How to Build a Successful Nonprofit: 8 Strategies for Growth and Sustainability

Starting and running a nonprofit organization can be one of the most rewarding experiences of your life, or it can be a complete nightmare. Too many organizations end up finding the are poorly funded, understaffed and not effective. And more often that not, this all comes down to poor planning, lack of commitment and a clear understanding of their purpose.

We will be going over 8 Steps to creating a successful non-profit and each and every step is important, so don’t skimp on one step thinking it doesn’t matter. Even though you are not a for-profit, that doesn’t mean you’re not a business with monthly bills, employees and responsibilities. You will have people donating their time and hard earned money to help you succeed, it’s your responsibility to make sure their commitment doesn’t go to waste and you achieve your goals as a charity.

Building a successful nonprofit requires a clear plan, consistent effort, and a focus on long-term sustainability. Here are the key actionable steps you can use as a checklist to guide you:

1. Define a Clear Mission and Purpose 

You need to be crystal clear on what you want to achieve and why it matters. This starts with your mission statement, the document that guides your nonprofit’s actions when it comes to achieving your mission. This document helps you decide what you are doing now and why you’re doing it while providing clarity about its mission. It should include your nonprofit’s purpose, who it serves, and how it plans to create impact. A strong mission statement is short, specific, and inspiring. It should answer three key questions:

• What problem are you solving?
• Who are you helping?
• How are you making a difference?

For example, a nonprofit focused on food security might have a mission statement like:
"We work to end hunger in low-income communities by providing fresh, nutritious meals and access to food education programs."

Once you have a clear mission, develop a vision statement. This paints a picture of the future you’re working toward and how things will look when you’ve reached your goals. While your mission focuses on what you do today, your vision statement should describe the long term change you want to see and can be broken into one, three and five year increments.

For instance, if your mission is to provide food to those in need, your vision might be:
"A world where no one goes hungry and everyone has access to healthy food."

Both your mission and vision should guide your organization’s decisions and keep your team focused on what matters while making sure everything aligns with a real need in the community. These documents can also help attract supporters, volunteers, and donors who believe in your cause. When they’re well written, these documents become the foundation for everything your nonprofit does.

2. Create a Strategic Plan for Your Organization

A well thought out strategic plan is usually what sets most successful nonprofits apart. This document is your roadmap and clearly lays out where you want to go, and each step that will be needed to get there. Usually you’ll break your plan down into increments of time, one year goals, five year goals and so on. You’ll also include what services and programs you’ll use to achieve your goals, and measure their results to understand how effective your choices are in the real world. This allows you to pivot when something is not working, or improve upon those things that are in a calculated way to become even more effective.

Set Specific Goals

Start by defining clear, measurable goals for different timeframes:

• First year: Focus on building awareness and establishing essential services needed to begin making an impact. For example, a mental health nonprofit might aim to launch a free support group in the community, create an online resource hub with different information for those effected and their families, and secure its first round of funding whether through donations or grants.
• Three years: Expand your services portfolio and increase your community reach. This could involve opening a crisis helpline, hiring licensed counselors for in house sessions or forming partnerships with schools and workplaces to offer mental health programs and support.
• Beyond three years: Focus on long term sustainability. Goals might include developing a corporate sponsorship program, expanding to new locations, or advocating for mental health policy changes at the state or local level in your own community.

Outline Programs and Services

Your programs need to directly support your mission. Ask yourself:

• What mental health services will you provide?
• Who will benefit, and how will you reach them?
• What resources (funding, staff, volunteers) will you need?

For example, if your mission is to provide accessible mental health support for underserved communities, your services might include:

• Free counseling sessions for individuals who can’t afford therapy
• Community workshops on stress management, mindfulness, and emotional resilience
• Peer support groups for specific needs, such as anxiety, PTSD, or depression
• Online mental health resources offering self-help tools and crisis intervention guides

Each program should have clear objectives and a plan for execution as well as what will be needed to introduce them. By having clear goals you’ll be more easily able to track and measure how successful each step has been so it can be tweaked or improved upon. And the best way to know exactly how effective your organization is will be to use KPIs.

Identify Key Performance Indicators (KPIs)

KPIs are used to methodically measure the results of your efforts and to understand what is working and what’s not. Choose which KPIs to track and review these metrics regularly as they can give you insights into your organization that you wouldn’t ordinarily see. This can save you a lot of time and resources that would have otherwise been wasted. Common mental health nonprofit KPIs include:

• Community impact: Number of individuals receiving counseling, support group attendance, percentage of participants reporting improved well-being ve those who have not
• Financial health: Amount of grant funding secured, number of new donors, recurring donors and the overall growth in fundraising revenue
• Operational efficiency: Volunteer hours contributed, number of mental health professionals onboarded and website increases or decreases of traffic to online resources

Although this is a simplified version of the metrics that can be tracked, it is a solid start if you’re new to using KPIs to understand your effectiveness. Regularly reviewing these metrics allows you to adjust your strategy quickly when things aren’t working saving valuable time and resources, and gives you insights into what is working so you can do more of that. This one step can greatly improve your charity in numerous ways, so be sure to create a clear and detailed outline and track as many KPIs as possible, being realistic of course!

