The One Big Mistake: Why Many Nonprofits Fail

Forbes

30-06-2025

Pablo Listingart is the founder of ComIT, a nonprofit providing free, tailored tech training to help people overcome employment barriers.
As the great Aretha Franklin once sang, leaders have to 'think.' But for some reason, many nonprofits reduce themselves to just asking for a little R-E-S-P-E-C-T, expecting support without critically assessing their own sustainability.
In the for-profit world, it's widely accepted that startups face an uphill battle, with high failure rates defining the landscape. Entrepreneurs understand this reality and often pivot, adapt or overhaul their business models to survive.
However, in the nonprofit sector, there's an underlying assumption that if the cause is noble, support should naturally follow. Many organizations operate under the belief that 'the world needs the help we are providing,' and therefore, they are entitled to funding, volunteers and sustained operations. Unfortunately, this mindset can be a fatal mistake.
Over the past 15 years, I've seen countless nonprofit projects emerge with great enthusiasm, fall in love with their mission and then collapse when circumstances changed—whether due to a global pandemic, shifts in government policy or evolving donor priorities. In many cases, these organizations pointed fingers at external forces rather than examining their own adaptability and resilience. The blame was placed on decreased funding, lack of awareness or insufficient government backing. Rarely did leaders ask: Are we structured to withstand change?
The Nonprofit Sector's Resistance To Change
When we look at for-profit corporations, we see a long history of reinvention. Companies like IBM, Sony and Microsoft are unrecognizable from their origins. These businesses have survived by continuously adapting to shifting consumer habits, new technologies and market demands. It's almost a given that survival depends on evolution.
Yet in the nonprofit world, many organizations operate as though social needs, donor behaviors and funding models are static. They build a single strategy and cling to it, even when clear signals indicate the need for transformation. Many nonprofits rely on the same fundraising methods, outreach techniques and service models they used decades ago, assuming that because their cause is important, their approach must still be relevant.
But when one pillar of their organization collapses—whether it's government funding, corporate sponsorship or donor engagement—the entire structure often crumbles. The result? Communities that relied on these services are left abandoned, and the people running these initiatives, despite their good intentions, are left questioning why things fell apart.
Are We Asking The Right Questions?
Survival in the nonprofit world demands the same level of critical thinking and adaptation as it does in the corporate world. Nonprofits should be constantly asking themselves:
• Who is our audience, and how is it changing?
• Are we offering services in a way that makes sense for today's world?
• Are we too attached to our own ideas, rather than focusing on what actually works?
• How can we evolve our funding models to ensure long-term sustainability?
When I founded the organizations I lead, I committed to running them as long as they made sense. That means staying open to change, embracing new perspectives and ensuring our work remains relevant not just for the beneficiaries but also for the donors, the volunteers and the broader society that sustains us.
Falling In Love With The Mission Versus The Execution
One of the most common traps nonprofits fall into is becoming infatuated with their mission statement rather than the actual impact they deliver. In the business world, there is extensive literature warning against this—companies that refuse to adapt to market needs go extinct. Yet in the nonprofit space, we sometimes act as though we are exempt from these same realities.
Nonprofits exist to solve problems, not just to perpetuate their own existence. If the world around us is changing, our organizations must change with it. That means listening to our communities, our funders and even our critics. It means being flexible, reevaluating our strategies and sometimes making difficult decisions about whether to pivot or even shut down in favor of a more effective approach.
A Call For Evolution
Sustainability in the nonprofit sector isn't just about securing funding. It's about creating a model that can weather storms, adjust to new realities and remain relevant. This requires:
• Embracing Innovation: Whether through technology, new outreach methods or creative funding approaches, nonprofits must be willing to evolve.
• Building Diverse Revenue Streams: Relying on a single source of funding is a recipe for disaster. A healthy mix of grants, corporate partnerships, earned income and individual donations increases resilience.
• Evaluating Impact Regularly: Just because a program worked five years ago doesn't mean it's still effective today. Nonprofits need to measure and adjust their strategies continuously.
• Being Willing To Reinvent: If the landscape shifts, so should the organization. Whether that means modifying services, restructuring leadership or changing focus areas, adaptability is key.
The fundamental truth is this: Passion alone won't keep a nonprofit alive. Just like in business, adaptability, strategic thinking and a willingness to evolve are what determine long-term success.
So, perhaps it's time we take a lesson from the classics. Aretha Franklin warned us long ago: 'You better think.' It's advice we should take to heart if we want to build nonprofits that don't just start strong but stand the test of time.
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