Different nonprofit organizations exist for a reason. According to statistics, there are currently at least 1.5 million nonprofits in the U.S. But during the pandemic, one in three nonprofits experienced a financial crisis. This made the number of nonprofits shutting down surge during the crisis alone.
Do you run a nonprofit organization or plans to open one anytime soon? It helps to learn from other leaders’ mistakes that caused their organization’s downfall. Know that starting a nonprofit with the best intentions is not enough to run the show.
To help you manage a successful organization for a cause, here are some mistakes you can’t afford to commit no matter what.
Letting Procrastination Be Your Friend
Unknown to many is that procrastination can have potential benefits, which is why many people have learned this habit over the years. For one, it enables you to enjoy that sense of autonomy and control. This is since it allows you to rebel and do the tasks we don’t feel like doing.
Procrastination also helps reduce one’s stress levels. You can put your focus away from your tasks that have deadlines. But then, the short-term happiness you might feel for putting off work can quickly have costly consequences, especially when it comes to your business.
Your nonprofit surely depends on tasks that have deadlines. If you consistently put off important tasks, you can end up cramming at the last minute. This can make you lose your donors and fail to attain your time-specific goals. This can kill your productivity, your staff’s enthusiasm, and your donor’s willingness to share more of their blessings.
Playing the Blame Game
It is so easy to focus on the faults of others when things start going downhill. Your staff might have forgotten to send out crucial email newsletters that could have caused confusion between your organization and your staff and donors. Or maybe another staff responsible for your accounting failed to maintain financial records or forgot to monitor your organization’s expenditure, leading to cash flow issues.
While you and your staff must learn to stay effective and productive, playing the blame game should not always be your priority. Remember that everyone makes mistakes. Mistakes can make you stronger and better if you learn the lessons tied to them.
Before you blame someone publicly for a problem, stop for a moment to think. Be sure you already know what their main responsibilities are, what challenges they face that led to their faults, and what you can do to help make things better. For instance, hiring a certified professional tax preparer might be a better idea than simply making another clueless staff work on your income tax return.
Be a good leader by setting good examples and helping each member find solutions to their problems. Be compassionate enough to see the bigger picture instead of blaming everyone and focusing on the losses. This way, you and your nonprofit can be more successful with the help of a staff that trusts and believes in your leadership.
Overwhelming Your Non-profit With Liabilities
Even nonprofits can acquire debt over time. You might have used debt to start the nonprofit or sustain your operational needs. But as you take out more debts that you can manage, this can quickly kill your nonprofit’s finances.
The more liabilities your organization has, the harder it becomes to operate. In a nutshell, work hard to obtain more assets to help your organization run smoothly. A strong equity ratio will help your nonprofit enjoy longer and better financial health.
Dehumanizing Both the Donors and Staff
It is so easy to focus on your organization’s mission that leaders sometimes dehumanize both donors and employees. Sure, you have many goals you wish to attain and responsibilities to take care of. But that is not enough reason to forget that your staff and donors are also human.
Remember that humans are social beings who need love and belonging. If your donors no longer feel important, donations can stop pouring. They might end up supporting another organization that enables them to support their corresponding advocacy and still treats them as humans.
If your staff and volunteers no longer feel appreciated, they might quit early and find another organization to offer their help. Keep in mind that they are your organization’s bloodline. Without them, you won’t have enough manpower to support your goals and no financial support to accommodate your growing needs.
There is no easy formula to running a nonprofit. But there are things you can do now to avoid its ultimate failure. Keep this short list in mind, and you can avoid killing your nonprofit.