Successful not-for-profit organizations typically proceed along
a standard life cycle. Their early stage precedes a growth period
that runs several years, followed by maturity. The maturity stage
generally begins around an organization's eighth year. By this
time, the not-for-profit organization has built its core programs
and achieved a reputation in the community.
However, no organization can afford to rest on its laurels. In
fact, mature not-for-profits often face a critical fork in the
road. The next step can lead to renewal or possibly stagnation and
Shift to Financial Sustainability
If you lead a not-for-profit organization in the maturity stage,
you should set your sights toward sustainability. By now, your
organization should have a good handle on its current resources and
be adept at forecasting its needs. From a financial perspective,
that means maintaining sufficient cash on hand to support daily
operations, as well as adequate operating reserves. This also may
be the time to initiate your planned giving and endowment efforts
to sustain programs into the future.
Your organization probably requires
more funds than ever. However, an organization of this age must be
wary of "mission drift," which happens when an
organization begins to make compromises to generate funds rather
than stick to its mission.
At this point, organizations often
see more program and operational coordination and more formal
planning and communications. Your not-for-profit organization also
may explore the possibility of alliances with other organizations.
Such affiliations can both extend your organization's impact
and increase its financial stability. Alliances also can help
reinforce your mission focus and prevent your organization from
getting too bogged down by policy and procedures.
The Mature Board of Directors
Another way to increase financial stability is to add members to
your board. A mature organization's brand identity may enable
it to attract more wealthy, prestigious and well-connected members.
Ideally, these members will have more to offer than simply money,
such as expertise in a certain area or a strong personal commitment
to your mission.
As your executive director and staff concentrate more on
operations, your board needs to take an even greater leadership
role by setting direction and strategic policy. The board may
become more conservative, though. (The boards of younger
not-for-profit organizations are usually more entrepreneurial and
willing to take risks because less is at stake.)
When it comes to programming, mature not-for-profit
organizations must take care not to be lulled into complacency.
It's important to regularly review your programming, including
the actual curriculum or content, for relevance and effectiveness.
Your strategic plan should focus on the long range and may outline
Surveys can be a good way of keeping up to date on your
constituents' needs and interests, which can change over time.
The results might lead to dramatic changes. One literacy
not-for-profit organization, for example, stayed relevant to its
community by shrinking its literacy programming and offering more
English as a Second Language services instead.
Celebrate, but Strive
In today's competitive environment, any not-for-profit
organization that makes it to maturity has reason to celebrate. To
continue to serve your mission, however, your organization must be
strategic in both financial and program planning.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Attorneys from WilmerHale's Emerging Company Practice will explore the most critical issues facing entrepreneurs and early-stage companies during our QuickLaunch University Webinar Series. Over the next several weeks, we will share key takeaways from each webinar.
Lawyers are often asked to serve on Boards of nonprofit corporations and if they do so, they will often be asked by other directors about the potential individual liability of a director for actions of the nonprofit, for actions of the director and for actions of other directors. - See more at: http://www.wcsr.com/Insights/Articles/2017/March/Liability-for-Directors-of-Nonprofit-Corporations#sthash.fomRRxiJ.dpuf
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).