The goal of most nonprofits is to reach a stage of maturity that allows the organization to become sustainable, ensuring that the mission is being met long after the founder moves on.
Like people, nonprofit organizations develop in stages, from “start-up” to “growing” to “mature” — and sometimes to “stagnation” or “decline.” According to the NH Center for Nonprofits, one of the most common mistakes nonprofits make in determining how they’re growing is by using measurements such as budget or staff size – rather than considering whether or not they are actually accomplishing their mission and meeting the needs of their constituents in a measurable way.
The good news is that tools are available to help. For example, Speakman Consulting has developed a rubric of the nonprofit life cycle that is a great tool for measuring your organization’s maturity and determining where your organization might need to focus attention in order to ensure sustainability.
Where to start when assessing your organization’s health and determining its life stage? Begin with the governing body, the Board of Directors. Boards also develop in stages, from a founding or developmental board, to a true governing board. In the start-up phase, the Board may be very hands-on and may participate at the ground level with the staff, ensuring programming and fundraising goals are met. As the organization grows through adolescence, the Board will begin to grow as well, separating itself from daily tasks and staff interaction, and forming committees to do the real work of the Board.
During the Start-Up Stage, the founding Executive Director generally leads the Board, often setting the agenda for meetings and steering the direction of planning. At the Mature/Sustainable stage, the Board will take on more leadership and will develop clear directives and measurable goals for the organization and for the Executive Director. The Board’s role will have evolved to a true governance level, focused on strategic planning, policy, financial oversight, and higher-level fundraising.
In order for your organization to move past the “growing” stage to the sustainable/mature stage, there must be a focus on diversifying funding streams — meaning the nonprofit is no longer dependent on the small circle of donors usually connected to a founding director but grows to include a larger and more diverse donor pool. At this stage, the organization will hire development staff, beginning with a Development Director, who will develop a long-term funding plan. A five-year plan should identify and set goals for various income strategies, such as direct mail, events, major donors, and grant writing. A Communication Plan will be put in place and will have dedicated staff, ensuring that the organizations branding and messaging begin to grow. At the Mature/Sustainable stage, the organization will be known within its community, further driving its ability to attract donors and volunteers.
At the mature stage there is a focus on capacity building, usually led by a Finance Director, along with key Board members, usually from the Finance Committee. Capacity building includes putting into place the appropriate systems and structures to maintain the organization, from HR policies and shared decision making processes to the use of technology and databases to a focus on measurement, both programmatically and organizationally.
The most important part of assessing your organization’s life stage is to look carefully at the people you have put in place to ensure growth and sustainability. Evaluate the level of Board leadership and determine whether you may need to add Board members who have previous Board experience at a nonprofit larger than your own, therefore ensuring a new level of experience in leadership. Examine staffing, perhaps utilizing an outside consultant to do an “environmental study,” an analysis of your current talent and skill level weighed against the organization’s future vision and goals.
Most importantly, review your mission and the measures you use to determine if you are meeting that mission, because, after all, your mission is the very reason for your existence.
