What to Look for When Funding a Nonprofit
When choosing the right nonprofit to support, funders need to be strategic and discerning. It’s not enough to find an organization with a mission and cause you support, due diligence must be completed to make sure every dollar you give translates to real impact.
Earlier this year, The Center for Effective Philanthropy released a report on the State of Nonprofits in 2024, providing key insights into the challenges nonprofits are working through and what donors should look for in order to maximize positive change.
CEO and leadership burnout can put a nonprofit at risk
Just like any other large organization, culture and work/life balance start at the top. If top leaders are burned out, there’s a high likelihood this pressure will work its way down the organizational chart or lead to leadership turnover.
Presently, 87% of nonprofit CEOs and top-tier leaders report being concerned about their own burnout. This is a striking figure and an unfortunate sign that too many nonprofit executives are missing the mark when it comes to effective leadership.
At Thompson, we’re proud to boast the history of leadership continuity funders look for prior to donating. Our CEO makes a concerted effort to follow a leadership approach that eliminates burnout while building stronger leaders down the line. He’s been leading the mission for 7.5 years and our executive leadership team brings an average tenure of 7+ years.
Why does this matter? Because a thriving and stable executive leadership team leads to better outcomes for children and families.
What leads to leadership burnout?
In the nonprofit sector, most leadership burnout can be attributed to two primary factors:
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- A lack of scale and growth: Just like a for-profit business, nonprofit organizations need to grow in order to have the resources to complete their mission. Nonprofits that are managed without a growth mindset stagnate, leaving executives to wear multiple hats.
- Get stuck in the weeds: Executives should be doing lead work, not weed work. On the surface, the optics look great when top leaders are digging deep and pitching in – but in reality, this is often a sign that the organization is broken.
To prevent burnout, CEOs and executives must lead at the right level and build the right leadership team to surround and support them.
Pay attention to financial statements
Supporting nonprofits with strong finances ensures that donations are used effectively and sustainably. Financially stable nonprofits are better equipped to deliver impactful programs, adapt to changing needs, and continue their mission long-term, maximizing the positive impact they make in communities.
In 2024, only 21% of nonprofits reported having a budget surplus, highlighting the importance of due diligence if you wish to invest in organizations that are good fiscal stewards while providing quality services.
The fours pillars of organizational strength
The simplest approach for funders to gauge the organization health of the nonprofits they support is to look at:
- Leadership continuity
- Intentional leadership development
- Growing impact
- Fiscal responsibility
Thompson meets all four.
Support our mission
At Thompson, our vision is simple: All Children Healthy, All Families Thriving, All Communities Strong.
To learn more about how you can donate and change lives, click the button below.