Organizational Life Cycle Stages

Organizations are like people. They often move through several different stages of development – from “Start-Up” to “Growing” (sometimes called the “Adolescent” stage) to “Mature” and sometimes to a stage of “Stagnation” or “Decline.” Just like people, organizations rarely do this in a neat, orderly, and predictable fashion. Organizations may be at the “Start-Up” stage in some respects and at the “Growing” stage in another. Similarly, organizations may be solidly in the “Growing” stage until they face a crisis such as a major change in leadership – that serves as a catalyst to either move them backwards to the “Start-Up” stage or catapults them forward to “Maturity.”

Typically, when the leaders of an organization are trying to decide where the organization is in its lifecycle, they think about indicators such as the size of the budget, how many staff they have or how many years the organization has been in business. They are less likely to think about how close they are to achieving their mission or how big of an impact they are having on the community.

The problem with using indicators like staff size or financial health is that these measures could be strong even if the organization is not achieving its mission; there are many examples of nonprofit organizations with large budgets, a large number of staff and many non-monetary organizational assets that are ineffective.

For these reasons, the Life Cycle categories used in the Guide focus on an organization’s ability to achieve its mission as the key determinant of its stage of development.

The important question is: to what extent is the organization consistently delivering high quality programs to all of the people or constituencies it exists to serve?

Stages of Nonprofit Organizational Lifecyle

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