5 Key Steps To Building A Successful Nonprofit



8 Key Characteristics of Successful Nonprofits

By Bernadette A. Moyer

  1. The bottom line: plan on grants and donations to almost entirely sustain your efforts for at least the first couple of years, as you experiment with building your revenue stream. Here is a five-step process for developing a viable earned-income strategy I highly recommend: Reaffirm your organization’s mission. Brainstorm your options.
  2. Step 7: Impact Plan. For a nonprofit, an impact plan is as important as the financial plan. A nonprofit seeks to create social change and social return on investment, not just a financial return on investment. Your impact plan should be precise about how your nonprofit will achieve the “Step 2: Heart of the Matter”.

What does it take to run a successful nonprofit organization? For more than 15 years I have been in nonprofit management and administration. I have witnessed highly successful organizations and others that were constantly struggling.

Times change and often so does support, how do you stay relevant when the financial purse strings tighten?

5 Key Steps to Building a Successful Nonprofit Meghan Kirby-McFarland. Meghan sits on the board for Copper’s Dream and is a content strategist at LinkedIn. Since the start of Copper’s Dream 5+ years ago, our team of dedicated volunteers have saved over 2,000 dogs. Given how 2020 has played out, you might wonder if it’s even worth the effort. But successful nonprofit organizations understand the value in planning for the future and directing its people, time, and resources toward accomplishing those plans. Goals are what show you the important steps to take to reach that envisioned future.

How important is the leadership both on staff and within a board of trustees? Who is in charge? And what roles do they play?

1. Qualified Staff Members

The key to any successful organization is its people. What is the composition of the staff? Does the leadership have an aligned staff and an aligned board of trustees; is everyone on the same page and working toward the same goals?

In my career it seemed that organizations with executives that had both a supportive staff (inside) and supportive board members (outside) were the ones that met their goals and often exceeded their goals while achieving success.

An organizational handbook and clearly defined job descriptions are paramount to assuring that staff members are informed. An organizational flow chair is imperative.

The more skilled the staff is the greater likelihood for achieving success. Is there unison and is everyone working in alignment and within budget will all determine the future strength of the organization.

Retaining staff is just good business sense. It takes time and money to train people to work together and to learn their job and to work as a team. Staff turnover is expensive and generally costs more than just dollars. It may decrease productivity and inhibit the ability to maintain and meet goals.

2. Cash is King

A nonprofit is no different than any business, regardless of how good your mission is, if you are out of money you are out of business.

Are there multiple revenue streams? Is the fund raising a priority? Is the work being done marketed properly and aligned with grantors requirements? Is the product(s) aligned with the demand?

Do all the members understand the difference between a “party” and a “fund raising” event?

Is the foundation reinvesting in itself? Is the equipment and are the systems up to date? Does the physical plant represent the mission well?

The most successful non-profits are aligned for success by reinvesting in their own products, their plant location, their people and their systems. Is education a priority? Staying ahead of the curve, anticipating needs and filling those needs require leadership. There is a big difference between maintenance and advancing the mission.

Budgets that have no real growth and development year after year are in “maintenance mode” and after a period of years maintaining that same budget is in essence losing money. All costs go up when salaries go up, products and services go up and a budget that is “flat lined” is one that is on the decline.

“It’s the economy” is one of the most overused statements and excuses because someone is always succeeding and growing and making money. Typically they are the organizations that are forward thinking rather than in “maintenance mode.”

Build it and they will come! Fill a need and make a difference in the community and add sales and marketing skills and the cash will flow again.

3. A Good Board of Trustees

A good board of trustees is one that is diverse in skill set, has a desire to help the organization move forward is willing to share their business knowledge and financial support. It is no secret that today’s grantors are looking closely at the composition of the board. They want to see a variety of types of professionals represented and they want to see that board members are 100% invested in the annual board drive. Simply put is the board putting their own money into the organization and are they personally invested.

Example: If you are running a capital campaign do you have contractors, lawyers, business people, financial experts and fundraisers on your board? Having the right people is often the difference between meeting your goals and succeeding or coming up short and failing.

A good board knows how to work together as a team, they come together for the common good and they support the board president as well as the executive director. With the right people in place trust is easily established and mutual respect is achieved.

