How to change your mission statement as a nonprofit

Nonprofit mission statements make powerful impacts. Organizations use these carefully crafted and concise statements to define the organization’s purpose. They communicate to the public – community members, vendors, donors, volunteers and others – why the organization exists and who it serves. Mission statements inspire and motivate the public to support the cause of the organization.

Over time, a nonprofit organization’s programs and activities may shift away from the direction of the original mission. When a nonprofit’s work shifts too far away from its stated purpose, it may alert the IRS to revisit the nonprofit’s registration and make a determination as to whether the work of the organization still qualifies under the law as tax-exempt.

Changes like this usually aren’t sudden, fortunately. Nonprofit board members and leaders can be working strategically to craft a new mission statement as they see the shift and growth in their activities and goals.

Nonprofit organizations need to keep their donors apprised of any changes in their missions because it’s important for donors to know that their money is going toward the programs and activities that they intended to support.

Nonprofit organizations can change their mission statements without disrupting their nonprofit status as long as their new missions still qualify under the description for a tax-exempt status under section 501(c)(3) of the tax code. They also must notify the IRS, their donors and their members.

When to reassess your mission statement

Mission-driven and charitable organizations can find that the original purpose has changed or morphed. When this happens, it will be obvious to everyone that the mission statement is due for an edit, update, or even a total makeover.

For example, a group sets out to help a community center build an after-school program by donating snacks for the participating students. After a couple of years, the founders see that hunger is a big problem in their area, so they added food for the parents and families of the students in the program. A donor purchases backpacks for the students to bring food home to their families on weekends.

The group originally wanted to boost attendance at an after-school program. It grew into a community feeding and nutrition program for children and their families. This change in response to circumstances was met with enthusiasm by the staff and the donors and funders of the organization.

Some organizational changes may be less drastic but could still require the board to assess what they should do about their mission statement. Depending on the organization’s desires and resources, the board could decide to revise their mission by changing it, expanding it or limiting it.

An organization that grew quickly may worry about mission creep, which can stretch resources and reduce the ability to fulfill the core purpose and goals of the organization. In that case, the board might consider using the mission statement to recommit to its original purpose.

Here are some reasons for which a nonprofit might consider changing its mission:

1. Evolving community needs: If the needs of the community have changed significantly since the organization was founded, it may be necessary to adapt the mission to stay relevant and effective.
2. Strategic shifts: When a nonprofit undergoes a strategic planning process, it might discover new opportunities or challenges that necessitate a shift in focus.
3. Mission drift: If the organization finds itself consistently engaging in activities that are not aligned with its current mission, it may need to formally adjust its mission statement.
4. Mergers or partnerships: When merging with another organization or entering significant partnerships, aligning missions can create a unified direction.
5. Funding and resources: Changes in funding landscapes or resource availability may prompt a mission reevaluation to ensure sustainability.
6. Impact and effectiveness: If the current mission is not achieving the desired impact or outcomes, redefining it can help in refocusing efforts for better results.
7. Stakeholder feedback: Input from stakeholders, including beneficiaries, donors, and volunteers, may indicate a need for a mission change to better serve or align with their expectations.
8. Legal or regulatory changes: Adjustments in laws or regulations may necessitate a mission change to remain compliant and operational.
9. Technological advancements: New technologies can open up different avenues to address issues, prompting a mission reevaluation.
10. Cultural shifts: Societal changes in attitudes and values may influence an organization to rethink its mission to stay relevant.

As Jeff Bezos points out, “No matter what your mission is, have some notion in your head. Forget the model, whether it’s government or nonprofit or profit. Ask yourself the more important question: Is my mission improving the world? Are you sure about it? Seek to disconfirm that all the time. And if you can, change your mission.”

“Forget the model, whether it’s government or nonprofit or profit. Ask yourself the more important question: Is my mission improving the world? Are you sure about it? Seek to disconfirm that all the time. And if you can, change your mission.” – Jeff Bezos

How to change a mission statement

Changes to the mission statement should not be done hastily. The board and leadership should take the time to discuss and debate any proposed changes. They should gather data and feedback from employees, constituents and others.

The more information, the better. It’s essential that all the board members support the new mission statement and the changes in the organization. Having data to back up changes can help.

How to update bylaws and articles of incorporation

Current bylaws will contain the rules for how to change or amend the bylaws. In changing the bylaws, it’s important to ensure that the rights of all board members are protected. This is why it’s common practice to give notice to the board members of the date of a board meeting where they will be discussing or voting on potential amendments to the bylaws.

Unless the bylaws state otherwise, bylaws can be amended by a two-thirds vote. Boards should record the results of the vote in the minutes.

How to notify the IRS

Once the board completes the new mission statement, they need to assess whether it meets the criteria for a tax-exempt entity. The 501(c)(3) tax code states tax-exempt purposes as follows:

“The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals. The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency.”

As long as the organization still meets the criteria for continuing on as a nonprofit organization, the board should vote to approve the new mission statement. The next step would be to make any necessary amendments to the bylaws and the Articles of Incorporation.

It’s not necessary to notify the IRS right away when a nonprofit amends its bylaws. Boards need to file Form 990 annually at tax time. It’s acceptable to wait until the normal filing period to notify the IRS of any changes.

If the IRS has any questions or concerns, they’ll send out a notice.

How to notify donors and grant-makers

Board members should take special care in handling matters of grants and donations when the mission statement is under review, along with changing or updating  bylaws and Articles of Incorporation. Timing can be of the utmost importance.

The charitable trust doctrine states that charitable organizations must use donations for the express purpose that they were received at the time of the donation. If a charitable organization accepts a donation and then substantially changes its mission, they should contact the donor with an explanation.

It’s appropriate for the organization to offer to return the funds if the donor objects to the new mission or requests the nonprofit to return the donation.

How to notify the public

When changing the mission statement, the board and administration should include communications plans or strategies, as well as a marketing campaign. The board or communications committee should look at all public announcements of the mission to make sure they change to consistently match the newly formed mission statement.

Boards should be the ones to inform members, donors and others of the changes. One way would be to make a public announcement on their website, email newsletter and on social media. They should also make the announcement in letters to donors and grant-makers. Larger nonprofit organizations may choose to issue a formal press release.

Next steps after changing a mission statement

After setting the mission and vision of their organization, boards must also provide organizational oversight. After making a change to the mission statement, the board will need to monitor their programs and activities and ensure that they are in keeping with the new mission.

Changes in mission statements that promote growth and change in organizations can be an exciting proposition. As with anything new, there are sure to be a few bumps in the beginning. It’s vital that board members communicate clearly as they work through any learning curves and address new problems as they arise.

How board management software can help

A board solution, such as  BoardEffect, provides an online platform through which boards can monitor all stages of changing their mission.

• Surveys can be used to gather information from your trustees as you go about the process.
• Committees or working groups can use secure workroom spaces to collaborate and work together on documents.
• You can store key data and information to help inform board members as the change in mission is discussed at board meetings.

To find out how BoardEffect can help your volunteer board achieve your organization’s new mission, contact us today.