Why Some Nonprofits Fail to Survive

The other day I — among many others — received an email from the leader of a large, well-established nonprofit announcing they were going out of business. The email was a shock to many because this organization is well respected and seemed to be doing important work. The reason they are closing is because, as they put it, “the increasing difficulty of fundraising.”

But difficulty fundraising is only ever the symptom, not the cause, of a struggling nonprofit.

There is a tendency in the nonprofit sector is to blame outside forces for failure (a poor economy, fickle funders, growing competition, government regulation) and certainly those play a part. But the most important determinant of whether a nonprofit thrives is the organizational will to overcome those and any other hurdles.

The ultimate reason a nonprofit goes away is a lack of enough will within the organization to persevere. Because any challenge a nonprofit faces can be overcome if enough people are willing to chart a different course. In other words, nonprofits never simply run out of money, rather they run out of organizational will.

Organizational will is a critical mass of board and staff members willing to do whatever it takes to move the organization forward. That could mean (to name a few):

• Meeting with friends, allies, supporters to ask them to give in new and/or bigger ways.
• Negotiating with vendors, partners, competitors to find ways to use resources in more efficient ways.
• Committing time and energy to creating a sustainable plan for the future.
• Cutting programs that drain resources or don’t deliver outcomes.
• Letting go of ineffective staff or board members.
• Convincing dynamic, forward-looking people to join the board.

One of my clients came to me a couple of years ago struggling with whether to continue. A national nonprofit in the education space, they had run a deficit for several years in a row, suffered from steep employee turnover, found it difficult to get meetings with potential funders, and struggled to recruit and keep board members. The board was seriously considering just giving up.

But a few board members dug deep and decided they simply could not let this critical nonprofit fold. They recruited a couple of other board members to the cause, hired a new executive director, asked a close donor to provide some runway funding, and hired me to help them create a strategic plan.

Two years later they are going strong with a growing staff, re-engaged membership, diversified funding streams, and a new confidence and vigor throughout the organization. I have no doubt that they will thrive and grow their impact for years to come. What separates this organization from the one that sent the email is simply enough organizational will to figure out a way forward.

If your nonprofit sits at this precipice between giving up or putting shoulder to the wheel, ask your board and staff these questions:

• Do we still believe there is a real need for what our nonprofit can uniquely offer?
• Are there enough board members who could be convinced to put in the work to find solutions to the problems we face?
• Are there other people outside the organization who could be convinced to get involved (as board members, funders, advocates)?
• Are we prepared to make unpopular decisions that will ensure the future of the organization?
• Do we have enough energy to devote to making some/all of the above happen?

There is no magic number that determines if you have enough people to constitute “organizational will.” For some nonprofits it might be three critical people, for others it might take many more. The key is that you have enough people who are truly committed to doing whatever it takes.

And if a nonprofit leader finds that there simply is not enough organizational will for her nonprofit to survive, that’s ok. It simply means there is not enough momentum right now for this organization, this mission, this model, or this combination of people. If the solution that the nonprofit was trying to offer the world is one whose time has truly come, someone else will find the organizational will to execute on it.

The key question every nonprofit faces is not whether or not it will get hard, the real question is whether they can fully commit to finding a way forward when it does.

Photo Credit: Li Yang