According to the National Center on Charitable Statistics, the failure rate for nonprofits is over 30% within the first 10 years of establishment. But why?

Lack of Planning. The old saying, “Build it and they will come”, only works when a plan of how to get them there exists and they can see the benefit of coming. Many organizations fail because of the lack a strategic plan of operation, marketing or growth.

Lack of Leadership. Most leaders focus on finding the right strategy; while the best leaders focus on finding the right people and empowering them. Many organizations have the right programs in place but don’t have the leadership in place to push the mission of the organization. This can include upper management and the board of directors.

Unrealistic Expectations. Having a plan in place is essential in the development and implementation of the operations within an organization. Without a strategy of execution, expectations can become blurred and unrealistic. Many organizations fail because they were not prepared for the influx of business, expenses or challenges.

Undocumented strategies and systems. Many organizations fail because they do not have basic systems in place to operate their organization. They are dependent on key people for specific tasks within the organization. If those individuals are no longer with the organization, the nonprofit suffers.

Inability to Scale. As an organization grows, it must be able to adapt and grow from within. Many organizations do not have capacity building strategy in place which results in fatigue and burnout from their employees and affects the quality of service it offers to its customers.

Lack of Funding. I put this one last because organizations do need funding to sustain. However, most nonprofit leaders seek grants to operate their organizations; when they should be looking for more direct and consistent ways to secure funds to operate through public relations and impact.