Understanding an Organization's Life Stages. (The Nonprofit Community).

Much like a detailed road map, a new book published by the Amherst H. Wilder Foundation, St. Paul, Minnesota, can help associations determine where they're headed and how to prepare for the opportunities and challenges that await them as their journey unfolds. The 5 Life Stages of Nonprofit Organizations examines the life cycle of organizations in an attempt to help nonprofits avoid unnecessary struggles and implement strategies that will help them succeed in reaching their goals. Typical characteristics of each stage in such areas as governance, staffing, and finances help clarify the hallmarks of each stage as do case studies.

Author Judith Sharken Simon contends that five factors influence in which stage an organization finds itself: its age, its size, and the career stage of its leader, as well as the growth rate of the industry and the external environment (e.g., cultural shifts, market demand). She also emphasizes that an organization can "move into decline and dissolution" from any stage of development.

STAGE ONE: IMAGINE AND INSPIRE. People who believe in a cause must decide at this "twinkle in the eye" stage if their dream can be realized. Actually establishing an organization will take considerable effort and the commitment of many more people. Key tasks include investigating possible funding sources, identifying possible administrative needs, securing a legal expert, and developing a concept paper for program ideas.

STAGE TWO: FOUND AND FRAME. Legal formation of a nonprofit entity with a formal governance structure occurs as founders concentrate on making their dream a reality. Limited funds, word-of-mouth marketing, and a dedicated group of volunteers characterize operations. Challenges include expanding the funding base, formalizing record keeping, and developing an organization identity (for example: logo, mission, and slogan).

STAGE THREE: GROUND AND GROW. Perhaps the most exciting time in an organization's life, stage three requires considerable growth in organizational areas. Efforts include expanding the board, hiring the first paid staff--including the executive director--and developing systems of accountability. Tips for moving through this stage include creating a fundraising plan and a multiyear budget, developing job descriptions and organization charts, and developing a strategic plan.

STAGE FOUR: PRODUCE AND SUSTAIN. By this stage, organizations are well established, productive, and secure in both structure and services. Determining how to sustain the momentum becomes the key focus, with efforts targeted on such priorities as developing an operating reserve, upgrading computer systems, revising board committee structure, and increasing management personnel.

STAGE FIVE: REVIEW AND RENEW. Challenges that began appearing in stage four (e.g., staff conflicts, stagnation) force an organization in this stage to renew its commitment to its mission. Revitalization becomes paramount as the organization makes changes to remain on the cutting edge. Redesign efforts may include holding a board retreat to review board roles and responsibilities, exploring new collaborative relationships, and creating internal career development opportunities.

The 5 Life Stages of Nonprofit Organizations--Where You Are, Where You're Going, and What to Expect When You Get There is available for $28 from the Amherst H. Wilder Foundation.