Should Your NFP Exist? If So, Why?

I’ve worked in and alongside not-for-profits (NFPs) for most of my career. I’ve led organisations through growth, faced funding shortfalls, and navigated the uncomfortable truths that come when a board realises it doesn’t actually know whether its programs are making the difference it thinks they are.

One thing I’ve learned? The bravest question any NFP can ask is: Should we exist? And if so, why?

It’s a confronting thought. Many boards and leadership teams avoid it, fearing it undermines the organisation’s legacy or diminishes the passion behind its cause. But if we exist to create impact, real, measurable, lasting change, then we have to be willing to hold a mirror up and test whether we’re still delivering that impact in a way that’s relevant and necessary.

Legacy and Feel-Good Moments Aren’t Enough

Too often I see boards anchor their value in legacy (“We’ve been here for 40 years”) or in the feel-good moments (“We helped a family this week who…”) without connecting those moments to measurable, systemic change.

Legacy doesn’t guarantee relevance. And while individual stories matter deeply, I’ve told hundreds myself, they are not the same as evidence of sustained outcomes.

If your organisation disappeared tomorrow, would your community feel the gap? Would your absence leave an unfillable hole, or would another provider quietly absorb your work with little disruption? That’s a litmus test.

The Danger of Scope Creep

Another trap I see NFPs fall into is scope creep. Over time, as opportunities and funding rounds come along, an organisation starts taking on programs and projects that sit just slightly outside its core mission.

It might feel harmless, even strategic, at first. But step too far and suddenly your resources are diluted, your team is stretched, and your impact is blurred.

Without a rigorous needs analysis and service mapping, you risk chasing work because it’s available, not because it’s aligned. Needs analysis isn’t just a box-ticking exercise for grant applications; it’s a discipline that keeps you accountable to the real gaps in your community, not the ones you assume exist.

Service mapping, on the other hand, forces you to look at the broader landscape:

• Who else is working in this space?
• Where are the overlaps?
• Are we duplicating effort?
• Could someone else deliver this better?
• Could we be collaborating more?

I’ve seen organisations invest years in projects that were already being delivered by others, simply because they never did the hard work of mapping the ecosystem first.

You’re Not “Just a Charity.” You’re a Business

There was a time when NFPs could rely on the “charity card,” the idea that good intentions and a noble cause would be enough to attract funding and public support. That time is over.

Today’s reality is blunt:

• The donor dollar is shrinking.
• Government funding is competitive, conditional, and often short-term.
• For-profit providers are moving into traditional NFP spaces with speed and efficiency.

If you’re not operating like a business delivering an essential product, you will struggle to survive. That doesn’t mean losing your values or mission; it means embedding commercial discipline in everything from strategy to operations.

And with that shift comes an even higher standard of accountability. We can’t simply believe in our impact, we have to prove it. Not only for funders and donors, but for ourselves, our boards, and the communities we serve.

The same applies in reverse: as individuals, we should scrutinise the organisations we donate to. Are they transparent about their outcomes? Do they report with integrity? Are they doing what they say they are doing and is it the best use of resources?

Moving from Good Intentions to Evidence

In my time leading and advising NFPs, I’ve noticed a pattern. Organisations are very good at reporting outputs: the number of workshops run, people reached, hours volunteered, meals served.

Outputs are important, but they are not the same as outcomes. An outcome is the change that happens because of your work. For example:

• Output: 50 people attended a financial literacy course.
• Outcome: 35 participants reduced their debt and increased savings over the next 12 months.

That’s the leap too many organisations fail to make and it’s where the real credibility lies.

Boards that are serious about their relevance must:

1. Define the problem they are trying to solve. Is it still the same problem you set out to address?
2. Identify their target cohort with clarity. Who exactly are you serving, and how do you know they want or need your services?
3. Articulate a theory of change that clearly maps the activities you deliver to the outcomes you want to achieve.
4. Measure only what matters. Data should inform decision-making, not sit in an annual report for the sake of optics.

The Three Tests Every NFP Should Face

Before your next strategic planning session, apply these three simple tests:

1. Purpose Test – Is our purpose still relevant to the problem we claim to address? Does the community still need us in the same way?
2. Impact Test – Can we demonstrate, with evidence, that we are achieving meaningful outcomes for our target cohort, not just delivering activities?
3. Uniqueness Test – Are we the best-placed organisation to do this work, or could another provider achieve greater results with the same resources?

If you can’t confidently say yes to all three, it’s time to either refocus or reconsider.

Why Boards Avoid the Hard Questions

I understand why boards shy away from these conversations. They’re uncomfortable. They might challenge long-serving board members or staff who feel personally attached to programs. They can lead to the painful reality that some cherished initiatives should be retired.

But I’ve also seen participants and communities light up when they finally have real evidence of the impact on their lives. It’s empowering. It strengthens funding applications. It attracts better partnerships. And it builds a culture where decisions are made confidently because they’re based on more than gut feel.

From Outputs to Outcomes: The Shift in Practice

Here’s how the shift looks in practice:

Before:

• Board papers filled with activity counts and operational updates and meaningless case studies.
• Success defined by “busyness” or visibility.
• Impact stories cherry-picked to please donors.
• Frustration about funding limitations and how to get more donors.

After:

• Board papers showing data trends on long-term outcomes.
• Decisions made on evidence of what’s working and what’s not.
• Stories and numbers combined to show meaningful change over time.
• Revenue is identified by alignment and new donors appeal to your clear story.

Embedding a Culture of Measured Impact

Building a culture of measured impact isn’t a one-off project. It’s an ongoing discipline that requires:

• Board buy-in – Impact measurement should be a standing agenda item, not a once-a-year event.
• Resourcing – Allocating budget for data collection, analysis, and reporting.
• Transparency – Being open about what you can control, influence, and only contribute to and never over-claiming.
• Feedback loops – Using data to adapt and improve programs in real time.

When organisations take this seriously, they stop drifting into irrelevance and start leading the sector in innovation and trust.

Why This Matters More Than Ever

We are in a period of increasing demand for services, rising operational costs, and greater competition for funding. Communities are facing complex challenges that require targeted, evidence-based solutions.

In this environment, an NFP that cannot clearly demonstrate its relevance and effectiveness is not just at risk of losing funding, it’s at risk of wasting precious resources that could be better used elsewhere.

Final Thought: Courage and Integrity

As leaders, we have to decide what matters more: preserving the comfort of the status quo or delivering the most value we can to the communities we serve.

Sometimes that means doubling down on your core mission and doing less, but better. Sometimes it means stepping aside entirely so others can step up.

Either way, it starts with courage, the courage to ask: Should we exist? And if so, why?

If you need help developing an Outcomes Framework for your NFP? Let’s make sure your organisation can prove its impact, not just believe in it.

Get in touch with The Prowse Project at www.heidiprowse.com.au.