Latest / Nonprofit Launch Plan Podcast for Startup, Small, and Growing Nonprofits / Your Nonprofit's Flight Path: The 5 Growth Phases Every Nonprofit Goes Through (Part 2)
Transcript
- Matt Stockman (00:00) Every nonprofit, regardless of mission or size, moves through a predictable series of five different phases, each distinct, where phase one is simply an idea that you can't stop thinking about, all the way to phase five, which is long-term health and sustainability, where your programs are thriving, your team is strong, your finances are stable, and the future is clear. And each nonprofit that I've ever worked with has been in one of the five phases, which comes with its own defining challenges, plus the emotional and mental weight for you as the leader. What you're thinking, what you're worried about, and what feels overwhelming can change as your nonprofit grows. And progressing from one phase to the next requires the right strategy at the right time. When you understand the phase that you're in, it becomes a whole lot easier to determine what actually deserves your focus right now and what can wait for some time in the future. I've given these five phases a name, the Nonprofit Flight Path. And today we finish part two of a conversation about the five phases that we started in the last episode. And in this podcast episode, I'll take you through the last three phases of the five, helping you name what you're thinking and feeling in these stages and helping you to clarify what it really takes to move forward. Welcome to the Nonprofit Launch Plan podcast for startup, small and growing nonprofits. This podcast exists to help you build your nonprofit from the ground up on a strong, sustainable foundation by providing clear frameworks, practical tools, and real world guidance that you can actually put into practice. I'm your host, Matt Stockman. I'm a nonprofit growth coach. Thrilled you're here at Nonprofit Launch Plan. We believe that every successful nonprofit has to be operating at peak performance across six key areas. Those areas are leadership, fundraising, marketing, programs and services, operations, and finances. So on every episode of the podcast, we focus on one of these core areas to help you create lasting impact without unnecessary complexity. Now, before we jump in, I want to give you a heads up. If you're in the dreaming or early phases of your nonprofit, you're looking for clarity on your mission and your vision. You're thinking about building your board, you're doing your initial fundraising and figuring out what your MVP is, your minimum viable nonprofit program. This is a personal invite to you. To join me for my upcoming virtual Launchpad workshop, Essentials for Moving from Nonprofit Idea to Impact, it's three hours over three days where we workshop your mission statement and your vision statement. We define who your board members should be. We drill down into fundraising and help you build out your beginning programs and a whole lot more. We'll talk about stuff that we're not able to get into on the podcast and so much more. So if you are feeling overwhelmed, or stuck in your dream for a nonprofit, not sure where to go next, sign up for the workshop. That's where you go next. It's April 28th through the 30th, one hour each day. Try your best to be there live. It does make a huge difference to be able to experience it with other people who are in exactly the same place in this journey as you, but you will have access to the recordings as well if you can't make all the sessions live. Sign up today. The cost is $49 for the whole thing, but space is limited. and people are signing up now. So go to nonprofitlaunchplan.com and click workshop to sign So in last week's episode, we talked about phases one and two of what I call the nonprofit flight path. Every nonprofit, no matter the kind of work you do, goes through a series of phases. Starting with dreaming of an idea because you've seen a problem in the world and you feel like you're the person to help solve it. That's phase one. And then progressing through four additional phases. The last being you're successful. You've got thriving programs, a great team, a strong financial footing. Clear vision for the future Each of the phases along the way are marked by some very unique challenges there that are in the forefront of that particular phase and also for each phase as the leader you're likely feeling some pretty specific acute emotional and mental stress which changes as well in advancing your nonprofit to the next phase take some super specific strategy when you understand the five phases and where your nonprofit is It actually makes determining what you need to focus on next a lot easier and a lot more streamlined. And oftentimes this is where having a coach becomes very important. A coach is somebody who has the experience and the outside perspective to guide you through pulling the right levers at the right time to grow through each phase in a healthy and smart way. I call this journey through the five phases, the nonprofit flight path, and for you as a nonprofit leader, Having the awareness of where you are in the five phases is the first very important step to getting through it and into the next phase. So in this episode, I'm taking you through phases three through five of the nonprofit flight path, and I'm going to help you name what you're thinking, what you're feeling, and what it actually takes to move forward. And if you're listening to this episode without having heard the episode prior, where I cover the first two phases, phase one being the dreaming phase and phase two, being the building consensus phase, you might wanna go back and listen to the previous episode first. And as you listen to these episodes, see if you can identify where you are and where your nonprofit is in these phases. of the nonprofit flight path, what I call the first steps phase. Now capitalize on the space parallels here, which you hear me do often in the podcast. This is what rocket scientists have named max Q when a rocket takes off. It's the time when the rocket is leaving the atmosphere of the earth and the pressure on the rocket is the greatest. In other words, if structurally there's design issues, this is where the pressure testing on it is the greatest. And this is where the pressure testing on what you're doing is the greatest. But at the same time, this is where things can feel, finally, like they're starting to take shape. typically in phase three, you may have begun the process or you may already have completed the process related to your tax designation. In other words, getting your ⁓ 501c3 paperwork in order or, you're working with a fiscal sponsor, you perhaps have even gotten some gifts in support of your plan, you're putting together your board, things like that. It's in this phase that some nonprofits can set