Jani’s Journal Issue 43: Smart Growth for Nonprofits

If this quote is true, I must be a grand scientist! I have a special talent for killing plants. Several azalea bushes, sunflowers, wisteria, things that are allegedly perennials and green things I can’t even remember the names of have shriveled and browned under my “care.” I’ve even killed cacti (yes, the plural of cactus) and any other “hearty” plant you can think of.

But last week, by some miracle, my rhododendrons actually blossomed for the first time after planting them over 10 years ago!

To recognize this accomplishment of pig-flying proportion, this issue of Jani’s Journal celebrates National Gardening Day on April 14. Cultivating a thriving garden shares parallels with growing a business, including a nonprofit business. Just as gardeners carefully plan, nurture, and prune to ensure healthy growth, nonprofit leaders must be intentional about expanding their programs and services while staying rooted in their core mission. Scaling up a business can bring incredible opportunities for community impact, but without clear boundaries, organizations risk overextending themselves—much like a garden that becomes overgrown and unmanageable. In this issue of Jani’s Journal, we’ll explore practical strategies for nonprofits to grow with purpose, maintain mission clarity, and flourish without losing sight of what truly matters.

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Growing a business and properly scaling it is challenging, with over 80% of companies failing despite initial success. This is especially true for fast-growth companies, where organizational and people issues are a leading cause of failure. This McKinsey & Company article provides insights from studying successful software companies and offers valuable lessons on achieving sustainable growth that apply to all types of organizations. Nonprofits can apply these principles by setting ambitious growth goals, fostering strong community and donor relationships, and strategically expanding their programs. Building a resilient organizational structure, cultivating leadership, and maintaining a mission-driven culture are crucial for scaling nonprofit initiatives while keeping community impact at the forefront. Key steps for successful scaling include:

• Build and Launch: Develop a program or service with a clear market fit (unmet community need), set up organizational basics, and assemble a top team with the right talent and collaborative culture.

• Grow: After achieving market fit, shift focus to growth by refining programs, enhancing program growth strategies, and building a scalable community and client outreach model.

• Scale and Sustain: Implement growth boosters such as entering new markets (communities and/or population served), expanding product lines (services/programs offered), focusing on customer success, and strengthening marketing efforts (community outreach).

• Foster the Foundation: Cultivate a strong organizational culture, plan strategically, and ensure effective decision-making with a capable leadership team.

• Leverage Partnerships: Build ecosystems and alliances to access new customers and resources while aligning goals for sustainable collaboration.

Whether a nonprofit grows by adding new programs and services, expanding existing programs to serve more people, or developing brand new programs for a previously unserved population, following the disciplined growth path outlined in this MIT Sloan Management Review article ensures nonprofits can grow purposefully without risking mission creep or resource depletion. Here’s a condensed roadmap from business scaling that nonprofits can apply to amplify their impact:

1. Set an Ambition Equal to the Scale of Opportunity (i.e., the problem you aim to solve). Avoid setting your sights too low because of risk tolerance or resource constraints, but incorporate them into your plan.

2. Work Backward From the Ambition to Identify a Potential Path to Scale. Develop a clear vision of success and outline strategic steps to achieve it. Identify the people to be served along with the capabilities and capacity needed to serve them, and work backward to plan the path forward.

3. Think Through Options for Acquiring Needed Assets. Use a combination of leveraging existing resources, building new capacities, acquiring essential assets, or forming partnerships to gather what’s necessary for scaling.

4. Adapt the Team and Organization to Support Scaling. Adjust leadership roles, organizational structures, and operational practices to meet the demands of scaling, focusing on efficiency and sustainable practices.

5. Anticipate and Prepare for Trigger Points. Identify key decisions that could significantly impact growth, such as major investments or new program launches, and plan accordingly to manage risks and opportunities.

In my experience, nonprofits often complete these steps out of order, or overlook some altogether. Tight budgets often propel organizations to jump at step 3 when a newly discovered grant opportunity presents itself, then consider steps 1 and 2 as part of writing the proposal, followed by steps 4 and 5 once growing pains begin presenting problems. Planning your garden’s growth path ensures it doesn’t take 10 years to begin blooming!

This Harvard Business Review (“HBR”) article focuses on cautionary lessons of startup corporations scaling too soon, but I find nonprofits often make the opposite mistake—scaling too late. Successful startups, both for profit and nonprofit, balance growth with experimentation. How to know when it’s time? Successful startups balance growth with experimentation, ensuring they achieve product-market fit (program/service-community fit for nonprofits) before committing to large-scale operations. Answering “yes” to the following questions indicate it’s time to scale:

• Are your programs/services consistently meeting the needs of the population you serve (product-market fit)?

• Is the revenue stream for existing programs/services consistent and relatively stable?

• Is your program/service a clear, repeatable model?

• Is there a team and structure that can handle increased operational demand?

• Do you have the infrastructure, know-how, and practice to use data and small-scale testing to minimize commitment risk before scaling?

e.l.f. Beauty's journey from a startup to the top-selling mass cosmetics brand in the U.S. may be an unlikely case study for nonprofits, but their story of maintaining ambition, focus, and speed reveals some valuable lessons for all types of organizations. Their success lies in operating with a startup mindset, fostering a collaborative culture, and prioritizing innovation and employee ownership. Nonprofits can learn from e.l.f.'s ability to scale while staying true to core values and mission. Key takeaways from this HBR article for nonprofits include:

• Maintain a Startup Mindset: Keep a flexible and agile approach, even as the organization grows.

