What Sets Successful Nonprofits Apart

By December 13, 2018Nonprofit

Have you ever read the book, “Think and Grow Rich?” There’s a saying in the book: “Success leaves clues.” The author of this classic self-improvement book suggests studying the lives and habits of successful business people for clues of how they obtained their success.

The same may be said for all businesses, including nonprofits. What clues do successful nonprofits leave behind to guide newcomers in the world of mission-driven business? The answer may surprise you.

Success Metrics at the Five-Year Mark

Experts used to say that they judged a business successful or not by the third year; now that has increased to five years. For nonprofits hitting the 5-year mark, statistics from the NCCS/Urban Institute tell us that just 16% failed to renew their form 990 from 2000 to 2005.

Why do nonprofits fail to renew their form 990? If they fall below the $25,000 income threshold or if they go out of business, they may cease to renew form 990.

We don’t know exactly how many of those nonprofits reflected in the NCCS/Urban Institute statistics went out of business, how many dropped below the $25,000 threshold, or how many simply forgot to renew their form. We, however, know that the remaining nonprofits were alive and growing after five years – fully 84%. That’s a great testimony to survival in an age where many businesses fail quite quickly.

The Key Factor Determining Success

Looking across many of the nonprofits that make it to their 5-year anniversary, one thing stands out. This may, in fact, be the key driver of success for nonprofits.

Successful nonprofits turned passion for the mission into passion for the organization. While passion for the mission was prevalent, it was successfully transmuted into passion for the livelihood of the organization. The organization then received the care and attention as a mission-driven business entity it needed to thrive.

That’s a valuable distinction. Nonprofits are, by their very nature, mission-driven. You can’t imagine a nonprofit without its rallying cry, whether that is to end hunger and homelessness, serve a religious group’s needs, or save animals.

However, thriving organizations also focused on developing as a business. Care and attention were paid to things like technology, which can be used in the service of the nonprofit to cultivate donor relations, encourage good communications, and track grant applications.

The Business of Nonprofits

You can also see several things in common among successful nonprofits. This includes:

  • A healthy, active Board of Directors: The Board of a healthy nonprofit takes a strong interest in the organization’s work. Its members aren’t afraid to roll up their sleeves and engage in some networking or fundraising to help the organization raise money or achieve a goal. Members take responsibility for the actions and activities of the nonprofit.
  • A strategic plan: Growth is directed and managed through a five-year strategic plan that lays out the foundation and direction for the organization.
  • Smart hiring: Recruiting and hiring are taken seriously, with people chosen for their passion for the mission and their skillsets.
  • Investment in technology: From software to track and manage grants to the right CRM system, nonprofit management knows that technology, especially software, can help them be more productive.

How does your nonprofit stack up against this list? Are there gaps or areas of improvement?

Success leaves clues. It doesn’t occur in a vacuum. Those nonprofits who thrive and achieve milestone anniversaries – 5 year, 10 year and beyond – do so when passion for the mission meets a passion for the organization. Together, the two create an unbeatable combination.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.