Most board members are in it for the right reasons; they want to make a difference and to be a part of something that is bigger than them. The articles of incorporation will address the type of board that the organization is whether it is an advisory board or a governing board. Board members should be willing to participate in both orientation and training.

Board members are often recruited for their specific skill set and for their sphere of influence as well as their ability to financially support the organization.

4. A Clear Concise Mission Statement

Everyone associated with the organization should be in a position to clearly communicate the mission of the organization. Who do they serve and why? Who is the target market audience and what sets your organization above others? What makes you unique and/or different?

Often going back to the founder’s intent helps to define the mission and create a clear concise mission statement.

5. Filling a Need

Is the organization doing good work and are they filling a need? Today just about all the buzz surrounding nonprofit work leads back to health and wellness and education. And no matter what the core mission of the organization there is usually a way to tie it back to wellness and education.

Health and wellness and education are never going to become dated and go out of style, they will always be relevant in any community.

Why should your organization be supported? Most thriving relationships are built upon win-win relationships. How do you align your organization with helping to serve the community and at the same time succeed and grow?

Who is your identified target market audience?

6. Public Relations and Sales & Marketing

Is the community aware of your products and services and do they feel welcome to become involved with you? Getting the word out has never been easier with so many social media sites and avenues. The challenge may be in the presentation of the materials. What makes your organization stand out? What niche market are you promoting that needs to be sold and properly marketed?

Business

A good story and doing good work sells itself! If you have a community paper and your organization is doing good work that paper will want to share your news. Making pitches and constantly keeping reporters and key community members abreast of your activities will assist greatly with your public relations campaign.

Not everyone sees everything or hears it the first time. Be willing to promote your message and your story over and over again. Most people don’t hear it or take it all in the first time. Beat the drum! Share your successes and your challenges.

A nonprofit that is filling a need and doing good works is an easy sell.

7. A Strong Supportive Volunteer Base

Recruit volunteers and train them and treat them well. A good volunteer is invaluable to most organizations. Build a diverse volunteer base. Young high school students and college aged students are looking for real life work related experience. Build a program for interns that support young people and the community and watch your organization refresh itself.

Retired community members have the time and the talents to share and are looking for a sense of community and belonging. They bring wisdom and support to the organization.

Having a variety of volunteers with different skill sets and abilities can help fill a void. Value your volunteers and they will value the work that they do and the organization that they serve.

8. Adjust and Adapt

5 Key Steps To Building A Successful Nonprofit

Strategic planning is great and having outside professionals come in and assess your organizations gives you new eyes/insight and a chance to help you grow again. Be willing to adjust and adapt. If a program or event is no longer working or relevant, discard it. Creating something new creates new buzz and new excitement.

If your staff is tired and worn out make every attempt to bring them back to life or look at replacing them. Sometimes an organization will hang on to a staff member or a board member because they believe that the organization will fall apart without them. This is seldom if ever the case.

Not long ago I witnessed a board that was so tied to a particular staff member, this person had the board completely “hood winked” they really believed that she walked on water. Yet the people on the inside of the organization, the ones that actually worked with her, saw it completely differently.

Without going in the details this person is now a convicted felon. She stole more than $160,000 by writing checks and taking cash that was not hers to take, she stole from the nonprofit that she pledged to work for and no one on the board or the hired auditing firm caught on until the damage was done.

Sometimes what appears to be a setback is often just an opportunity to adjust and adapt and set the stage for new growth and development.

In 2008 when many businesses, charities and nonprofits were feeling the financial crisis hit and taking a loss, I witnessed one nonprofit that grew substantially.

How did they do it? They grew their mission and their target market audience. They grew from being a special needs school and added new programs that included addressing the needs of kids with autism. They had boy’s group homes and added a girl’s home. They expanded their grant writing and their special events fundraisers to meet more programs and fill more needs.

In essence, they became more and more relevant in the community by serving more and more people and their needs from the community. They had a leader with a vision and he was surrounded by a well-trained and an educated staff and by a board of trustees that not only believed in him but supported him. They all worked together in alignment and all worked toward the same goals and together they achieved them.

In every economy and at any time, somebody is always growing and doing good works; be willing to adjust and adapt and that “somebody” just may be your organization!

Bernadette on Facebook at www.facebook.com/bernadetteamoyer

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I doubt there is a single definition of success for nonprofit collaborations, but here’s my take: a collaboration is successful if the parties are eager to work together again. In contrast, if the parties are running away from each other, vowing never to collaborate again, something’s gone wrong. Here are 5 tips for success, plus a kicker at the end of this post for nonprofits committed to success with collaborations.

