The article is full of very useful information outlining alternative nonprofit funding options (like fiscal sponsorship or collaborating with an existing nonprofit) and highlights the need for sufficient research to be conducted as well as preparing viability plans.

According to the National Center for Charitable Statistics, there are currently 956,760 public charities, 112,959 private foundations, and 443,464 other types of nonprofit organizations registered with the IRS. That’s a lot. I am sure that many of these organizations have overlapping missions, serve similar communities, and feed off of similar funding sources. But does that mean that no new nonprofits should join this large community? And that especially goes for new, small nonprofits?

This is where it starts to get tricky, I think, for a couple of reasons:

SURVIVAL OF THE FITTEST: “Small” does not necessarily mean “unplanned,” “not well strategized,” or “not likely viable.” Although, sometimes (maybe more often than not) that is the case. The Bureau of Labor Statistics reminds us of this fact with its statistics on small business survival rates: “Two-thirds of new employer establishments survive at least two years, 44 percent survive at least four years, and 31 percent survive at least seven years.”

What does this mean: Not every idea will make a great business. And, not every person who has an idea will make a good business owner.

FIGHTING FOR THE DOUGH: More nonprofits means more people “fighting for the dough.” Let’s look at environmental nonprofits as an example. Just because there are already a number of very large, very successful, and very well known environmental nonprofits out there, like the Natural Resources Defense Council (NRDC) and Environmental Defense (ED), doesn’t indicate that smaller environmental nonprofits don’t have a place. What it does indicate, though, is that when you are looking for environmental grants on the Foundation Directory you are going to see very long lists of grants awarded to NRDC and ED and substantially less grants awarded to smaller nonprofits that you may have never heard of before. What should a small, start-up nonprofit take away from this picture? Large, successful nonprofits are well-oiled fundraising machines that know what they are doing, have large fundraising budgets, and have built strong relationships with their funders over many years.

What does this mean: Competition for funding will be a serious issue for a teeny, tiny nonprofit and having a strong understanding of nonprofit fund development and philanthropy (or building up a team with fundraising experience) should definitely be a part of your “business plan.”

ENTREPRENEURSHIP & THE “AMERICAN DREAM”: Maybe my main issue with discouraging small nonprofits, is that entrepreneurship is heralded as the key to economic vitality and sustainability. The Ewing Marion Kauffman Foundation; has front-and-center on their homepage: “Searching for a way out of the current economic crisis? Entrepreneurs have led the U.S. out of every recession of the last 100 years.”

In addition, the Bureau of Labor Statistics provides the following interesting statistics on the impact of small firms in the United States:

Small firms:
• Represent 99.7 percent of all employer firms.
• Employ about half of all private sector employees.
• Pay nearly 45 percent of total U.S. private payroll.
• Have generated 60 to 80 percent of net new jobs annually
over the last decade.
• Create more than half of nonfarm private gross domestic
product (GDP).
• Hire 40 percent of high tech workers (such as scientists,
engineers, and computer workers).
• Are 52 percent home-based and 2 percent franchises.
• Made up 97.3 percent of all identified exporters and produced
28.9 percent of the known export value in FY 2006.

What does this mean: Lots of data supports the fact that small and micro businesses play a huge role in the U.S. economy and are a real vehicle for economic development. I think it makes sense to overlay this reality with the possibility of small social ventures and teeny, tiny nonprofits providing the same sort of social and economic boost.

Small nonprofits and small social ventures have the potential for significant social as well as economic impact. Smaller nonprofits are able to have much more focused niches, work on a grassroots level, make meaningful collaborations with small corporate sponsors, engage individual donors interested in more personalized philanthropy, and more. However, in order to be successful, small nonprofits and social ventures (like successful small businesses) need to realistically assess their “business plan” and thoroughly research all aspects of the endeavor they are planning to pursue. If it isn’t a sound investment, people either will not or should not invest–either financially or in-kind. While a start-up nonprofit can rely on an army of volunteers to get its feet of the ground, is it really ethical to ask people to donate their time to an enterprise you have not thoroughly developed, researched, or planned for? I say, “Go ahead! Start a nonprofit or a social venture!” But I caution, “Do your homework. And be prepared because it is not only going to be a lot of work, but also a lot of responsibility.” It may be philanthropy, but its not free–you will be accountable to not only your donors but also your volunteers.

For some more reading on entrepreneurship, I recommend checking out this Ventureneer post: “There is Never a Bad Time to Start Up a Company.”

Exactly. The article points out that “international visitor arrivals [in Australia] were expected to fall by 4.1 percent this year.” So what did Tourism Australia do? They partnered with Aussie director Baz Luhrmann (of Moulin Rouge and Romeo + Juliet fame) for the release of his film Australia.

The country, which relies heavily on tourism, is aggressively marketing its vacation value with a campaign linked to the movie “Australia.” The film’s director, Baz Luhrmann, also produced a weighty tourism video, in which a stressed-out Manhattanite on the verge of a breakup is visited by an Aboriginal youth who magically transports her to Australia. There, in a “walkabout,” she presumably reconnects with herself and her partner.

I am fascinated by this for a couple of reasons. The first of which is that I think Baz Luhrmann is awesome–but that is besides the point. Or is it? Of course it is not besides the point. The whole reason Baz Luhrmann’s name is being thrown around in the NY Times article and on the Tourism Australia website is because his involvement in a national campaign is anything but irrelevant. He brings with him his personal brand, which involves (1) being Australian and (2) being a highly successful director of international box office hits.

The second reason I find this fascinating is how this partnership has used the brand of “Australia” as a movie title and then reconnected it back to the government’s tourism activities. An interesting and audacious marketing move, but also very clever. With a rare opportunity to showcase their country in an epic blockbuster film with A-list Aussie actors, Tourism Australia knew that they would have a large audience whose heart-strings they could pull on and have hopping onto Quantas flights and drinking Tooheys New before you could say, “Crocodile Dundee.”

Thirdly, Tourism Australia  did something new. Not so new in the sense that movies are frequently partnering with sponsors to promote products, but new in the sense they took advantage of a one-time market opportunity (the release of “Australia”), partnered with a reknowned expert who added another layer of attraction to their oroduct (Baz Luhrmann), and created a unique platform to link their message with the film (the creation of a film-like commercial).

The moral of the story is: “There’s no business like show-business. ”

Or,

“When times get tough, rely on your celebrity friends with strong–and relevant–personal brands.”