The Real Reason Nonprofits Struggle to Grow

Let’s start with a statement that might feel a little uncomfortable.

Nonprofit funding challenges are not primarily about a lack of money.

Yes, economic conditions matter. Donor trends matter. Competition matters.

But if you are being honest, most leaders and their organizations that feel “stuck,” are dealing with something deeper, something structural.

I recently came across a thoughtful LinkedIn post by Donald Summers of Altruist Partners. I’ve been following Donald’s teachings for years. He always delivers data-based insights.

He outlines five critical areas that limit nonprofit organizational growth.

If you’re a nonprofit leader trying to break through a plateau, his framework built upon 20+ years of working with nonprofits, is well worth your attention.

The “Boat Anchors” Beneath the Surface

On the surface, many nonprofits look like they’re doing everything right. Events and programs are running. Fundraising campaigns are active. Staff are working hard.

But what is underneath the surface? There are often hidden “boat anchors” or structural weaknesses that slow everything down.

These anchors typically fall into five key areas.

1. People: Your Greatest Asset… and Your Biggest Risk

Every nonprofit leader knows this instinctively: your mission is only as strong as your people.

But here’s the reality many organizations face:

• Burnout is high
• Turnover is constant
• Skill gaps go unaddressed
• Having the right people in the right seats

You can’t scale impact with an exhausted or under-equipped team.

Growth requires:

• Investing in leadership development
• Clarifying roles and accountability
• Building a culture that retains great talent

For example, if your team is stretched too thin, no new fundraising strategy will fix this underlying problem.

2. Programs: Good Intentions Aren’t Enough

Passion drives programs - but design and execution determine impact.

Too often, programs:

• Evolve without clear structure
• Lack consistent evaluation
• Aren’t fully resourced

The result: Your case for support will NOT be compelling and you’ll achieve only limited outcomes.

Strong nonprofits treat programs like living systems:

• Clearly defined outcomes
• Measurable impact
• Continuous improvement loops

If your programs aren’t producing clear, demonstrable results, growth will stall - no matter how strong your mission is.

3. Planning: The Missing Link Between Vision and Results

Many nonprofits either:

• Over-plan (and never execute), or
• Under-plan (and operate reactively)

Neither works.

Effective planning is both focused and flexible. It connects:

• Strategic priorities
• Revenue goals
• Day-to-day decisions

Without this alignment, teams drift, opportunities are missed, and resources get diluted.

Planning isn’t about creating a perfect document. It is about creating clarity and direction that guides everyone’s behavior.

4. Finances: More Than Just “Raising Money”

Here’s where the myth really breaks down.

Financial challenges are often framed as: “We just need more funding.”

But the issue may be:

• Lack of a clear revenue strategy
• Over-reliance on a few funding sources
• Weak financial management systems

Healthy nonprofits don’t just raise money - they manage and design their financial model intentionally.

That means:

• Diversifying revenue streams
• Understanding true program costs
• Aligning funding with strategy

Money flows more easily to organizations that demonstrate clarity, discipline, success, and impact.

5. Operations: Where Strategy Lives or Dies

Planning is important. But execution is everything.

And this is where many nonprofits struggle the most.

Common operational challenges include:

• Inefficient systems
• Lack of process discipline
• Weak internal communication

These issues don’t always show up in strategy discussions.

But they show up everywhere else:

• Missed deadlines
• Frustrated staff
• Inconsistent results

Strong operations turn good ideas into real outcomes. Without them, even the best strategies fall flat.

So… Where Should You Start?

The hardest part of all this isn’t understanding the five areas. It is knowing where your organization stands now.

I appreciate the practical approach from Donald Summers. He has created a simple, 10-minute assessment that helps you evaluate your organization across each of these five dimensions. Click here.

The assessment is designed to help you:

• Identify hidden gaps
• Benchmark your current state
• Get immediate, customized insights

If you’re serious about growth, it’s worth taking a few minutes to get that clarity.

Final Thought: Growth Is an Inside Job

It’s tempting to look outward for solutions - find more donors, get bigger grants, implement new fundraising campaigns.

But sustainable growth starts internally, when your:

• People are aligned
• Programs are effective
• Planning is clear
• Finances are strategic
• Operations are strong

Funding follows function.

If your organization feels stuck, don’t just ask, “How do we raise more money?”

Ask: “Which of these five critical growth areas is holding us back?”

The answer you get is where real growth begins.

If you’d like to discuss your situation, click here.