Successful Nonprofits: The Dangers of Mission Creep

Mission Creep: Nonprofit Kudzu

by goldenburggroup

Mission Creep: Nonprofit Kudzu

by goldenburggroup

by goldenburggroup

Mission creep is like kudzu. If you live outside of the 17 southeastern states where it dominates the landscape, let me give you this quick lesson about kudzu.

Kudzu was introduced at the 1876 World’s Fair as an ornamental plant. It gained widespread popularity in the 1930s as a way to reduce soil erosion. Now, almost 100 years later, many of us in the 17 states wage a constant, daily war against its inevitable encroachment. Source: Smithsonian Magazine.

Here in Georgia, many yards and green spaces suffer from the invasive vine, kudzu. A single plant can grow multiple feet in a day, engulfing other plants and trees. And it grows so densely that it can even smother and kill a healthy oak tree. 

Kudzu is what comes to mind when I think of “mission creep.” It, too, seems beautiful at first. Those extra funds or the opportunity to help our community seems like a great opportunity. And, like kudzu, it can end up smothering programs and organizations. 

Earlier this year, Dolph was featured on the Pro Bono Partnership Atlanta Podcast with Sireesha Ghanta and Robyn Miller. Together they explored mission creep:

        • what it is
        • why you should avoid it
        • how you can avoid it
        • what to do if your organization decides to intentionally expand beyond its mission

The full transcript is below, and you can also listen in at Pro Bono Partnership Atlanta’s podcast feed and keep your programs and organizations healthy and thriving!

Transcript

Dolph Goldenburg (00:00):

Welcome to the Successful Nonprofits® Podcast. Today, we have a very special reverse episode of the podcast with Pro Bono Partnership Atlanta’s Sireesha Ghanta and Robyn Miller. We’ve only done one reverse episode up to this point so it’s worth a quick explanation. Earlier this year, Sireesha interviewed Robin and I on the Pro Bono Partnership Atlanta podcast. That episode, on mission creep, just got released on their SoundCloud platform last week. This week, we are releasing the episode on the Successful Nonprofits® feed so that all of our Listeners can hear it as well. If you really like what you hear, then make sure you go over to SoundCloud and subscribe to Pro Bono Partnership Atlanta’s podcast. Currently, SoundCloud is the only platform that you can get the podcast on.

Dolph Goldenburg (01:06):

Before I end this intro and we roll over to the Pro Bono Partnership Atlanta’s podcast, I want to share a little bit with you about Pro Bono Partnership. They’re an Atlanta-based nonprofit that provides legal counsel and also coordinates pro bono legal counsel for nonprofits all over the state of Georgia. I have been working with them for over a decade in one way or another. In fact, when I was a permanent executive director, my organization was actually a client of theirs. Now, as a consultant, I work all over the country and I work in cities that have an organization like Pro Bono Partnership Atlanta and I work in cities that do not have an organization like it. I will share with you that cities that do not have an organization like Pro Bono Partnership have such a harder time securing pro bono legal counsel for even the smallest matters. So I am so grateful for the work they do in Atlanta and in Georgia. And I was so excited to be a part of their podcast. Without further ado, I hope you enjoy their podcast episode. Remember you can find it on SoundCloud and also remember that we will be releasing the regular weekly episode of the Successful Nonprofits® Podcast this Thursday.

Sireesha Ghanta (02:28):

Hello, and welcome to the PBPA podcast. I’m your host, Sireesha Ghanta. Today, our guests will share some tips and considerations, both legal and logistical, to help your nonprofit avoid mission creep. Before I introduce today’s guests, I’d like to tell you a bit about the Pro Bono Partnership Atlanta. PBPA strengthens our community by engaging volunteer attorneys to provide nonprofits with free business legal services. For more information on who is eligible to be a client or to apply for consideration, visit our website pbpatl.org. Our website also has tons of resources, including articles and webcasts specific to Georgia nonprofits and their business legal concerns. And please keep in mind that this podcast is general information, not specific legal counsel. Contact your attorney for guidance on your specific questions. And now, joining me today are Robyn Miller, PBPA Senior Corporate and Tax Counsel. And Dolph Goldenburg a nonprofit consultant, host of his own podcast named Successful Nonprofits® Podcast, and self-proclaimed charity nerd. Thank you both for joining us today.

Dolph Goldenburg (03:58):

Thanks so much for having me on. I’m grateful.

Robyn Miller (04:00):

Wonderful to be able to be here with you.

Sireesha Ghanta (04:01):

Dolph, how would you define mission creep?

