Why Nonprofits Should Focus on Growth

Why is it important for nonprofits to grow?

I often hear small nonprofits say that they want to stay small. They are happy with the impact that they are making and don’t want to get into the “business” of growth. They enjoy the camaraderie of a tiny staff, the low overhead, and the ability to make a difference to their grateful cadre of supporters.

So, why focus on growth?

1)     To make a bigger impact. Imagine providing your services to an even larger community by doing more of what you do well to more people in need.

2)     To stay relevant. If you continue to earn the same amount of revenue in year 10 as you did in year 1 you will not be able to provide the same amount of services due to the future value of money. To demonstrate in real numbers, assuming a 3% inflation rate (which is pretty low) and an revenue of $1 million, your adjusted revenue in 10 years would only be $760,000…and that’s not even taking into account that the prices for everything would also be dramatically higher. Bottom line, you’d only be able to provide less than 75% of what you do now.

3)     To get more support. Small organizations typically get small donations. However, if you can demonstrate growth and your ability to serve more of your constituents, larger funders will support you. They’ll understand that you have the capacity to do more and that you are more likely to stay in business.

Nonprofits provide a service to the community that for-profits and governments often don’t provide. If you want to do even more for the group that you serve, focus on growth.