How to Build a Successful Non-Profit

by Terry Masters

Starting a new nonprofit and building it into an organization that will exist for years, even after the founders have moved on or passed away, can be more challenging than it seems initially. Management can spend so much time pursuing the organization's mission that they forget a nonprofit is also a corporation that must focus on proper governance, developing resources and establishing a reputation for delivering effective services. The best way to build a successful nonprofit is to find a balance between the pursuit of a mission and the development of the infrastructure that makes the pursuit of those objectives possible.

Mission

A successful nonprofit is started by dedicated people who are committed to a specific mission that defines and directs the scope of its authorized actions. Devote time during the organization's inception to crafting a mission statement that will be relevant for years to come. A narrowly defined mission statement can help an organization stay focused and make it easier to attract support, while a more broadly defined mission statement can give the organization the flexibility to change as the funding landscape changes without having to modify the nonprofit's formative documents.

Governance

A nonprofit’s board of directors is responsible for governing the organization and providing financial oversight of its affairs. The quality of a nonprofit's board will often make the difference between a successful organization and one that is not. Organizations that are able to recruit board members with a broad range of relevant professional experience and who are willing to help the organization identify and raise resources to pursue its mission have a better chance of growing over the long term. Draft a job description for the ideal board member that clearly outlines expectations and look for people who can bring real resources to the table.

Reporting Obligations

A successful nonprofit keeps up with its state and federal reporting obligations. To maintain its tax-exempt status and build its profile with donors, a nonprofit must file an annual information return with the Internal Revenue Service and submit an annual report to the state. Many nonprofits must also have an independent audit performed annually. If a nonprofit does not meet these obligations every year in a timely fashion, it can lose its tax-exempt status as well as incur fines and alienate donors.

Programming

Successful nonprofits focus on results-based programming. Goals and objectives should be designed to prove the efficacy of the organization's theory of change, or how its programs work to accomplish its stated mission. A nonprofit's product is the accomplishment of its mission, so management should be able to prove that the money the organization invests in programming is providing a demonstrable return. The best organizations often understand that success is as much about quantitative results that can be tracked and studied as it is about anecdotal evidence that makes people feel good.

Fund-Raising

One of the best ways to build a successful nonprofit is to diversify its fundraising efforts. Nonprofits raise money through individual donations, grants from foundations, corporations and government entities, and proceeds from events and special activities. Relying too heavily on one particular source of revenue can have adverse consequences if that source is unexpectedly interrupted.