Every nonprofit we encounter has different strengths and weaknesses but there are a few common challenges and blind spots that many of them share. Here are just a few:
- The first rule of a nonprofit is that you actually have to make a profit or a surplus (what you call it doesn’t matter but you cannot run a nonprofit sustainably at a deficit). Mission achievement is often used to justify deficits and while they may be okay in the short term they cannot be allowed to last. Profit is not a dirty word.
- Objective program assessment: each program an organization runs needs to make sense. Key questions include:
a. Does this program align to the mission?
b. Does this program connect to and enhance other programs offered by the agency?
c. Is this program achieving the desired outcomes (which requires knowing who the stakeholders are and what constitutes desirable outcomes for them)?
d. Does this program contribute positively to overhead ie when considering the various sources of funding directly attributable to this program, do they exceed direct costs of the program?
If the answer to one or more of these questions is no then the program may not make sense for the agency (which doesn’t mean that there isn’t another agency that would be better suited to run the program!)
- Succession planning for key personnel in the organization. Even when things are going well, the board needs to know what steps they will take in the event of a planned or unplanned change in leadership or a gap in other key roles. Since most nonprofits are relatively small and resource constrained, organizations can quickly become strained when key roles are temporarily vacant. Knowing who will step up and be accountable in such situations can alleviate a lot of tension.
- Engaging and activating the board of directors. People are often flattered when asked to join a board and typically feel a passion for the mission but too few boards are active in promoting, supporting and monitoring the organization or on-boarding new board members.
a. Few set goals for, and objectively evaluate the performance of their ED in the context of an agreed upon strategic plan (especially after a few years)
b. Few have developed a set of measures (a data dashboard) by which to regularly assess the current operations of the organization and are therefore surprised when things go south
c. Few have board subcommittees that set goals for themselves and meet regularly to assess progress towards those goals. As an aside, make sure the board meets with the auditors every year or beware the consequences
d. Few actively recruit new board members and plan for board officer succession – even the most passionate board members lose energy and boards need to refresh themselves.