Nonprofit change management is an ongoing need in today’s nonprofit landscape. Without a strategy for managing the process, whether positive or negative, an organization can easily become destabilized.

In fact, without a nonprofit change management plan, 54% of change initiatives fail. This can result in diminished morale, wasted resources, and questions from funders regarding your capacity. 

Nonprofit Change Management Scenarios

Organizations experience ongoing change due to numerous and, often, simultaneous external factors that are beyond their control. Senior leadership and board members should always support Executive Directors in developing strategies that manage change. The first step is being aware of the types of situations that require a change management strategy. The following are some of the typical reasons nonprofits experience change: 

1. There is a change in the funding climate (e.g., new funding formula from funders, new documentation requirements, new audit requirements, etc.); 
2. There is a planned or unplanned change in the leadership of the organization;
3. Changes in the law or the regulations governing your programs require major changes in practices or systems; 
4. The political climate is either friendly or unfriendly towards your mission; 
5. There is increased competition from other nonprofits for funding and clients; 
6. There is a population or demographic change that reduces interest in the mission or increases the demand;
7. There is an organizational crisis (e.g., leadership void, malfeasance, crimes, violation of human rights, funding loss, etc.); 
8. New management systems impact the workflow of employees, are overwhelming staff, and/or are too complex to understand; and
9. The organization experiences rapid and sudden growth that does not allow the organization to create mature leadership teams and the needed structures to align the organization’s culture with its strategic goals.

Change Management is Strategic Management

Nonprofit change management is a key component of strategic management. During periods of change, the executive director and the senior leadership must meet to develop and implement a plan to help staff members understand what they are supposed to be doing, what to expect, and how to adjust their workflow. This results in ethical, robust, and high-functioning organizations.

Consider the Human Side of Nonprofit Change Management

It is critical for a nonprofit change management plan to be cognizant of the human element involved in change. Employees are often resistant and adopt a, “If it ain’t broke, don’t fix it” attitude. Other employees will become ongoing critics of all of the changes and will resist doing things differently. Some will feel unsafe and disoriented in the face of uncertainty. Others will create negative narratives that they share with other employees to explain changes that they don’t understand, which can result in divisions across the organization. Some employees will see this as an opportunity to generate chaos or orchestrate power plays to advance their agendas.  Other employees will simply act like bystanders to see how the process plays out. Thus, the change management strategy should engage employees and be transparent. 

Engaging Employees in the Process

The executive director and the senior management team should engage and communicate with middle management and the front-line workers in a transparent and ongoing fashion from the beginning. This key strategy will increase the likelihood of a smooth transition since employees are the ones that can identify obstacles and implement solutions. 

A great reference point for how to develop a nonprofit change management strategy can be found in the Kotter Phases of Change which describe how to create a climate for successful change through the following strategies: 

1) Creating a sense of urgency around the issues; 

2) Creating a coalition of change champions;

3) Developing a strategic vision;

4) Communicating the vision;

5) Removing obstacles;

6) Creating short-term wins; 

7) Building on the change; and 

8) Instituting the change and embedding it in the culture. 

Of course, managers should also have to beware of strategic decay and change fatigue in the planning and implementation phases. 

Infrastructure Needs Should Be Addressed When Planning Change

Nonprofit change management strategies should also be accompanied by infrastructure development plans that help to clarify decision-making and how the change will impact the following: 

• Information technology systems,
• Financial systems,
• Policies and procedures,
• Strong Human Resources practices, 
• Leadership and management,
• Professional development, 
• Fundraising processes,
• Administrative and programmatic requirements, and 
• Governance from the Board of Directors. 

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