Topic: How to Start Your Organization

Guest Speaker: Shikha Gulati, Interim Director of Cancer Schmancer

Date: November 2007

 

1. Shikha’s Bio

Previously, Shikha worked with Do Something, as the director of the Challenge Program. At the same time, she worked to help distribute half of a million dollars to tsunami-stricken areas in Southeast Asia. After holding her position at Do Something, Shikha moved to SAYA, a community-based youth organization located in New York City which aims to help South Asian youth reach their full potential.

Currently, Shikha is the interim director of Cancer Schmancer, or the Cancer Schmancer Movement, which was launched by Fran Drescher of CBS’s “The Nanny.” Fran went to nine different doctors before she was properly diagnosed with uterine cancer, and this long and painful ordeal inspired her to write a book, “Cancer Schmancer.” During her book tour, Fran encountered countless women who had faced the similar issue of being misdiagnosed with late-stage cancer. Not long after, Fran launched the Cancer Schmancer Movement whose mission is to ensure stage-one diagnosis of all women’s cancers, focusing on education, prevention, and policy change. Because Shikha was invited onboard to the project during its early stages of development (she joined the movement in early 2007), she greatly knowledgeable of what is required and most effective when starting an organization.

 

2. 11 Great Take-Away Tips

1. Create a mission statement. You should be able to sum up the purpose of your organization in one sentence. Think about the problem you’re trying to solve and use that to help write your statement. Also do a competitive analysis and find out what it is you’re doing that other companies are not.

2. Develop your Board of Directors. Two key backgrounds to have are law and finance, but marketing and mission-specific are also useful. Consult that lawyers in the state where you’re founding and find out the minimum requirement for your board. The board votes on major decisions and actions, your annual budget, hiring and firing. They also help determine the direction of your organization.

3. Do your paperwork. Decide how you want to file (501 c 3, etc), and this makes you tax exempt from the IRS and they will recognize you as a legal entity.

4. Develop your bi-laws with your lawyers. Adopt a legal document that tells what the purpose of your organization is, talks about the structure of your board of directors, you have to give contact information for yourself, your executive committee, as well as your offices, where you’ll be receiving mail and what’s going to be your primary office space.

5. Develop and clear and clean financial infrastructure. Keep track of all the money you spend or take in, and develop an annual budget with your board. Always allocate your money for something including office supplies, travel, etc. At this point you want to do some financial fundraising, and you can also ask your board to contribute.

6. Develop promotional material, such as logo, trademarks, and taglines. This can be done with a graphic designer you know who is willing to donate their expertise, or you can pay someone to do that for you, or if you’re talented enough you can develop your own logo.

7. Do a competitive analysis to find out what other organizations are out there in your space. Find out what their mission is, what their niche is, and what their specialty is. You should be very clear so that when you create your own mission you can make sure that you’re not doing the same thing that somebody else is already doing.

9. have a way to track the money that’s coming in as well as the money that’s going out, and at the end of the year you want to make sure that the IRS is happy with you.

10. Do Some initial fundraising. Someplace to do that is to get your board to contribute, so that once they sign on as a board member and commit to a year, you can decide how much that’s going to be and again depending on how much you anticipate spending that year you can scale your board contributions according to that.

11. Get your name out there. Get your board together to organize volunteers or any staff that is working for free to organize events, and raise awareness for your organization and collect funds while you’re at it.

 

3. Transcribed call with Shikha Gulati, Interim Director of Cancer Schmancer

Kat: So last time I did a whole new thing where I opened up the theme to whatever you guys wanted, and overwhelmingly people said that they just wanted a good foundation in non-profit, and I think that’s a good idea. I just wanted to do the basics, the nuts and bolts of how to turn your project into something real, sustainable, a real solid organization.

So the person I have with us today is Shikha Gulati, she’s currently the interim director of Cancer Schmancer, or the Cancer Schmancer movement. Shikha is very amazing because not only is she a young female leader, social entrepreneur and activist, but she’s working with Fran Drescher for a really important cause, and that is the diagnoses of women’s cancers in the early stages. Shikha can go into the particular details of that work, but she was bought in very early in the foundation of the organization, so she is a great expert in how to give you guys ideas of how to create the basics of your organization.

Just to give you a little more background, before she worked with Fran and the Cancer Schmancer movement, she worked with SAYA, which is a community-based youth organization located in New York and they’re all about helping South Asian youth realize their full potential. Prior to SAYA she was a huge, huge asset at Do Something. She was the director of our Challenge program, and while she was here she helped coordinate the distribution of half a million dollars to areas in Southeast Asia stricken by the tsunami. So, big impact in a lot of ways, and she’s a very very passionate and amazing woman.