Dolph Goldenburg (04:09):

So “creep” is difficult to define, but you know it when you see it. And typically, it’s when an organization has started some unrelated programs or services that in no way are related to current programs or services or serving current constituents. Things like that. But again, it’s really difficult to define. That’s one of the reasons why nonprofit boards and senior leadership teams spend a lot of time, hopefully, really trying to answer questions like: Does this fit within our mission? Does this not fit within our mission? Is this strategic expansion? Is this the direction we want to be moving in? Or is this more of a perilous creep? Sort of like a hundred plus years ago, we brought kudzu to the United States thinking, “Oh, this is going to be great. It’s going to make great feed for our cows and our goats and everything else that we like to get milk from and eat.” And then it turns out that it was an invasive species and took over most of the southeastern United States. That’s sort of what mission creep looks like.

Sireesha Ghanta (05:20):

And why should it be avoided?

Dolph Goldenburg (05:23):

Oh my gosh, there are so many reasons for organizations to avoid mission creep. I think that there are essentially four reasons. Before I give you those reasons, though, I want to share a story with you. I once worked with a housing organization. This organization provided housing and housing services to thousands of people a year. Every fall, this organization did a coat drive where they collected about 500 coats. Now it was a little bit ironic that they would do a coat drive because they had partnerships with restores in the area where their clients could go and get free coats any time of the year. They could go in November or if there was a cold snap in March. But every fall they mobilized this coat drive, taking hundreds of hours of staff resources to put it together.

Dolph Goldenburg (06:18):

And those resources could have been spent in other ways. So let’s just quickly walk through the four main reasons to avoid mission creep using this as an example. First, mission creep dilutes your focus and brand as an organization. Some people started to think we were a clothing donation center. People stopped by the office in April or May to give us their coats. This became a problem because we did not have the storage. So we gave coats away to a thrift store. Second, some of our funders and donors were also confused about our mission. Third, mission creep frankly creates a much less efficient organization, which I just described. If you’re doing a program that really interrupts the other work you’re doing, you’re not nearly as efficient or effective at doing the work that you’re supposed to be doing. So those are the primary reasons why I would never suggest an organization engage in mission creep.

Sireesha Ghanta (07:29):

Those are really good points. Robyn, can you remind us what the legal purpose of a mission is and why would the IRS care if a nonprofit changes their mission?

Robyn Miller (07:40):

So your mission is fundamental to everything that you do as an organization, and it’s the basis for why your organization exists. And so 501(c)3 organizations must qualify under that code section as one of the exempt activities. Exempt activities are things that are charitable, educational, literary, protection from cruelty for animals and children, and so on. And so for an organization to be recognized as a 501(c)3, it must meet one of those exempt activities. And then it must, most importantly, maintain that activity and continue to maintain that activity in order to remain an exempt organization.

Robyn Miller (08:29):

So when an organization is first starting out, it completes the Form 1023 application, which it submits to the IRS that says, “Hey, here’s who we are and here’s how we meet section 501(c)3 of the internal revenue code and how we’re going to have this exempt activity.” And then each year a 501(c)3 is required to complete a Form 990, which is also called an information return. And they provide information to the IRS about how they’re conducting their mission and what that mission continues to be. And so the mission is fundamentally who you are and how you operate. In addition, in most states, and particularly in Georgia, your board has a duty of obedience to live up to that mission and to continue to promote and commit to fulfilling that mission. There have been a few organizations that have gone out of business because they completed their mission. It doesn’t happen often, but you would hope that it could happen more often. If we could solve homelessness by fulfilling that mission wow, that would be outstanding!

Sireesha Ghanta (09:55):

That would be fantastic. And does it matter how much a nonprofit shifts its mission? If the nonprofit just pivots versus leaps into a completely new direction? What should a nonprofit take into consideration?

Robyn Miller (10:11):

501(c)3s that have been around a long time are going to shift their mission over time. And that’s taking into account what Dolph said; that strategic, thoughtful decision making by the board about what the next activity is that relates to the mission and how to continue to work towards achieving that mission. You often see very small, incremental changes as organizations get into how to address and achieve their mission. Sometimes shifts are temporary and sometimes they’re more long-term. Sometimes there is a need to change as society or governmental regulations change. And then there’s things like the situation we’re in now, what I call COVID World, where some organizations have needed to shift to fit new needs, like providing emergency food, as opposed to some of their other, more usual activities.

Robyn Miller (11:09):

And temporary changes due to emergent circumstances are just fine. But then there’s organizations that make big, long-term changes. The YMCA is a really good example of a shift over time. When the YMCA was originally created, it was in larger cities and was a place where young men could stay when they move to a new city to help them get on their feet while they looked for jobs. Well, certainly today we don’t think of the YMCA as doing that. We see it as more of a fitness and family facility that offers a variety of different services and programming. That change didn’t happen overnight. Those changes were slow and incremental and the IRS was aware of those changes because the YMCA informed them through that Form 990 each year.

