The Life-Cycle of a Non-Profit Organization:
Creating Opportunities for Success
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“Leaders
must create an environment that
embraces change not as a threat but as an
opportunity.”
-- Warren Bennis
Peter Drucker’s 5 Questions for Nonprofit
Leaders
1. What is the mission?
2. Who is the customer?
3. What does the customer value?
4. What are our outcomes/results?
5. What is our plan?
Logic Model
Nonprofit Systems: Priority Areas
1. Programs and Services
2. Staff Leadership/Management
3. Staffing
4. Governance/Board
5. Administrative Systems/Operations
6. Finances and Fund Development
7. Marketing/Community Awareness
ADAPTIVE CAPACITY
1. Needs Assessment
2. Organizational Assessment
3. Program Evaluation
4. Knowledge Management
5. Strategic Planning
6. Collaborations and Partnerships
LEADERSHIP & MANAGEMENT CAPACITY
LEADERSHIP CAPACITY
1. Board Development
2. Executive Leadership Development
3. Leadership Transitions
MANAGEMENT CAPACITY
1. Human-Resources Development & Management
2. Internal Communications
3. Financial Management
TECHNICAL CAPACITY
1.
Service Delivery Skills
6. Fund-Development Skills
2. Evaluation Skills
7. Earned Income Generation
3. Outreach and Advocacy Skills
8. Accounting Skills
4. Marketing/ Communication
9. Facilities Management
5. Legal Skills
10. Technology Skills
The Model of Nonprofit Life Stages
Stage 1: IMAGINE and INSPIRE
“START-UP”
This is the vision or idea stage, where the organization is not
yet formalized and where imagination and inspiration
abound. The primary question at this stage is “Can this
dream be realized?” This stage is characterized by lots of
enthusiasm, energy, and creativity, but at this point, the
organization really is merely a dream of a better world that
is inspirational and worth striving for.
Stage 2: FOUND and FRAME
“ADOLESCENT”
This is the start-up phase of the organization, when it receives its
official nonprofit status and all the activities of founding and framing
an organization occur. The key question at this stage is “How are we
going to pull this off?” Like Stage One, this stage is characterized by
excitement and high levels of interest by many people, accompanied
by the fear that formalizing the dream will result in the loss of its
magic. The act of incorporating formally establishes the organization.
Stage 3: GROUND and GROW
“MATURE”
In this stage the organization is concerned with building its
foundation by grounding its activities and growing the “business.”
The overriding question is “How can we build this to be viable?”
Organizations in this stage are focused on establishing systems of
accountability; however, the need for growth on multiple fronts may
be overwhelming to those running the organization. The Ground and
Grow Stage has a mundane feel of “taking care of business”; but it
also has numerous enticing intersections, choices, and challenges.
Stage 4: PRODUCE and SUSTAIN
“MATURE”
This is the mature phase of the organization’s life when production is
at its peak and sustaining the organization is a high priority. The
primary concern, “How can the momentum be sustained?” The
organization is very stable, yet that same stability may make it stale
as concerns for procedure slow creativity and growth. Stage Four is a
productive place that, at its peak, feels a little like automatic pilot.
Staff are doing their work effectively and enthusiastically.
Stage 5: REVIEW and RENEW
“STAGNANT”
In this stage the organization is reinventing itself in some way, shape, or form through a process
of review and renewal. The primary question is “What do we need to redesign?” It can be a time
of large or small, exciting or stressful, but always necessary, change. Proponents of chaos theory
will recognize that in order for organizations to be as viable as possible, they will need to operate
in modes that promote chaos and therefore create possibilities for new patterns of interaction to
form. Mature nonprofits revisit one or more aspects of their organization—mission, vision,
products, services, structure—sometimes changing them drastically, sometimes only making
slight innovations, as they rediscover who they are and how they fit in the changing world.
Relative to the scope of the modifications, organizations may cycle back to an earlier stage. For
example, if the change relates to the primary mission of the organization it may find itself back in
Stage Two, while minor alterations in the organizational structure may simply mean revisiting
Stage Four.
Decline and Dissolution
DEFUNCT
Sometimes it happens—an organization is forced or chooses
to shut its doors. In this model, decline and dissolution
is not considered an inevitable stage of an organization’s life
cycle but rather one of the routes an organization can find
itself taking. An organization can face dissolution at any
stage.
Preventing Premature Organizational
Death: Risk Factors
Board and staff stagnation
Reliance on a single funding source
Failure to pay attention to external factors
Take Action
 Avoid the “we’ve always done it this way” syndrome
Frequently ask: “is there a better way to do this?”
Add new Board members
Pay attention to staff morale
Pay attention to financial trends revenues, expenses available fund development strategies
Have a strategic plan. Use it and monitor it daily.
Ask yourself whether you may be part of the problem? Are you challenged, are you having fun?
Fight stress and encourage others to do the same. Do we enjoy working together staff/vols?
The “PASSION METER”
Measures Receptiveness to Change
Rather than guessing how receptive people are to a change, we
find it is sometimes better to ask them directly. One approach to
use is a tool called the passion meter. A passion meter can be as
simple as asking people how they feel about the change: “red light,
yellow light or green light?”
The Change “PASSION METER”
*Negative Skeptics
*Positive Skeptics
*Cautious Fence Sitters
* Indifferent Fence Sitters
*Promoters
*Sponsors
Adjust the Sails in Your Organization:
Move the Mission Forward