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More Reasons Why Nonprofits Fail

Have you noticed that a very large number of non-profits that are started within a year fail after some time?

In their study of numerous nonprofit organisations, Forbes acknowledged that more than half of the nonprofits that are started every year are set up to fail. A closer look at these not-for-profit organisations that fail after some time, reveals a whole lot of things which they have in common. Among these are:

  1. Operating Without A Clear-Cut Vision

If there’s one type of organisations that must never run without a very clear vision, it is nonprofits. Sadly, only few truly understands the power of one. Majority of those that have it, do not regularly communicate it to their volunteers and donors.

Vision is what keeps the organisation alive and focused. It is what determines the plan, goals and principles of a firm. A study of successful nonprofits reveals a good vision to be among the things their leaders have in common.

2. Lack Of A Concrete Plan

A leading factor in the common reasons that most nonprofits fail is the absence of a well detailed strategic plan. It is alarming to note the number of charities operating without a concrete written plan. In most cases where some plans do exist, they are hardly reviewed or updated to meet the demands of the day.

As a result of this, the organisations become helpless in the face of tough challenges like the Covid-19 pandemic and many others.

3. Inability To Invest In Talent, Technology And Professional Development

Another leading cause of failure among nonprofits is the inability to make their money work for them. By making their money work for them here, I mean investing in talent, technology and professional development.

Most charities would rather stick to the old methods of doing things than investing in what truly works today. For instance the use of modern technology in their daily execution of tasks.

While successful companies are always on the lookout for such technologies, the others would rather have it the old traditional way. In the long run, the effects of this is seen in the poor results that keep coming from those operating this way.

4. Lack Of Adequate Funding

This one of the primary reasons nonprofits fail. If a nonprofit would be successful, it has to be able to come up with new ways of generating adequate funds for the organisation. The statement that money makes the world go round is not only true for businesses, it is also true for charities.

Part of the responsibilities that lies on the shoulders of nonprofit leaders is to continually come up with new ways of accepting donations from individuals, organisations and government.

These new ways may include the use of payment gateways like Paypal, Skrill etc, and social media platforms like Facebook, Instagram and Twitter.

It may also include the use of modern responsive websites that are maintained and updated regularly.

What Should Nonprofits Do In The Face Of All These?

The leaders of nonprofits must be able to go back to the table and draw up a good vision and plan for their firm, and be willing to review it from time to time. They must be willing open up their hearts to new ideas and take advantage of the new technologies available to maximize their level of impact in the community they operate so that they overcome the reasons why nonprofits fail.