April 4, 2018

Ruined by Success? The Challenge of Nonprofit Windfalls

Man with money held up to his faceThe nonprofit that served children won a grant of $500,000. It was a significant step forward, and it almost did them in.

A nonprofit that served seniors received a bequest from a senior woman no one knew for $1,250,000.

It was terrific, and it nearly ruined them.

Almost every nonprofit, over time, will receive one or more windfalls. At successful nonprofits, these windfalls create grand celebrations. But after celebrating and investing the funds to further the mission, wise nonprofits return to their tried-and-true fundraising and income development plan.

The Danger of Windfalls

For other nonprofits, windfalls create challenges that knock them over. Like their successful counterparts, they celebrate and make much-needed mission investments. However, instead of returning to consistent fundraising and income development work, they fixate on repeating the windfall.

At the senior program, 500 people visit them per year. They obsess about finding the next person to give them a huge bequest instead of developing lots of donors who will donate every year.

A grant for children came from the community foundation as it was launching a new initiative in the area. The nonprofit fixated on grant opportunities instead of developing more corporate partners where they had been making excellent headway.

How Can You Avoid a Windfall Placing Your Nonprofit At Risk?

First, be joyous. Be grateful.

After the celebrations, return to realistic fundraising planning based on consistent, disciplined work, proven outcomes, and fit with your organization’s temperament. Follow the paths that successful nonprofits like yours follow.

Your Story

How does your nonprofit handle windfalls? Have you developed a board policy about how to handle them? Has your nonprofit ever been “hurt” by success?

For more about how to raise millions together year after year and after a windfall, download this free chapter of Let’s Raise Nonprofit Millions Together.

Karen Eber Davis

Karen Eber Davis provides customized advising and coaching around nonprofit strategy and board development. People leaders hire her to bring clarity to sticky situations, break through barriers that seem insurmountable, and align people for better futures. She is the author of 7 Nonprofit Income Streams and Let's Raise Nonprofit Millions Together.


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