3. Build a Strong Leadership Team for Your Members

Even as a small charity you need to assemble a board of directors with diverse skills in areas like fundraising, finance, marketing, and operations. The broader the skill set of your board members, the more opportunities you’ll have for taking advantages of their skills in order to make your charity more effective. And don’t forget, board members aren’t paid, so including skills like accounting, law and other expensive sought after skills on your board can save you a lot of money in the long term.

Leadership in your nonprofit isn’t just your board, this also includes individuals like a dedicated executive director or leadership team to oversee daily operations. Again, these people will lead your staff and volunteers and should be worthy of their roles in your organization. They may be salaried employees or volunteers themselves, it all depends on your own specific needs and resources.

Once you have your leadership team established, be sure to clearly define each individual’s role and responsibilities so they are able to do their tasks efficiently. Having clear responsibilities also helps deal with accountability if things aren’t going as planned. But without clear job descriptions, it’s difficult to hold someone responsible if no one knows whose actually responsible for said task, so make sure everyone is clear.

4. Establish Legal and Nonprofit Financial Foundations While Staying Compliant

Although registering your nonprofit as a legal entity and applying for 501(c)(3) tax-exempt status in the U.S. to qualify for tax-deductible donations should be a given, many nonprofits don’t understand the importance of staying compliant once they become a legal entity. This requires solid nonprofit accounting procedures that are accurate and transparent to your organization and its supporters. Noncompliance can lead to fines, loss of tax-exempt status, or reputational damage.

Most nonprofits must submit annual filings to maintain their legal standing. In the U.S., this typically includes filing IRS Form 990, Form 990-N (e-Postcard) or Form 990-EZ. You may also need to file your financials with your state so check with your state’s nonprofit regulatory office in order to know what’s mandatory. Furthermore, if you’re soliciting donations in many states, you may also be required to complete a Charitable Solicitation Registration and register with each state’s charity office. This is where a dedicated accountant can come in handy, especially if they are on your board and willing to do the work pro bono!

You’ll also need to follow employment and labor laws both on a federal and local level. Paying payroll taxes and filing necessary forms (such as W-2s and 1099s) and offering legally required benefits (where applicable) are necessary to keep your charity in compliance with authorities. Non-profit employees do still need to pay taxes on their income, although you the charity will not need to pay additional taxes. But each state is different so you’ll need to verify what’s necessary within your own local. Volunteers are also subject to specific labor laws, so ensure you understand any relevant regulations.

Another compliance issue is holding regular board meetings and keeping detailed minutes so you can fulfil the IRS’s mandatory requirements of holding at least one meeting on a yearly basis. During this time you should also review and update your organization’s bylaws to align with any changes in legal requirements, or any change of direction within your organization.

Last but equally important, you’ll need to always be transparent with your donors and the general public. The IRS has clear regulations that all nonprofits must publicly share any financial data they poses with the general public. Failure to do so will result in forfeiting your 501(c) status! By publicly sharing your financials such as audited financial statements on your website is an easy way to stay compliant and build trust with your supporters by demonstrating transparency. You can go a step further by clearly stating how donations are used to build an even stronger reputation.

5. Secure Diverse Funding Sources

One of the biggest causes of a failing nonprofit is being underfunded. A financially stable nonprofit doesn’t rely on a single source of income and diversifies as much as possible without being dependent on one type of funding. Clearly mapping out a variety of funding sources can really benefit your chairty and make long term sustainability a reality.

Develop a Multi-Channel Fundraising Strategy

Your nonprofit should generate income from multiple sources, including:

• Grants – Research and apply for funding from foundations, government programs, and corporate grant programs. Mental health nonprofits, for example, can seek grants from organizations like the National Institute of Mental Health (NIMH) or the Substance Abuse and Mental Health Services Administration (SAMHSA).
• Individual Donations – Build a donor base through email campaigns, social media appeals, and recurring giving programs. You should be constantly working to onboard new supporters and looking for new channels of communication and networking opportunities. Take advantage of peak giving seasons like year end giving and Giving Tuesday to increase funding.
• Corporate Sponsorships – Partner with businesses that somehow align with your charity’s mission. For instance, a mental health nonprofit could collaborate with wellness brands or therapy platforms to fund its programs or create partnerships that can donate items that can be later used for auctions or fundraising incentives to push people to give more.
• Fundraising Events – Organize annual galas, virtual summits, or community walks to engage supporters while raising funds. A 5K charity run for mental health awareness is a great way to attract participants and donors in a social and fun way. Make sure you plan your events well in advance to be sure you are fundraising enough to cover all expenses. A fundraising strategic plan is just as important as any of the other steps we’ve covered and can help ensure your charity has adequate funding for the year.

