The Death Spiral of Non-Profits

The Death Spiral of non-profits cover

People vote with their feet.  You know what that means, right?  That means that if people do not perceive that something is worth their time or effort, they will leave – walk away – not come back. Most people are very busy today. If they believe that the disadvantages of participating in your organization outweigh the advantages, then they will not become involved or stay involved.    

Unfortunately, this happens to non-profits all the time, especially smaller non-profit organizations. This is what I call the “Death Spiral.”

Stages of the Death Spiral 

The leaders of many non-profits do not understand the importance of training their replacements and continually launching new leaders. Therefore, they try to do everything themselves and are extremely busy. As a result of trying to do everything, things get missed; important details get overlooked; things fall through the cracks; and the leader(s) cannot see the “forest because of the trees.”

When this happens, funding decreases because the leader is not spending adequate time seeking funding or does not have the energy to do so.  When funding of a smaller non-profit decreases, the death knell starts ringing. Here is what often happens:     

  1. Funding decreases, so staff and/or external consultants must be cut.   
  2. Once external consultants are cut, the agency loses valuable expertise.
  3. Once staff size decreases, the services of the agency also decrease.
  4. Once services decrease, then the agency cannot reach as many people.
  5. The agency’s stature and reputation decrease because fewer people are helped.
  6. The priority population is not helped and in some cases is harmed.
  7. Funding decreases even more because of less services helping fewer people.
  8. More staff must be let go because of the loss of even more funding.    
  9. Thus, even fewer services are offered and even fewer people are helped.
  10. Eventually, the agency irrelevant, shrivels up, and dies.

The death spiral. Every year, non-profits die because of getting trapped in this spiral.

It is important that you understand that new, non-profits are launched every year in a community. Many of these new, non-profits have fresh, strong voices that your community has not heard before. As a result, these new voices are heard. Your voice may be old. Similar to an aging adult, your voice may be getting progressively weaker. If you get trapped in the death spiral, these younger, stronger voices will drown out your voice. Their voices will be heard but the voice of your non-profit will not be. Once that occurs it is nearly impossible to reverse. Your organization has now become irrelevant.    

Signs and Symptoms of the Death Spiral 

We believe that there are signs and symptoms that your non-profit may be ready to enter the spiral:

  1. High turn-over among leadership, board, or staff.
  2. Lack of grass-roots participation and leadership.
  3. Shrinking attendance at meetings and/or less participation (e.g., volunteers).
  4. Talking about change but things rarely change.
  5. Starting new initiatives but rarely finishing them.
  6. Everyone is busy but no one knows if your mission is being accomplished.
  7. Little to no evaluation of your organization or its programs.

Please do not get caught in the death spiral!  If you see your non-profit described in the content above, call us today. We may be able to help you get out of the spiral and onto the road to success.   

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