To kick this off, Shikha has prepared a top five list of the basic things you should know about how to start an organization, so I’m going to hand over the phone to her and she’s going to give you the run-down, and then in between we’ll pause in case you guys have any questions, and then at the end we’ll have a more specific Q and A in case you guys have any questions that partain to your specific programs or organizations. So with no further ado, here’s Shikha.

Shikha: Katherine? Will the transcript be available on the Do Something website?

Kat: Yeah, what I do following every call is send out very comprehensive meeting notes attached to an email, and I also attach the notes to the grant section of the website so that you’ll be able to access them via email and online.

Shikha: Thank you.

Kat: No problem. Alright Shikha, go for it.

Shikha: Hi guys, how are you?

All: Good

Shikha: Good. Some of you I still remember- I know Daniel I was still working at Do Something when you were a BR!CK Award winner, and Kelly I was one of your judges last year, I don’t know if you remember.

Kelly: Yeah!

Shikha: And Natalia, I’m new to you so it’s nice to meet you over the phone, before I get started about the five steps that I think are most important in starting up an organization, I just wanted to give a little more background on what Cancer Schmancer is. So as you know I worked at Do Something for about two years, and then I moved on to another youth organization here in New York, and after about five months of working there I got an amazing opportunity to be hired personally by Fran Drescher to help her launch an organization called the Cancer Schmancer movement. You may know Fran from the show The Nanny, which was a show on CBS, and during that show Fran was actually diagnosed with uterine cancer, which you may not know. It actually took her two years and eight doctors to get a proper diagnosis. And after having her own personal crisis, she wrote a book about her experience called Cancer Schmancer that went on to be a New York Times best seller, and in that book she talks about her own problems getting a proper diagnosis, going from doctor to doctor, and no one being able to tell her what was wrong with her. And then finally doctor number nine does a biopsy and found out she had cancer. So she was really changed by this experience and wanted to change it with others and during her book tour she found out that thousands of other women have gone through what she went through, which is misdiagnosis or late-stage diagnosis of women’s cancer. So that’s what motivated Fran to get together with a bunch of her girlfriends who are very, very passionate women’s health advocates, and form an organization which we now call the Cancer Schmancer movement, and the mission of the organization is to ensure stage-one diagnosis of all women’s cancers, so we focus on education, prevention, and policy change, and I’ve been with the organization for the last ten months now.

And so with that whole intro, I’m going to begin the first of five steps that I think is most important when starting an organization whether it be your own or any that you might decide to found later in life.

So number one is to create a mission statement for your organization. You should be able to sum up in one sentence the purpose of the organization. And if you haven’t yet done that, it’s a good exercise to be able to do that because if you can’t, it means that you’re not really clear on what it is that you’re trying to do with your organization. So when you’re creating the mission, think about the problem that it is that you’re trying to solve. For example in our case we found that thousands of women were being misdiagnosed for gynecologic cancer, and often times these women are dying because they’re not finding out what’s wrong with them and having the surgeries that are needed and the treatments that are needed.

So that’s how we created our mission, and when you’re coming up with your mission you want to do a competitive analysis to find out what other organizations are out there in your space. So find out what their mission is, what’s their niche, what’s their specialty, whether it’s their particular audience or whether it’s a particular city that they’re focused on. You should be very clear so that when you create your own mission you can make sure that you’re not doing the same thing that somebody else is already doing. So that’s number one, be able to sum it up in one sentence what you’re mission is.

Number two is develop your board. A lot of people forget about that, but it’s actually very important in the early stages of developing your organization to have a founding structure, and that really comes from your board of directors. They should be the ones giving the overall strategic vision to your organization. And the way you want to do that is you have to consult the lawyers in the state where you’re planning to start up your organization and find out what the minimum requirements are for your board of directors. Typically you want to have at least three members on your board, often times depending on how large your organization is you want to have a larger board, but at least starting off you should have at least three people and they should be in the positions of president, secretary, and treasurer. And those three people once your board starts growing, they become your executive committee and then you can add on more members to your board as you see fit.

But the purpose of having this board is not only so that you can incorporate and be identified by the IRS as a legal entity, but these people are the ones who should really be approving the mission, helping develop structure for the organization, any programs that you plan implement, as well as approving your annual budget for the year. So they’re really managing the finances of your organization to make sure that you’re healthy and you’re on track. And if you’re not on track, they can help you get back on track. So they’re really the manager of whoever the head of your organization is. So that’s the second thing, and you can ask me more questions later about how to develop the board or what field they should come in from.

