Life Cycle of the Nonprofit Organization

In their great book, Leaders Who Make a Difference (1999), Stephen Dobbs and Burt Nanus outline the four typical stages of the nonprofit lifecycle.  Here is a summary...

Phase One: Start-Up

An individual or a small group has a passion around a perceived need.
A small group (perhaps a charismatic leader with enthusiastic supporters) founds a new organization.
The founders gather resources.
The founders entice others to serve on a board of directors.
The founding board of directors establishes the legal entity.
Operations commence.

Phase Two: Growth

Leaders expand circle of support.
The organization extends its sphere of influence and visibility.
The size and/or scope of programs increases.

Phase Three: Maturity

The organization focuses on internal policies and procedures.
Funding streams appear to be steady and sustainable.
Depending upon leadership and circumstances, maturity leads to:
Decline,
Renewal, or
Transformation.

Phase Four: Decline

The organization becomes inflexible in its activities.
Efficiency is emphasized over effectiveness.
Leaders lose touch with the dynamics of the surrounding environment.
Depending upon choices made, decline leads either to closure or merger.
 

Where is your organization on the cycle?  And where do you want to be?