In the past five years, the need for nonprofit services has exploded. While for-profit businesses struggled with decreased revenues and downsizing during the Great Recession, the nonprofit sector continued to grow, and actually thrived during this period.
With the growing importance of this sector today, I wanted to point out several strategies to take your nonprofit from “good to great” based on my 30 years of experience working with for-profit and nonprofit organizations:
Success Strategies for Nonprofits
Keep Focused on the Mission – Nonprofit leaders and executives need to have clarity of purpose and resist the influence of external and internal stakeholders who can sometimes lead to “mission creep.” For example, funders could exert pressure to go beyond the nonprofit’s stated purpose. This could lead to the organization’s resources becoming overwhelmed and utilized away from its core purpose.
Steadfast Fundraising is a Must – Unfortunately, with federal, state and local budgets being cut, funding to nonprofits over the last several years has been cut as well. As a result, nonprofits must maintain a greater effort at fund raising in order to maintain a level of service clients and customers expect. Relationships from board members down through management to the front line employees should be leveraged to help raise funds. A clear cut plan for raising funds should be developed and implemented, with “plan B options” if goals are not met.
Start with a Diverse Board – Pick board members who have the expertise and experience to guide the organization’s strategy, listen to updates, and are able to make and act on critical decisions. A board’s composition and professional backgrounds should be diverse and emanate from for-profit and nonprofit sectors as well as from various industries. By having a board with a “360-degree” perspective, board members can bring differing and creative perspectives. This also provides balance which is helpful to guiding strategy and decision-making.
Next Focus on Employee Development & Retention—Just as for-profit firms, executive and leaders of nonprofits need to focus on staff development and growth. Ask staff what they want to learn, and keep them informed about what’s going on and where the organization is heading. Employees of nonprofit firms likely realize that salary levels are not going to be the same as at for-profit firms. However, nonprofit firms such as the Alzheimer’s Association and American Diabetes Association have tried to remain competitive and retain employees by providing better benefit packages and retirement plans as well as increased vacation time.
Measure Outcomes – They say “results speak for themselves,” and this is definitely the case at nonprofits as they are at for-profit forms. Nonprofits need to decide on performance metrics to be examined over a time period to determine the effectiveness of their performance in meeting their mission. Since their ultimate goal is not to earn a net profit, nonprofits actually have to better analyze how to measure their results and success. For instance, is money spent on a particular program achieving our goals or should we reinvest in fundraising? Whatever the answer, clear measurement of outcomes allows nonprofits to zoom in on a strategy that works.
Keep Financial Reporting & Accountability Transparent – Nonprofits are facing tougher and tougher reporting requirements and are expected to have virtually transparent organizations so as to satisfy government authorities and private funders. Nonprofits need to create a financial infrastructure that demonstrates what is occurring in every aspect of their operations, in a way that is timely and which provides great clarity. Transparency of financial reporting, streamlined auditing processes and financial software that can support on-the-spot audits are key requirements.
Plan for Succession – Many nonprofits have started from impressive and visionary founders, who served as dynamic leaders and growth catalysts of the firm. Oftentimes, these leaders don’t realize that they must plan for their own mortality in order that the firm lives on and is not fraught with transitional challenges. These challenges could impair or lead to the nonprofit’s ultimately demise. Leaders should plan for replacement leaders and outline succession plans for a smooth transition.
With the nonprofit sector representing the third-largest workforce in the United States, behind retail and manufacturing, competition among nonprofit firms is growing. Keeping your nonprofit firm working effectively and efficiently is more critical than ever in order to maintain your employees and your share of public and private funding. By focusing on becoming “great,” you can help ensure your nonprofit’s mission is achieved and its longevity.
Don’t hold back. Be Great!
Author Terry Trayvick is the CEO and Founder of Level Five LLC. Level Five is committed to bringing clients the best approaches to business management across all disciplines – from strategy to execution – for the expressed purpose of driving breakthrough results. The company’s mission is to partner with clients to supplement their industry experience and knowledge with world class management systems to help deliver the results deserved. Simply stated, the company brings world class management to world class ideas