Robyn Miller (12:08):

But big, overnight changes are inappropriate. For example, an organization that provides homeless services and that switches to providing pet fostering services. That is completely different from what the IRS recognized you as. And so that would be an inappropriate kind of change to make from one night to the next. There is one more area I do want to mention, and that is new clients versus existing clients. So sometimes organizations will start by representing a certain group of clients and they want to expand. Maybe they see there is a service gap. For example, counseling services. Maybe an organization realizes there is a group of people of people who could afford to pay something for their services and there is a group who cannot. Can they expand their services to charge something to those who can afford to pay? Certainly not at the for-profit level. But there are theories behind why organizations should charge for their services and the benefits of that. In those cases, organizations should reach out to legal or accounting counsel. Or a consultant like Dolph. Someone who can help guide them through that process.

Robyn Miller (13:11):

Dolph, we’ve talked about expansion versus creep. How might fundraising influence an organization’s mission? Can grant seeking and fundraising opportunities actually be a cause of mission creep?

Dolph Goldenburg (14:14):

They absolutely can. And I think that there’s a push pressure and a pull pressure there. I love Robyn’s phrase “COVID World.” So in this time of COVID World, I think a lot of organizations are seeing both this push and this pull. The push is there are an inordinate number of foundation and government funders that have released requests for proposals and given nonprofits the opportunity to apply for funding around some very specific COVID-related programs and mobilization. Whether that is services for people who are unemployed or support services for people who are having economic issues and may be facing eviction or have food scarcity issues, et cetera. So that’s the push; there are all of these funders right now that want to fund these sort of services. There are a lot of chief executives and development directors and grant writers that see this as a great opportunity. So they may jump into creating a new program that’s probably not actually the best fit for their organization.

Dolph Goldenburg (15:21):

But here’s the pull: we’re also facing a recession, probably unlike anything we’ve ever seen in our lifetime. So there’s also these chief executives who have a strong, understandable sense of responsibility for the people they serve, but also the people they employ. And so, in a lot of cases, these chief executives may be thinking, “You know, this may not be the best fit, but if we can bring in a $100,000, it’s going to save three jobs and we really need to save those three jobs.” So there’s a push and a pull there. And that is also where I think the board plays such an important role. I’ve been a chief executive, I’ve been an interim chief executive. I think any of us that have been an executive director have been guilty of this at some point or another, where we see an opportunity to expand, or in the case of a recession, not have to have as deep of cuts. And a good board is the board that says, “Let’s take a step back. We know you’re excited about this, but let’s really examine this and make sure this is the right fit for us.”

Sireesha Ghanta (16:29):

And in that case, what would you recommend to organizations that have recently been moved by the heightened awareness around racial inequities? And what if there are opportunities for grants around DEI? How can a nonprofit participate in the movement while avoiding mission creep?

Dolph Goldenburg (16:49):

That is a great question. I absolutely see that there is going to be a number of foundation funders that are going to be looking to fund diversity, equity and inclusion related projects at a much higher level in terms of funding per grant, but also at a much higher level in terms of total funding. So there will be a lot of that push opportunity to expand for nonprofits. I believe that the first thing a nonprofit needs to do is that tough internal work within its staff team and within its board. That culture work really examines what the organization’s role in oppression has been. Then finds ways that it can create a culture and policies and procedures that break down oppression and barriers and create greater inclusion and diversity and equity.

Dolph Goldenburg (17:42):

So organizations shouldn’t start by creating a program, whether that’s a training program for the broader community or a more laser focused program. I think the first thing is for organizations to go back to the funder and say, “We need to do this internal tough work first, but this is going to cost some money. We need to bring in a consultant that specializes in DEI. We need to have them come in and do an organizational assessment, help us create some goals and work toward this so that we, as an organization, can live the values. Once we’ve done that, we can look at other programming, but this is the first step.” Another option for organizations that really want to be engaged in that programming but risk mission creep is to partner with another organization. For example, they can subcontract with another nonprofit so that they can ensure the communities they serve get the training that’s appropriate for that community while also still staying true to their mission.

Robyn Miller (18:40):

And Robyn, if a (c)3 strategically decides it’s going to change or modify their mission, what are the legal responsibilities of the nonprofit?

