Why Do Nonprofit Organizations Fall Short of Their Potential?

Jathan Janove, J.D. By Jathan Janove, J.D. August 21, 2023

​Former employment attorney and author Jathan Janove writes for SHRM Online on how to inject greater humanity into HR compliance. Jathan welcomes your questions and suggestions for future columns. Contact him at the email address at the end of this column.    

Nonprofit organizations have long been and will continue to be an important part of peoples' lives. When I was an attorney, I represented many nonprofit organizations on workplace issues, and I continue to work with these organizations as an executive coach and consultant. In addition, I've served on the boards of many nonprofits, including as president and board chair. I also served a two-year stint as a nonprofit's chief administrative officer.

The concept of nonprofits doing good for others is wonderful. The sacrifices and commitments of those who support them, and the results they produce, help make the world a better place. And yet most nonprofits fall short of their potential. In my experience, they succumb to an entitlement mentality and lose sight of their "why" and their accountability. As a result, nonprofits with wonderful missions staffed by (mostly) wonderful people experience counterproductive behavior, including resistance to change, silo mentality, disengagement and toxic relationships. 

This column addresses the roots of the problem and offers suggestions for improvement, including how HR can be a catalyst in building a "why" culture. 

Entitlement Mentality 

The vast majority of people who work in the nonprofit world, whether as paid employees, volunteers, donors, board members or committee members, have done so out of a desire to do good. If they are employees, especially in leadership positions, they made a decision to trade maximizing their earning potential for contributing to a greater good. If they are volunteers or donors, they are giving up their time, energy and money for a worthy cause. 

Their spirit is laudable, yet it often carries a sense of self-sacrifice, which if unchecked creates an entitlement mentality that reduces flexibility, adaptability and accountability. It also makes constructive conflict resolution much harder to achieve. When otherwise well-minded people with respective senses of self-sacrifice disagree, conversations can get heated. 

With boards, this entitlement mentality often results in either passivity or excessive activity (i.e., micromanagement). In addition, commitments to attendance, timeliness, follow-up and follow-through suffer. This mentality also makes board members prone to developing toxic relationships with each other. 

Lack of Accountability 

Although executive directors, CEOs, board members and other nonprofit senior leaders overwhelmingly are good, kind, caring human beings, they repeatedly fall short in holding themselves and others accountable. The rationalization often is, "We're not part of the cold, cruel corporate world. We care." 

There are two problems with this rationalization. First, as I've asserted elsewhere, accountability doesn't mean being cold and cruel. Second, bypassing accountability inevitably impairs the mission—the people and causes the nonprofit was created to serve. That's cold and cruel. 

Losing Sight of ‘Why’ 

Another area where nonprofits fall short is losing sight of their "why," what author Simon Sinek (Start with Why, Portfolio 2009) describes as an organization's raison d'être—its reason for being. Without a direct connection to the "why," growth opportunities are missed, engagement suffers, collaboration gives way to silo mentality and turf consciousness (both internally and with other nonprofit organizations pursuing similar goals), and the risk of relationships turning toxic increases. People go through the motions of work without thought or reflection as to whether what they do truly supports the organization's mission.

For needed change, here are two suggested steps: 

1. Keep the ‘Why’ Front and Center

A well-crafted mission statement is not an accomplishment; it's a step. Putting it on a wall or webpage won't necessarily translate into desirable results.

Every meeting—staff, board or committee—should include a discussion of the organization's "why," including whether contemplated actions or decisions advance it. Will they make for a more devoted religious congregation? Will they improve the services offered to women escaping abusive relationships? Will they best promote the organization's environmental objectives?

After taking those actions, be sure to celebrate the success—the results as well as the people who helped produce them. Don't assume everyone is already aware of the successes or that people know they're appreciated. Leaders, including those in HR, should make it an ongoing priority to recognize and show appreciation for any and all actions that further the organization's mission. And when conflict arises, the "why" sets the course for HR as mediator to shift the discussion from the past (blame) to the future (solution). 

2. Make Accountability a Necessity

For leaders reluctant to confront problematic behavior, they should ask themselves:

  • What is the impact of my avoidance on other employees, volunteers, donors and, most importantly, the people or causes our organization was created to serve?
  • Is the mission sufficiently important to me that I'm willing to do things outside my comfort zone and exercise leadership courage?

Board or committee members and other volunteers should set the example for what they want their employees and volunteers to do:

  • Do you attend meetings promptly and reliably?
  • Do you promote free exchange of ideas versus one or two extroverts monotonously expounding their own?
  • When there's disagreement, do you help ensure that it is addressed civilly and constructively?
  • When you commit to do something, do you take that commitment as seriously as you would with your job or family?

For the nonprofit's employees, managers should thank them for their sacrifice in forgoing what most likely would have been a more remunerative career elsewhere, and then ask:

  • To maximize your contribution to this organization's mission, what are you doing daily?
  • Are you open to change if it potentially better serves the mission?
  • Do you actively collaborate with others regarding what will maximize collective achievement of goals?
  • When problems arise, do you promote a solution-oriented approach versus blame or fault-finding?

HR as Catalyst

There are several ways HR can link the organization's "why" to its culture:

  • Onboarding. Include a robust section on the good your organization does, perhaps with pictures, stories, videos and other messages that tell new employees that they are now part of a great adventure, providing much needed help for others.
  • Handbook and related policies. Replace dry legalistic recitations with something written for the reader. For example, your handbook should include a personalized statement about the important work the organization does, why every employee is vital to success of the mission, and how much senior leadership appreciates their efforts.
  • Culture conversations. Ensure that every significant discussion includes a reference to the "why." Ask the above questions, and add in "How does your contemplated action or decision support our mission?" In this way, HR serves as a reminder, coach and supporter of what Sinek would say connects the "why" to the "what" and then to the "how."

With HR's help, a continual focus on the "why"  coupled with a commitment to accountability will go a long way toward producing the good this world needs.

Jathan Janove is a former state bar "Employment Law Attorney of the Year" and author of Hard-Won Wisdom: True Stories from the Management Trenches (HarperCollins/Amacom, 2017). Jathan is Master Coach & Practice Leader with Marshall Goldsmith Stakeholder Centered Coaching®, and faculty member, University of California San Diego HR Masters Series. If you have questions or suggestions for topics for future columns, write to JathanJanove@comcast.net.



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