Why Non-profits Fail

WhyNon-profits Fail


WhyNon-profits Fail

Manynon-profit organizations are on the verge of being insignificant intheir delivery of service and the failure to meet the needs of theirtarget populations. The failure of the organizations to occasionallyfail to deliver their intended mandates, not a basis to write themoff but the small mistakes can be lethal in the long run if left toaccumulate. Their impacts have slow but dangerous effects on theoperations of the institutions as people continue to lose faith inthem. They are at the risk of failing to get support from thesupporting institutions like governments and individual donors whomay see their efforts as being washed down without any benefit to thecommunity. It is, therefore, imperative to point out these problemsso that the management can develop timely ad effective measures tocounter them before they breed to uncontrollable levels. There areseveral instigating factors to the failure of non-profitorganizations. They include


Themanagement of any institution is the direction pointer for a mass ofemployees and other stakeholders with an interest in theorganization. Its failure has far-reaching effects on the operationand achievement of goals and objectives. All non-profit organizationshave well-structured vision and objectives that give them direction.Most management structure, however, do not work towards the samepurpose. Jang &amp Felock (2007) observe that most organizations areat the disadvantaged end due to inflexible management structures. Thelack of dynamism of the individuals or the rules that govern thepositions they hold makes some of the practices obsolete due to newinventions and ways of carrying out tasks (Jang &amp Felock, 2007).

Poormanagement coupled with poor leadership in giving the organizations adirection. Some organizational leaders are going to the extent ofusing the swim or sink mechanism to approach the problems thatafflict them. In this method, the organization has only one chance ofsurviving a wave or sink in case of failure (Block 2004). Theapproach is wrong and risky bearing in mind that there are a lot ofpossible actions to take through the prior development of contingencyplans in case the intended plan fails. Organizational leadershiplacks corporation with other institutions with the same interests.

Theplatform that could facilitate the exchange of leadership ideasbecomes shunned and most organizations soldier on to try their luck.According to Jang &amp Felock (2007) organizations that act inconsultations have shown desirable outcomes in terms of their goalsand objectives than those that work in isolation (Jang &amp Felock,2007). Since they are not government institutions with a disclosedmonopoly of the problems to address, organizations can always findclosely related partner and learn from each other.

Poorleadership fails to identify the strengths of the organizations thatcould be used to thwart the pangs of threats and weaknesses. Anefficient management works toward internal stability beforeidentifying the potential areas of service delivery. Conflictingmembers of staff do not work towards achieving a common objective.Leadership should develop a platform that allows the staff members towork alongside others from other organizations dealing with the sameproblem and learn from each other. They will identify the values thatthey harbor and the ones that they need to develop.

Lackof Donor Interest

Non-profitorganizations depend on the funds from monetary institutions andindividual philanthropists. Most of the big donors look forward toorganizations using the money in the most prudent and transparent way(Lazarevski et al., 2008). Impact loaded service delivery is alwaysthe attention capturing aspect for donors.

Organizationsthat cannot account for their funds receive fewer donations, unlikethe successful ones. The most unfortunate thing is that a significantnumber of them only want to have the funds in their accounts andspend it on a few orchestrated intervention programs and document itas a complete life changing activity. These organizations do not putthe needs of the recipients in mind by conducting a preliminary needsassessment and prioritize the most pressing issue. Attacking theneeds of the community in a blanket will bear undesirable results,and the organizations fail to convince their donor that they arechanging people’s lives.

Donorsalso depend on the success stories that organizations draw as aresult of their interventions to particular problems. Failure toprovide them with the expected picture of the field leads to denialof funds or channeling of funds to the most successful organizations(Skloot, 1987).

PoorEmployees’ Performance

Themanagement of any institution cannot deliver its mandate without theinvolvement of the right people to occupy the positions that bestsuits their professional characteristics. Poorly motivated employeesare one of the major reasons why non-profit organizations fail. Mostof the organizations rely entirely on the data collected from thefield by the employees. Poorly motivated and appraised workers cangenerate manipulative data and present it to facilitate an actionsince they feel alienated to the success or failure of theorganization (Jang &amp Felock, 2007). Trust, confidence, and highlyethical behavior are a critical component of employee behavior whenworking in a community. False information may lead to theorganization addressing the wrong need in the community or theimposition f a project to a community.

