‘Sustainability’ is a word we often hear when it comes to running an organization, whether it is a nonprofit or a commercial one. Sustainability refers to the ability to use resources in a way such that it prevents their depletion. For nonprofits, this means being able to continue with fulfilling their mission.
Nonprofit sustainability planning often focuses on financial sustainability but also includes leadership succession, adaptation, and strategically planning for the future.
Organizations that don’t pay as much attention to the financial aspect as they should are at risk of falling into the ‘nonprofit starvation cycle.’ This is how the starvation cycle plays out:
- Donors misunderstand how much it can cost to run a nonprofit organization
- Feeling the pressure to conform to these expectations (no matter how unrealistic they may be), nonprofits underspend on overhead and underreport on expenses
- As time passes, donors expect the nonprofits to do more with less, and this continues until the nonprofit is starved and eventually has to shut down.
This highlights the importance of making sure your donors understand your costs and expenses. To be able to achieve financial stability, you want to make sure you have established clear communication with your donors, your board members, and staff to erase any doubts they may have. As such, you would need to make sure that your mission and long-term goal drive all aspects of your work, and that your needs are defined clearly in terms of how they are going to benefit your nonprofit in the long run.
Of course, finances are not the only element of sustainability for any organization. If you are serious about your nonprofit’s sustainability, you would want to put extra emphasis on other aspects of your organization, such as leadership transitions, to allow for planned transitions as well as unplanned ones. You would also want to make sure that your staff are not only trained in their own department but are also cross-trained to the bare minimum so that in case of any emergencies, the day-to-day functions can continue without interruptions.
Many nonprofits overlook their sustainability planning in favor of improving their image in the eyes of the public. However, a brand reputation only goes so far if the inner workings of the organization are not up to the mark.