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The Five Biggest Mistakes Nonprofits Make That Limit Their Effectiveness

The Five Biggest Mistakes Nonprofits Make That Limit Their Effectiveness

Wouldn’t it be nice if every time we start to do something stupid, someone would be there to intervene before we did it?  But what if I told you that, right now, you are possibly doing five things to undermine your nonprofit’s success.  Would you want to know what they are?  Chances are, you’re doing at least one of these, so let’s jump in and take a look.

Mistake #1: Not Being Clear About Your Mission

Before you say that isn’t MY situation, hear me out. In fact, this lack of clarity can take many forms. It could be that your team totally has the mission internalized. You eat, sleep, and breathe this stuff. But, you’re just not doing a very good job of explaining it externally. In other words, your insiders get it, but your audience is a little unsure what you do.

Or maybe you get it, but you feel like even your internal team members don’t all march to the same drum beat. And if that’s true with your insiders, then it’s definitely true for your audience.

The third possibility is that you yourself, the founder and idea person, are still somewhat of a moving target. You see where I’m going with this?

Lack of clarity is fatal to your cause. You simply have to have all of your team rowing in the same direction, and you don’t want any misunderstandings in the marketplace about what your mission is.

Now, I can hear some of you protesting that, “Hey, we’re an animal shelter. How much more clear do we need to be?” Well, if all I know about your mission is that your nonprofit is an animal shelter, then I still don’t know much about you. Do you focus on dogs and cats, or only dogs? Or do you take in other animals? What about livestock animals? Are you a no-kill shelter? Does that matter to you? Does it matter to your donors?

I could use any number of hypothetical organizational types, and the advice would be the same. First, make sure everyone involved in your work can articulate what you do and why. If they can’t, you can be sure that your potential beneficiaries and donors don’t fully get it. Spend time here. Really think about your messaging.

When you think about St. Judes, you instantly know what they’re about, right? They’re a children’s research hospital for critically sick children. You probably also know that St. Jude’s never charges the families that get care there. That’s what I’m talking about: Clarity. Make sure you’re being just as clear.

Mistake #2: Expecting Others to Care As Much As You Do

The second critical mistake we see is organizations that get discouraged because they just can’t seem to get people to care as much as they do. But that’s just the reality you have to accept. Don’t forget that you are the one so drawn to this mission that you have sacrificed time, talent, and maybe treasure to get involved in trying to bring your solution to the table.

It’s perfectly natural for your passion to be elevated beyond those who are not a part of what you’re doing. You job is compel them to care. Go back to mistake number 1 about clarity. This is critical when it comes to fundraising.

Sticking with our earlier theme, you might generate some acceptable level of donor support from just those who are passionate about animal rescues. Chances are, though, you’re going to have to reach beyond that. And to do that, you have to find a way to effectively tell your story.

Think about that sad ASPCA commercial with the Sarah McLachlan song in it. It’s so cringy that they made a meme Busch Light beer commercial this year for the Super Bowl with Sarah in it. It was hilarious! But as excruciating as that ASPCA commercial is, guess what? It works! People by the thousands donate because of it…many of whom, by the way, don’t spend their average day thinking about abused dogs.

What I’m saying is that getting the larger community beyond your inside circle to care isn’t automatic. You’re going to have to drive interest and keep driving interest. This never stops, so set the pattern now.

Mistake #3: Not Cultivating Your Donors

Getting that first donation from someone is a huge success. It’s hard work. And it brings a lot of gratification when a supporter comes on board!

But here’s what often happens. Your fundraising efforts tend to focus almost entirely on generating new support and your current donors get neglected. Maybe you’ve heard it said that in business, it’s many times harder and more expensive to attract a new customer than it is to hold on to an existing one. Well, the same is true for donors. But are you consistently thanking your donors every time they give?

Before you say that you don’t have time to do that, let me just say that there are great ways to do some of that stuff automatically with a donor CRM or something similar. You don’t have to pick up the phone and call necessarily. Make sure your donors are on your email newsletter list. And be consistent about putting out communications to your supporters.

But some donors deserve more attention than others.

I’ll give you an example from an organization I served on the board of. It is a private school, and a particular donor gave a matching gift of $1 million to help pay for reconstruction after the huge flood that hit Nashville back in 2010. Now, I hope it’s self-evident that an automatic email “thank you” from our donor database wasn’t sufficient. In fact, the headmaster nurtured that friendship over the years, and when that same school was hit by a tornado in 2020, guess who was there to help out. That same donor, who to this day has remained publicly anonymous, by the way.

Your situation doesn’t have to be this extreme, and I hope your facility doesn’t experience the types of destruction visited upon our school. But cultivating donors you already have goes a long way toward locking in that support for the future.

Mistake #4: Not Prioritizing Compliance

When I say the word “Compliance”, I’m talking about your tax, your accounting, and your regulatory compliance.

Who’s doing your bookkeeping? Do they know what they’re doing? Would you know if they didn’t? Are you and your board seeing financial reports on a regular basis?

What about your IRS Form 990? Did that get filed on time? If not, Uncle Sam’s got some hate mail headed your way. He’s got his hand out, too.

What about fundraising? Have you registered in every state in which you are generating revenue? Did you know that generating revenue without registration can result in some pretty hefty fines, maybe even an injunction from the Attorney General’s office?

The point isn’t to scare you. It’s to remind you that as important as your mission is, you will never see progress toward your mission if you don’t keep your compliance house in order.

Call us if you need help. We provide these services to nonprofits so that they can indeed focus most of their energy on mission.

Mistake #5: Getting Lazy With Any of the Above

Ok, some of you are thinking we got lazy ourselves with number 5, but we really didn’t.

Work with nonprofits for as long we have…and that’s 28 years in business now…and you start to see a lot of patterns. One of those patterns is nonprofits starting strong, but eventually getting bogged down in the day-to-day and losing sight of the fundamentals. But just like in business, this stuff is never on autopilot. These things that I’m talking about require diligence and constant attention throughout the entire life cycle of your nonprofit.

Sarah McLachlin’s sad dogs are still on TV. So are the St Jude’s kids. Why? Because letting any of this slip means you will inevitably see your mission success start trending down the backside of the bell curve. And that’s not what you want to see.


There’s a lot more to accomplishing your mission than just these five things.  But failure to properly handle these particular issues will all-but-guarantee a struggle for your nonprofit.  It may even prove to be its undoing.

Keeping your hand to the plough is the only way you’ll ever see success.  It’s hard work and it takes consistency.  But hard work and consistency pay off.  Don’t get weary in well doing!

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Greg McRay is the founder and CEO of The Foundation Group. He is registered with the IRS as an Enrolled Agent and specializes in 501(c)(3) and other tax exemption issues.

This Post Has One Comment

  1. This article is a valuable reminder that success for nonprofits demands ongoing dedication and vigilance. It emphasizes the significance of having a clear mission, compelling storytelling, engaged donors, proper compliance, and consistent attention to these critical areas. Excellent work! Thanks, Greg.

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