This document analyzes traits that contribute to nonprofit failures in order to create a strategic method for success. Through research identifying correlations between failed large and mid-sized nonprofits, three major common problems were discovered: cash flow obstacles and chronic underfunding; ineffective and unworkable programs; and lack of adequate risk assessment in the sector. The document recommends reducing costs, avoiding repeated audits, implementing financial/programmatic reporting systems, and enhancing board/staff engagement and risk assessment to strengthen nonprofit infrastructure and sustainability.

1. Correlations Between Failed Large to Mid-Sized
Nonprofits: A Closer Look at Why Nonprofits Fail
Shelly Espejo
Sandra Guerra, Program Administrator, The
Fordham Center for NonProfit Leaders
PURPOSE
SIGNIFICANCE
METHODOLOGY
OUTCOMES EVALUATION
ACKNOWLEDGEMENTS
Analyze traits that contribute to the
failure of nonprofits to create a strategic
method for success.
• Nonprofit organizations play a
critical role in building and
supporting the well-being of New
Yorkers.
• Nonprofits enable 2.5 million New
Yorkers to contribute to their
communities.
I would like to give a special thank
you to Sandra Guerra, Internship
Preceptor, Ann Marie Hill, Internship
Coordinator, and the staff of the
Fordham Center for NonProfit
Leaders for their contribution and
support.
•Reduce staff
•Invest in infrastructure
•Training and accounting
systems
Capitalizing the
Sector
• Avoid repeated audits
• Reduce costs
• Highly-designed,
appropriated evaluated
program
Program
Collaboration
•Implement a financial/
pragmatic reporting
system
•Enhance board members
and staff engagement
Risk Assessment
• Organizations with budgets less
than $1 million are less likely to be
in financial distress.
• Underfunded government are
making payments of 80₵ or less of
each dollar of program’s actual
cost.
• Underfunding and contract
payments delays leads to costly
borrowing, acquiring interest not
covered by government contracts.
• Three major common problems were
discovered: cash flow obstacles and
chronic underfunding, ineffective and
unworkable programs, and lack of
adequate risk assessment in the
sector.
Research
Identify Correlations
Analyze
Recommendations
Organize
Develop Strategic
Method
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Overwhelming
Administrative
Costs & Inability
to Alert Short
and Long-term
Fiscal Dangers
Redundant
Audits
Unfunded
Mandates
Weak Internal
Financial &
Programmatic
Reporting
Other
Oversight
Mechanisms