You can never have enough money but...
You do not need much money (or any money really) to start a goods sharehouse. The primary thing is information and email contacts. Your dedication and interest will determine how much space you need. The Wish Project started out with one mom a cell phone and a minivan. Bulk donations went into the one car garage for sorting. Then we rented a 10' x 20' mini storage unit for about $100/month.
But the lack of bathrooms and heat drove us to rent a better space after a few months of New England Cold. After 2 years of working out of a garage, we spent another year moving 4 times into larger and larger spaces and now rent a large warehouse space. The primary thing that drove this rapid growth was the need for furniture. If you want to be a furniture bank you will need 10,000 sq ft pretty quickly. We could easily run all of our other operations out of about 3,000 sq ft even now and we help more than 90 agencies and more than 10,000 clients per year.
Even if you work out of a small church basement you will find as we did that some items, like diapers, are just never available in large enough quantities and are a necessity in some situations. So some pocket money for these emergencies is necessary.
And there are some costs just to operate even if you do not rent space or pay salaries. YOU WILL NEED A BUDGET AND TO KEEP TRACK OF ALL EXPENSES IN A NOTEBOOK OR EXCEL.
POSSIBLE EXPENSES FOR A STARTUP:
- Website hosting etc. Try your local university. Most can help you design a site and will host it for free. But if you like to tweek things constantly like we do, you will want control. Figure about $150 per year plus another $20 to secure a URL (your website address).
- Plastic bags and markers (and labels and signs....) See if you cannot find a local hardware store to sponsor you for the bags. They are expensive.
- Printing costs - You can have a digital logo and just use your home PC to print out thank you letters and pleas for donated goods. But you will need to make copies of flyers etc. And print cartidges for your computer are about $25 each.
- * To start your 5013c (see that page for complete details)
- Fees about $550
- Insurance for rental space and board of directors (varies based on how big of a board and how big a rental space) about $1,500
- Pay an auditor at the end of the year to prepare your 990 and other forms (try to get this donated). Estimated market price $750 for year one. Then it goes up to about $3,000 in our area for a full audit once your income passes $100,000. Remember, goods count as income.
- Utilities - gas is working from car, cell phone, home phone, Internet service and possibly heat etc if renting a space.
* The Wish Project operated for several years without a 501c3 non-profit status because we had no budget and did no fundraising. We worked under the City of Lowell's Hunger/Homeless Commission. If your city does not have a similar organization, consider starting out of your place of worship or other existing non-profit entity.
WANT TO GO IT ALONE? GOOD FOR YOU! Do not dispare is you want to really go it alone. People want to donate their unwanted goods and will give them to you even if you are not a non profit. The tax free status only becomes important when you need operating funds for rent, salaries etc. And of course you can not do any fundraising without being under a legal organization.
THINGS YOU SHOULD NOT PAY FOR:
- ADVERTISING - call your local paper and get them to do a story on your good works.
- GOODS ALREADY DONATED - this is just a personal pet peeve of ours. If a company already donated it to a charity to give away, we should not have to pay again for the honor of handing it to the needy. Not all non-profit agencies agree. Avoid paying for these already donated goods. In the end we find they are not a good investment. You will build your own donor connections eventually.
- TRUCKS - this is tricky and still a big hurdle for us. We still do not have a truck and we need one but until we can afford to support one, we do not have one. Don't forget trucks need insurance, gas, paid drivers (or you need a good chiropractor). We have been very lucky to have trucking, moving, landscaping companies and even the food pantries - that will help us to move big quantities of goods.
- RENT - IF YOUR STATE ALLOWS RENT TO BE A TAX WRITEOFF. In MA this is not the case. Our landlord gets no break so we pay rent. But we do get a good deal on a space that woudl be hard to rent to company.