Someorganizations also have poor work schedules that exploit theemployees without giving the supportive materials. Most of them workin highly risky areas with very few public utilities. When theemployees work for long hours or when they the management ambushesthem and drops them in the midst of a new environment, they may takeit as a punishment. They will only offer lip service to themanagement while doing very little on the ground. Managers shouldcome up with a program that does not exhaust their employees unlesswhen there is an emergency. They should also have a comprehensiveorientation of their new places of work and the various challengesthat they are likely to encounter. Organizations that do not employworkers motivational programs fail in achieving their goals andobjectives (Jang &amp Felock, 2007).

Fundingand Financial Services

Asmentioned earlier, non-profit organizations rely on institutions tofund their activities. Very few of them have resources to runautonomously without writing lengthy proposals to convince donors toassist them with funds (Guo, 2007). Sometimes, donors withdrawwithout giving prior notice to the organizations. Since they cannotrun without money, they opt to dissolve their services. Limited fundsare also a challenge for the organizations. Managers can develop aplan to offer services and prepare the groundwork in wait f the funds(Moldof, 1993).The money may come in smaller amounts than expected,and it may not suffice the operations for the stipulated period.

Besidesthis, some management may develop unrealistic strategic plans thatcan depict their organizations as a profit making in the eyes of thedonor. Others may fail to draw a strategic plan, and this may lead todenial of funds. Their mission, therefore, becomes obsolete in theeyes of the donors and they may not release funds. The institutionsthat give grants want a correct and concise breakdown of how theorganizations will use the money (Moldof, 1993). Donors want astrategic plan that paints a good image of the community that theorganizations want to change. The plan must show realistic measuresfor the organization to follow and a realistic budget. Sometimes,organizations are too eager to please the donor while they know thatwhatever they put on paper is not applicable on the ground (Collins,2000).

Besidesthis, firms also fail due to lack of contingency donors in case theprinciples ones fail to release funds. For this reason, most of themfail to deliver the anticipated services or materials. Some projectsbecome stalled while others do not go past the planning stage.Non-profit organizational managers should venture out and look forother potential donors even when they are running a project funded byanother donor unless when the principle donor bars them from seekingadditional funding. Sufficient pooling of funds for a particularinterest in the community will help the organization to scale up itsoperations and consequently create a big impact in the community.


Identitycrisis and the clash of roles is another factor leading to failure ofnon-profit organizations. The competing needs of the boards ofdirectors and the management bar the organizations from achieving itsgoals (Blum, 2011). Most organizational managements also fail toidentify the needs of various stakeholders lie the donors, employees,and the target population. The stakeholders have different needsdetermined by their role in the organization. Failure to satisfyeither of the group has detrimental effects on the organization’sfuture (Lee, 2013). A poor mission statement and unrealisticobjectives results in the organization hitting the mark from thetargeted audience. The situation that is subject to change remainsuntouched, or the impact is insignificant concerning the weight ofthe issue.

Inabilityto Cope with Change

Accordingto Hoffbrand, (2007) change is an organization is inevitable. Theexternal environment surrounding organizations requires them tocomply with the changing trends to remain relevant. Changes intechnology and beat practices are some of the daily challengesexperienced in organizations. Through them, institutions have madetheir communication and sharing of ideas efficient. Besides this,organizations need to change their strategic plan after aconsiderable period to come up with a plan that suit the everchanging environment. However, some of them have rigid protocols andunwilling leaders who want to use the conventional way in the modernworld.

Agood example is the increased use of internet users who visitdifferent non-profit organizations websites. The number rose from 20%to 30% between 2006 and 011.however, the number of funds collectedfrom the online platform did not rise with the same rate. It isevidence that a significant number of organizations have not embracedthe change from paperwork to using the online fundraising platform.Such moves do not find a place and the result is losing somestakeholders like donors and volunteers. Failure to alter thestrategic plan by instituting another one makes some practicesobsolete with time and them many not bear any fruits in a dynamicenvironment (Helmig et al., 2004). It is also a major challenge thatis leading to the failure of some organizations.

