Aaron Ross explores why entrepreneurs choose nonprofits, identifying two hidden fears: looking greedy by charging, and ego bruising from selling. He argues nonprofits are actually harder because fundraising drains more energy than selling a product. Test your idea for six months to a year before deciding on a legal structure.
Hey, it's Aaron Ross again. Now I want to share one more thought on nonprofits and why you might want to do a nonprofit or why people do nonprofits. So something I've seen in myself and others is you might have an idea that you love, you're so passionate, you just want to be out there for people to have it for free. It should be a nonprofit.
Why? Well, what I've seen is that normally It's because you have these hidden fears around, "Well, if I turn it into a business—" You may not even see these, but they're unconscious.
"If I'm trying to make money from helping people, what are people gonna think? They might think I'm bad. That's not right." Or there's another hidden fear around, very common, "If I charge money for something, it's another way people can judge me.".
But if I do it for free, that'll be—
it's easier on your self-confidence, on your— people, it's easier. You don't feel like you're gonna be rejected because it's free.
So it's an easier way on your ego, I guess, to do it if it's free. Because if I try to sell something, they may not like me, they may reject me. So if you are thinking about a nonprofit, I would say really question, you know, why— what are the reasons why you want to do it as a nonprofit. Are they reasons that are authentic or are they based in fear?
Have you really thought about it? And my advice too would be, why do you need to decide right now if it's for-profit or nonprofit?
Why don't you build something first?
Do it for 6 months or a year and then decide after you've built something that's working.
You don't need to decide right away.
Have some fun with it.
Get some people involved. See what they think.
Play with it. Doing a nonprofit actually is, to me, harder than doing a for-profit.
Harder on yourself and your energy, and just harder. It's a business.
Raising money is a lot harder than selling something.
Anyway, you have permission to take something you love so much and to turn it into a business. In fact, my prediction is you'll make a bigger impact in your own life and others if you start there. But ultimately, really ask yourself what are the real reasons, if you're really being honest with yourself, why you want to be a nonprofit.
