Anyone who’s spoken with either of our principals lately has probably gotten an earful on the subject of nonprofit sustainability. What is it? How can we measure it? What mistakes threaten it? What practices ensure it? And have expectations around it become a stick to beat nonprofits with?
We have answers.
In a series of articles starting here, we’ll give you a good working definition of what nonprofit sustainability is (and what is isn’t), back up our findings with research and expert references, and explain each of the areas we think are important. We’ll also debut a new tool, the Leadership Evaluation for Nonprofit Sustainability (more on that later).
So: What is sustainability?
Nell Edginton at Social Velocity says it’s attracting and effectively using enough and the right kinds of money to achieve long-term goals. The United Nations "Our Common Future" report says it’s doing what is required to meet the needs of the present without compromising the ability of future generations to meet their own needs. And Jeanne Bell points out that Wikipedia says it could be just the capacity to endure.
When we focus on nonprofits, we separate sustainability from impact. There are plenty of resources available to nonprofits to evaluate and improve their mission impact, and we’ve noticed that lots of nonprofit staff and board members naturally enjoy spending most (if not all) of their time focused on issues related to mission. We want to concentrate on what it takes for a nonprofit to support all that great missioning.
Powering Nonprofits’ view on sustainability is fairly straightforward. It’s the ability of a nonprofit to marshal the resources it requires to enact its mission for the long term. “Resources” covers a lot of areas; financial, governance, staff, volunteer, donor and community support. In our opinion, a nonprofit that sets, measures, and meets the right goals in these areas is likely to be around, doing its good work, for a long time to come.
"Sustainability is the ability of a nonprofit to marshal the resources it requires to enact its mission for the long term."
Unfortunately, in some circles, “sustainability” has become a stick to beat nonprofits with. It’s a reflection of feedback, more and more common over the past decade, from corporations and foundations that want nonprofits to re-tool to become more like for-profit organizations. They ask already stressed nonprofits to begin moving from a donor-funded model to an earned revenue model. Or they use diversity of revenue streams as a measuring tape without recognizing that other measures are just as important. Worst-case scenario, they band together in implementing policies that refuse to fund programs unless someone else makes it “sustainable” first.
What practices ensure sustainability? We’ve concluded, after decades of working for and with a wide variety of nonprofits, that sustainability isn’t primarily about money. Because nonprofits are focused on mission and dependent on people (see the IRS’s Form 990 “public support” section), sustainability, while requiring financial support, is really about marshaling people. That’s right, people not money.
I can illustrate what we mean by calling out some of the threats to sustainability. Have you seen:
Whether they give, work, support, volunteer, or participate in programs, people are the key to nonprofit sustainability. They serve on boards, encourage others to donate, create and enforce good policies and practices, effectively manage finances, and build nonprofits that outlive them. Nonprofits that can attract and engage a diverse and effective stakeholder group, one that forms an organization that invests in the hard work of holding itself to account and putting structure around the people who support it, will most likely be able to enact their mission long term.
So yes, nonprofit sustainability is about money. It’s just not all about money. Sustainability is defined by myriad elements, big and small, visible and hidden, that can be measured and improved.
Powering Nonprofits is developing a sustainability assessment tool, the Leadership Evaluation for Nonprofit Sustainability (LENS).
Kara has a lifetime of success in patron engagement and fundraising in North America, and spent two years recently at Birmingham Royal Ballet building systems for engagement.