somewhat of a difficult precedent to recover from. Because what happens a lot of times in phase three is as you start to see a little clearer path forward toward a future where you're actually impacting people, doing the work that you created the nonprofit to do to begin with, It's very common in this moment to start right away putting energy and effort and sometimes money that you see coming in towards doing the work, which I understand after all, this is what you've been hoping to do all along, where you currently are in your nonprofit journey or where you're headed, I want to encourage you in this moment to resist the urge to start doing too much too quickly. Remember, we're building a nonprofit for long-term sustainability, and as much as you might feel like you want to rush into starting to making an impact through your work, I want you to spend more time building a solid foundation. I've worked with a number of nonprofits that have tried to do too much before they had a solid financial and operational foundation in place, and ultimately, they set themselves up on a very difficult path to success because they launched programs too early And then they just kind of always existed hand to mouth because they didn't want to close down the programs that they started too early. So if and when you find yourself in phase three, the questions going through your mind are going to be, how can I get off ground zero? That's zero names in your database, zero donors and zero dollars in the bank. I did a podcast on that just a couple of episodes ago. Who needs to be on the board and who are going to be some of our earliest supporters? Those are the questions in your mind. Do I need a website? How can I streamline my thinking and my time and my effort to get the stuff done that needs to really get done now? The feeling of overwhelm is also getting super real at this point because phase three is where the reality that launching a nonprofit is going to be a lot more work than maybe you first thought. And that can really set in in this phase. And at the same time, it's a real mix of emotions because the future you have imagined and you've built the vision for your organization around is just starting to come into a slightly clearer focus. It's like one of those old Polaroid photos that you have to wave around in order to get the picture to start to form. That's very exciting. At the same time, you can also feel a significant amount of frustration at this point as well, that everything is taking a lot longer than you think it should. which of course is a test of your patience and you might very well be asking questions of yourself like how much longer do I have to keep my other job before I can be doing this all the time? Some of the crucial steps and areas of focus in order to move your nonprofit from phase three, the first steps phase to the next phase is really putting in the hard work of fundraising, growing your donor database, growing your database of people who express any interest whatsoever in your work. building some strong monthly sustaining giving, asking volunteers to help organize some other volunteers, growing your email list and building a consistent donor communication plan. And as all this bulks up, then you launch your first program and you start changing the lives of the people you've been called to serve to begin with. That's phase three. That brings us to phase four, which is the one to three year phase. This phase really begins as long as you've progressed through the previous phases in a healthy and thorough way. This really begins when you start your programs in Your tax designation is in place. You've got a solid board in place that understands their role and they support you and hopefully hold you accountable as well. And hopefully you're building your support base, getting your funding a little bit more stable. It's at this time that it becomes really fun, very exciting, but still comes with a strong sense of fear. Fear over running out of funding, fear out of losing that first big grant that you tried for so long to get. The thoughts that keep you up late at night in phase four are we need to grow our support base, but I don't know how to get in front of more new people without spending a bunch of money. Should we start doing marketing? Is the board happy with our progress? Is the board happy with me? Are we going to have enough that I can cover payroll, including my own paycheck? It's questions like that that keep you up at night. Questions like these leave leaders in phase four feeling like this gigantic ball of hope, but fear as well over finances, apprehensive about knowing exactly when and how you should be scaling up, and always frustrated that things never progress as quickly as you want. I say that phase four of the flight path lasts up to three years, but I actually think that it can be a little longer or shorter depending on your fundraising efforts and a few other factors as well, like how much overhead you have, what your program costs are, et cetera. And as you grow inside of phase four, I always encourage nonprofit leaders in these ways. This is really the time where a fair amount of focus should be on growing larger gifts and givers. should really be the time to gather your best impact stories and refine them to communicate your impact as powerfully as possible. You can maybe think about adding a team member or two and looking for ways to delegate to elevate, meaning empowering others around you to own things that might be tough for you to let go of, but you do it because your head should be ultimately focused on some other things. like growing your major giving program or developing business partnerships, things that only use the director can do. It can be in this phase where you really begin to elevate your efforts to grow your database and your support base wider with maybe a couple of annual events or larger marketing campaigns. It's doing all of these things that ultimately get you to the next phase, phase five, which is the place where we're all heading in Phase five, which if it all goes well, you can hit somewhere in maybe year three through five in the nonprofit flight path. This is where you've reached a comfortable orbit. Your nonprofit is functioning well in the six key areas that you hear me talk about all the time for any nonprofit to thrive. For example, in phase five, in terms of your leadership, your role is well-defined. You're communicating and working in unity with your board. Your team is growing in fundraising. Your fundraising efforts are fruitful. You've built a reserve. You have others on your team that are concentrating exclusively on fundraising and you've got a system in place to bring new donors into your nonprofit and grow them in your giving. When it comes to marketing, you're capturing your nonprofits impact stories and you're