Here's how you can navigate the risks of scaling a nonprofit organization as an entrepreneur in leadership.

One thing I found helpful in managing risk within the nonprofit sector is to benchmark risks against your mission driven work. Evaluate the opportunities and threats that scaling offers to making mission-informed impact. Identifying these often facilitates clear and fruitful dialogue with stakeholders.

Entrepreneurs aren’t afraid of taking smart risks. Too often, non-profits are risk adverse. Entrepreneurs also possess the special capacity to dream and dream big. That is also lacking in too many non-profits. The most successful fundraising non-profits win major gifts with bold dreams that capture the imagination and support of high wealth individuals that can elevate them to the next level of impact. Absolutely, non-profit boards should include entrepreneurs. If they have them, they should harness their gifts of seeing opportunities that others don't. If a non-profit doesn't have leadership with entrepreneurial background and instincts, it should actively seek them out and recruit them.

Scaling a nonprofit organization presents both opportunities and challenges. Effective scaling requires a balanced approach, integrating risk assessment, strategic planning, and financial management. While these elements are crucial for guiding growth, the process must be handled with care to avoid potential pitfalls. Community engagement and monitoring progress are also important aspects to ensure that scaling aligns with the organization's mission and values. Ultimately, the success of scaling depends on how well the nonprofit navigates these complexities and adapts to evolving needs and conditions.

There is an excellent book that I recommend to everyone who is looking to scale. Jim Collins wrote a book "Good to Great". He outlines the fundamentals of great leadership. He has two supplements to this book which are very valuable. "Good to Great for Social Sectors" and "Building your Flywheel". Ensuring that all your leadership team understand the bigger picture and how they impact one another is critical.

My advice is always to secure at least 50-75% of your first 3 years of start-up and ongoing operating costs for any expansion before it gets the greenlight. Too many times funding for existing sites gets shifted to expansion, resulting in huge gaps. As a nonprofit, you have the most leverage with expansion funders BEFORE you have expanded.

Culture and team building often get overlooked in organizations that are scaling. What can end up happening is usually a cultural divide between the longstanding employees and the more newly hired employees. Culture needs to be actively stewarded. Additionally, investing in professional development, particularly in training new managers on how to become effective and connected leaders, is critical scaling. Build their self-awareness, their emotional intelligence, and their ability to connect with, motivate and hold their teams accountable. This often gets overlooked and attrition / employee dissatisfaction are the result.

As a former employee of one of the fastest scaling nonprofits in history and a Board Member of rapidly scaling nonprofit, I feel that a management dashboard is one of the most important tools for leadership and the board to monitor the organization's health. It can be a relatively simple spreadsheet that tracks 8-20 KPIs across fundraisings, programs, impact, HR, finance & accounting, Board, etc. and stoplights them based on scores. It becomes an objective indicator of how the organization is doing and where to focus more attention.