By: Tara Levy
Caterpillar. Cocoon. Butterfly.
Baby. Teenager. Adult. Elderly.
Understanding the natural life cycle of things helps us know what to expect from each stage. Although none of us are happy to wake up as teenagers with pimples, we know it’s a normal part of development. We’re better prepared for the issues (and advantages) that come with each stage when we know that it’s a phase that so we can ride it out or get ahead. A nonprofit’s organizational life cycle is no different.
We can view nonprofits through the same lens of developmental cycles. In doing so, we benefit from understanding the challenges and opportunities of each stage and can anticipate and prepare for what is coming next. There are many theories of development that build on the organizational life cycle concept, and at Nonprofit Elements we focus on a cycle of three core stages: start-up, growth, and stability.
During the start-up phase, organizations tend to have a small, passionate board and a sense of family among the staff, board, and volunteers. The program or service is usually straightforward and strongly connected to a perceived need. This energy and drive provide momentum to glide past challenges such as limited systems (if any) for finances, metrics, or communications.
The move to the growth phase isn’t triggered by a specific period of time passing, but by the development of a stable base upon which the organization’s board and staff can build. Both groups tend to be more professional, have specific expertise and new networks, and are able to strategically divide labor to deliver the organization’s services with greater consistency. Even as technology is purchased and systems are established, there are often internal communications challenges, lack of predictable cash flow, and a tendency to be more reactive than strategic.
When those systems finally synch up and are running smoothly, the organization enters the stability phase and focus shifts to maintaining and sustaining their services. With a diverse team of professionals as board and staff, there is greater accountability, specialization, and focus. Additional programs are developed to enhance or expand upon the core program, and metrics are tracked and utilized for consistent improvement. With so much running well, there’s a drive to protect the success, so there can be a lot of red tape and risk aversion to navigate during this phase of the organizational life cycle.
Unlike the life cycles of living and breathing species, the living organization doesn’t expire at the end of that last phase. While there might be reasons to close up shop, more often an organization moves out of the stability phase into a renewal phase, a new type of start-up phase that builds on the success and lessons of the stability phase, but with a new twist to grow and serve. When an organization moves through a renewal phase, it can reinvent, iterate, and improve upon its prior work, depending on the priorities and needs of its clients and community.
Start-up. Growth. Stability. Renewal. Growth. Stability. Renewal. Growth. Stability. Renewal….
As a nonprofit naturally moves through these organizational life cycles, it should embrace the transition as a time to consider its leadership and organizational structure, its relevancy in the market, its strategy and plan, and its shifting operational needs. Nonprofit Elements can support organizations preparing for and experiencing these transitions. If you feel like you’re not taking full advantage of the phase you’re in or foresee a lot of change as you move to the next, contact us for a comprehensive and objective look at the development and growth of your organization.