Tip #1: Beware the “scarcity mindset”

I love this: “Do what you do best and partner for the rest.” This quip acknowledges that there are limits to what we can accomplish on our own, and it also captures the positive, expansive outlook essential for a successful collaboration. Many nonprofits are jaded by negative experiences with past collaborations so it may seem naive to stress the benefits of a positive outlook. However, consider that each nonprofit has its own unique “sphere of influence.” Any nonprofit, no matter how successful, can only communicate with, and therefore influence, a finite number of people. But when that same nonprofit collaborates with another entity, their two spheres of influence combined can expand their ability to advance their shared goals and their individual missions. (This theory is consistent with a collective impact or a networked approach to problem solving.) So while collaborations definitely require time, energy, and tons of effort (and usually also exact a financial cost), the upside of collaboration can be enormously positive for moving an agenda forward, mobilizing stakeholders, or simply increasing a nonprofit’s ability to influence a greater number of people.

What’s the takeaway? Mindset matters. Think positive to unleash potential success. In the book Forces for Good, the authors observe that high-impact organizations are those that embrace a collaborative mindset:

We had assumed that there was something inherent in these organizations that helped them have great impact – and that their success was directly tied to their growth or management approach. Instead, we learned that becoming a high-impact nonprofit is not just about building a great organization and then expanding it to reach more people. Rather, high-impact nonprofits work with and through organizations and individuals outside themselves to create more impact than they ever could have achieved alone.

A scarcity mindset will put limits on all the potential upsides. Instead, look for abundance through a collaborative mindset: celebrate the skills, resources, and contacts that your collaborative partner(s) shares with you. If you are able to intentionally hold scarcity thoughts at bay, and replace them with a more positive outlook, you will energize the collaboration and release creativity and innovation. More on that below! Nonprofit leaders play important roles, especially when the collaborative partner is a grantmaker. As the excellent piece, Building Collaboration from the Inside Out(GEO), points out, when staff and board leadership visibly demonstrate commitment to a collaborative mindset, there is a greater likelihood of success. Just like any other cultural norm, collaboration needs support from the top.

Once your mindset is positive, you’re ready to take on other challenges in “forming, storming, norming, and performing” a collaboration!

Tip #2: Work with your partners to define success and articulate shared goals.

Each partner in a collaboration should be able to answer, “What role are we playing in this collective effort?” As any sports team coach knows, “keeping your eye on the ball” is key. At the outset of a collaboration it’s very useful to take the time to jointly work out and write down “what success will look like.” The process of identifying shared goals should also include exploring all the things that may go wrong. Looking at those potential derailments in the eye, in advance, will help the parties put strategies in motion to avoid them, and jointly developing a shared vision will motivate everyone to keep moving forward together despite the challenges.

Peter Kramer, Associate Director with the Nonprofit Finance Fund, notes that clarifying goals keeps collaborations from stalling. In his article, What it takes to succeed in a nonprofit collaboration, (Chronicle of Philanthropy) he wrote:

The simple question, “What are we trying to achieve together and why?” can lead to candid conversations among partners and help prevent roadblocks. The motivations and goals of the partners don’t have to be identical, but articulating them clearly fosters transparency and helps manage expectations throughout the process.

We have found that the simple process of writing down shared goals and defining who’s doing what, will manage expectations about the parties’ responsibilities, which reduces surprises mid-project. When the National Council of Nonprofits engages in a significant collaboration our practice is to jointly prepare a letter-agreement that defines shared goals and spells out who’s responsible for what (and when collaborating with a for-profit entity, to avoid any concern about private benefit, we believe it’s extremely important to document that the collaboration’s goals will advance our own organization’s charitable mission.)

Tip #3: Be honest.

If “relationships are the currency of trust” then certainly trust is the currency of collaborations. Let’s face it: It’s hard for many nonprofit leaders to cede control and share power, which has to happen collaborations. Nonprofits have to trust their partners in order to share both power and responsibilities. Earning trust happens along the way, but you can look for and intentionally create opportunities to talk about trust issues and call out friction points with your collaborative partners. Some examples include discussing ways in which intellectual honesty and lack of resources could play out in the collaboration, or exploring what the norms will be for the parties to share credit, control, and be open to criticism. Nonprofits that already have cultures of accountability and transparency will be comfortable with conversations about trust but their partners may not, so be patient, and keep communicating.

