Building a Community Service Nonprofit
This article continues the series on the five circles of Christian Compassion (here). The series started with discussing personal compassion (here) and moved to the second circle, which is the compassion of a church (here). This article discusses the third circle of compassion, which is organizational compassion. When your community service outgrows the boundaries of your church and an all-volunteer supported ministry, your program has crossed the line to become an organization. To be successful the leap from a community service program to a community service organization requires dedicated and experienced leadership, financial acumen, and strategy.
I recently was presenting a workshop on the topic of the five circles of compassion (audio here). Before the seminar started, one of the audience members described the experience of his church that began a food distribution program. As the food program grew, the needs of the community outstripped the ability of the church to raise sustainable revenues to meet the demand. Over time, the budget of the food ministry grew to the point of eclipsing the church budget. As a result, the church and the food pantry were crippled. This story illustrates the considerable leap between managing a compassion ministry as a church program and allowing the compassion ministry to become an organization.
There is no doubt that servicing those who are oppressed and impoverished is central to the gospel message and is the work left to the faith community as earth’s history progresses (see Matthew 25, and this expository here). Yet, on the continuum of service, a church must be clear about its boundaries, or it risks becoming consumed by the complexity of needs. Like the church example that was cited above, without attention to limits of our ability to meet the needs of compassion, the entire mission of a church can be pulled off course and ultimately failing in providing the community with either food or the gospel message.
Don’t get me wrong. Developing nonprofit community service organizations is a powerful way to meet community needs. Our organization, the Portland Adventist Community Services, traces its work back to 1934 and was formalized as an organization by eight churches collaborating together in 1963 (see here). Today our organization has nineteen full and part-time employees, working alongside 20-30 volunteers each day. We touch the lives of over 70,000 community members every year with core programs of emergency food distribution, health and (soon) dental care, and a low-cost thrift store. We are not alone. Other community service nonprofits across the county are affiliated with the Seventh-day Adventist faith.
Many books have been written on starting a nonprofit organization, although I hesitate to post a link to any book for fear that one might be tempted to jump prematurely into starting a nonprofit (okay, just one here). But before jumping to books and launching a community service organization, one must consider the following core questions.
What is the compelling need, vision, and mission of the organization? If starting a church-based compassion ministry requires a church to assess a community need and create a sustainable mission and vision, then the decision to start a nonprofit organization requires a full-on strategic planning process. It is a disservice to the community to attempt to launch a nonprofit organization without a carefully planned and sound justification.
How will we develop revenue streams to sustain the organization? Starting a nonprofit organization is starting a business. While the charitable status of a nonprofit agency signifies to the IRS that the profits of the enterprise will serve the public interest, it does not negate the need for an organization to generate revenues sufficient to sustain the nonprofit. Further, most businesses operate at a loss for the first several years, and so a related question is, does the nonprofit have access to resources to offset financial loses for 3-5 years?
What is the actual cost of service for the nonprofit? While the revenues are half of the equation of running a successful charitable organization, understanding the expenses associated with operating the enterprise is equally important. Thinking about costs requires you to estimate the capacity you need to deliver your programs and services. Expenses include staff, facilities, equipment, back office support, insurance, to name but a few.
Who owns the risk of the nonprofit enterprise? Make no mistake about it, starting a nonprofit business is starting a business. Beginning a nonprofit involves risk, and someone owns and managers that risk. Ownership for a nonprofit is at the level of the board of directors. A board of directors is not simply an advisory body but are the owners of the enterprise and manage risk by thinking about the organizational and legal structure of the entity. Who is accountable for the success or failure? Who provides leadership and vision? These are some of the many related questions about ownership and risk management.
Again, the point of this article is to outline the complexity of making the transition from a church-based community service program to a faith-based nonprofit organization. That leap requires financial resources, a dedicated team to support the start-up process, intensive strategic and business planning, and the entrepreneurial acumen to support the development of the organization. That said, the rewards of building a successful organization can amplify and deepen a church’s service to the community. While building a community service nonprofit is not easy, it can be a powerful expression of the gospel of liberation that Christ taught in Luke 4:18-21.
Your thoughts are always welcome.