Recognizing a Broken Nonprofit
There is an old saying that “if it aint broke, don’t fix it.” But in the reality of nonprofit corporations, this attitude can hide weaknesses that can ultimately destroy your organization. Thomas McLaughlin writes a piece in Nonprofit Times that encourages nonprofit leaders to take an honest look at their organization. Recognizing the warning signs allow leadership to makes small changes that create large benefits and adds longevity to your nonprofit.
Cash Flow Loss One of the first signs of distress in a nonprofit is the loss of cash flow. This loss can take several forms from loss of grant money, reduced donations or increased cost for services or supplies. Every nonprofit should run lean. The basic model should be such that every dollar is used efficiently. But the reality is; no company can last long when it pays more than it takes in. Cutting back may help the nonprofit survive for a time. But ultimately, cutting back on staff and supplies will affect services for the target population. By the time a nonprofit runs into cash flow issues, it is often tine to take a good look at the overall business model and make changes necessary to save the nonprofit.
Chronic Deficits Sometimes the entire nonprofit is fully funded, but portions of the organizations services run in a deficit in some way. Perhaps this is a program that attracts few participants or it uses high priced supplies or equipment. A strong nonprofit can survive these programs for a time. But in the long run, these programs will drain any company. Take a good look at these programs. Make sure that they are fulfilling a need for your target population. Look at ways to fund that portion of the program, cut the program or end the program completely.
Focused Programs Sometimes programs develop because they seemed like a good idea at the time. But as the years pass, these programs are simply carried forward, splitting away from the core values of the organization a little more every year. It is important to look at every program and process offered by your nonprofit and ask how each relates to the core values and goals of the corporation.
Looking at your company objectively can stop problems and potential problems and add years of healthy life to your nonprofit organization.
Cash Flow Loss One of the first signs of distress in a nonprofit is the loss of cash flow. This loss can take several forms from loss of grant money, reduced donations or increased cost for services or supplies. Every nonprofit should run lean. The basic model should be such that every dollar is used efficiently. But the reality is; no company can last long when it pays more than it takes in. Cutting back may help the nonprofit survive for a time. But ultimately, cutting back on staff and supplies will affect services for the target population. By the time a nonprofit runs into cash flow issues, it is often tine to take a good look at the overall business model and make changes necessary to save the nonprofit.
Chronic Deficits Sometimes the entire nonprofit is fully funded, but portions of the organizations services run in a deficit in some way. Perhaps this is a program that attracts few participants or it uses high priced supplies or equipment. A strong nonprofit can survive these programs for a time. But in the long run, these programs will drain any company. Take a good look at these programs. Make sure that they are fulfilling a need for your target population. Look at ways to fund that portion of the program, cut the program or end the program completely.
Focused Programs Sometimes programs develop because they seemed like a good idea at the time. But as the years pass, these programs are simply carried forward, splitting away from the core values of the organization a little more every year. It is important to look at every program and process offered by your nonprofit and ask how each relates to the core values and goals of the corporation.
Looking at your company objectively can stop problems and potential problems and add years of healthy life to your nonprofit organization.