Robyn Miller (18:55):

I want to first begin by echoing what Dolph just said, which is the better move is to find someone already in the space and to partner with them. Do what you’re good at and support those that are good at other things. So should a (c)3 decide that it’s going to change or modify its mission? It depends on the extent of that change. I recently worked with an organization that worked with women who were had been previously addicted. The organization helped them get training and housing and get on their feet. In the last couple of years they added helping veterans to do the same thing, whether or not those veterans had any addictions of any kind. The board discussed whether or not this change made sense. The services they were providing were virtually identical, it’s just a different group of individuals who are in the same place. And so it was an easy modification of their mission. They came to me and we talked through. We discussed whether or not we needed to change the bylaws and articles. If you’re going to make a change official, then you want to consider modifying your mission in your bylaws and articles because you want all of them to be consistent. And then you also want to make that change on your Form 990. The more that you can share with the IRS the better off you will be. And ultimately that relates to the public, because your 990 is public and is on GuideStar and people look at that. So the more that you can be consistent and clear about what your mission is and who you are serving, the better off you are.

Robyn Miller (21:02):

If it’s something more significant than that, you can always reach out to Pro Bono Partnership Atlanta and get assistance. Particularly the Articles of Incorporation amendments. Bylaws are a little more simple if you’re just changing your mission. But if there are more significant changes, of course reach out; we have attorneys that are happy to help. If it’s a more significant change, you really have to look at what makes sense. If we use the example I gave earlier of a homeless organization changing to serve foster animals, then that’s a left turn. And in that case, you really have an obligation to go back to the IRS and get approval. The problem is, today, it costs $30,000 to get that private letter ruling request to be considered for that change. And so it is almost easier to dissolve your organization and start a whole new nonprofit. And frankly, if you’re going to make that kind of change, you might be better off with a new organization with new people who are committed to your new mission. So starting with that thoughtful approach to how this organization is going to be established, what it is going to consist of, how it is going to run, what kind of board you need; all of that changes as the mission changes. How you structure an organization should be based around what your mission is.

Robyn Miller (22:51):

Another option is to spin that activity out to another entity that is already doing that activity. Or just spin it out into its own new nonprofit. We’ve seen that over and over again. For example, an organization that serves those in need in a community by providing utility assistance and food assistance. Maybe they also have a thrift store and provide clothing. But then they realize this community needs a home for homeless women and children. They might get that up and started, but spin it off into its own entity because now it could become bigger than their services and there is a risk for incredible mission creep. But they know the community and they know what’s needed so they can help create that spinoff entity.

Sireesha Ghanta (23:54):

And finally, Dolph, if a nonprofit is already far into mission creep, what should they do?

Dolph Goldenburg (24:02):

One of the strategic planning processes that I facilitated last year did address the board’s strong concerns that multiple programs were really not as mission focused and, frankly, not as effective or beneficial for the organization. And so the board, the executive team and I created what we referred to as a strategy screen. And it was a seven or eight step screen that allowed the executive team and board to walk each existing program through each step. Is this related to our mission? Yes or no. Does this have a financial impact? Is it positive or negative? Is this a program or service that our constituents are really calling for? One of those steps was a close look about whether or not the program was related to the mission. And then, ultimately, the organization made some decisions about the continuation of programs.

Dolph Goldenburg (25:01):

Before I talk about the options surrounding continuing programs, I want to say that this organization did something that I thought was a great idea. They have taken that strategy screen to evaluate any new opportunities. And they look really prescient now because we’re at a time when there’s a lot of new opportunities that are related directly to COVID, DEI and our recession. And so now when those opportunities come their way, they run them through their strategy screen and can determine if this is a program they want to do or not.

Dolph Goldenburg (25:44):

So there were a couple programs that did not make it through the organization’s strategy screen and so they decided they needed an exit strategy. They essentially developed two exit strategies. One exit strategy is just waiting until the grant ends. In one case, the grant was going to end in about eight or nine months. So it just made the most sense to continue to have a good relationship with that funder, fulfill the terms of the grant and then close out the program. In another case, the funding was not going to be ending for a few years. And so they found another nonprofit that they could spin that program off to. Now what that meant for the other nonprofit is, obviously, they got a new program that they were able to integrate and they got a new funding relationship. And my client earned mad respect from the funder because they thought, “Wow, this is an intentional organization. They’re not all about the money. They’re about serving their constituency well and staying true to their mission.”

Sireesha Ghanta (26:44):

Wow. That is that is great strategy. Dolph, Robin, thanks so much for sharing this great information with us. I really appreciate you both taking this time to talk with me. And to our audience, we hope you found this conversation to be helpful. Thanks for joining us in this episode of the PBPA Podcast. Be well.

Dolph Goldenburg (27:08):

I am not an accountant or attorney and neither I nor the Goldenburg Group provide tax legal or accounting advice. This material has been provided for informational purposes only and is not intended to provide and should not be relied on for tax, legal or accounting advice. Always consult a qualified, licensed professional about such matters.

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