The Biggest Mistakes New Nonprofits Make

Losing focus on core mission

I have worked in non-profits for over 20 years with a majority of my time spent as an Executive Director. Too often new nonprofits struggle to find their identity.

I have seen so many well-intentioned non-profits tread water because they are trying to be too many things to many people. If they do something well, they should focus on that and stay in their lane and be the very best at what they do well.

— Brian White from The Fort Wayne Rescue Mission

Creating unnecessary competition

Not doing research about what other nonprofits are already doing – whether before seeking nonprofit status or starting a new program.

As a 30-year veteran in the nonprofit industry, I see this happen constantly and it’s frustrating because it just creates more competition for funding when we should be working collaboratively for more effectiveness and efficiency.

— Melissa Jensen from Centennial Area Health Education Center

Lack of focus, fundraising, and professionalism

Too many “do-gooders” do not realize that nonprofit organizations are legal entities that deserve the same attention and effort as any profit business. Nonprofits are not social clubs, they have the potential to make significant positive impacts in the communities they serve. And as such deserve to be managed and monitored accordingly.

Another area for new nonprofits is not developing strong fundraising processes early; and recruit board members who understand fundraising and who will support and be engaged in this.

Lastly, those interested in starting a new nonprofit should investigate other nonprofits that offer similar services and consider partnering with that organization rather than starting a new nonprofit that competes for limited resources.

This is based on my 30+ years of doing something with nonprofits. Great question.

— Christy Crosser from Estes Park Museum Friends & Foundation, Inc.

Dysfunctional board management

Having the same board over and over that’s completely unaccountable, rigid, makes things personal, with dishonest unethical board members who sabotage the rest, and are all 100% dependent on management when management consistently fails to do what they’re suppose to (like file taxes)

— Tara from Diamond View Residents Association

Weak leadership and self-centered fundraising

New nonprofits often don’t have the correct leadership, whether that be an ED with no non-profit experience, or a board that wasn’t put together intentionally.

Fundraising without strategy. Making the story about themselves (the founder or ED’s passion or motivations) rather than the people they serve or plan to serve, or initiatives or results they want to bring about.

— Molly Krichten from Carnegie of Homestead

Rushing to hire

Hiring employees before they are ready. Being an employer, especially in multiple states, can be costly and tack on more administrative work.

— Clarice Williams from WEBS Training Center

Lack of succession planning

Not having an active succession plan. The problem of keeping qualified volunteers on your board moving into the officer positions so burnout doesn’t happen and your nonprofit is looking and moving forward with fresh new blood and ideas.

— Rick Hoffman from Nature Center Association of Caesar Creek

Poor collaboration and duplicating efforts

Not doing a thorough scan of what other organizations in their area (both physical and area of expertise) already exist. We need to be leveraging and elevating each other’s efforts, not duplicating them.

A new nonprofit will have a much stronger case for support if it can articulate not why it is *better than* another nonprofit with a similar mission and work, but how it is collaborating with those organizations and what gaps in service, programming, or resources it provides.

— Kate from Social Responsibility Chicago

Weak accounting practices

One of the biggest mistakes we had to learn from the hard way was not investing in our accounting “engine” enough and soon enough.

Making the switch from an inexpensive local bookkeeper to a contract accountant was expensive, but worth every penny, and it we had done it sooner it would have saved us a lot of headaches.

— Fiona Benjamin from The HEAL Project

Staff Undervaluation

Underpaying and undervaluing staff.

— Victoria Silverman from Cook Silverman Search

Devaluing employees and lacking awareness

I have retired now (AMEN). I still get our agency’s monthly newsletter. Was reading a current issue that estimated how much our volunteers efforts “saved” the agency. In the thousands of dollars.

The whole article smacked of devaluing the hard work and dedication of employees. But on doing a little math with my calculator it seemed the wage they used to come up with this figure resulted in the volunteers having been paid over $30/hour…far more than long time staff ever received.

While I realize the casual reader will not retain that info or bring it up in discussion, I can’t imagine how hurtful it would be if still an employee, to feel so DE-valued, if indeed that was an accurate figure…maybe it took into consideration benefits and overhead…who knows…In addition the other issues you mention are relevant but even more problematic the smaller the agency.

The lack of awareness of the good an agency does is due to limited marketing, and that results in less support for fundraising. Too often board development seems based on looking for those with $$$ to donate, not on other skills…it’s more who they know and less what they know and their experience.

It’s a job that people need to be trained and educated to take on, not a social gathering.

— Robin Rosner from Community Partnership on Aging

Lack of employee accountability

The biggest mistake I see new nonprofits facing (and in fact some very well-established ones as well) is not holding their employees accountable for meeting performance expectations. Too often, nonprofits take a “charitable” approach to poor performance instead of addressing it from a business perspective.

This not only sends a message to the employee who is performing poorly that their performance is acceptable but it also demoralizes the employees who are meeting expectations.

— Greg Wilken from Nonprofit HR Collaborative

Closed culture that stifles innovation

Resisting change or trying new ideas discourages new board and employee innovation and nonprofit growth.

Instead of defaulting to ‘no’, default to ‘let’s see how we can try this’.

— Membership Chair from League if Women Voters of Oregon

Mission drift for funding creating burnout

One of the biggest dangers is making significant changes to the mission in order to satisfy a funder, or even a potential funder. For example, After the Harvest added annually increasing outcomes to appease the foundation directors to the detriment of our actual mission statement and focus.

However, this funding was restricted to that outcome and left the organization’s staff increasingly overworked to satisfy those outcomes. One of the end results was staff that was burned out and frequent employee turnover.

— Jane Fletcher from After the Harvest