How to Grow a Nonprofit

In 2012, a Stanford study found that if nonprofits wanted to grow to a larger size (like, Habitat for Humanity’s size) they needed to develop funding from a concentrated source (rather than diverse source), find funding that was a natural match to their mission/beneficiaries, and build a professional organization and structure around this funding model. 

While a lot has changed since 2012, these principles still hold true when growing a nonprofit. Yet, it’s also important your organization knows the growth stages of a nonprofit, and how to transcend each one. 

Building a strong foundation, getting clear on fundraising, marketing and outreach, leveraging technology, and physically expanding can also all play a role in increasing your nonprofit’s size and impact. 

Understanding the Growth Stages of a Nonprofit

There are four stages of a nonprofit. 

1.  Formation stage: This includes the initial setup, legal structuring, and mission development. 
2.  Early growth stage: This is where a nonprofit develops programs, starts fundraising, and builds relationships with donors and volunteers. 
3.  Sustainability stage: This is when nonprofits develop financial stability, robust programs and are able to expand their outreach. 
4.  Mature stage: The stage all nonprofits hope to achieve. At this stage, you can scale your impact and make long-term plans with a proven track record of success. 

Moving from one stage to the next is hard work for any nonprofit organizer. It requires crafting a strategic plan with clear objectives, timelines, and responsibilities. 

No matter which stage you fall into, it is smart to create a 5 year strategy that you revisit at least once a year to once a quarter. It should include operations, program development, funding and staff development. 

Here are some ways to grow your nonprofit. 

Build a Strong Foundation

If your nonprofit is built on a weak foundation, you likely won’t make it to the sustainable stage. This stage requires a clear mission and vision statement. Your mission should be a concise statement about what your nonprofit plans to achieve. Your vision statement should inspire and guide your long-term goals. 

The early growth stage is also when you’ll begin building a dedicated team. The most important members of your team are your board members. While volunteers can help you incrementally move the needle, board members should be the champions of your organization. Whether helping you with funding, your building a solid foundation through advising on processes, board members should be motivated, active, and engaged. 

If you’re just starting out, you can also consider partnering with a larger, existing nonprofit with a similar or adjacent mission. They can help you with funding, volunteers, and building a strong foundation. 

You’ll also want to establish transparent governance and operational procedures while your organization is in the formation and early growth stage. Create policies for conflict of interest, decision-making, financial oversight, and documents for daily operations. 

As your organization grows, these will likely change. But having them in place now will help you create transparent growth and new process iterations. 

Fundraising and Financial Management

The earliest growth stages for nonprofits require you to come up with effective fundraising campaigns. This will require a lot of trial and error. Whether you decide to put all your efforts into an annual giving campaign or seek to engage individual donors, be sure to regularly assess what is and isn’t working and pivot as needed. 

One thing to keep in mind during earlier stages, grants are not gifts, they are an investment in your nonprofit. You’ll need a financial track record and proof of results to get grants, so don’t solely depend on this source of income to get your nonprofit started. 

Once you have your main events determined and established, consider launching microprojects. This will give you the opportunity to collect donations and support during your ‘off seasons’. It’s also a way to pilot a new idea before fully investing in it. With it being a smaller project, you can host a beneficiary-centric campaign with a high degree of customization. 

Regardless of the growth stage your nonprofit is at, you’ll need to create financial transparency and accountability. Regular financial reporting, external audits, and reviews can help increase trust that your nonprofit is responsibly managing its finances. 

Accounting software can save you, or a bookkeeper, hours of time and stress later. Plus, this can help you create an annual report that establishes a clear mission, shares highlights, achievements, and the challenges of each project. 

During the sustainable growth stage, you’ll likely have diversified revenue streams. Some common revenue streams include grants, donations, events, and partnerships. This is where the Stanford study suggests narrowing your focus on one type of income. Where does most of your funding come from? How can you capitalize on that income stream further? 

Marketing and Outreach

During the early stages of nonprofit development, you’ll want to create a strong brand identity. This should include a logo, tagline, and visual identity. Your brand messaging should also resonate with your audience and be clear and concise. 

At all stages, social media and digital marketing will play an impactful role in your organization’s success. 

Social media can either have a huge impact, or be a giant time suck. Yet, it’s a necessary evil. 57% of the world’s population is on at least one social media platform. Grab your nonprofits handle across each social channel to ensure that you always have access to it. Make sure your contact information, bio, and donation button are consistent and set up across all platforms. 

Then, try to determine which platforms your donors are active on. Pick one or two platforms to create meaningful content on. Nonprofits usually have small teams, so make the most of your people-power by executing on one platform. Participate in trends, learn about the algorithm, and be an active contributor. This will help increase your chances of building an authentic, engaged community. 

Email marketing is another lucrative area for nonprofits, especially those wanting to expand from sustainable to mature. Nonprofits have a 25% email open rate on average – which means donors and volunteers like hearing from you. Use this opportunity to:

• Send updates about wins and needs
• Find volunteers and solicit donations
• Share success stories and transformations
• Thank your donors and volunteers

These marketing efforts can keep your nonprofit top of mind. 

Leveraging Technology for Growth

One of the biggest things that will keep your nonprofit from reaching the sustainable stage is avoiding technology. Investing in software can streamline tedious tasks and processes, allowing you to dedicate your time (or volunteer time) elsewhere. 

There are lots of nonprofit management softwares out there, and many of them are free. For example, the Salesforce Nonprofit Success Pack is free for the first 10 subscriptions and includes a wide range of features. This can help you streamline your operations, grant applications, manage donor relationships, and track your impact. 

A robust donor database is essential to growing a nonprofit. It allows you to track each donor, customize your thank yous and run reports on individual fundraising efforts.  

You’ll also want to make sure your external facing technology, like your website and donation platforms are working to help donors and volunteers find you. A user-friendly and informative website that’s optimized for SEO can regularly generate new traffic. 

A moving GoFundMe campaign can also inspire action and help you reach your goals – even when you’re not working on your nonprofit. 

The Benefits of Co-Warehousing for Nonprofits

Co-warehousing allows nonprofits to maximize their investment in a formal storage space. By only renting out a percentage of a warehouse, you’ll be reducing your overhead expenses while still allowing your organization to grow. 

For example, not only do co-warehouses provide more affordable rent than traditional warehouses, you’ll also be splitting utilities and management fees. Co-warehousing neighbors also often place bulk orders together, helping your organization save on shipping and supplies. 

You can also set up an office and work from your co-warehousing space, or use it as an operational headquarters for volunteers to meet at. Co-warehouses include conference rooms, office equipment, and kitchen spaces – ideal for gathering.  

Given how flexible co-warehousing is, you can also increase or decrease your space as needed. This can be invaluable during high-donation times, or before big events. 

Plus, being a part of the co-warehousing community can help spread awareness about your nonprofit and your mission. 

What is the hardest part about running a nonprofit?

The hardest part about running a nonprofit is scaling. Whether you need more donations, more volunteers, or more awareness, growing a nonprofit takes time, focus, and a lot of hard work. Learning how to grow a nonprofit is a great place to start.

By following some of the steps outlined above, you can make an effort to transcend from the growth stage your nonprofit is in now, to the next one.

Are you a nonprofit looking for a co-warehousing space in Atlanta? Check out the Shift co-warehouse.