{"id":53328,"date":"2021-04-28T05:00:00","date_gmt":"2021-04-28T09:00:00","guid":{"rendered":"https:\/\/bloomerang2dev.wpengine.com\/?p=53328"},"modified":"2025-08-29T16:54:21","modified_gmt":"2025-08-29T20:54:21","slug":"common-reasons-why-new-nonprofits-fail-and-how-to-avoid-it-part-one","status":"publish","type":"post","link":"https:\/\/bloomerang.com\/blog\/common-reasons-why-new-nonprofits-fail-and-how-to-avoid-it-part-one\/","title":{"rendered":"Common Reasons Why New Nonprofits Fail And How To Avoid It: Part One"},"content":{"rendered":"

With one and a half million tax exempt nonprofits in the United States alone, it\u2019s not surprising that thousands of nonprofits fail each year. Forbes states fifty percent will hit the wall in the first twelve months. Other data suggests it\u2019s less, with the National Centre For Charitable Statistics putting the figure nearer thirty percent.<\/p>\n

Either way, the numbers indicate that even in regular times, no-one is guaranteed success. Why a nonprofit fails is as much an important question, as it is to ask how one might have navigated a safe course to succeed.<\/p>\n

It\u2019s a sad truth that some nonprofits fail, but at least by understanding these pitfalls we can all better adapt, survive, and ultimately thrive.<\/p>\n

Here are the first five common issues to address — ones I\u2019ve seen and even experienced in my own working life in the nonprofit sector.<\/p>\n

1. Not keeping up with technology<\/h2>\n

Failing to remain up to date with the latest technologies can be a sign of stagnation. We can\u2019t all be Bill Gates, but we can at least accept that technological advances are important. Too often nonprofits believe because they have an virtuous mission, they will surely be OK. The problem is others will be paying attention, and neglecting technology and online progress significantly increases the chances of being in that thirty to fifty percent fold.<\/p>\n

If you\u2019re not sure what this means to your area, reach out to those in the tech world and ask questions. More often than not, experts are keen to help good causes, and will share advice about changes and opportunities.<\/p>\n

2. A reluctance to invest in unglamorous infrastructure<\/h2>\n

New nonprofits often hesitate to invest in anything but the front line services, proving their worth to early supporters. However noble a goal this is, it leads to serious problems down the line. Before long the backstage operations upon which sustainable growth builds, become underdeveloped. Leading to stagnation and ultimately limiting operational scope.<\/p>\n

It\u2019s natural to think donors need to know that every cent reaches the coalface. Yet how can you dig coal out of the ground without first investing in the machinery, the man power, the pit head and the railroad to move it?<\/p>\n

To be a successful nonprofit you need to focus on infrastructure<\/a> as much as the delivery of service; the two are the same. It\u2019s longevity which matters.<\/p>\n

Your donors will respect long game investment, as much as the instant satisfaction of providing the core mission.<\/p>\n

3. Failing with the founder<\/h2>\n

Businesses and nonprofits share this common bug bear. When one person drives the organization, it can be hard for the oxygen of new ideas to circulate.<\/p>\n

Nonprofit founder’s syndrome<\/a> is tricky to combat. Businesses and nonprofits are rarely democratic. All too commonly \u201cJust do what I say!\u201d <\/i>goes as an unstated policy and counterproductive policy.<\/p>\n

Side effects of this can result in:<\/b><\/p>\n