By Chris Mennel, CPA Think for a moment about starting a restaurant. As an owner, you have to worry about borrowing money from a bank, hiring employees, creating a menu, setting prices, paying bills and an endless list of other tasks. But if the food doesn’t taste great and the experience isn’t enjoyable, then the restaurant is never going to make it.
Nonprofits follow a similar trajectory. There are so many important aspects: fundraising, board governance, succession planning, fraud prevention and the list goes on. But if the mission is not sound, it’s never going to work.
As a CPA firm that works extensively with nonprofits, we often make recommendations centered on the aspects mentioned above. We advise that your organization can’t take your eyes off of them or else you’ll be caught off guard. But across many different parts of the sector, we’ve seen nonprofits benefit from renewing focus on their mission.
For example, a membership organization that has declining numbers might attract new members by highlighting its mission, instead of simply trying to recruit new people. An arts organization can diversify its grant funding by reinvesting in its mission and designing an innovative program that reaches a new audience. A youth education-based organization can increase contributions by revising programs so that it serves a larger group of students less often, rather than a small group more often.
Most nonprofits start out with a great mission, and if they are successful, they’ve managed to attract support for their programs. However, they should not rest on their past laurels, but continue innovating and improving the organization and its programs or else they may begin to lose their focus.
Additionally, be aware of mission creep — when a nonprofit is formed with one stated mission but carries out programs focusing on a different mission. This situation can draw the attention from the IRS causing them to potentially lose their 501(c)3 status or increase the possibility of being audited.
Here are three straightforward ways to increase focus on your mission without drastically changing what you do each day:
- Review meeting agendas with a mission mindset to keep mission top of mind. Before finalizing an agenda, including board meetings, staff meetings, and staff or board retreats, review the agenda to identify ways to increase the discussion about the mission. Perhaps it’s just an update on your most recent program to increase awareness or maybe it’s a bigger discussion about the effectiveness of programs.
- Analyze the source of contributions – Oftentimes, foundations or individuals that support an organization can start to shape its direction. This isn’t necessarily a bad thing, but it should be reviewed to determine if it’s the proper direction moving forward. To begin, identify where contributions are coming from and then have a discussion about what each source wants from the organization. Make sure that improper strings are not attached to the donation, which could derail your mission or jeopardize your nonprofit’s reputation. If donor requests don’t align with the mission, it is okay to refuse the gift. Transparency is critical.
- Build in time to reevaluate – Complacency can set in resulting in a failure to routinely, reevaluate programs. Whether it’s a retreat, a meeting, or time to individually ponder your nonprofit’s mission, set aside time to determine if your current programs are reaching as many people as possible and whether they are meeting the needs of the recipients in the best way possible.
If your goal is to teach music to young children, are you using all available resources to instruct them as effectively as possible? Or if your goal is to encourage and educate the public of how and what to recycle, are you using multi-media sources to spread the word? Thinking through these questions may not have immediate effects, but they may open your mind to thinking outside of your daily routines.
And some nonprofits are so successful, that they accomplish their missions. If you reach this crossroads, then consider broadening your mission to include related issues. Consider the March of Dimes, which was founded in 1938 to fight polio. When the polio vaccine was introduced in 1955, it virtually eradicated the disease. The March of Dimes then changed its focus to combat other infant diseases and birth defects, such a rubella, premature births and spina bifida.
When you are committed to your work, it’s easy to become so focused on the day-to-day details that you begin to lose sight of the overarching mission of your nonprofit. Many times, it’s better to slow down and reevaluate what you’re doing to guarantee that you are remaining true to your mission.
This post was written by:
Christopher Mennel, CPA
Senior Audit Manager
Chris oversees audit and accounting services, not-for-profit and consulting services. Chris’ specialties include manufacturing, distribution/wholesale, retail, health and welfare, service and civic organizations. Chris also prepares financial statement projections and other financial analyses.
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