Organizational DeclineEvery nonprofit right now is feeling a bit unsteady. We have gone through a collective earthquake – with the initial shock and many aftershocks of the pandemic, which now include inflation and an economic downturn. It is natural to feel a bit “wobbly” in the face of all these ripple effects. In fact, these ripple effects have had a profound effect on many nonprofits – while some fared well temporarily with infusions of capital from PPP loans and recovery funds and have been able to go back to “business as usual,” many others have had to develop new business models to build back.

Now, in the aftermath, you may be wondering – how is my organization faring? Are we wobbly because of external forces and faring as well as to be expected? Or, has the earthquake rocked our very foundation and we need a collective reset?

In many ways, the health of social sector organizations is similar to our own. Without regular check-ups, problems can become chronic and difficult to reverse. Now that we are in recovery from the pandemic, it is important to do this check-up to ensure that your organization isn’t in permanent decline or crisis. Here are a few preventive health tips to keep your social sector agencies in tip-top shape.

Check Your Vital Signs

Whether you are the CEO, senior manager or a board member, it is important for you to know the organization’s vital signs. Using a dashboard of key indicators can be helpful in staying attuned to the organization’s health on a regular basis. Have board and staff take a survey to gauge their satisfaction with operations and strategy. Check in with your donors or clients with a satisfaction survey. These indicators should include the major revenue and cost drivers for the organization and should answer questions, including: Are we hitting major fundraising milestones? Are we following industry guidelines for cash reserves? Are we serving an appropriate number of clients? Are we being good stewards of our donors? Has client or donor behavior changed post-pandemic and, if so, how do we adjust?  If you have goals set for your organization, you will be more alert when anomalies arise and can respond quickly. Additionally, you may want to look at pre-pandemic numbers and compare them to where you are today to gauge how well you are faring.

Diagnose Chronic Pain

As you can see in the detailed nonprofit lifecycle graphic below, the prominent theme of the decline and crisis stages is chronic pain. When your organization is in one of these stages, even in one category, you and your staff will feel stress. Here are some warning signs:

  • Staff are overwhelmed and reaching burnout.
  • Employees are leaving the organization in exodus.
  • Board members are quiet quitting.
  • It’s challenging to find new employees and/or board members to fill vacant positions.
  • Clients lack interest and aren’t enroll in your services.
  • Funders lack interest.


While healthy organizations also experience this type of pain (typically called “growing pains”), the differences between the two are the duration and intensity of that pain. Here are two simple diagnostic tools to help you determine the severity of your organization’s challenges: 1) Compare the organization’s current strategic plan with the plan from five years ago to check for progress or regression/stagnation, and 2) Benchmark your organization against similar agencies to better understand your unique value proposition and assess your current relevancy in the community. Because social sector strategy has changed post-pandemic, you might need to update or refresh your strategy as well as your strategic plan. The purpose of these tests is to calibrate your pains to what is now acceptable in the industry and current environment while also determining the best strategic positioning for your organization.

Work on a Treatment Plan

It is critical to diagnose your organization’s pain before it is in decline and crisis. Based on our experience, it is far harder to fix the issues when they hit these stages, especially across multiple organizational areas (e.g., impact, governance, culture, etc.). By recognizing that the organization is in or headed toward decline, leadership has time to develop a turnaround or strategic planWhile it can hurt to admit failure, waiting for a crisis to address chronic pain leaves leaders with fewer options and less time. To assess the severity of the organization’s problems, talk to internal and external stakeholders and conduct research to ensure the organization is still relevant, serving current needs based on community assessments and following best practices. You might also want to assess your readiness for enhanced collaboration and even consider merger, acquisition and exit opportunities.

Remember the analogy of the frog in the boiling pot? Similarly, the symptoms of decline can sometimes come on so gradually that it can be easy to miss the warning signs. As an added layer of complexity, we find that many senior staff and boards have a collective post-pandemic blind spot, thinking things will eventually get better. But, we encourage all social sector leaders to know their organizations and be courageous in recognizing when dramatic foundational changes need to be made so these agencies can continue to successfully serve our communities – even in new or different ways. As I tell my students, “Mountains do not rise without earthquakes.” Please share your signs of crisis or decline and tell us about courageous, difficult decisions you’ve made post-pandemic to face them.


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