• Foster a Collaborative Culture: Engage employees at all levels and value diverse perspectives.

• Innovate Continuously: Create a cycle of assessing customer (community) needs and responding to it with creative solutions and new offerings.

• Empower Teams: Resist the urge to micromanage by sharing ownership for ideas and execution. Staying laser-focused on mission, vision, and values pushes decision making down in the organization, freeing up executive teams to focus on strategy and innovation.

• Incentivize Teams: Encourage teams to get to know each other personally and align incentives and rewards with team-focused mission-based outcomes.

• Lead with Vision and Values: Stay rooted in core principles while expanding programs and services (more on avoiding mission creep below!).

Mission creep occurs when a nonprofit gradually shifts focus, engaging in activities that stray from its core mission. This BoardEffect article outlines how even well-intentioned mission creep can lead to financial strain, loss of donor trust, and confusion among staff ultimately risking the organization’s reputation. BoardEffect advises Nonprofits to remain vigilant and ensure that every new initiative aligns with their primary purpose to maintain sustainability and mission integrity. This can prove challenging since donor funding or perceived community needs often drives mission creep. To prevent mission creep, use data to assess community needs, evaluate new opportunities carefully, and partner with funders to shape opportunities accordingly.

This Forbes article outlines fourteen tactics nonprofits can use to prevent (or reverse) mission creep:

1. Use Your Mission and Vision as a Guiding Force. Continuously referencing your mission and vision statements to evaluate new opportunities ensures every decision aligns with core objectives and prevents the adoption of irrelevant initiatives.

2. Create a Clear 'North Star' Statement. Developing a clear, unwavering guiding principle that consistently reflects your mission helps prioritize mission-centric decisions over appealing distractions and keeps growth purposeful and aligned.

3. Make Your Mission Statement a Prominent Feature. Displaying the mission statement in meetings and common areas fosters a mission-focused culture, ensuring it remains top of mind during decision-making and guiding the organization’s direction.

4. Develop a Strong, Strategic Plan. Crafting a comprehensive strategic plan with clear priorities serves as a structured filter for new ideas, preventing impulsive decisions and keeping initiatives aligned with long-term goals.

5. Set Clear Metrics. Establishing measurable goals that align with your mission enables data-driven decision-making, ensuring that new initiatives support core objectives rather than divert resources.

6. Take a Balanced Scorecard Approach. Utilizing performance metrics related to a Balanced Scorecard’s four perspectives: finances, customer satisfaction, internal processes, and learning and growth capacity, maintains a holistic perspective, balancing mission-driven work with practical outcomes.

7. Lean on Key Stakeholders for Advice. Involving community members and beneficiaries in evaluating new opportunities ensures that initiatives align with community needs, fostering support and minimizing mission drift.

8. Hold Strategic Planning Meetings with Stakeholders. Conducting regular strategy sessions with board members and key staff maintains alignment with strategic priorities, reinforcing commitment to the mission and discouraging mission drift.

9. Form & Empower an Innovation Task Force. Creating a dedicated team to evaluate and develop new ideas within the context of the mission allows for innovation without risking mission dilution, keeping initiatives purpose-driven.

10. Regularly Revisit Your Founding Principles. Periodically reflecting on the original mission fosters accountability and encourages thoughtful evaluation of new ventures, ensuring alignment with long-term goals.

11. Determine Whether New Opportunities Align with Set Priorities. Using a decision-making rubric to assess alignment with core values helps prioritize mission-focused growth, and prevents the pursuit of initiatives that conflict with organizational priorities.

12. Learn How to Turn Down Asks. Practicing saying “no” to projects that don’t clearly fit your strategic plan preserves resources and maintains focus on mission-aligned efforts, fostering disciplined growth.

13. Prioritize Opportunities Within Your Established Niche. Staying committed to the organization’s core area of impact prevents over-extension, ensuring that growth remains purposeful and relevant to the mission.

14. Keep Your Values and Goals Top of Mind. Continuously aligning expansion efforts with mission, values, and SMART goals safeguards against taking on projects that conflict with core values, maintaining organizational integrity.

As with everything in life and business, balance is key. While mission creep is typically seen as something to avoid, it can offer potential benefits when approached thoughtfully. Expanding a mission can help organizations evolve with changing community needs, enhance strategic growth, foster collaboration, and secure increased donor support. However, this missionmet.com article stresses that it must be managed with clear planning and stakeholder alignment to ensure it strengthens rather than dilutes the organization’s core purpose. Key questions to ensure “fruitful” growth include:

• Does the data indicate your community’s needs are truly evolving?

• Do you primarily serve marginalized groups facing interconnected challenges and/or related social issues?

• Are there potential partnerships that can naturally expand your focus while maintaining mission alignment through collective goals?

• Is there buy-in from key supporters to validate mission expansion is a strategic evolution rather than a loss of focus?

• Does your organization currently possess the resources and expertise to manage an expanded mission that leads to increased relevance and long-term sustainability? If not, can the resources and expertise be developed or hired?

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