Is nonprofit sustainability a reality?

The nonprofit landscape is changing and you’re faced with a real challenge. You want to create impact and build a sustainable future for your nonprofit. But is it really possible? Experts say, yes! In fact, Jeanne Bell, Jan Masaoka and Steve Zimmerman, authors of Nonprofit Sustainability: Making Strategic Decisions for Financial Viability, say that when nonprofits begin to understand how to bring programmatic goals together with financial goals, they’ll start to make decisions that lead to organizational sustainability. These experts say that sustainable nonprofits follow these core principles:

  1. Financial sustainability. Sustainable nonprofits always tie impact goals to financial goals. Remember, fiscal health and the maintenance of adequate working capital is as intrinsic to success over the long term as community impact is.
  2. Effective management of hybrid revenue strategies. Nonprofits today are supported by diverse sources. Many nonprofits are looking at alternative revenue-producing models to mitigate funding cuts. Management of hybrid strategies can be a challenge. For this reason, different financial goals must be set for different revenue streams and each must be managed in a different way.
  3. Development of an explicit nonprofit business model. Strategic business decisions can’t be made without an existing business model. For this reason, every nonprofit needs to develop a viable business strategy that brings together all of the organization’s activities under the umbrella of the organization’s mission. In the nonprofit world, programmatic impact strategies will be a significant part of the business model. But each activity should be associated not only with an impact strategy but also a revenue strategy. Thus, the sustainable nonprofit has a “dual bottom-line” – impact and financial return.
  4. Continuous decision-making. Today’s nonprofits face unprecedented challenges. Evaluation, assessment and continuous decision-making are necessary for survival and success when change is constant.

You should also keep in mind that succession planning is also a critical aspect of sustainability because it ensures that staff, leadership and board members don’t take critical knowledge and relationships with them when they leave.

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