-old Philanthropy & Nonprofit Leadership Center at Rollins College. "They figure, 'Since I'm out of work, maybe I'll be fortunate enough to find something in an area where I can serve the community.'"

But starting your own charity is another matter. The process takes much more than a noble idea or sincere heart.

"Anyone who thought it was going to be simple … learns quickly that it's not so easy," Linnane said. "And a lot of people mistakenly think if they have a great cause, there will be no problem having their idea funded."

There's a lot of bureaucracy involved, a fair amount in fees and a whole lot of homework. And that's only to launch it. Of Florida's nearly 50,000 public charities in 2008, fewer than half made $25,000 or more in gross receipts — meaning the majority never raised enough money to pay anyone a decent salary.

At the Rollins philanthropy center, which teaches a class on starting a nonprofit, Linnane said many students discover that running a charity is much more administrative work than they imagined — when what they really want is the face-to-face human interaction.

Ultimately, "nonprofit" is only a tax status. You're still essentially starting a business.

In the past decade, there has been a "pretty dramatic" increase in the number of public charities, said Steve Delfin, president and CEO of America's Charities, a Washington, D.C., nonprofit that helps employers run workplace-giving campaigns. The number of public charities registered with the Internal Revenue Service, for instance, increased 60 percent nationally from 1998 to 2008, and the number in Florida nearly doubled. It is still too early to say what happened in 2009.

But not everyone thinks growth is a good thing.

"There is a lot of redundancy and duplication," Delfin said. "And as in any industry where you get a lot of growth, now I think we are going to see this whittling down."

There is some evidence that's already happening. For the first time in decades, individual charitable donations dropped in 2008, compared with the year before. With less money being split among more charities, some nonprofits found themselves laying off employees, cutting programs or closing altogether.

Daunting? Maybe. But for the bold, visionary and determined, the experts contend, success is still possible. It just may take longer. Read more here.

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