Definitely when you’re forming the board it could be you, or it could be someone you think is really passionate about the cause and knows a lot, but definitely you want to keep in mind that you have someone who’s very well versed in finances because that is so incredibly important for a successful organization, and then you also want someone who has some sort of legal background. I always suggest that because a lot of times you’ll have questions and want legal advice but you don’t have the funds to go to a lawyer, so it’s good to have someone on your board who has that background and can help you answer questions from time to time.

The third step to founding a successful organization is doing your legal paperwork. Basically, filing for incorporation so that you can become a tax-exempt organization by the IRS. And the way that you do that is again you need a lawyer on your side, and you can do this by getting some legal help from free legal associations such as the lawyers alliance or lawyers without borders, or you can hire a legal firm, or if a board member of yours has a legal firm and they would be willing to donate pro-bono legal advice, you can go that route as well.

What you want to work with with your lawyers is to create your organizations bi-laws. That is to adopt a legal document that tells what the purpose of your organization is, talks about the structure of your board of directors, you have to give contact information for yourself, your executive committee, as well as your offices, where you’ll be receiving mail and what’s going to be your primary office space. And these legal papers are really important because when you go on to look for sponsors and you continue to grow as an organization, sponsors are going to ask for your legal paperwork. They will want to make sure that the IRS recognizes you as a tax-exempt organization. You can do this in multiple ways, by consulting your lawyer you can figure out what is the best way to incorporate.

My organization incorporated as a 501 c 4 organization, which allows us to spend as much funding as we want on lobbying, but most charities are founded as 501 c 3 organizations, and when you’re a 501 c 3 the advantage of that is that you offer your donors a tax write-off at the end of the year, so if they donate to you they can write it off against your taxes and get some money back at the end of the year. So they’re doing something good but they’re also getting something out of it.

The fourth important point is developing a clear and clean financial infrastructure. So you want to have a way to track the money that’s coming in as well as the money that’s going out, and at the end of the year you want to make sure that the IRS is happy with you. That you’re not doing anything wrong or spending money on things you shouldn’t be spending money on. The way to do that is to keep a tally of all the checks that are coming in, and if you can accept online donations, keep a record of that, and be diligent about sending out thank you letters because that helps you with your bookkeeping.

And when you’re spending money, keep track of where you’re spending it. save all of your receipts at all times, and always allocate your money to something. For example if you spend $100 on supplies you want to mark $100 for office supplies, and they’re going to be used for marketing or education, whatever programs you’re spending it on. You always want to know what program it’s going back to. As you grow during the first 3 months of the organizations growth, make sure you develop an annual budget that will anticipate the costs of rent, salary expenses, office equipment, travel expenses that you anticipate, as well as legal fees. Those are very, very key when you’re getting started. You want to anticipate the costs and get the board to approve your annual budget and that will help you decide what your revenue goals need to be for that first year.

At this point you also want to do some initial fundraising. Someplace to do that is to get your board to contribute, so that once they sign on as a board member and commit to a year, you can decide how much that’s going to be and again depending on how much you anticipate spending that year you can scale your board contributions according to that. For example with the Cancer Schmancer movement, we wanted to raise about $300,000 this year, so we asked each board member to donate $2500 when they first became a board member. You would ask them every single year to make that contribution, and that’s always a good source of revenue for you.

Other ways are to apply for start-up grants, for example, the $500 Do Something grants are a great way to get started, other foundation vouchers do similar work, and then of course there are fundraising events you can host. Get your board together to organize volunteers, any staff that is working for free to organize events, raise awareness for your organization and collect funds. All of this is seed money to help you initially until you’re registered legally to become a fundraiser nationally. You’d have to register state by state depending on where you plan to fund-raise. But at that point you can register nationally and start applying for all sorts of grants to get the money rolling in, and the board should be a part of that, helping to strategize sources of funding and well as actually fundraising for you. So they can be a strong asset.

The last point that I want to bring up is once you’ve got the financial and legal infrastructure in place, you want to develop your promotional materials. You need to develop a logo, which can be done with a graphic designer you know who is willing to donate their expertise, or you can pay someone to do that for you, or if you’re talented enough you can develop your own logo. Once you create the logo you want to create a tag line as well for your organization. In our case it’s “take control of your body” and any sort of images that are associated or words with your organization, make sure you work with a lawyer to get those trademarked. If you’re a 501 c 3 you can get lawyers to do it for free because there are tons of legal resources out there for non-profits and they don’t charge you a dime, so that’s exciting.