A diverse funding strategy ensures your nonprofit remains financially strong, even if one revenue stream fluctuates or even disappears completely. By combining grants, individual giving, corporate partnerships, and digital fundraising, you can create a steady flow of donations to support your cause.

6. Build an Engaged Community

People are the backbone of every successful charity or foundation. Whether as supporters, volunteers or donors, it’s people that are the most important asset in the end. So coming up with a clear plan to connect and engage with supporters and potential supporters should be your number one priority. Social media, email newsletters, and events are all great ways to connect and grow awareness for your organization. So is partnering with local businesses, other charities and even religious organizations. All of these are opportunities to expand your reach and encourage personal involvement to strengthen your nonprofit’s impact.

Another important aspect of community building that’s often overlooked is creating an action plan for recruiting volunteers and a donor stewardship program to keep your donors engaged and hopefully grooming them to become major donors. These are all aspects of building and growing your community for the sole purpose of moving your charitable work forward. Each aspect should be carefully though out and planned so you can go back and see how successful your results were and impliment any changes that need to be made in order to make each of your plans more effective.

7. Develop a Strong Digital and Software Presence

If you aren’t on the web, you’re missing out on probably 90% of the potential you could harness if you had a strong digital presence. It’s estimated that 63% of donors prefer to give online with a credit or debit card, so by not having a strong presence you’re leaving a lot of support on the table. And we’re not just talking about asking for donations on Facebook, a solid website is a must have in today’s connected world.

One of the first things a potential donor is going to do is to go to your website and see what you’re abut and how you use your funding. If you don’t have a website, or it’s ugly and hard to use, people will feel your not professional and loose trust almost instantly. Remember, the time people are willing to give a site online is shrinking yearly. So yu need to stand out and come off as a professional organization right from the start.

Luckily platforms like Paybee have some amazing tools and solutions that can make the entire donor experience look and feel professional while also helping you to raise more funds and run your entire charity on the back end. We offer fundraising tools like live event and virtual options so you can easily reach a global community of people looking to support causes aligned with their beliefs. Paybee can even be used as a hybrid event solution allowing you to raise money in person, online and even through all of your social media channels all at the same time, greatly expanding your reach and ensuring your competitiveness in a saturated nonprofit sector.

But that is just the front end. The back end allows you to accept donations legally while giving your donors multiple options to give in any format they wish, sending a thank you email and donation receipt instantly, and even organizing your donor data so you’re able to track and understand their giving habits in order to increase their gift through marketing. There are so many ways to improve your charity using a digital platform that is easiest to experience it for yourself through our free demo which can be found here. It only takes a second to sign up and see how we can catapult your organization to new heights almost immediately!

8. Measure and Improve Your Impact

The last step we’ll go over in creating a successful charity or foundation has to do with using hard data to understand multiple aspects of your organization. Most nonprofits fail to actually measure their performance which leaves you a solid competitive advantage if you choose to use it. If you’ve done all the work and laid out clear plans for each, then the last thing to do is to compare your actual result with what you expected to happen. And don’t be disappointed if your results don’t coincide with the expected ones. If you have measured everything using KPIs like we discussed before, even shortfalls or straight out failures can give you insights that can reverse your course.

Tracking key metrics such as donation growth, volunteer hours, and program effectiveness allows you to see exactly what has worked and not worked. That means things can be tweaked, adjusted or scraped depending on their performance. This also means any mistakes can be corrected and not made again!

Further, gathering feedback from beneficiaries, donors, and volunteers to refine your approach can create even more profitable or amenable results by using their experience to spot inefficiencies and improve upon procedures. These are all things that most charities never implement, yet can easily set you apart from your competition. Knowing exactly what works and doesn’t, what your donors like and don’t like, and how best to interact with potential supporters can help make your organization a powerhouse of success. It just takes the commitment to do the work and the intelligence to use our recommendations.

Final Thoughts

Building a successful nonprofit isn’t just about passion, it’s about strategy, consistency, and a willingness to adapt. Every step, from defining your mission to securing funding, plays an important role in your long term success. Without proper planning, clear leadership, and financial stability from multiple sources, even the most well intentioned organizations will struggle to make any sort of impact. But when you put in the work, stay accountable, and continue refining your approach using real world hard data, your nonprofit can grow and complete its mission.

Success doesn’t happen overnight and challenges will come, but with the right foundation and plans in place, you can create a lasting impact in your community that can last a lifetime. You just need to keep pushing forward and stay committed to your mission, and never lose sight of why you started this amazing experience in the first place.