The death of a nonprofit…And what we should learn from it

In many ways, the last article I wrote as a reporter for the Philanthropy Journal illustrates why I am so eager to get started as the newest addition to Clarity Group.

YWCA of the Greater TriangleThe demise of our local YWCA highlights the challenges this post-recession hangover poses for nonprofits across the country. Those challenges aren’t new – nonprofits have always done more with less. But their work was made more difficult – and important – by the twin impacts of the recession: Heightened community needs and scarcer resources.

Now nonprofits have to do even more with even less.

The YWCA of the Greater Triangle closed suddenly three months ago, having served women and children for over a century. That loss is a huge blow to the community – and a dramatic example of why nonprofits have to do the hard work it takes to be strong, relevant, responsive and adaptable.

Take a look at the article when you have time, but here’s a Twitter-worthy summary:

Beginning around 2008…

  • Staff counts and expenses rose as revenue fell, leading to ballooning deficits.
  • Individual fundraising languished and large project grants came to an end, not to be renewed.
  • The board and staff didn’t communicate well.
  • The YWCA masked the downward spiral, presenting an outward picture of vibrancy.
  • With creditors calling, the YWCA closed with one day’s notice, leaving clients adrift.

I am sad and disappointed that the YWCA went under – mostly on behalf of the people who relied on its programs and services.

I’m also sad that Wake Teen Medical Services folded, leaving scores of uninsured teenagers without primary care. And that the Raleigh Ensemble Players – reportedly the oldest independent theater company in our area, and defintely the best adaptation of Romeo and Juliet I’ve ever seen – went bankrupt.

But I don’t want these closures (and, unfortunately, many others) to be the end of the story. We need to learn – and improve.

As I immerse myself in my new role here at Clarity Group, three lessons stand out:

Build a culture of openness

It’s safe to say something in the culture of the YWCA was ailing. Where there should have been strong board and staff leadership – ready and equipped to respond to internal and external changes – there was a lack of trust and communication, and either ignorance or denial of impending doom.

A culture of transparency and openness could have led to honest conversations across the organization, and with its supporters and funders. That honesty wouldn’t have made the YWCA’s problems go away, but it would have ensured they were acknowledged and addressed much earlier.

Put the right operations and processes in place…

Did the board notice that expenses and revenues were grossly misaligned? If not, why not? And if so, why didn’t it address the issue at the first (or second or third) sign of trouble?

A high functioning nonprofit has the systems in place that throw up red flags when worrisome trends emerge – and procedures that prompt the staff, and then the board if necessary, to address them. In such an organization, problems are identified early, analyzed thoroughly and dealt with methodically.

Understand and engage with your constituents…

It appears the YWCA lost touch with its supporters.  I wonder if it ever really knew who its supporters were, what connected them to the organization and how to keep and strengthen that connection.

Individual donors provided only a tiny fraction of the YWCA’s income, and its deathbed fundraising appeal yielded little from this anemic base. And its foundation and corporate supporters had no idea the YWCA was drowning and therefore couldn’t come to the rescue.

A vibrant nonprofit knows who its constituents are, what drives their passion for the organization and takes the time to connect with them on that level.

So how’s your nonprofit doing?

Great organizations don’t just happen – they are the result of intentional and ongoing hard work and investment.

  • Is your culture one of openness and trust?
  • Are your operations and processes designed to catch problems early on?
  • Do you know who your constituents are, what motivates them and are you staying in touch?

Seriously – let me know.


About Ret Boney

Curious. Strategic. Organized. Dedicated. Champion of nonprofits. Wife. Mom to middle schoolers.
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2 Responses to The death of a nonprofit…And what we should learn from it

  1. C. Ray Reddrick says:

    Thanks, Ret — and congratulations on your new role with Clarity Group, They are indeed lucky!
    I thought that the recent closing of Hull House might be the beginning of an unfortunate trend among 100-year-old organizations. Your YWCA case study illustrates how yet another has encountered the same fate. While I’m disheartened to read about the Greater Triangle YWCA’s demise, I’m also hopeful that nonprofit industry volunteers and professionals can learn from these casualties in the community — and make efforts to avoid the fate of service organizations that ultimately failed in their mission. The questions your article posed for me are: Can an organization established 100 years ago adapt to 21st century philanthropy’s demands? Are they ready, willing and able to reinvent themselves and remain relevant to both the clients they serve and the donors they solicit? Or is a ‘centennial’ the end of the life cycle for service organizations in particular?

    • Ret Boney says:

      Thanks for the feedback. I think the issue you raise of relevance is spot on. With fewer resources available, we may no longer have the luxury of supporting all the nonprofits in our communities. It’s now more important than ever that nonprofits evolve and adapt to meet the needs of the people and places they serve. And you’re right, that might be harder for the older, more established organizations that can become stuck in the old ways of doing things. But I’m optimistic that we can learn and grow (e.g., YMCA of the Triangle is 150+ years old and still going strong). We just have to be intentional about it!

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