So that’s pretty much it in terms of basics, and once you get beyond that point then you can do some more fundraising to hire staff, grow your volunteer base, launch a website, do all sorts of exciting things and begin actual programs. But these are in my opinion the first five steps that you need to really focus on before you get started.

So that was a lot to take in, is there anything you need repeated before we get into questions? No? ok, any questions?

 

4. Question & Answer portion

Q: I have one question, sorry I came in late. My first question is, as a student organization, is it better to apply for fiscal sponsorship, or to go the 501 c route, given that you may be changing the people managing the company every one or two years. Is it a hassle when you’re a 501 c 3 to change leadership so often? Would fiscal sponsorship be better? What are the pros and cons of both?

A: Ok so going the route of a 501 c 3, you have to deal with the excesses. Unless you get a grant or an organization to donate pro bono legal advice, it can be excessive. In our case we probably spent about $20,000 until we started getting free legal support. So that being said, you have to keep in mind the cost. But if you go the route of a fiscal sponsor, you cut that out because you don’t have to worry about incorporating and that will save you thousands of dollars. But, in the long run, the way to figure out which way is the right way for you, is do you want complete control over your organization: in the sense that if you have a fiscal sponsor, you don’t need your own board of directors. All you need is an advisory board, and the board of directors is the board of directors for the fiscal sponsor. And what can be the downside of that is that you need to at all times make sure that your mission and your work is being approved by your fiscal sponsor. So say that you want to change the strategy of your organization, say that 2 years down the line you say ‘the programs we’ve been offering are good but not great, and we want to go x, y, z route.’ Well, you have to go back to your fiscal sponsor and talk to them about it, and if they’re not willing to agree with you on your new vision, you may lose that sponsor. So that’s one thing to keep in mind.

In terms of a 501 c 3, that’s more responsibility on your end because you have to manage your own board of directors and pay your own legal and administrative fees, but it gives you more freedom. It really depends. What some organizations do is that if they don’t have the money or a big board, they’ll take on a fiscal sponsor for two years and once you’ve fundraised enough, you wish your sponsor well and say that you’re ready to spread your wings and form your own board of directors and incorporate as your own organization. So that’s a compromise, which is something you may want to think about. My organization did think about that, but we decided we wanted the independence and not to feel dependent on our fiscal sponsor who may one day decide that they’re not in line with our mission. Does that help?

Q: Yeah it helped a lot. When you said it costs money to obtain the 501 c 3, does that mean legal cost or other stuff?

A: Well, it depends what you’re doing, I think the initial costs of primarily legal, but once you get over that it’s just a one time thing. The only recurring legal costs are for you to fundraise, especially if you’re a national organization. Every year you have to pay to do fundraising so you have to register individually with every state. It’s only a couple hundred dollars but it’s a recurring charge for every state and every year, and that’s something you work on with your accountants. But other than that it’s really up to you how much you want to spend. No one’s going to tell you if you’re spending too much or too little, it’s up to you and your board. So if you’re going to be doing a lot of work and think you need a full-time staff, after the legal work it’s your staff that becomes your biggest cost and in every organization your personnel is always your biggest line item, and after that is office space. Depending on what city you’re in, your rent can cost a lot, and if someone is not willing to donate office space to you, then those are your two biggest items.

Caller: Okay.

Kat: Any other questions?

Q: I came in late too. How long after you’ve filed the paper work does it take to be approved?

A: It’s usually a process that can take up to six months so you want to get started right away, which is why I said in the beginning of the call that the first two things you want to do are create your mission statement and your founding board, and once you’ve got those you can go ahead and incorporate.

Caller: Thank you.

Shikha: You’re welcome.

Q: I have a question regarding funds. How do you get people to be among first-time donors to your new organization?

A: That is certainly a challenge which is why I recommend that you go to your board of directors first and foremost, because these people have committed themselves legally to your organization, and are committed to you. So go to them first, create your annual budget, decide how much you need to raise, and see how much they are willing to contribute.

Secondly, I would then go towards hosting events in your community. And I would say, ‘we’re a brand-new organization, we want to do some grass roots fundraising before we can start soliciting sponsors’ and try to get support from your community. As you continue to grow and you get your approval for incorporation, you can start approaching community based businesses, because they are always willing and looking for opportunities to give back. A young organization from their community may be something that they are very interested in supporting.

Caller: Thank you.

Q: Could you speak a little more about putting together the board of directors and what kids of background experiences they are supposed to have?

