- Failing to follow best practices
A National Center for Charitable Statistics study found that over 1.5 million nonprofits are registered with the IRS. This is a 4.5% increase from 10 years ago. With such a high number of nonprofits in the country, there are many best practices that you must adopt for your nonprofit to thrive. There is no question that many nonprofits have faced challenges, with some of them failing altogether. However, the good thing is that the failures of others can be used as lessons for new ones. Sadly, many ignore the best practices and try their ways as they go. This results in setbacks that could have been easily avoided.
- Limited fundraising efforts
Fundraising is the lifeline of any nonprofit, without which you will find yourself lagging in accomplishing your mission. It allows you to grow your nonprofit and serve as many people as possible. Fundraising is one of the key challenges that most nonprofits face. The biggest mistake you can make in your nonprofit is failing to focus on fundraising efforts. Doing this affects your ability to fund your mission and address the needs of people in the community.
- Hiring the wrong people
Like for-profit, nonprofits can easily fail if you employ the wrong people. This is common practice with charitable organizations because people think a dollar spent on operations is wasted. After all, such money could have been spent on something else. Nonprofit organizations always face challenges associated with poor hiring practices, failing to keep employee records, opting for salaries instead of hourly wages and having a problem managing the workplace, mainly due to indecisiveness in firing staffers.
- Failing to build relationships with donors
While fundraising is an important ingredient to a successful charitable organization, some nonprofits focus too much on it at the expense of everything else, including building genuine relationships with their donors. Therefore, even as you concentrate on fundraising, your efforts should be motivated by service to the community, and this starts with building lasting relationships with the donors. Never make the mistake of reaching out to donors only when you need money from them or during fundraising. Rather, reach out and thank them for their support and share updates about your organization.
- Lack of board diversity
The final and most important point that turns out to be overlooked by most nonprofits is board diversity. Most nonprofits fill their boards of directors with friends and acquaintances, forgetting the importance of having a diverse board of directors where decisions are made. As a result, innovation is limited, and the nonprofit struggles to create new solutions to emerging problems. Studies have repeatedly shown that diversity in boards contributes to the success of a nonprofit. Therefore, as you run your nonprofit, make sure you choose a diverse board in terms of gender, age, race and abilities.