Mistakes That Can Kill Your Nonprofit (and How to Avoid Them)

March 18, 2024. 2 minute read.
By VV Sarah
Business Formation

You’ve got an incredible idea to help people and you’ve registered your idea as a nonprofit with the US government. Congratulations. It’s time to get to work, but now is the time to prepare for the worst. Here are the 7 mistakes that nonprofits make that can kill them before the end of their first year in operation.


Here’s a quick overview of the 7 things that we see are the strongest killers of nonprofits in the US. Save this list to reference as you build your organization in it’s first year.


  1. Lack of Clear Vision:

It’s important to have a clear understanding of what your organization stands for and what it hopes to achieve. You cannot be all things to all people, even if you desire to be. The way that your organization succeeds is by identifying a specific mission and sticking with it.


  1. Inadequate Planning:

Planning is critical to the success of any nonprofit. Develop a comprehensive strategic plan that includes short-term and long-term goals, budgeting, fundraising, and marketing plans.


  1. Failure to Build a Strong Board:

A strong board of directors is essential for any nonprofit. Nonprofits should seek out individuals who bring a diverse set of skills, experience, and perspectives to the table. Engage your board members and ensure that they are committed to your mission and vision – yesterday, today and tomorrow.


  1. Poor Financial Management:

Financial mismanagement is one of the most common reasons why nonprofits fail. It’s important to establish clear financial policies and procedures, monitor expenses, and ensure that your organization is in compliance with all relevant regulations.


  1. Inadequate Fundraising:

Fundraising is a critical component of any nonprofit’s success. Nonprofits should develop a comprehensive fundraising plan that includes individual and corporate donations, grants, and special events.


  1. Failure to Build Strong Relationships:

Nonprofits need to build strong relationships with donors, volunteers, and other stakeholders. It’s important to communicate regularly with these groups, express appreciation for their support, and engage them in your organization’s activities. Develop a way to efficiently and regularly communicate with each group of supporters in your circle. These people will become your tribe, and your tribe will continue to evangelize and advocate for your mission for years to come.


  1. Inadequate Evaluation and Impact Assessment:

It’s important for nonprofits to regularly evaluate their programs and services to ensure that they are achieving their intended impact. Nonprofits should establish clear metrics for success and regularly measure and report on their progress.



Avoiding these 7 pitfalls can certainly help build your nonprofit on a strong foundation, however we always advise that you seek out advice and support from experienced professionals, such as nonprofit consultants or attorneys, who can help guide your startup and growth. By avoiding these common mistakes, nonprofits can set themselves up for long-term success and impact in their communities.




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