Tip #4: Embrace mistakes, take risks.

One of the country’s leading scientific experts on creativity, Dr. R. Keith Sawyer, studied collaboration in the context of jazz performances. According to Sawyer, innovation is stimulated through a trial-by-error, improvised process, “with … multiple dead ends, and the reinterpretation of previous ideas.” One of the potential frustrations in collaborations can be the apparent need to repeat a variation on something that had not worked previously for one of the partners. Instead of being frustrated by what seems to be a waste of time, review lessons learned together. You may find that a slight spin on what was tried before will result in progress. It also may be tempting to take fewer risks because of the embarrassment factor of failing in front of peers. However, when a collaboration offers a supportive environment of learning and striving together, that may actually be the RIGHT time to take a risk.

Tip #5: Expect, and accept conflict, gracefully.

Assume that there will be conflict at some point in a collaboration. If you accept this, you will be more prepared when something blows up (inevitably it will!), but it will be easier to focus on the “big picture” instead of the slight or oversight, dropped ball, or worse. The key is to discern whether the collaboration’s goal is still within reach, and if so move as smoothly as possible beyond the conflict. Acknowledge the conflict, but focus on keeping the project moving forward together to reach the endgame: “We didn’t get this last bit right, but what can we do now to make sure it doesn’t happen again, and keep moving forward together?” If you ignore tensions or outright conflict, you’ll miss important signals that otherwise can lead to improvements and better solutions. Conflicts managed well can offer the necessary friction that polishes the final product.

Finally, don’t forget your manners. Expressing your ‘thanks’ when the collaboration is over is important!

Beyond Tips

5 Key Steps To Building A Successful Nonprofit Non-profit

A common lament among nonprofits is that grantmakers frequently encourage nonprofits to collaborate but don’t recognize the costs - and therefore don’t provide funding to nonprofits that they are simultaneously urging to collaborate. Nonprofits have a role to play in correcting this damaging dynamic. We need to self-advocate (which means speaking truth to power) about what it really costs to deliver what a grantmaker is asking us to do. As GEO points out, “When funders provide steady core funding to organizations participating in aligned work, it can give organizations what they need to support staff and leaders in developing capacities for collaboration, reduce competition among collaborative members for project dollars and ease the process of trust building. Grantmakers also should remember that achieving real results from collaborative efforts can take time.” (excerpt from What capacities do nonprofits need in order to collaborate?)

5 Key Steps To Building A Successful Nonprofit Organizations

The National Council of Nonprofits’ materials on #ownyourowncosts, and misunderstanding overhead may be useful for nonprofits to help frame discussions with donors/grantmakers. Additionally, to help nonprofits make the case that there are indeed hard dollar costs to collaboration, here’s a short list to use as a springboard for discussions with funders: Consider and define what will it cost your nonprofit to:

5 Key Steps To Building A Successful Nonprofit Business

  • Spend time defining and articulating joint goals?
  • Spend time meeting with collaborative partners? Developing a rubric or process for evaluating the collaboration’s progress?
  • Get to know each partner’s culture and build trust?
  • Ensure that your nonprofit has the capacity (technology needs?) to communicate effectively and regularly with collaborative partners?
  • Build your nonprofit’s ability to negotiate effectively?
  • Adjust and adapt if things aren’t going according to plan?
  • Evaluate and report/share lessons learned about the end results?

5 Key Steps To Building A Successful Nonprofit Organization

There are many useful resources for both nonprofits and grantmakers on collaboration. Here are a few we recommend:

Resources

  • Mergers, collaborations, and strategic alliances (National Council of Nonprofits)
  • Principles for Ethical Collaboration (various)
  • What capacities do nonprofits need in order to collaborate? (GEO)
  • Building collaboration from the inside out (GEO)
  • Nonprofit collaborations: Structural options (Gene Takagi)
  • Making sense of nonprofit collaborations (Bridgespan)
  • Building successful collaborations (Lawyers Alliance of New York)
  • Collaboration Hub (Grantspace)
  • 8 Tips for collaborative leadership (Forbes)
  • Start with a shared vision (Stanford Social Innovation Review)