Common Issues Faced By NonprofitsJuly 18, 2017
Attention nonprofits: Are you facing operational difficulties? You could be inadvertently ignoring opportunities for improvement.
Oftentimes, nonprofit organizations will run into situations where operations could have been run more smoothly, recruiting could have been handled differently, and resources could have been used more efficiently. So how do organizations use these “what-ifs” to improve their organizations?
Top two issues
Many nonprofits will experience issues when they:
- Neglect to take the time to appoint the right board members with the right experience.
- Avoid merging with a similar nonprofit organization where they can combine resources.
In the first situation, a strong board of directors is critical to the success of the organization. Not only should the board members be interested and ideally passionate about the mission of the organization, but there should be board members who bring different levels of expertise to the table.
As an example, there should be a board member who understands finance, accounting and budgeting. However, the rest of the board members cannot rely on this one board member's expertise and therefore ignore the finances and related financial reports. The board chair must make sure that the other board members are involved and have a basic understanding of the organization’s finances.
In the second situation, many non-profits struggle because their board is not willing to merge with a similar non-profit, until it is too late. The last thing any organization wants to do is lay-off employees, but when a non-profit is struggling and can find a similar non-profit either in a similar situation and/or can combine resources that will be beneficial to all, why not reduce overhead expenses, by possibly eliminating rent, certain payroll and other expenses?
A great example of this is a chamber of commerce.
The membership of many Chambers of Commerce and similar non-profit associations consist of small businesses who determine from year to year whether they want to continue their membership with their Chamber or similar association or use those funds for other more pressing needs.
As a result, many of these types of organizations are struggling to attract and retain members. So, wouldn’t it make sense for two Chambers of Commerce that are in close proximity to one another consider merging and combining resources? Think of the costs that will be saved by only having to maintain one office, and employ one executive director and run one accounting department, with essentially double the membership.
What’s the hesitation in doing this? --More often than not the boards of these chambers continue to believe there Chamber will survive, and are not willing to let go, despite the fact that their Chamber struggles to pay its bills from year to year.
Before these situations arise, think about your organizational structure and how it can be improved. You don’t want to run into a situation where it’s too late and your organization has failed as a result. Reach out to me or a member of our Not-for-Profit Services Team for more info.