Managing Your Nonprofit for Resilience

APPENDIX 150 Reasons Why It Is Hard to Run a Nonprofit

MOST NONPROFITS PERFORM extraordinarily well with the resources they have. The exceptions noted in Chapter 1 demonstrate, by their relative infrequency, that most nonprofits manage to gather critical financial resources, maintain and grow their staffs, work relatively effectively with volunteer board members, train and supervise volunteers, deal with needy and risky service recipients, grapple with competition, maintain public trust, respond to changes in markets, keep funders informed, and deal with the wide variety of stakeholders.

Given that nonprofits do so well under such circumstances, why worry about the sector? This appendix provides the answer—50 answers, in fact. If anyone doubts your argument that your nonprofit needs to devote time, energy, or money to risk management, give them this appendix and ask them if they face the same conditions in their line of work. (Although this list refers principally to social services nonprofits, the same dynamics tend to apply with other nonprofits.)

Money Worries

1. Underfunding. Most nonprofits do not have sufficient resources for all the activities they wish to perform. The dynamic here is different from a traditional for‐profit business. With a for‐profit business, insufficient funds may lead to either outright failure or failure to capture all potentially available revenues. The for‐profit business may go under because it does not have sufficient resources. It may leave ...