Getting Straight on Planning and Finance

To care for the first objective – making sure the necessary strategic and financial ingredients are in place – I think we should request the following information on some sort of application to be a 501-c-3 nonprofit organization:

1. Ask each charity start-up to submit information regarding their prospective board members. We need to know their name and contact information, of course. But we also want to know their field of professional work, their relative capacity to give or solicit contributions to the new nonprofit on a continuing basis, and their estimated previous experience in governing nonprofit organizations. We want to know that the skills and experience background of the initial board is diverse and strong enough to provide good governance. We want to know that the board members selected are going to be independent of the founder/executive. So what is there relationship (not just family ties, either) to the founder?

2. Ask each organization applying for nonprofit status to submit a 10-page summary of their strategic plan – or their "business plan." What we would want to see here is a summary of
the organization's mission and vision statement, the group's strategic objectives, the program strategies that will be used to accomplish the strategic objectives, and the organization's budget for the first five years of its existence, including all sources of revenue. We would also want to have a comprehensive fundraising plan to ensure the continuing sustainability of the new nonprofit. We want to know that this group has done their strategic planning and financial homework.

3. We also want to know how, and the extent to which, the founders of the new nonprofit have ascertained that there is, in fact, a community need for their anticipated mission, and that the community and its leadership are supportive of and ready to undergird the new nonprofit and its work with their contributions of time and money. This would require some sort of means testing and some affidavits from typical community leaders in government, education, business, media and nonprofit sectors.

4. We would also want a summary of the competence areas and the experience depth of the organization's founder or starting executive or other program staff that will be employed as the new nonprofit gets underway.

5. Once the new nonprofit is approved, we would want a series of follow-up reports on financial status and mission accomplishment for up to five years after approval. We would want to see comparative budgets vs. actual revenues and expenses, as well as an annual balance sheet. In other words, we would want a full and audited financial statement for each of the five years of the start-up charity's existence. We also would want audited figues relative to programs of service provided, the target populations served and the results obtained in service.

Now, you're probably saying to yourself, "Is this guy nuts, or what?!" But tell me, dear reader: is it better to require this information up front and for the first five years, and to set up the mechanism for doing that? Or is it better to have a plethora of charity start-ups, many of whom will no longer be in existence in five years, or who will be serving ineptly and inefficiently, thus mis-using the public's contributed funds? Is it better to "let 'em run wild" and proliferate, or to weed out the inadequately prepared groups right from the start?

In my view, it serves the public interest – both the society at large and the donating public – to have charities out there whose start-ups have been properly certified as having the right ingredients from their beginning. If they don't get off to a good start, of what ultimate use are they to society?