Learning from a nonprofit’s failure

logoA couple of the nonprofits where I have worked over the last 30 years have closed for good. I don’t count my time at either agency as enjoyable, and I don’t mention either on my résumé. It was many of the things that made these places so unenjoyable for me (and others) that ultimately lead to their demise. But both organizations did teach me quite a bit in terms of how not to run a nonprofit.

As I read an article today by some of the board members that tried to save one of those organizations from closing its doors, I shook my head at the level of denial about what they said the problems were at the organization: they lamented how they were unable to find that one big donor that would have saved the organization with an annual massive donation and connections to friends who would also have made an annual massive donation.

Here are the actual reasons the organization closed:

  • The organization’s leadership never made an effort to connect with and serve the many diverse communities that made up their region. It’s not at all a cohesive community. It’s a community that’s known worldwide for people working in high-tech, but it’s also a community with a massive Hispanic population – both new immigrants and third, fourth, even fifth-generation families. It’s a community with massive wealth, but also massive poverty, with a homeless population that’s one of the largest in the USA. There’s no one style of music listened to by most people, no one type of food eaten by most everyone there, no one set of religious values most people in the region adhere to – it’s not a melting pot but, rather, a tossed salad of diverse thoughts, beliefs and lifestyles. This now-closed organization didn’t initiate meetings with representatives from the many different populations that make up the area, to talk about how to serve them better or better reach different people. There were no special employment or volunteer recruitment efforts to attract staff from those different communities – in fact, there was no volunteer engagement scheme at all outside of having ushers at events (almost always the same people, people just interested in getting community service hours rather than doing something to serve the organization’s mission). Programs were developed in a bubble, and leadership just never understood why people outside that bubble didn’t participate.
  • The organization never successfully marketed its fee-based programs to groups. Group sales are everything when you are trying to sell something for a price, something that people have to pay something for to be a part of. You must have a crackerjack person, or team, that knows how to sell blocks of items or event tickets in order to generate the proper amount of income. Successful ballet companies, art museums, live theaters and other arts-based groups know this. Roller derby leagues in the USA — all nonprofit — know this. For-profit sports leagues know this.
  • The organization didn’t really try to cultivate young people as participants. People that grow up participating in a particular activity often want to continue to participate in that activity as adults. Integrate your nonprofit program offering into schools, and you will have, in a few years, new supporters, new donors, and new participants. It takes more than just having a “youth day” or one “youth event.”
  • Leadership didn’t engage with the leadership of other nonprofits. There were no regular meetings, formal or informal, with others serving the community through nonprofit services, and, therefore, no relationships – instead, other nonprofits were seen as competition for audiences and donors. The long-time head of the organization’s programming was particularly isolationist, and saw no need for building professional friendships with other nonprofit leaders. Without those relationships, the organization wasn’t hearing about what was important in the region it served, wasn’t hearing fresh ideas, wasn’t learning new approaches that could have helped improve their own offerings.
  • Leadership ignored criticism. Certain actions by this organization had ignited hostilities of some rather outspoken folks who claimed to represent a certain population of the area, and such has received a lot of media attention. I’m not sure if those criticisms were legitimate, but they were loud and they created a mindset about many people about the organization that was quite negative. The organization chose to ignore that criticism, rather than sitting down not only with the people claiming to represent that group, but with other representatives from that group to find out if they felt the same way and what might be done to build bridges. Instead, the leadership said, internally, “This isn’t our audience anyway,” and took no action.

During my brief time working there, I was frequently reprimanded for how I approached things regarding public relations and marketing. An example: I marketed one program in particular so well that it became one of the best-attended in the organization’s history, but my boss told me that I had not done a good job, because I’d marketed the program to the large gay community of the region, and he didn’t want people thinking of the organization as “a lesbian” one. I once lined up several media representatives to interview a member of senior management, in order to create a blitz of coverage for our organization in a variety of publications, and she cancelled most of the interviews at the last minute, saying this one wasn’t really worth it, that she wasn’t in the mood to do another one, etc.

It’s strange that so many of the things I did at this organization that were so disliked by senior management have ended up getting me hired elsewhere, and have lead me to be successful at other organizations. Because I was so passionate about the organization’s mission, the experience was even more painful. But as a result of what I witnessed in my brief time at this now-failed agency, ties with the community is one of the first things I evaluate when I take on any communications or management task. I look to answer lots of questions:

  • What do different people from different populations say about this organization?
  • Are the different populations that make up our community represented among our employees and volunteers, and/or among the active participants in our programs? Who are we missing, and why?
  • Does this organization have lots of people making small donations, or is this organization funded primarily by just a few big donors and grants?
  • Are there people that don’t like this organization and, if so, why, and how should we address that?
  • Are media reps seeking our leadership out for stories, even to just comment as experts on a particular issue they are covering – and if not, why not?
  • Do emails, calls and tweets from the media get answered promptly?
  • Do we monitor social media about this organization and what people are saying?
  • What nonprofits are doing similar work, or are also serving this region, and what is our relationship with them?

I’m so sorry for the people that have lost their jobs because of this organization’s closing. I hope they have learned as much as I did as a result of their experience there, and I wish them the very best of luck.

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2 thoughts on “Learning from a nonprofit’s failure

  1. Megan McInnis


    Hi! I just discovered you! Thanks for all you share!

    I am working on a paper right now for school, and I must address the failure of a non-profit within the past 5 years including what happened and why. Could you fill me in on the 2 failed orgs you’ve worked with?

    Megan McInnis

    1. jcravens Post author


      “Families Plus officially shut down in July, although the announcement was made just this week. The charity offered parenting and childbirth classes, stress management seminars for parents, and ran the Safe Kids program, which seeks to reduce accidental injuries among children.”


      budget gap and an increasing focus on permanent housing programs pushed Father Joe’s Villages to close Toussaint Academy, a program that’s aided hundreds of homeless teens since 1992.


      Kiwanis in Forest Grove, Oregon disbands


      Nonprofit theater closes


      About another theater closing – though I’m not sure if it’s a nonprofit – you will have to research


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