When I was young, my grandfather owned a boat that he kept stored in his garage. The boat irritated my grandmother, because it was expensive to maintain, took up a lot of space, and she no interest in water activities. One day, she expressed her displeasure by hanging a sign in their garage that said, “A boat is a hole in the water into which you pour money.”
After consulting with numerous non-profit organizations, I’ve found that you could create a similar sign that reads, “A non-profit is a hole into which people pour money.” This doesn’t mean that all non-profits are wasteful or ineffective. Nothing pleases me more than helping a great organization spread its message like wildfire. But, my experience has shown that the following 10 reasons cause too many non-profits to turn into money-sucking holes that struggle to be profitable:
The Top 10 Reasons Why Non-Profits Are Non-Profitable:
1. The organization’s marketing language comes across as selfish, rather than selfless. For a more detailed explanation, watch my video here.
2. The organization’s website looks boring, appears like a static online brochure, and rarely gets updated. Once people visit, there’s no reason to return.
3. The leadership won’t pay enough money to hire and retain good talent. Instead, they pay measly wages to achieve their goals by depending on interns, inexperienced workers, and part-time help.
4. The organization fails to use newsletters (print or email) to effectively to gather new contacts and stay in touch with their audience to drive continued donations.
5. The organization doesn’t display success stories. Thus, prospective donors and volunteers can’t tell if the non-profit is worth the investment of their money and time.
6. The non-profit keeps milking the same old sources for money, rather than creating new revenue streams to diversify their income. There are dozens of ways to generate more money.
7. The founder is a poor public speaker and an ineffective communicator who tries to survive off of passion alone. No investment is made to learn new skills that would improve their reach.
8. Donors are rarely given an interesting reason to spread word of mouth. So, nobody says a word, and the non-profit wonders why donations are slow.
9. The organization is so consumed with their own mission that they become myopic. Their narrow-minded attitude creates a failure to look for new ideas and build bigger partnerships.
10. The non-profit is run as a non-profit. Instead, all non-profits should be run with the mindset of a for-proft company. You must be able to legitimately earn people’s money and respect. Ask yourself, what if the government took away your non-proft status? Could you still survive?
If you run a non-profit or support one that is struggling, use my Top 10 List to identify issues that could be causing the problem. Feel free to contact me for consulting help. My grandmother would appreciate a world with fewer holes into which people pour money.
Ron Tracy says
As someone preparing to launch a new nonprofit, this is a very timely post Rob. Thank you for being so generous with your experiences! Reason #10 is the catch all. You simply must have a for- profit mindset in today’s competitive nonprofit world.
Cindy Finley says
Rob, thanks for this. And I would agree with Ron – very timely. I’m with a young nonprofit, RiverCross. We believe that the world’s most vulnerable children need a bridge to hope. We’re building bridges of hope by equipping the children’s caregivers through radio theatre drama that pairs best practices with a great story and world class talent. It’s really exciting. While our approach to fundraising is theoretically transformational, it”s easy to slip back into a transactional approach to get money in the bank now. Thanks for the reminder to stay the course!