Hint: It's not as simple as people make it seem
I'm going to start this post off asking you to bear with me. There is a lot to be said on this topic and great opportunity to become side tracked. I promise to do my best to avoid the road of a rant but if you come here often it is not the road less traveled.
I received a text message a couple of months back from a local associate. He wanted me to be aware of a networking opportunity in the city. He had come across an article with the information and wanted to share it with me. I hadn't heard about it so I jumped in for the read. Maybe half-way through, I stopped reading. Why? I am happy you asked. With the exception of the demographics (it focused on women entrepreneurs), it was a networking event like many of the others - an opportunity for business owners to network. This might come as news to many, but I don't consider myself to be a business owner and when I see events for "business owners", I don't consider the event/space a place for me and my work.
I know what you're thinking: Doc, this feels like the introduction of a rant you've had before. It's not, I promise. Hear me out, remember the title of this post, and keep in the back of your mind that this is my personal opinion.
We, nonprofit organizations, are often left out of opportunities that could lay a foundation for us - help us build capital even. The major difference in the provisions of nonprofits and for-profits, in my opinion, comes down to the satisfaction of the consumer. If you are a for-profit (business) and your consumer(s) don't love what you provide, you have the opportunity to switch it up - I use "opportunity" loosely. If you are a nonprofit (organization), you have to make a case as to why what you provide is a necessity to your "consumer" (often referred to as "client") and if you don't have capital, you could be making this case 10 times over before you see a dime.
Let's call it "The Power of Contracting".
Even when you know the services you provide as an organization are necessary to fill a gap in the community, you must convince those with the "power of contracting" of its urgency and help them see it is not just a here and now problem but something that has stood the test of time. This, in my opinion, is part of the reason why nonprofits fail. Often you're attempting to convince someone who has never experienced homelessness (the service you provide) why it is important to invest in the ending of homelessness. A business owner is reading this and saying, "In some ways, we have to do the same thing". And I wouldn't completely disagree but would challenge you to go to that drawer in your kitchen where you keep all the things that don't really belong in the kitchen but you didn't know where else to put them and ask yourself, of all the forgotten items in that drawer, how many lives would be impacted if no one saw its value? I mean in a life altering kind of way. If they stopped making that shoe-shapped corkscrew, would a family go without a place to sleep?
The point?
After a for-profit deal is final, it is possibly just another sale of something that will end up in that kitchen drawer. After a nonprofit organization is turned down for funds, because the funder has decided to go in another direction, we don't re-invent ourselves; we don't find another mission or new services to offer. We are constantly at the mercy of those with the "power of contracting". And don't let it be a cost reimbursement contract because the struggle is real, let me tell you...
So, from someone who once taught a leadership and management of the nonprofit sector course, these are the top three reasons I believe (especially new) nonprofits fail.
My List
More passion than data
The flow of funds
Mission drift
Reason 1: More Passion Than Data
I have had multiple people tell me, especially when I first started my "Who's Who" when I talk about the work of Meryl's Safe Haven, they can hear my passion; I hear this especially from my co-founder now. It is hard work and if I won a million dollars, I would still show up everyday just with fewer cares. Unfortunately for me, passion doesn't pay the bills. It is the responsibility of me and others like me to paint many pictures that speak to the background and processing abilities of anyone we come in contact with. Some "pictures" that come to mind: (1) a picture of truth, (2) a picture of data, (3) a picture of compassion, and (4) a picture of myself as a leader with a clear understanding and vision of the work ahead.
Growing up, I often heard "money (or numbers) talk and bull- walks", I understand that now more than ever. In a discussion with an investor, I was reminded that my past experience was as important as the future of the organization. They were interested in knowing how much money I had previously managed and how many youths would this work impact. Different pictures, same canvas.
Reason 2: The Flow of Funds
As a kid, I knew the importance of holding back. I would skip lunch all week just to hold on to my lunch money and buy something I wanted. Lucky for me, I didn't want much. However, when someone gave me money for my birthday or something, it burned a hole in my pocket and I didn't want to to spend it but the thought of going to buy some music made me less of a cheapskate, somehow. Unfortunately for my family, I am still cheap.
When MSH received our first award letter, I wanted to jump right in! However, what I forgot was the long process that comes after that one document. I had to submit documentation. I had to wait for documentation. I had to wait for everything to go through accounting. I was spending to get started and to be able to provide the necessities for families but nothing was coming in, yet. For a new nonprofit, this feels like a trap. A situation riddled with failure! And you reach a point where you can't spend anymore nor can you bill and you ask yourself what do you do next. You become stuck between a rock and a hard place. This is a difficult situation for a nonprofit and one that often ends dramatically with a few inabilities: an inability to hire, an inability to grow, an inability to keep the doors open.
Reason 3: Mission Drift
If reason two doesn't fold you, the chase for the next dollar just might. In search of the next contract or grant, many organizations lose themselves. They forget who they are and why they came to be in an effort to fit into the box of a request for proposal (RFP). Then they get to a place where they cannot manage, in the sense of programming, this new identity or the population they are now supposed to serve and it becomes a lost cause with many statements beginning with, "Remember that organization that...". A lost to the community and families they once served.
So much has changed!
Unfortunately (and fortunately) so much has changed. The economy has more waves than an ocean and need is as constant as the heat in Florida. In my opinion, there is no one way or road to "do nonprofit work" but there are many opportunities to learn from the mistakes and mishaps of others. To combat the failures I have outlined, I suggest the following:
Never forget your why and if you reach a place where your why is no longer enough, maybe you have worked yourself out of a job which is what I was told nonprofits should do
Stay informed and aware of the needs of your population and allow them to be the voice of reason, need, and data
Never believe the work of grant searching and writing is complete because just as sure as your doors are open, you will need resources for them to remain so
I wouldn't call myself an expert, but I would consider myself to be a life long learner of the nonprofit sector, an admirer, and someone who believes the work is never done. With all of that said, I also have a deep fear of failure and recognize the opportunities often provided to business owners are not accessible by founders of new nonprofit organizations but could be the difference between failure and success. As I acknowledge these reasons, I also am aware that MSH is in no way an exception to the possibilities of becoming a statistic. Until small nonprofits like MSH hold the "Power of Contracting" in their hands, many will risk all they have to only have all the odds stacked against them while not being offered opportunities that could sustain them.