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Truth or Fable: 10 Common Myths About Starting a Nonprofit Organization

March 19, 2025

“Start where you are. Use what you have. Do what you can.”

Arthur Ashe

Starting a nonprofit is an inspiring journey – born out of passion, purpose, and a deep desire to make a difference. But along the way, many aspiring changemakers encounter advice, assumptions, and straight-up myths that can cloud the path forward.

If you’ve ever dreamed of launching your own nonprofit, let’s clear the air by busting 10 of the most common myths about starting one.

1. You Don’t Need a Business Plan

The truth: Just because it’s a nonprofit doesn’t mean it’s not a business. A strong mission is important – but so is a roadmap. A nonprofit business plan helps you define your goals, strategy, financials, and how you’ll measure impact.

2. You Have to Do It All Alone

The truth: Nonprofit work is all about community – and that includes how it starts. You’ll need a board of directors, volunteers, advisors, and cheerleaders. Collaboration is not only allowed – it’s essential.

3. You Can Start Raising Money Right Away

The truth: Before you can solicit donations legally, you’ll need to register with your state and often obtain tax-exempt status from the IRS (501(c)(3), for example). Fundraising has rules – and skipping them can lead to legal trouble.

4. Passion Is Enough

The truth: Passion is your fuel, but structure is your engine. Without clear goals, systems, and accountability, even the most heartfelt missions can fizzle out. Purpose and planning go hand in hand.

5. Nonprofits Don’t Make Money

The truth: Nonprofits can and should generate revenue. The key difference is where the profit goes: instead of being distributed to owners or shareholders, it’s reinvested into the mission. Financial sustainability is part of impact.

6. Getting 501(c)(3) Status Is Quick and Easy

The truth: While some nonprofits receive tax-exempt status fairly quickly, the process often involves detailed paperwork, financial documentation, and months of waiting. It’s doable, but not instant.

7. Grants Will Be Your Main Funding Source

The truth: Grants are helpful, but they’re not guaranteed or always available at the start. Individual donations, corporate sponsorships, and earned income (like events or programs) are equally important revenue streams.

8. Volunteers Will Always Be There

The truth: Volunteers are amazing, but they come and go. Recruitment, training, and retention require time and strategy. Planning for volunteer engagement is just as important as hiring staff.

9. If You Care Enough, People Will Support You

The truth: A powerful mission needs powerful messaging. People give when they understand the impact they’re making. Clear storytelling, communication, and outreach are critical to rallying support.

10. It’s Just Like Running a Business – But Easier

The truth: Running a nonprofit includes the challenges of running a business plus nonprofit-specific regulations, funding restrictions, and community accountability. It’s deeply rewarding – but definitely not “easier.”

In summary, starting a nonprofit is an act of courage, generosity, and vision. But to bring your mission to life – and keep it thriving – you need more than good intentions. By understanding what’s myth and what’s reality, you can take meaningful steps toward building a nonprofit that’s impactful, sustainable, and built to last.

A comprehensive, step-by-step program designed to help you bust the myths, build a strong foundation, and launch with clarity and momentum. From idea to impact, we cover everything you need to start smart and grow with confidence.

Click here to learn more and register today!