Nonprofit Smart Growth Mini-Series: Intentionality & Systemization In Early & Late Growth Phases

This is episode 3 in my 4 part series on smart growth. 

I’ve been making the argument that the best way to grow your organization is not to focus on budget or staff or board size as the key metric, but instead, to notch down and focus on the stage of development — the specific characteristics and goals of each stage, and the clarity, capacity, and capital milestones that are aligned with where you are. 

In the first episode I talked about moving from idea to launch, and in the last episode I talked about childhood – the stage of development where you’ve concretized an idea and need to focus on defining its contours.  

The key is that for some of you, your entire org may be at a stage of development, but for others, your clarity and capital may be in different places. That’s normal, and good to note so that you’re setting the right goals in the right order. 

If you set the wrong goals for where you are, you risk allocating resources to the wrong thing – wasting time and energy and money, and burning out chasing something that you weren’t ready to chase.  

So in this episode, I’m looking at growth stage organizations x4 I’m going to drill down on that…”. Now these are often lumped together. But really there are two phases here, each marked with its own characteristics.

During the early and late stage growth, growth almost always outpaces capacity, systems, and money. This stage is often marked by trouble with workflows and communication – as the team becomes less flat, and not everyone knows everything, issues of authority can also start to emerge. 



So this is growth stage organizations. But there are some important distinctions between early and later- stage growth organizations.

During Early Growth Stage, you have definition and the goal is intentionality.  

In this early growth phase, there are few systems and policies, and the ones that are developed are weak and still being tested. 

You need to pay attention  to what works and  let go of what doesn’t test and refine processes with an eye towards formalizing policies and standard procedures; You should begin setting and naming norms on your team and your board.  

Your fundraising is more robust, but lacking clear systems. There is still an emphasis on doing what works and fundraising is income rather than stability focused — focused on bringing in whatever money is possible rather than identifying the correct revenue streams for your organization. Perhaps an annual event isn’t the best ROI for your community…  

Many organizations whose capital is in the early growth phase have at least a modest fundraising plan in place, but at this stage, it often documents tasks to be accomplished rather than setting strategic course. Similarly, accounting is done but financials are not used strategically and KFIs are not set.

In terms of capacity, these organizations have a solid staff/ team with some differentiated lines of responsibility and accountability but still no leadership team; People do what needs to be done and work flows around people not roles; core authority still sits with ED

The board is often growing – committees and officers exist and are beginning to function

“Similarly on the board…”

To move into the later growth stage, leadership shifts are critical. An ED must change their style and up their skill level. Must build a leadership team and get comfortable delegating; begin to shift the nature and type of fundraising to support growth and stability – more GOS, different types of donors; Paying attention to financials – not just cash flow – becomes critical. 

So that’s the teen years – early growth stage. Just as the org is beginning to focus on growth in earnest. 

The later growth stage is distinct. The organization is still growing, but it becomes important to ensure that it remains anchored in its values and mission as it grows.

Whereas the the goal of early growth is intentionality, the goal here is stability. 

As you enter late growth phase, design is intentional moving into systematized. You see more robust systems, policies and processes.

The thing that is really critical…

Strategic plan informs the growth budget – they aren’t separate practices or pieces of information inside the organization. 

Early fundraising systems are in place and being refined. There is a focus on diversification and building a fundraising engine; a working definition of financial health; and the identification of KFIs; a solid and accurate growth budget, and an emphasis on the type of relational and GOS fundraising that supports growth and sustaining an increased budget – not just transactional fundraising that brings in money.

Your capacity is expanding and becoming more structured. This is where you see the formation of a leadership team; clear lines of authority that are separate from the ED, and entire workflows owned by other people. 

On the board, you have groups of board people doing their own work; not just responding to the ED, but beginning to function as an entity – setting board level goals, engaging in self governance practices. The role of the board vis a vis the staff is clear. 

To finally transition into the mature organization, the leader must learn to work ON the organization not just in the organization; to get out of the weeds and rely on the leadership team and the systems that have been built to execute. 

So in the final episode next week, I’m going to describe a mature organization.  

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