Five Reasons Why Nonprofits Are Not Sustainable

Unrolling a new nonprofit program is an opportunity for an organization to address a social problem or need in a UNIQUE or innovative way, to which the program’s ultimate EFFECTIVENESS and financial SUSTAINABILITY are closely linked.

At least IT SHOULD BE.

After all, BOARD MEMBERS and DONORS want to know that their hard earned money will support a floating “ship”, not a sinking one.

How do you increase your chances of PROGRAM SUSTAINABILITY? A clear ANALYTICAL PROCESS should be followed BEFORE jumping into any new business venture. Make sure you ANSWER THE FOLLOWING questions:(SPOILER ALERT: Your answers should be YES!).

1) Will the program serve a unique community need or demographic? 
This is a question which is often bypassed. Why? With the difficulty some nonprofits encounter in obtaining program funding, if they are fortunate enough to land some extra cash, this is often enough to substantiate starting a new program. Receiving FUNDING on day one, however, does not necessarily mean that the program will be sustainable on an ONGOING basis.

Assess the current competitive landscape as well as social appetite or NEED for the program. Nonprofits are likely to have difficulty gaining program constituents in their desired demographic if other organizations in that space run similar programs which are IMPACTFUL, more efficient or delivered more effectively.

Be both PRACTICAL and INNOVATIVE! Lower constituents than expected can negatively impact program revenue and funding income potential, which in turn can put your program (and company) in a financially unhealthy position.

2) Will your company have the FINANCIAL RESOURCES necessary to MAINTAIN the program so that it meets expectations?

Perhaps your organization has already built up some excess cash. If not, develop a FUNDING STRATEGY and overall financial plan for the next several years that will keep your program (and organization) fiscally sound.

3) Do you have the human capital necessary to effectively run the program?

Program effectiveness is very much a human capital issue. DON’T UNDERESTIMATE the MANPOWER necessary to administer the program and monitor success. Make sure you realistically budget for this. (If you can’t support this effort financially, there are many ways to find skilled volunteers.)

4) Have you determined HOW you will you know if the program is PERFORMING well?

Set qualitative and quantitative program EXPECTATIONS and COMMIT TO THEM. Then monitor them against actual performance. It is wise to track both program financial results and general program outcomes.

Uncover performance deficiencies and make corrections. Isn’t it better to “fail faster and succeed sooner”? (David Kelly, founder of IDEO).

5) Is the timing right?

It is very easy to develop tunnel vision and lose sight of what areas your organization has financially committed to thus far. Your program manager may have conceived of an ingenious new program, and it may also meet all the points I mention above, but consider this: COULD YOU BE PUTTING YOUR FINANCIAL RESOURCES TO BETTER USE?