Starting a nonprofit is pretty straightforward, but preventing your dream from ending shortly after it begins is a lot harder.
For new nonprofits, learning lessons the hard way is a luxury they can ill afford. According to Forbes magazine, one quarter of fledgling nonprofits will close their doors this coming year and almost half will be gone within three years of founding.
So in order to reach long term sustainability it’s important that new nonprofit leaders look at why others may have previously failed before them. Here’s a rundown of twelve areas new nonprofits need to focus on.
1. Recognize that you’re a small business
When your mission is effecting positive change it’s sometimes easy to overlook that at its heart a nonprofit is still a business model, with all the same ways of failing. Business leaders know their venture lives and dies on its profit margins and they pay special attention to every factor that can influence that.
Whereas nonprofit leaders sometimes fail to recognize that they will go bankrupt if they fail to respect every dollar they earn and spend in the way that small business owners instinctively do. This is understandable when an inspired founder launches their dream nonprofit, they are consumed with tunnel vision on mission delivery and fail to see the broadest panorama of their organization’s needs.
Mission delivery is the engine which will drive you forward, but the vehicle is a lot more than just its engine. From office space to employee wages, it may seem like counting paper clips, but if your organization makes better use of what it already has, then you will have more to offer in mission delivery and therefore more to show to potential donors.
Pro Tip: Get obsessed with the bottom line early on just like counterparts in the commercial sector do. Regularly have meetings to discuss expenditure and overheads. These meetings help us put fiscal responsibility center stage alongside mission success, and your board members will appreciate this level of care.
2. Make sure you’re answering a unique need
When starting a nonprofit, research whether you’re overlapping too much with other organizations’ missions. Mission overlap isn’t always a bad thing, as nonprofits can collaborate well, but you’re starting an uphill battle if another local organization already does the job you hope to do.
Pro Tip: Try to establish where your skills, hard work, and dedication can be best applied. If you wish to make a difference that may mean looking at an alternative place to affect change than the one you first envisioned.
3. Don’t underestimate the need for a sustainable funding source
While it may take time to open up those donation pipelines, put every effort early on behind your fundraising efforts. Here are some tips:
- Creating a sustainable funding source takes years, so work hard to keep your overhead as low as possible while you’re building your donor list.
- Study good grant writing techniques and apply what you learn to as many as you can. Look for start-up grants at State and Federal levels.
- Develop a good relationship with your bank. They will have good advice about ways to structure your nonprofit finances responsibly.
- Use crowdfunding to crowdsource your early goals.
4. Try to gain the technological edge
Today, nonprofit leaders have access to software, like a donor database, that can help them reach their funding goals. Let modern software be the extra member of your staff. New nonprofits sometimes think software is a luxury when it’s as important as having a Wi-Fi connection. In the digital age information management is as important as personnel management.
Managing your donors, your volunteers, your taxes, your recruitment, your advertising, and your social media outreach will all be carried out digitally. Trying to run a nonprofit without the assistance of modern information management software is like running it on landlines, and investing in software management will only become more crucial in the future.
5. Communicate with other nonprofit leaders about the challenges they faced
One of your greatest assets early on is learning from other nonprofit leaders who have travelled the same road as you. They have invaluable information about everything from organizational advice to local legislation that you may need to pay attention to.
Your fellow nonprofit leaders are not your competitors — they are your comrades working towards the same goal. The ability to collaborate is one of this sector’s greatest strengths.
6. Develop deep relationships with your unique supporter base
Personal calls and regular thank you letters help your donors connect with your cause. Once you have a donor, put as much effort into keeping them as you do into finding new ones. There are many individuals out there who will resonate with your cause. They will show generosity to your nonprofit if they feel valued. Here are some tips to get started with donor engagement:
- Have a weekly meeting or brainstorm about how to better appreciate your donors and how to connect with those who have already taken the time to connect with you.
- Keep it sincere! Try not to create a stream of generic thank you emails and letters. One personally drafted letter is worth twenty mass communications.
7. Avoid poor record keeping
We all have our strengths, and if yours is paperwork (which others may find tedious) then you’re in luck. Few people are drawn to running a nonprofit in the hope of late nights completing paperwork. But from payroll to account keeping, it has to be done and done well. These tips can help:
- Read up on record keeping basics, and speak to established nonprofit leaders and ask them for advice.
- Find a good accountant, one who comes recommended is best!
8. Don’t lose sight of your mission
When things inevitably get tough, a laser focus on mission delivery will get you through. It doesn’t matter how far from the mission the task at hand may be, you must keep the reason you work so hard always as the jet fuel through any obstacle course. Just keep focused and remember to stay positive.
9. Get the right team members in place
When it comes to hiring staff, please take your time! You will save yourself a headache you definitely don’t need by simply slowing down and making sure you bring the right people into your organization. Here are some recruiting tips:
- Have several interviews before you offer the job.
- Have informal dialogues with your shortlist of applicants.
- Make sure there is a trial run with a review at the three month mark.
- Understand carefully what you want from your employee. You can’t change the parameters after they have started without the risk of causing friction. Some employees work better on 9-5 office hours, while others thrive on flexible working patterns. If you can very clearly set out (perhaps with the help of former colleagues who know your strengths and weaknesses) what you need as a leader, then you can lay that out in the job offer without either party feeling like they discovered their role wasn’t what they expected.
- Use your organic networks. I would also advise that when it comes to creating your core team to launch the nonprofit (which may be as little as one other person to begin with) then try to ask far and wide with your former colleagues, your friends, and family. Between them they’ll have a huge potential pool of individuals they already know intimately. Their inside information will help you find high-value individuals with the good character your nonprofit will desperately need.
10. Create an atmosphere of collaboration
Don’t let yourself think that because you started the organization you will always be the one with the answers. Many of your employees will have wide skill-sets outside of what you hired them for.
When you decide to go one way rather than the other, try and ask these questions:
- Did I really have the best approach?
- Could I have listened more?
- Even if I disagreed with my colleagues, did I convey my appreciation of their views and input?
Here are some tips to help you create a nonprofit culture of collaboration:
- Listen to your staff.
- Have regular meetings where their ideas can be aired.
- Include them in presentations.
- If you have meetings outside of the organization try to bring different staff members with you.
11. Study, study, study!
If you take on the mantle of leadership then try to put the hours aside to study, develop, and continue learning. One of the best pieces of advice anyone can give you, is to find those courses which will expand your knowledge and broaden your skill-set. Part-time, evening, or the increasingly popular online class offer lots of options for you to grow as a leader.
Pro Tip: Consider making professional development for you and your team part of your strategic planning. There are courses both online and in local colleges which may help you and your team develop, helping you get to grips with your potential challenges and improve your skills at a time you most need them.
12. Before you start your own nonprofit, try gaining experience in an established one
Even if you’re resolved to start a nonprofit, it may be advantageous to find a role in a well-established organization prior to launching. This way you will be learning valuable lessons, growing into management, and understanding the dynamics of volunteers and fundraising. Helping another nonprofit with your skills will give you a far better result when it’s your turn to launch.
If you have the spark, the drive, and the vision to get out there and make a difference, remember it takes a special person to begin at all, and a never say die attitude will overcome the highest hurdle. It’s far better to study the places where others have failed so you can learn from those mistakes before starting your own journey. Best of luck!