using them in your marketing efforts and in your donor communication. Your marketing efforts are introducing your work to people outside the boundaries of where you are known. This is what's happening in phase five. Also in phase five, it comes to your programs and programs are thriving and growing in natural, healthy ways. Each year, the numbers of people that you're serving is growing and each initiative that you have is well-resourced well documented in relation to ROI and impact effectiveness. You've got plans for expanded programs in the future. When it comes to operations in phase five, your staff and your volunteers are experiencing high levels of job satisfaction. And you've got the systems and processes in place to manage HR related concerns. ⁓ Insurance for your team, consistent pay raises, things like that. The software and the other company work tools that you use are all the best they can be for the money are understood and adopted by everyone on the team. And then when it comes to your finances in phase five, you've got a dedicated accountant or an accounting team that's managing the finances. And as the leader, you've got access to a clear dashboard that you can look at and at a glance know exactly where you're at financially. Your revenue is reliable month over month. You've got surplus. Your finances are appropriately liquid and you've got little or no debt. Now, even though in phase five, the orbit stage, all of that sounds like a dream. And if you're in phase one or two, you're thinking, man, we'll never get to that point. First off, promise you, you will, if you follow these steps in the right order and you keep your head in the game But even in phase five, even as wonderful as all of that sounds, as the leader, there is still a tremendous amount on your mind. Questions like, how can I streamline our processes? How can I save a little bit more on costs? How can I get more out of my current donor base? How can I get more major donors attract foundation gifts, expand our programs, hire a couple of more people, refine our There's always questions. And in this phase, phase five, you're feeling excited about seeing the evidence of the impact that your nonprofit is making, but you're also feeling quite a bit of frustration that it's not more. You see what could be rather than what is. You may be feeling anxious about cost savings and generally just trying to do more with less. You have a sense of worry that you're missing financial opportunities, in other words, leaving money on the table in different places, or ministry opportunities as well. You might be feeling stretched and anxious about attracting and engaging donors with higher capacity. Those are some of the things that you're asking yourself, stuff that you're feeling and thinking when you're in phase five, the orbit phase of the nonprofit flight path. Let me review all five one more time for you as we kind of wrap up this episode. Phase one is the idea, the dreaming or the idea phase. This is where you've just got a problem that you see and you believe that you might be the one to start to solve that problem. Phase two then is the building consensus phase where you start to share that problem with others to get their feedback. Phase three is the first step, so the liftoff phase. This is where you're actually starting to do the work, you're building your board, you're starting to grow, you maybe taking your first gifts, you're doing your IRS paperwork and so on and so forth. Phase four is the one to three year phase. This is where you're growing, but you're feeling a lot of pressure, a lot of anxiety about trying to make payroll and grow in the right way and not grow too fast. then phase five is the three to five year phase, the orbit phase where you're running a successful and thriving nonprofit. But the questions and the curiosities and the what's next never goes away. Those are the five phases. So wherever you find yourself in the nonprofit flight path right now, the most important step is to find clarity. When you can name the phase that you're in, you stop trying to do everything at once and you start focusing on the few things that actually move your nonprofit forward. Progress does not come from working harder in every direction. It actually comes from knowing what matters most in the season that you're and taking the next right steps with intention. The reality is that many nonprofit leaders stay stuck not because they don't have passion or vision or the willingness to work because they're just not sure what to prioritize or how to build the right foundation underneath what they are trying to launch. And that uncertainty can cost you time and energy and momentum. But when you get the right clarity, the right structure and the right guidance, things do begin to move. Decisions get easier, your confidence grows and your nonprofit starts to take real shape. Now, if you're in the early phases right now and you want help turning your idea into something solid and sustainable, that's exactly what I want to help you do. Let me tell you about something that's coming up designed specifically for leaders in this stage. If you are in the dreaming or the early phases of your nonprofit, phase one or two, and you're looking for clarity on your mission and vision, looking for guidance on how to build your board and do your initial fundraising and maybe figuring out what your MVP is, your minimum viable program is. This is an invite to you for you to join me for my upcoming LaunchPad Workshop Essentials for Moving from Nonprofit Idea to Impact. It's three hours over three days where we dive in and work on your mission statement or your vision statement. We define who your board members should be. We talk about fundraising some and we help you build out your beginning programs. and a lot more. talk about stuff that we're not able to really dig into necessarily on the podcast and so much more, and a lot of personal intention as well. So if you're feeling overwhelmed, you're stuck in your dream, sign up for the workshop, April 28th through the 30th. It's one hour each day. I want to encourage you to try your best to be there live. That makes a huge difference to experience it with other people who are in exactly the same place in the journey as you are. but you will have access to the recordings if you can't make each one of the days. Sign up today. It's just 49 bucks for the whole thing, but space is limited. Go to nonprofitlaunchplan.com, click on workshop to sign up. That's it for this episode of the Nonprofit Launch Plan podcast for startups, small and growing nonprofits. If this podcast has been helpful at all, would you consider sharing it with another nonprofit leader who maybe is just getting started and needs more clarity? Thank you so much for listening and watching and until next time, keep making a difference.