A: Sure. What I had touched on before is that you want to start with your executive committee which is three people, your president, secretary, and treasurer, and amongst those three people, and they are the most important people in your organization so pick them wisely because they get final say on anything, so when it comes to hiring and firing your executive director and CEO, they’re the ones that get say on everything except in board meetings when you’re doing voting. So when you’re forming your committee, your treasurer should be someone who has some form of accounting background, and is really familiar with the nuts and bolts of how to manage the finances of a company. That’s something that’s really important when you’re starting out, because you don’t know how much you’ll be spending but you want someone who can account for every penny when the IRS comes to you at the end of the year and analyzes and audits your organization.

The second field is someone with legal background, which could be someone in any law firm but particularly corporate law, and is familiar with how to start up organizations and manage them. Or if they have experience writing contracts and have a keen eye towards any business matters that would affect you, I think that’s really good to have.

Other types of fields you should think about are mission-specific, so if you’re health focused you may want a doctor or a specialist in your particular field to be on your board, if you’re education based you may want a school principal, someone who runs an education-based organization of their own.

Another field that’s nice to have is marketing, because marketing people will be able to help you develop fundraising campaigns to reach your audience, and bring in money. So aside from legal, finance, and mission-specific, I think marketing is next.

If you have those four you’ll have a really strong board, and as it grows you can identify the strengths and weaknesses of your organization and the fields you really need, because you may be really heavy in the legal, you’re dealing with an immigration based organization so you’re dealing with a lot of legal paperwork so you want a lot of legal experts on your team, one or two is not enough. So I think that comes with time but for beginning organizations like I said I think legal and finance definitely, and as for mission specific and marketing, absolutely, if you have those contacts then I would go after those people as well.

Q: Would you also explain about the balance of the work that gets done by the day to day staff and the role that the board plays in the organization?

A: Sure. I think that in the beginning the board of directors does a lot of work in the sense that they’re going to build the initial infrastructure, so you may not have any money in the beginning. So if you’re the executive director, then you need to have the board help you get through the legal paperwork initially, help you with the initial fundraising. They should be the ones reaching out to the their contacts, inviting people to the events, getting their own friends to write checks, hosting dinners at their house, that sort of thing. So I think it’s a little bit more work in the beginning for the board but once you get up and running within the first 6-12 months, if you have enough money to have enough volunteers or enough staff people to take over for the day to day, then the board should only be involved on a peripheral basis, having the regular board meetings depending on what’s in your board bi-laws. So if you’re going to meet every two months, every four months, they should be having those regular board meetings and whoever is managing you organization should be in one those board meetings as well as any key staff.

At every board meeting there should be a new item to be discussed by your board, including your annual budget, including a strategic plan for seeing your organization meet it’s mission by implementing certain programs, maybe they’re going to vote on a marketing campaign that you hope to implement in the future. But as you grow, it’s going to be big picture involvement, not so much day to day. And you should only involve them as much as you need to for advice and always feel free to use them as resources. Other than that, I think it’s really just the board meetings and anytime they need to vote on something.

Caller: Thank you.

Shikha: You’re welcome.

Kat: Does anyone else have any other questions for Shikha?

Q: Is there a specific requirement to require your board members to donate?

A: No, it’s absolutely not required. What’s required by your board is determined by what’s written in your bi-laws. So when incorporate your organization you need to get your board to vote on your bi-laws, and in your bi-laws it’s say what is the minimum number of board members you need to have, how many times a year do they need to meet, what is the policy when a board member resigns or is kicked off, how does that take place, what is the hiring and firing procedure, who gets the final say when you’re hiring and firing an executive director, all that stuff is outlined.

If you want, you can include a policy that says they absolutely have to contribute x amount of dollars a year, but in my experience that’s not mandatory and we by no means do that with our board members. What we did was we said, “we’re inviting you to join our board of directors for x, y, z purpose, and to help us get started would you kindly donate $2500?” Or, “If you all collectively donate $2500 then we will raise $25,000 and then we will be able to do x, y, z.” explain to them what the money’s going to go towards, but if you don’t want to make it obligatory, you don’t have to do that.

Kat: Great. Does anyone else have any other questions? Okay, so in conclusion I’d like to thank Shikha so much for giving us that amazing bit of information, I know that for me personally I learned a lot. What I’ll do now is in the next day or so send out call minutes so that in case you missed anything or you need a recap, you’ll have very comprehensive notes at your disposal. Also, Shikha’s been very generous with her time and is willing to take more questions after this call, so email me your questions and I’ll forward them to her. Otherwise, keep an eye out for next month’s topic, if you have a specific need that you think needs to be addressed just send me the topic and I’ll try to find a speaker that’s appropriate. But thanks so much guys, I know that you’re all busy and it’s been our pleasure. Take care!