Nonprofits Do Entrepreneurship Too!
On July 10, we hosted a discussion with the Libraries Build Business (LBB) community about how libraries can better support nonprofit start-ups. What are the needs of patrons who are passionate about addressing a community problem through a nonprofit? What research, networking, and emotional intelligence skills do librarians need to support them? What free, specialized resources are available? To address these questions, we led a conversation with LBB librarians and library workers. Many had experience and stories to share. This post is a write-up of our main points and the ensuing discussion.
Entrepreneurship Isn’t Just for Tech Startups
A simple yet accurate definition of entrepreneurship is “creating an organization to solve a need.” We often assume that entrepreneurship means starting a for-profit venture, maybe even one that seeks venture capital from Wall Street or Silicon Valley, makes a splashy IPO, and creates new millionaires, regardless of its social or environmental impact.
But in reality, most for-profit start-ups receive no external funding. They’re often local, focused on specific communities or markets. Immigrants and women of color are disproportionately represented in this local entrepreneurship. (This is one reason LBB and Entrelib work hard to support entrepreneurs.)
And some start-ups are nonprofits. That’s why we define entrepreneurship using the word “organization,” not “company.” Social entrepreneurship, creating an organization to address a social, economic, or environmental problem, can take both for-profit and nonprofit forms.
One of the LBB librarians mentioned B Corporations (“B-corps”), for-profit businesses certified on social and environmental performance. TOMS Shoes is a well-known example. But nonprofits remain more closely associated with tackling local challenges.
Key Differences Between For-Profit and Nonprofit Startups
Librarians supporting entrepreneurs should understand the key distinctions between the two incorporation types:
For-Profits
- Exist to earn a profit for owners/shareholders
- Pay federal income taxes
- Accountable to owners, shareholders, and private investors
- Fewer public disclosure requirements
- Can incorporate as LLCs, partnerships, C-corps, S-corps, etc.
Nonprofits
- Must reinvest any surplus into mission-aligned activities
- Exempt from federal income taxes
- Governed by a board of directors accountable to the mission and donors
- Must meet public inspection requirements (such as filing an annual IRS 990)
- Typically incorporate as a 501(c)3 via IRS Form 1023
Little-known fact: Organizations can convert between for-profit and nonprofit status.
Do Nonprofits and For-Profits Have Different Research Needs?
At this point in the presentation, we asked what we hoped would be a provocative question: How different are the research needs of nonprofit vs. for-profit entrepreneurs? Answer: Not much.
Both must:
- Research their industry
- Understand their market
- Identify direct and indirect competitors
- Develop sustainable revenue models
- Benchmark their finances
Both types of organizations need sustainable revenue and steady cash flow. This is often a sticking point for new nonprofit founders who may be deeply committed to a cause but unfamiliar with financial realities.
Jana Bradley from Durham County Library shared that the NC Center for Nonprofits begins its startup packet with a cautionary note:
“We recommend that you seriously consider whether to create a new nonprofit organization.”
And yes, even nonprofits have competitors. It may feel awkward to use that word, but it’s critical to recognize that existing nonprofits, funders, and volunteers may already be addressing the same need.
Carlo, Diy, Program Manager at NC IDEA, added:
“One of the most important forms of research for a potential nonprofit founder is connecting with existing organizations in that space. It’s not just networking, it’s critical to understanding what unmet needs still exist.”
Support with EQ: Emotional Intelligence and Strategic Guidance
Public librarians in BLINC shared that they often encounter patrons with unrealistic assumptions. Rather than dissuade them outright, they use emotional intelligence to guide conversations and highlight challenges. The goal: help the entrepreneur make informed decisions, not give up.
Words Matter: Code-Switching for Nonprofit Conversations
Sometimes, adjusting our vocabulary is useful when working with nonprofit founders. The concepts are the same, but language may need to shift.
- “Community partners,” not competitors
- “Citizens” or “people,” not customers or markets
- But: still talk about budgets, balance sheets, and cash flow
What Are the Revenue Strategies for a Nonprofit?
We asked: What is the nonprofit’s business model? How will it fund its work? Here’s what the LBB group brainstormed:
- Grants (public or private)
- Ticketed events (talks, performances, etc.)
- Merchandise sales (shirts, coffee, art)
- Publishing (books, journals)
- Memberships (individual or institutional)
- Donations (recurring or one-time)
- Fee-for-service programs (consulting, training)
- Space rentals
Steve shared the example of Industries of the Blind, a nonprofit with a manufacturing-based business model. Its factory produces textiles for the U.S. Army, among other clients. Despite this variety, there was agreement: grants are often seen as the holy grail, frequently discussed, rarely secured.
Benchmarking with 990s: A Superpower for Nonprofit Research
One huge difference in nonprofit research: IRS 990 forms. These public documents include:
- Mission and goals
- Revenue streams and expenses
- Executive salaries
- Board members
They’re essential tools for competitive intelligence, benchmarking, and understanding gaps in a community. And they’re searchable via:
- GuideStar/Candid (free registration)
- ProPublica Nonprofit Explorer
- Charity Navigator
Where to Find Nonprofits in Data Sources
Since there’s no NAICS code for nonprofits, they can be hard to locate in business databases. But because they have physical addresses, they show up in:
- Data Axle Reference Solutions
- Mergent Intellect
- AtoZdatabases
You can search by industry and geography to find nonprofits alongside for-profits. Additionally, many counties and cities maintain nonprofit directories.
Examples from North Carolina include:
- NC Center for Nonprofits
- Guilford Nonprofit Consortium
These organizations can make great library partners.
Final Thoughts and Big Ideas
We closed our session with a few key questions:
- What are your experiences supporting nonprofits?
- What common pain points do they face?
- What are your best practices for guiding new founders?
From the discussion, here are some highlights:
- Concerns about federal budget cuts and instability in government grant programs
- Libraries provide vital infrastructure: space, Wi-Fi, expert help
- Some libraries now hire Business/Nonprofit Librarians—a great idea for outreach-focused systems
- Consider recruiting a “Nonprofit Entrepreneur in Residence”, just like campuses recruit business founders
Success Story from Pennsylvania
One LBB member shared a moving story:
“Almost ten years ago, a new nonprofit came to my grant writing class. They were all-volunteer. Now they’re one of the major nonprofits in the region for miscarriage and early child loss. It’s very rewarding to see.”
About the Authors
Khamry Varfley (kovarfley@gmail.com; LinkedIn) is Curator and Program Manager of Gather RI, a nonprofit that creates “collective momentum through inclusive and intentional connections for and by women and gender-expansive people.” Previously, she was Entrepreneur Specialist at Community Libraries of Providence.
Steve Cramer (smcramer@uncg.edu; LinkedIn) is the Business & Entrepreneurship Librarian at UNC Greensboro, a minority-serving, first-generation campus where community-centered social entrepreneurship is popular. He also liaises with the university’s Nonprofit Management program.
Khamry and Steve are co-directors of the upcoming Entrelib International 2025 conference (free and online), where they first connected.
Tags: LibrariesBuildBusiness, libraryinnovation, nonprofitstartup, publiclibraries, socialentrepreneurship