Declinein Volunteer Base

Mostorganizations employ the help of volunteers to carry out variousfunctions that require support staff. These people come from thecommunity that is a disadvantage condition. Organizations may alsoengage professional volunteers from without the community and givethem a chance to offer their skills. The major reason peopleparticipate voluntarily is the accepted fact that non-profitorganizations have no intention of individual interests. However,although they do not make any profit, they are responsible to providethe right environment for work so that the volunteers do not struggleor suffering when offering their help (Blum, 2008).

Afterservice, many of them lack interest in some organization sand thismakes the level of return very low. The reduced number of second orthird-time volunteer is evidence that most of them do not findsatisfaction in the services they offer. The problem trickles down tothe organizational management and objectives. People would be willingto render their services to an organization that has practicaladvantages to the communities. Poorly planned and ineffectivestrategies may be less desirable to the volunteers. Since they offerfree services, their exit, and low registration makes theorganizations incur overhead costs of hiring and sometimes haltingthe services.


Thereare other factors leading to the failure of non-profit organizationsfrom achieving their mandate. This paper has only shed light on a fewof them. The small mistakes that an organization makes may not leadto an immediate downfall. However, when they accumulate, they presentthe management with an uphill task of stabilizing the operation ofthe organizations. It would be prudent to tackle the problems intheir individual contexts and institute preventive mechanisms toavoid repeating the same mistakes.


Block,S. R. (2004). Whynonprofits fail: Overcoming founder`s syndrome, fundphobia and otherobstacles to success.SanFrancisco,CA: Jossey-Bass, Incorporated.

Blum,D. E. (2008). Volunteers fail to return to many charities, a newstudy finds. Chronicleof Philanthropy, 20(20),11. Retrieved from http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&ampdb=a9h&ampAN=34032519&ampsite=eds-live&ampscope= site

Blum,D. E. (2011). Many boards fail to fully support executives orcoffers, new study finds. Chronicleof Philanthropy, 23(16),15-16. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&ampdb=a9h&ampAN=63980621&ampsite=eds-live&ampscope=site

Collins,B. D. (2000). Fuddy-duddy managers fail to recognize importance offlexibility. CorporateLegal Times, 10(105),7. Retrieved from http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&ampdb=bth&ampAN=3517104&ampsite=eds-live&ampscope=site

Guo,C. (2007). When the Government Becomes the Principle Philanthropist:The Effects of Public Funding on Patterns of Non-profit Governance.PublicAdministration Review,67(3), 458-473.

Helmig,B., Jegers, M., &amp Lapsley, I. (2004). Challenges in managingnonprofit organizations: A research overview. Voluntas:International Journal of Voluntary &amp Nonprofit Organizations,15(2),101-116. Retrieved from http://ezproxy.umuc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&ampdb=a9h&ampAN=13598024&ampsite=eds-live&ampscope=site

Jang,H. S., &amp Feiock, R. C. (2007). Public versus private funding ofnonprofit organizations: Implications for collaboration. PublicPerformance &amp Management Review,31(2),174-190.

Lazarevski,K., Irvine, H., &amp Dolnicar, S. (2008). The effect of fundingchanges on public sector nonprofit organizations: the case ofBushcare NSW. Journalof Nonprofit &amp Public Sector Marketing,20(2),213-227.

Lee,Z. (2013). Rebranding in brand-oriented organizations: Exploringtensions in the nonprofit sector. Journalof Marketing Management, 29(9),1124. Retrieved from http://web.a.ebscohost.com.ezproxy.umuc.edu/ehost/detail/detail?sid=56c88eaa-fb61-441a-be94-7d8350df4c26%40sessionmgr4002&ampcrlhashurl=login.aspx%253fdirect%253dtrue%2526scope%253dsite%2526db%253dbth%2526AN%253d90091870%2526msid%253d-427779969&amphid=4201&ampvid=0&ampbdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#db=bth&ampAN=90091870

Moldof,E. P. (1993). Strategic Planning for Non-profits. Fund RaisingManagement, 24(10), 29-33. Retrieved fromhttp://bi.galegroup.com.ezproxy.umuc.edu/essentials/article/GALE%7CA14860307/f771c73d52f9d1d6b420edd719b33195?u=umd_umuc

Skloot,E. (1987). Identifying and refining the idea. NonprofitWorld, 5(2),8-9. Retrieved fromhttp://ezproxy.umuc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&ampdb=bth&ampAN=13220813&ampsite=eds-live&ampscope=site