Why do new Nonprofits fail?

50% of all Nonprofits fail in the first year. The top reasons cited are 1) lack of infrastructure and 2) lack of funding.

 

Years ago, I was on a new nonprofit’s working board in their first year of operation. I felt the overwhelm of everything that I knew foundationally that needed to be done. It was frustrating to sit in board meetings as we tried to decide which way to go. The majority wanted the vague and elusive “awareness”. They also wanted funding which began to feel like the “event of the month”. So while everyone else was worried about awareness and the next event, I was thinking about the foundations that needed to be in place for sustainable funding. By the end of my term, I had figured out that not everyone was on the same page for the mission – the most basic steering and guiding force of a nonprofit! Six months after I left, a year and a half after joining the board, the nonprofit folded and became another statistic.

 

My answer was to write the fundamentals that lead to sustainable funding and are absolutely needed to be in place the first year in my 9 Step Guide to a Successful Nonprofit.  The Guide has slowly evolved into the book I Have My 501(c)3! Now What?!? Your Blueprint to Starting Your Nonprofit Without Being the Sole Funder. It lays out the plan which sets your foundation the first year and builds your organization with the end goal of funding your mission.

 

I found out from my Board experience and through talking with hundreds of Founders that foundations are often the most overlooked element to starting a nonprofit. Founders get so caught up in creating the nonprofit and starting a program, that they don’t stop to think about what it takes to run the nonprofit infrastructure and funding.

The foundations needed are the infrastructure that helps you clarify your mission and work its way to funding. Here are three reasons why you should focus on infrastructure in your first year.

 

Foundations Give You Clarity

When you put in the work, you will get clearer on your mission, organizational goals, and funding needs. You will also build programs that set them up for funding. Being clear about your inputs, outputs, and measuring those results, will help you later with your grants and really help show donors you are a good investment.

 

Clarity also helps you steer the ship so to speak. Once you know who you are as a nonprofit, where you want to go, how you will get there, and who you will serve, everything becomes easier. You can formulate a litmus test to help you make decisions for new opportunities. Your messaging to clients, donors, and the community becomes easier. You quit wasting time, energy, and money on those things that don’t further your mission.

 

Foundations set you up for success

 

When you put the right foundations in place – ones with funding as the end goal – you begin focusing and working toward those things that will bring the organization’s success. You begin measuring your progress and feel like you are getting where you want to go. You will see your organization take shape little by little.

 

Foundations Give You Direction

 

When you set up your nonprofit with funding in mind, you are able to focus on those things that will get you to fundraising faster. You are no longer distracted and using up energy that won’t move your nonprofit forward. You will have the confidence that your organization is IRS compliant and donors can invest in you with confidence. You will know how to get funding for your organization.

 

Next Steps

 

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Tell me on Facebook or in the comments: What is one take away that you can take action on right away?