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Fieldstone Alliance: Tools You Can Use e-newsletter
Tools You Can Use

Nonprofit Life Stages:
Knowing What's Normal and What's Next

Resource
The Five Life Stages of Nonprofit Organizations

Contents
Overview of the Five Life Stages of Nonprofits
    Stage One: Imagine and inspire
    Stage Two: Found and frame
    Stage Three: Ground and grow
    Stage Four: Produce and sustain
    Stage Five: Review and renew
    Decline and dissolution
Diagram of the Life Stages
Summary

Additional Resources

 

From Becky Andrews, Marketing Manager, Fieldstone Alliance:

SHIFTING GEARS is a part of life, for people as well as organizations. The ability of nonprofit leadership to recognize critical stages in the life of the organization is vital to the organization’s success.

Armed with the knowledge of nonprofit life cycle stages, staff, management, boards, and funders can project future needs, make decisions proactively, and anticipate challenges. (It’s also comforting to know that the stress staff and organizations are experiencing is normal and inevitable—not a sign of incompetence or impending disaster!)

This issue of Tools gives you an overview of Judy Sharken Simon’s organizational life stages model as described in Chapter One of The Five Life Stages of Nonprofit Organizations.

Overview of the Five Life Stages of Nonprofits
An organization’s life really is a journey of sorts, with many choices, challenges, and obstacles along the way. Nonprofit organizations typically move through five stages of development:

  • Stage One:  Imagine and inspire
  • Stage Two:  Found and frame
  • Stage Three:  Ground and grow
  • Stage Four:  Produce and sustain
  • Stage Five:  Review and renew

Let’s take a closer look at each stage.

Stage One:  Imagine and inspire
This is the vision or idea stage, where the organization is not yet formalized and where imagination and inspiration abound. The primary question at this stage is “Can this dream be realized?” This stage is characterized by lots of enthusiasm, energy, and creativity, but at this point, the organization really is merely a dream of a better world that is inspirational and worth striving for.

Stage Two:  Found and frame
This is the start-up phase of the organization, when it receives its official nonprofit status and all the activities of founding and framing an organization occur. The key question at this stage is “How are we going to pull this off?” Like Stage One, this stage is characterized by excitement and high levels of interest by many people, accompanied by the fear that formalizing the dream will result in the loss of its magic. The act of incorporating formally establishes the organization.

Stage Three:  Ground and grow
In this stage the organization is concerned with building its foundation by grounding its activities and growing the “business.” The overriding question is “How can we build this to be viable?” Organizations in this stage are focused on establishing systems of accountability; however, the need for growth on multiple fronts may be overwhelming to those running the organization. The Ground and Grow Stage has a mundane feel of “taking care of business”; but it also has numerous enticing intersections, choices, and challenges.

Stage Four:  Produce and sustain
This is the mature phase of the organization’s life when production is at its peak and sustaining the organization is a high priority. The primary concern, “How can the momentum be sustained?” The organization is very stable, yet that same stability may make it stale as concerns for procedure slow creativity and growth. Stage Four is a productive place that, at its peak, feels a little like automatic pilot. Staff are doing their work effectively and enthusiastically.

Stage Five:  Review and renew
In this stage the organization is reinventing itself in some way, shape, or form through a process of review and renewal. The primary question is “What do we need to redesign?” It can be a time of large or small, exciting or stressful, but always necessary, change. Proponents of chaos theory will recognize that in order for organizations to be as viable as possible, they will need to operate in modes that promote chaos and therefore create possibilities for new patterns of interaction to form. Mature nonprofits revisit one or more aspects of their organization—mission, vision, products, services, structure—sometimes changing them drastically, sometimes only making slight innovations, as they rediscover who they are and how they fit in the changing world. Relative to the scope of the modifications, organizations may cycle back to an earlier stage. For example, if the change relates to the primary mission of the organization it may find itself back in Stage Two, while minor alterations in the organizational structure may simply mean revisiting Stage Four.

Decline and dissolution
Sometimes it happens—an organization is forced or chooses to shut its doors. In this model, decline and dissolution is not considered an inevitable stage of an organization’s life cycle but rather one of the routes an organization can find itself taking. That’s why only five stages are described. An organization can face dissolution at any stage. The book includes several indicators that signify an organization is seriously declining.

Diagram of the Life Stages
To help you remember the stages, each has a short two-word title and accompanying graphic image. The titles and images are meant to be brief descriptors of the primary tone or activity for that stage. Here's the diagram:

Model of the Five Life Stages of Nonprofit Organizations

Summary
Each life stage has its ups and downs. Challenges and opportunities coexist as organizations grow. Knowing what stage you’re in as well as the typical challenges and opportunities for that stage will hopefully help you feel less isolated, know what’s normal, plan for the future, put problems in context, and manage transitions more effectively.

 

Additional Resources

Five Life Stages Bibliography
http://www.fieldstonealliance.org/client/book_excerpts/069229-life_stages_bib.cfm
Resources related to organization developmental stages.

Nonprofit Life Stages Assessment
http://www.fieldstonealliance.org/client/tools_you_can_use/01-10-05_Life_Stages_Assess.cfm

(Tools You Can Use e-newsletter, January 10, 2005)
Describes how the Nonprofit Life Stage Assessment can help you anticipate some of the challenges you'll face, and plan for some of the changes you’d better make. Includes links to other useful resources.

Nonprofit Life Stage Assessment Online
http://surveys.wilder.org/fieldstone/lifestages
You can take the life stage assessment online for free!

Books
Adizes, Ichak. Corporate Life Cycles: How and Why Corporations Grow and Die and What to Do About It. Englewood Cliffs, NJ: Prentice-Hall, 1988.
Bridges, William. Managing Transitions: Making the Most of Change. Reading, MA: Addison-Wesley Publishing Company, 1991.
Connolly, Paul M., "Navigating the Organizational Lifecycle: A Capacity-Building Guide for Nonprofit Leaders", BoardSource, 2006
Mathiasen, Karl III. Board Passages: Three Key Stages in a Nonprofit Board’s Life Cycle. Washington, DC: National Center for Nonprofit Boards, 1990.
Miller, Lawrence M. Barbarians to Bureaucrats: Corporate Life Cycle Strategies. New York, NY: Ballantine Books, 1990.
Stevens, Susan Kenny, and Lisa M. Anderson. Life Cycles of Nonprofit Organizations. Saint Paul, MN: The Stevens Group, Inc., 1993.

Contact the Author
Judy Sharken Simon is available for speaking, training, and interviews on nonprofit life stages. She can be reached directly at jsharkensimon@mapfornonprofits.org or by calling 651-632-7222.

All the Best,

Becky Andrews
Fieldstone Alliance

October 17,  2007

 

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