How to avoid nonprofit failure

Why do nonprofits fail despite having competent staff and board members? This
is the question that is haunting a lot of nonprofits nowadays. You can hire the
most efficient staff and you can organize the most experienced board member
but still, the chance that you will be unable to fulfill your mission is probable.

Why?

As we all know, the blood life of every nonprofit is the donors. No nonprofit
will not exist or continue to endure without the funds coming from them. It is
through their donations that the nonprofit is able to accomplish the purposes for
which they are organized. However, a lot of nonprofits experience difficulties in
retaining the support of their donors. Data from the National Center on
Charitable Statistics on all 501 (c)(3)s that filed a tax return between 1989 and
2003 shows that 12% of nonprofits exited from the data within five years and
17% exited within ten years. A lot of this is attributed to difficulties in decision
making, lack of long-term planning, incompetent leaders and change in
revenues.

In order to avoid nonprofit failure, there is one thing nonprofits must avoid:
inexperienced staff and board of directors.

The major thing to avoid is having inexperienced staff and board of directors.
Although there are a lot of staff and board of directors who are willing to render
service to your nonprofit, not all of them may have the necessary knowledge to
fulfill their obligation. That lack of knowledge contributes to the failure of the
nonprofit especially when it is closely related to the financial aspect of running
it. When the people running the organization has inadequate experience in
allocating funds or keeping up with assets, it negatively impacts the nonprofit.
Intelligent use and disposal of funds is essential for attainment of organizational
goals.

A survey conducted in collaboration with Board Source and Guide Star revealed
that 27% out of 900 nonprofit board directors don’t believe their fellow board
members have a strong understanding of the organization’s mission and
strategy. This must be avoided. The key players of your organization must know
the contributions expected from them so that they may be able to help in the
attainment of the mission of the nonprofit. The board of directors must have a
clear understanding of the mission of the nonprofit so that they will not have
conflicting ideas on how to direct the businesses of the nonprofit.

Inexperienced staff and board of directors may be avoided by having an

effective recruitment strategy, a strong orientation on the mission of the
nonprofit and personal accountability.