2.
Strategic issues for non profit organisation
Non-profit organizations face several strategic issues that can significantly impact their
ability to achieve their mission and remain sustainable. One key challenge is financial
sustainability, as non-profits primarily rely on donations, grants, and fundraising, which can
be unpredictable. To mitigate this, many organizations diversify their funding sources, such
as forming partnerships or exploring social enterprise models. Another issue is mission
drift, where non-profits might deviate from their core mission to meet donor demands or
funding opportunities. Maintaining focus on the original mission is essential for building
trust and ensuring long-term impact.
1. Financial Sustainability: Non-profits rely on donations, grants, and fundraising,
which can be unpredictable. To ensure long-term financial stability, many non-
profits diversify their funding sources, such as forming corporate partnerships or
creating social enterprises
Example: Habitat for Humanity generates funding through donations, but also diversifies its
revenue by operating ReStores (thrift stores) and partnering with corporations like Lowe’s
for building materials.
2. Mission Drift: Non-profits may be tempted to shift their focus to secure funding or
respond to donor demands, leading to mission drift. It's important to remain focused on
the organization's core mission to ensure consistent service delivery and maintain donor
trust.
Example: Doctors Without Borders has faced the temptation to expand its services
beyond medical aid to attract more funding. However, the organization remains focused
on providing emergency medical relief, sticking to its mission of delivering healthcare in
crisis zones to maintain its credibility and trust with donors.
3. Accountability and Transparency: Donors and stakeholders expect clear reporting
on how funds are spent and the measurable impact of programs. Non-profits must
adopt transparent financial practices, regularly report on their impact, and use
data-driven metrics to showcase success.
Example: charity water is known for its transparency. The organization reports exactly how
donations are spent by publishing detailed breakdowns of costs and showing the progress
of water projects, earning credibility and trust from donors.
4. Talent Acquisition and Retention: Attracting and retaining skilled employees can be
challenging due to limited budgets and lower salaries compared to the private
sector. Non-profits must focus on creating a positive work culture and offering
professional development opportunities to retain talent.
Example: The American Red Cross struggles to offer competitive salaries, but it has
created a positive work environment with flexible hours, career development
programs, and volunteer leadership opportunities, which helps retain employees
and volunteers long-term.
5. Governance and Leadership: Effective governance is crucial for non-profits. Challenges
include a lack of engagement from board members or insufficient leadership skills.
Recruiting skilled board members, providing training, and ensuring clear roles and
responsibilities can improve governance.
Example: The Humane Society faced governance challenges with its board, particularly
due to a lack of engagement. To address this, the organization recruited board members
with expertise in fundraising, legal matters, and animal welfare, and provided them with
regular training to strengthen leadership.
6. Adapting to Technological Advancements: Many non-profits struggle to keep up with
technological changes due to limited resources. Implementing technology can improve
program delivery, fundraising, and data management. Non-profits can collaborate with
tech companies or use open-source tools to stay current.
Example: The Nature Conservancy partnered with Google to use data-driven tools for
environmental monitoring, improving the way the organization tracks biodiversity and
ecosystem changes
7. Building Partnerships and Collaborations: Non-profits often need to collaborate with
other organizations, governments, or businesses to expand their reach. Building effective
partnerships requires clear communication, aligned goals, and mutual respect.
Example: The Global Fund collaborates with governments, private sector companies, and
other non-profits to fight HIV, tuberculosis, and malaria. Their partnerships allow for a
pooling of resources, expertise, and political support, enhancing their global reach
8. Measuring and Demonstrating Impact: Non-profits must demonstrate the effectiveness
of their programs to maintain donor support. Using outcome-based metrics and third-party
evaluations can help measure success and ensure accountability to stakeholders.
Example: Kiva, a micro-lending platform, uses data to demonstrate the impact of its loans
on poverty reduction. The organization provides detailed reports on the success of each
loan, showing how funds help improve livelihoods, which builds trust
9. Navigating Political and Regulatory Environments: Non-profits often operate in complex
political and regulatory environments. Changes in laws or policies can impact funding and
operations. Non-profits need to stay informed about these changes and engage in
advocacy when necessary to ensure compliance and continued support for their mission.
Example: Planned Parenthood has to navigate political and regulatory challenges as
policies regarding reproductive rights shift. The organization advocates for policy changes
that support reproductive healthcare and works to maintain compliance with regulations
while fighting for their mission.
