surprising reason nonprofit struggles to grow

One Surprising Reason Your Nonprofit Struggles to Grow

I regularly speak with nonprofit leaders who wonder why their nonprofit struggles to grow. They have a great theory of change, clear intended impact, enthusiastic donors, but … something is wrong.

Here are a few quotes from some of these leaders. I’ve disguised their identities. Let’s see if you can spot the problem:

“We didn’t hire our staff to be leaders, we hired them because they’re good with clients.” –Human Service Nonprofit Founder

“We’re a family. We don’t want to become corporate with managers and all that.” –Healthcare Nonprofit President

“The last time we did leadership development? Oh, I should do some of that, shouldn’t I? Anyhow, I’m frustrated that people aren’t committed to our work. What do you think is wrong with them?” –Education Nonprofit CEO

It’s a little obvious, isn’t it?

In my experience, the number one reason an otherwise healthy nonprofit struggles to grow is the failure to develop leaders.

Insidious Consequences

Would you be surprised to learn that employee engagement in nonprofit organizations is among the lowest in any sector?

At first, this might seem like a contradiction. After all, we know that connection of work to meaning and purpose is one of the big drivers of energized, motivated employees. Shouldn’t there be a lot of meaning and purpose in charitable organizations?

Of course, there is. But when that passion for the cause is used to justify poor leadership or governance, it creates dangerous pitfalls for culture, leadership, employee retention, and financial resources.

With healthy leadership at every level, your charitable nonprofit can be some of the most fulfilling, productive work you’ll ever do. Without that leadership, however, it can feel like a treadmill of futility and growth is all but impossible.

How to Build Leaders and Get Ready to Grow

Your mission matters. Your people are working hard. Your donors deserve the best impact for every dollar they contribute. Build the leaders you need at every level of your nonprofit to be the best steward of the time, talent, and money you received.

“Every person that gives their life for a cause deserves a competent, diligent leader who invests in their development. It’s time for nonprofits to step up to the challenge of developing healthy organizational cultures. Real human lives are in the balance.”  – John Oliver, Chief Program Officer, National Education Nonprofit

If you’ve got a clear mission, an articulate theory of change, and motivated donors, but your nonprofit struggles to grow, here are five steps you can take to build the leadership you need to get to the next level.

  1. Train Every Leader. No Excuses. No Exceptions.

Don’t give anyone responsibility for people without fundamental leadership and management training.

You would never entrust your life to an untrained surgeon – why would you entrust your most important resources, your people, time and money, to an untrained manager? (Tweet This)

No excuses.

If you’re a smaller organization, you can start internally. Create a leadership development circle (you can download the free Winning Well Facilitator’s Guide to get you started). If you’re a growing organization, consider bringing in experts to help you create a common leadership language, use consistent, practical management skills, and create a performance-oriented, people-centered culture in your organization.

  1. Expect Performance.

As you invest in leaders and equip them with the skills they need to be effective with people, expect them to excel in their leadership responsibilities. Clarify the MITs (Most Important Thing) and ensure you’re both on the same page about what successful performance looks like. Celebrate success and hold one another accountable when performance drops.

I’ve watched too many nonprofit take a few hours with a volunteer trainer to share some leadership tools and then never mention the tools and training again. Don’t undermine your training. Evaluate your leaders based on how well they’re achieving results and building healthy relationships. (Use our Winning Well MIT Huddle Planner to help you and your leaders stay focused.)

  1. Measure What Matters.

Don’t lose yourself in the metrics maze and focus on meaningless measurements. If this year’s 75% functional program expense allows you to double your impact next year, great! Help your Board and donors understand how they’ll have more to celebrate.

Rigorous performance evaluation is a hallmark of effective nonprofits. Every investment you make should have a clear path to increased mission impact. As you invest in your leaders, demonstrate the value: reduced attrition, improved talent recruiting, improved efficiency with donor dollars, greater impact on your clients and cause, and a “next-one-up” succession plan that guarantees effective work long into the future.

  1. Boards, Get Serious.

Boards have an important role to play by setting clear expectations regarding leadership development and regularly reviewing these processes to ensure it is happening. Hold your executive staff accountable for developing their talent and ensuring the organization’s current and future success.

  1. Donors Make a Difference.

Educate your donors about why they should invest their money in organizations that build leaders at every level rather than with those who don’t.

As a donor, when you contribute to charitable organizations, look at their management team and leadership development. Ask questions about how the organization trains leaders at every level to be effective at achieving results and building relationships.

Your Turn

My favorite leadership development is with people who commit to making the world a better place. Whether you’re a part of a for-profit, nonprofit, or public organization, there is an energy, joy, and passion for performance in those teams that’s infectious.

If that’s not your team; if your mission and people are as important as you say they are; if you have the fundamentals covered but your nonprofit struggles to grow, then it’s time to invest in your leaders.

I’ve built these teams as a nonprofit leader and consulted with many leaders who have done the same – even with limited budgets. It’s not about money; it’s about mindset.

How do you ensure leaders at every level receive the training and skills they need to succeed?