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John Coxon

Failure for nonprofits can be a difficult situation, as well as paradoxical; especially for those that are funded by grants, philanthropic trusts and charitable donations. Unlike a for profit business who can generate revenue through sales as well as create new services and products, a nonprofit can be reliant upon donations and grants for survival. In these instances the nonprofit may fear an admission of failure may lead to a lack of confidence by funders and supporters.

On the other hand, as you state correctly, failures do occur and it is my experience that when they do happen, nonprofit management teams lack experience in crisis management and stakeholder communication. This lack of experience may be created by the sectors inability to talk about its failures and learn from the lessons of each other.

John Coxon

Great points, John. Nonprofits may shy away from admitting failure because they fear they'll lose financial support. But, keeping mum may have the opposite effect. Consider the recent firestorm surrounding the Susan Komen Foundation's decision to defund Planned parenthood. It was obviously a huge mistake in many of heir supporter's eyes. Check out John Haydon's round up of bloggers on the topic --

By being unwilling to own up to their mistake early on did they exacerbate the situation? Maybe so.

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