Is Your Nonprofit Moving in the Wrong Direction? 5 Signs to Watch For
We all recognize the signs of a healthy nonprofit organization: meeting or exceeding strategic goals, a strong leadership base, growing financial resources, a solid infrastructure and excellence in program delivery to support the mission and those served. These are organizations with engaged volunteers and stakeholders, all committed to the sustainability of the nonprofit.
So, it goes to reason that we should be able to recognize an organization that is moving in the wrong direction. Sometimes these signals even point to an organization headed toward extinction. When organizations become too comfortable, too set in their ways, or when they begin to settle for less than they could achieve, they begin to ignore the red flares that may indicate their organization is on the decline.
Here are the 5 signs that may indicate that your nonprofit is moving in the wrong direction:
Strategic planning is nonexistent, or the plan was developed by the “board president” or executive director with little or no input from key members of the organization. It is the strength of the strategic planning process, as much or even more than the plan itself, that leads to healthy organizations. The plan (and its implementation) should reflect a shared vision for the direction of the organization that is built from input from all stakeholders. An effective plan cannot be developed in a vacuum but should instead allow perspectives from all reaches (and levels!) of the organization.
The board is weakening. There is no strategy for building a leadership pipeline and as a result the organization is recycling board members. The board members themselves are not committed to finding and recruiting new leadership. Volunteer leaders are burned out, tired, and distracted. Board obligations are ignored, and no one is holding anyone accountable for their primary responsibilities. Strong organizations rely on strong, fresh, and sustainable leadership. The pipeline must always remain full of promising prospective leadership candidates.
Lack of ownership over revenue. The organization is so disassociated from fundraising that they almost believe funds arrive like “manna from heaven.” Even with board education and numerous opportunities (if not pleas), they would rather allow fundraising goals to lapse than to take an active role in achieving goals. Even simple requests for names and contact information for potential donors, or for making appropriate introductions to staff members so that they can move forward with solicitations, are too much to ask. But the board is responsible for the financial health of the nonprofit. Each board member needs to find a role in fundraising that works for them.
The board no longer seeks counsel. Staff and consultant expertise is often ignored - if it is even solicited - when making key decisions and shaping strategic direction. The contributions from the staff can be taken for granted, and the skills and experience they bring to the organization are not used to their fullest. When things begin to decline, which they eventually do, the responsibility will fall squarely on the staff. The staff will often be the first to recognize the signs that an organization is moving in the wrong direction. Volunteer leadership should ask those questions on a regular basis and take the feedback they receive into consideration.
The budget is upside down. Projections are made based only on prior performance versus the financial resources the organization needs to meet its mission. Leadership becomes more interested in counting pennies than investing in the growth of the organization. Volunteers want line by line detail on budget reports. No one is even considering growth factors in the budgeting process. Changing the mindset to reaching goals versus building a program with “what you believe you can raise” can often mean the difference between a healthy, growing organization and one that is on the road to demise.
So how does an organization avoid or escape these traps?
Strategic planning is always a good place to start. An honest and open discussion with key stakeholders about what is working and what is not, coupled with a review of vision and mission, often provides feedback that the board needs to hear. Utilize a strategic planning consultant with strong facilitation skills, someone who will ask the hard questions and make sure the board takes the time needed to answer them.
The plan needs to be comprehensive and articulate clear goals, objectives and expectations. This will enable the staff to set, and achieve, measurable deliverables. The process will no doubt lead to a review of resources available to advance the organization, including leadership, funding, and operational support/staffing.
A new plan with new goals and direction may require a different type of board member. Remember: the board exists to lead and support the growth of the organization, not vice versa. Nonprofits require different levels of skill, expertise and resources in their leadership as the organization grows and develops. Board position descriptions will need to change to reflect the needs of the organization under a new strategic plan.
A strategic planning process will also address the funds needed to effectively operate the organization and how these funds are to be raised. Once the board confirms the organization’s mission and vision, a next step would be a discussion of how to secure the funding needed to reach that vision. The funding plan will impact your board development, how you recruit and build out staff, infrastructure, and more. A robust plan will require a rethinking, and likely a reallocation, of funding sources and the means through which to acquire them.
Plan to revisit your strategic plan annually to review, assess, and adjust as needed. By staying aligned to your vision, and to the strategies and actions designed to move you toward it, your board and staff will stay focused and energized, and your nonprofit will remain healthy.
Find out how The More Than Giving Company can help your organization head in the right direction. Schedule a call today.