Is Your Nonprofit Healthy? Are You Sure?
According to the National Center on Charitable Statistics, approximately 30% of nonprofits fail to exist after ten years. In other words, almost a third of nonprofits aren’t healthy and will never manage to reach a sustainable level.
So, how do you, as a nonprofit board member, know if your organization is one of the healthy ones?
The first step is to understand the things highly functioning, successful nonprofits have in common. Continue reading this blog for my overview of these critical must-haves.
The second step is assessing whether your nonprofit is doing everything necessary to excel in these areas. This free assessment tool can help. A series of questions, most requiring only “yes” or “no” answers, will quickly identify threats and gaps.
The third step is action! From the link to the assessment tool above, you’ll have the opportunity to schedule a 60-minute complimentary call with me to review your assessment results and discuss strategies to address them.
Healthy nonprofits have a plan.
In addition to a well-defined mission (that everyone associated with their organization can effectively communicate!), and a clear and concise case why donors should support them, healthy nonprofits have a plan.
A strategic plan streamlines decision-making and provides high-performing nonprofits with a road map for reaching goals and, ultimately, realizing their organization’s vision.
Healthy nonprofits assemble the right team.
It’s all about the people! In my experience, organizations with strong leaders, engaged volunteers and sufficient, skilled support staff are the ones that meet, and often exceed, their goals.
It probably comes as no surprise that strong, sustainable leadership is a vital component of any nonprofit’s success. While the board members of most nonprofits are there for the right reasons, healthy nonprofits make sure that their board members meet an even higher standard: they must be fully engaged and accountable. The right board composition is also a critical factor. Top-performing boards have assembled the mix of skills and expertise necessary to advance their particular organizations. Finally, healthy nonprofits have a succession plan in place for their leaders.
An engaged volunteer base is also invaluable and provides a pipeline for nonprofit leadership roles. Healthy nonprofits are effective at leveraging their volunteer force, from recruiting and training them, to deploying them, to evaluating their potential for larger roles.
The most successful nonprofits also secure quality professional support. Even before 2021’s “Big Quit” put an exclamation point on it, they recognized that the notion nonprofit staff should work for pennies is an outdated, unproductive one. Relying heavily on the idea that funding staff is anti-mission, or an unnecessary use of donated funds, constrains an organization's growth and its ability to reach a sustainable level.
Once the right people are in place, clearly defined job descriptions ensure leadership, board members, staff, and volunteers are informed and accountable.
Healthy nonprofits operate a lot like successful businesses.
Healthy nonprofits recognize that they need to maintain high operational standards and develop a sustainable and predictable pipeline of funding.
Regardless of how compelling your mission is, if you are out of money, you are out of business.
A healthy nonprofit can comfortably forecast how much revenue they expect over the next 12 months, and they update their revenue pipelines at least quarterly. Additionally, top-performing organizations effectively leverage a diversified mix of nonprofit revenue domains -- individuals, corporations, foundations, event fees, investment income, etc.
Another foundational piece of strong and consistent performance is maintaining high operational standards. This means accurate and well-organized recordkeeping, as well as adherence to nonprofit best practices for certifications, insurance, accounting, taxes, and audits.
Healthy nonprofits are sustainable.
We in the nonprofit sector use the word “sustainability” all the time, but what do we mean, exactly? For charitable nonprofits, sustainability is commonly used to describe an organization that can sustain itself over the long term, perpetuating its ability to fulfill its mission. It includes the concepts of financial sustainability, as well as leadership succession planning, adaptability, and strategic planning. In brief, sustainable organizations have eliminated living “hand-to-mouth” and have ensured they will be here 3 years, 5 years, and 25 years from now.
Healthy nonprofits regularly take a hard look at their strengths and weaknesses.
The leaders of the healthiest nonprofits don’t assume they have every base covered and they recognize that growth and success will create brand new challenges. So will factors beyond their control, like the economy and job market. What they have in common is the courage to address the areas in which they feel least comfortable, and a willingness to seek out help and counsel when they need it. They recognize that their organization’s continued health depends upon it.
Vicki Burkhart is the founder and CEO of the More Than Giving Company. She has 30+ years of experience in the nonprofit arena as an Executive Director, nonprofit executive and consultant.