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Is it time to close our nonprofit doors?

As a nonprofit organization, you are here to meet a mission to your stakeholders.  Maybe long ago, or not so long ago, you were founded to assist a particular group or meet a critical need.  And, months go by, years go by, and you are still in existence.  But, is the need still there?  Are you still relevant towards meeting that need?

Sometimes, we just don’t want to answer this question.  Because in answering it, you may find, that yes, indeed, you have met your mission or, in fact, are no longer relevant, or facing a crisis, or maybe even just plain exhausted and lack energy as an organization.

Is it time to dissolve perhaps?  Maybe merge with a similar group?  Shutting down is not the only option, but it is one.

Let’s face it, was it ever our intent to be here forever?

Hopefully not.

In admitting that you have met your mission, you have done exactly what you have set out to do.  And, more and more nonprofits are choosing this route, admirably I may add.

Ultimately, though, this is a larger Board discussion.

Why?

Because the Board of Directors is directly responsible for the organization’s future:  whether to grow, change, downsize, merge, evolve, or close.  This is governance at its most important and highest level.

Here are some important questions to explore as a Board before you do:

  • Are we meeting our stated mission?
  • Are we helping our intended audience?
  • Are we still relevant to our community?
  • What is the situation that is precipitating this discussion?  Are we tired, lack energy?  Financial constraints?  No longer needed?
  • What would be the implications if we did no longer exist?
  • Do we want to continue?  Can the organization be saved?
  • Have we simply run out of steam and need to close down?
  • Is it time to let us fail instead of always trying to “right” the ship?
  • Do we have adequate human resources to keep things going and are they the right people?

After seriously reflecting on these questions, a nonprofit Board can choose to take several routes.

  • You can choose to change your mission statement to reflect who you are and what need you are truly meeting.
  • You can choose to restructure your operations, programs, and activities to lead to a better functioning organization.
  • You can find a similar nonprofit organization in mission and merge.
  • If under undue financial stress, you may consider filing for bankruptcy
  • Or, if you are just tired or having met your mission, you can cease to operate and dissolve.

Ultimately, the Board must recognize that a crisis situation exists, focus efforts on addressing this issue, and come to a consensus-based conclusion on which path is most appropriate to your mission, to the community you serve, and to yourselves as individual Board members.

 

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The intersection between mission and mergers

There always comes the point in an organization when the natural order of things is change.  Whether that change is an executive transition, upheaval in the Board of Directors, or even things greater than that.  Things such as what should we do as an organization?  Stay the same?  Merge with another organization?  Or even cease our operations?

What does one do or how does one handle this inevitable change?

As with everything, the mission should always be forefront and center.

Case in point, I want to examine one major organizational change that many groups must addresses – merging.

Use your organizations mission as a guide to a mergerI have some experience with mergers.  For a few years, I worked at a religious order that had decided to consolidate.  Now, there could have chosen any one of several options – cea
se to exist, merge with another order, or combine their order to a larger entity.  In the end, they chose to merge the order from local areas into one community,  merging all the Northeastern states into one “community.”  And, the end results, were that the merger made them more efficient and useful in many ways including financial, in their infrastructure and support, and in their ability to do ministry to those they serve.

In all cases, the organization should base these big decisions and transitions on how compatible the two or more organizations are in their missions.  Are they like missions?  Is this mission too much of a stretch?  What will happen if they merge missions?

Then they need to determine if, in merging, the organization will become stronger or will it weaken?  Will it dilute its services in merging?  Will the organization change and become different?

But, most importantly how will this merger impact those that the organization exists to serve?  Will the demographics of who the organization serves change?  Will they serve this demographic in a different way?  Will they serve an entirely different demographic?  Will they stop serving a particular demographic?

What about the culture of an organization?  What about history?  What about past leadership?  Will they become financially more viable?  Stronger in its internal operations through greater infrastructure?  More funding?

I have seen other organizations where these mergers have not been carefully thought out, and, thus, have not faired so well.  They lost their identity to those they serve and the community; their organization’s culture of compassion and nurturance changed, and they lost their historical memory.  But, most importantly their mission became diluted into a bigger whole and lost its effectiveness.  For in this merger, long-time staff was forced to leave, and supporters turned away.

Significant change during an organization’s life cycle is inevitable and in some senses should be planned and accounted for in advance of this change ever transpiring.

If one keeps mission at the center of significant shifts in an organization, then the right decisions will be made.  However, if the mission is left out of the picture when making this decision, almost, always, the merger is doomed to fail, or if it doesn’t fail, the organization is in for some rough perceptual seas and waves of transitions ahead.

P.S. – Are you ready to shift your nonprofit Board from management to governance?  And, you want it to be successful?  Get started with my FREE Non-Profit Governance E-Book and use the same steps that I share with my clients. Click here to download your FREE Non-Profit Board Governance E-book and start shifting your Board’s culture today.   I will share with you valuable resources and tools on how to get started.

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