People May Need Your Nonprofit--And Still Not Show Up

If you’re a committed Difference-Maker, you may be ready to start a charitable nonprofit. You probably have a file on your computer with pages of information you found on the Internet.

Let me invite you to change gears for just a moment, though, and consider an important reason for NOT starting a nonprofit. Not yet, at least.

The Myth of “Needs"

"If I open a nonprofit to serve people in need, they’ll come.”

That sounds reasonable, but human behavior isn’t that simple. Human need doesn’t always translate directly into “market demand,” which can make or break your nonprofit.

Market demand is a business concept that sheds light on human behavior. Here’s an illustration:

A store in a modest-income neighborhood offers two pairs of women’s shoes, one for $60, the other for $500. The $60 pair sells out four times a year, while the $500 pair rarely sells. Each month, dozens of women try on the $500 shoes and love them, but they don’t buy. So there is want, but almost no market demand.

This same dynamic shows up in the nonprofit world more often than people expect.

Market Demand and Nonprofits

People may need your nonprofit’s programs and services and still not take advantage of them. The assumption that need automatically creates participation is a common startup mistake—one I see often. The reasons people stay away vary and may not be obvious. So if you want to avoid the risky “build it and they will come” approach to startup, a bit of research is in order.

Here is a real-life example from my professional experience to illustrate the importance of research before startup:

A Brand New Community

A community development nonprofit targeted a troubled community for redevelopment. The goal was to buy up all the dilapidated houses in the neighborhood, clean up the area, and build modest new homes for sale. Their target market consisted of families with low incomes who lived in the neighborhood in substandard housing or barely-decent housing that strained their resources.

The new development opened with great fanfare, but after a few months, the sparkling new houses sat unoccupied. The nonprofit’s executive director and the staff were baffled. They had expected a rush of buyers. The new development offered residents the chance to own beautiful new homes at affordable prices and begin building generational wealth.

So where were all the buyers?

Instead of giving up, the staff canvassed the neighborhood to ask residents about their interest in the new homes. They learned that these families had school-aged children who attended a safe and highly-rated school. The new homes were situated just outside that school’s boundary, so if the families bought the new homes, their children would have to switch to a school with a poor reputation.

The families wanted decent, affordable homes. And they valued their children’s future. Unfortunately for the nonprofit, the families believed a good education in a safe, high-quality school was a better investment in their children’s future than a beautiful new house.

The Takeaway

So what does this mean? If you haven’t confirmed that your nonprofit will offer programs and services that your target population needs, wants, and is willing to access, consider waiting to start it.

Talk to people like those you hope to serve and service providers who work with them. Gather both real-life and statistical information, and use them to decide whether to launch a nonprofit. If the answer is yes, that reality check can help position the nonprofit to succeed in the real world.