1. Empty Optimism - or Pie in the Sky Dreams (without the proper ingredients to bake a pie)
I've seen some of the best, most needed (in my view), and earnest efforts falter and fail because the leaders simply did not accurately calculate the amount of support that would be available and the alliances and partnerships that they would need to support their humble beginnings. In other words - they lacked a sound business plan upon which to build a platform for success. The old saying 'to fail to plan is to plan to fail' is so very, very true.
2. Values Vacuum - or Poor Organizational Development
Healthy organizations establish core values that guide the way leaders and staff do business, and how they deal with each other and with outside people and groups at every point of contact. It is far too common for autocratic and self-focused founders to establish one core value: "do as I say." These nonprofit heads find it very difficult to transfer authority or to share the limelight and leadership with an empowered team. There is little internal trust, and insufficient values to guard against abuses of power, privilege, and people. It is also an environment in which many unethical and even illegal practices can flourish, and often do. These organizations frequently fail in the first generation, and almost never thrive when the leader with all of the chips finally cashes them in.
3. Competitive Blinders - or 'we're unique, there's no one like us in the market'
Nonprofit leaders and ministry executives are frequently insular and blind to the external changes and "market" forces that will be their undoing. Often it's because they are so focused on the needs and crises around them. Or they cannot imagine anyone or anything that would deter them from their righteous ends. And charities are often unfamiliar with, or even repelled by, the notion of "competitors," so they don't recognize true rivals or adjust to compete. There is no ability to adjust programs to match changing situations, culture, or competition and to compete for donations, volunteers, media coverage, or program space. This blindness also manifests itself in the lack of research done to determine if there are other Organizations doing the same thing, with basically the same goals. This along with a self-righteous notion that "we" can do it better, or the right way, when cooperation, even merging with another Org would be so much more efficient.
4. Iced Innovation - or the notion that 'our website is good enough for now' - Nonprofits must Embrace Technology
Mobile access, mobile devices and the experience on the internet has changed user expectations and has also provided nonprofits with a more level playing field
Take a look at the businesses that have grown quickly over the past years, innovative companies which are "disruptive" or at least are very different from doing "business as usual." Apple, Amazon, Netflix, Zappos. Or nonprofit organizations which leverage technology to deliver on mission, like DoSomething.org and donorschoose.org.
Today's donors are also today's online shoppers. So your "competition" isn't the other charity with a similar mission-it's Zappos. Today (and tomorrow's) donors are accustomed to finding and buying what they want, when they want it.
Ask yourself this question: Is your organization set up to allow donors to find and give you what they want to give, when they want to give it? Now pick up your smartphone and see how easily and quickly (or not) you can find your site and make a donation- because they will not go to a desktop to make a donation or share their affinity for your cause, when the ability to do so is right at their fingertips. It's what they're used to.
The good news is that this technology also makes the playing field for causes, more level. Just a handful of years ago, DRTV might have been the most effective way to reach a mass audience but, due to expense, was only available to organizations with the largest budgets. Today's technology allows any sized organization the ability to communicate, educate, and engage on a greater scale than ever before at little cost.
The emergence of the Internet and subsequent online innovations that have changed the world in many ways has made strikingly obvious a business truth that is actually timeless. If you do not innovate, you will disappear. If there is no adjustment of creative content, communications, or methods for new times and trends you will miss opportunities, and be judged as antiquated (and perhaps irrelevant). Creative presentation and original thinking buy you another look, enable you to capture attention in a crowded field, and present new ways for people to engage with your mission.
5. Mission Creep or 'yeah, we should do that too!'
When a corporation goes beyond its initial product line and area of service, it's called brand extension. In nonprofits, we call it mission creep, and because charities are in the business of changing the world, their leaders often cannot seem to stop themselves from seeing every need as a call. The result is too many directions, no mission clarity, diffused expertise, and donor confusion.6. Misplacing Priority #1 - or forgetting who the 'real boss' is
At the end of the day, for nonprofit organizations - Money is more important than Mission. Nonprofits exist to serve and to meet needs on a global scale, and we care deeply for the causes we embrace, often to the detriment of our funders. A successful nonprofit knows that their #1 Customer is their donors, period. Without the donors, there would be no impact, no people served, no mouths fed, no backs clothed. Those we serve are important, but if we really want to have an impact, we must take care of our donors first, we must make sure that our programs are designed to give our donors an opportunity to fulfill the goals they have for their philanthropy, and then constantly communicate to them the impact their dollars are having. And when it comes to taking care of donors, relationships, personal relationships are KING! No fancy CRM or automated gift response mechanism will ever trump a personal relationship.
7. The Data Conundrum - or the fear of information
Although many organizations have begun measuring every possible statistic related to fundraising efforts, few have enough data to guide planning, analyze management systems, or redirect underperforming programs or communications. This may be because of the pressure to reduce overhead, or because the entrepreneurial spirit of charity leaders causes them to fly by the seat of their pants, to trust their own (often flawed) instincts. Also factor in the age-old truism - "there's paralysis in analysis" - there's a real and present danger for Organizations who dive too deeply into the studying the data on their donors at the expense of personal relationships.
Seven Reasons Why Nonprofits Fail was written by Tracy Ebarb, Veteran Fundraiser and the National Association of Nonprofit Organizations & Executives' International Director. Tracy's journey in the nonprofit world began in the early 80's through his service on Church Staff as Youth Minister, Associate Pastor, Church Administrator, Director of Development and Stewardship and Senior Pastor. Tracy joined the renowned consulting firm of Cargill & Associates in 1998, designing and conducting over 60 Capital Stewardship Campaigns raising over $50 million dollars. As an independent Consultant, Tracy has traveled extensively overseas raising funds and working to develop humanitarian projects in the African nations of Sierra Leone, Malawi and Zambia, and the Central American nations of Nicaragua, Haiti and Honduras. As well as consulting and developing Capital Fundraising Campaigns in over 75 churches and nonprofits across the US. Until recently, Tracy has guided the International Bowling Museum and Hall of Fame as the Director of Business Development. He has recently accepted the position of Senior Counselor at Development Systems International.