What truly makes a nonprofit successful? Ask most leaders, and you'll hear familiar answers: clear strategy, strong reputation, and efficient operations. These factors certainly matter—but they're not the whole story.

After two decades of working with European nonprofits, we at Novya have discovered something surprising: the factors most strongly correlated with long-term success aren't what most people think. While mission clarity remains essential, research shows that stakeholder engagement, learning culture, and smart decision-making are more powerful predictors of sustained impact than operational efficiency or public perception alone. 

What connects these lesser-known success factors? They all relate to what we define as 'good governance'—a nonprofit's ability to make smart, agile, and innovative decisions that genuinely reflect the needs of those they serve and that create meaningful change.

"Governance isn't about dusty legal frameworks and bureaucratic procedures," explains Benita Lipps, Novya's CEO. "When done right, it's creative, dynamic, and the most powerful lever for driving real impact."

For many nonprofit leaders, the word "governance" conjures images of tedious board meetings, legal requirements, and administrative burden. But this limited view misses the transformative potential of governance as a strategic asset.

💡 Good governance lies at the heart of nonprofit excellence because it ensures organizations operate with creativity, effectiveness, and integrity while staying aligned with their mission. It creates the conditions for nonprofits to remain innovative, culturally healthy, legally accountable, and credible—essential factors for achieving meaningful social impact over time.

At Novya, we've developed the European Nonprofit Excellence Framework based on our extensive experience working with nonprofits across Europe. This framework recognizes that governance isn't just about formal structures—it's a comprehensive system integrating legal frameworks, decision-making processes, organizational culture, and administrative practices.

Our work has revealed that organizations typically operate with three overlapping governance systems:

1. De Jure (What's written) This covers the formal rules and structures laid out in statutes, bylaws, and official documents. Examples: Roles of AGM, Board, Committees; required quorum, deadlines, and election procedures.
2. De Facto (What really happens) This reflects actual practice—how decisions are really made day-to-day. Examples: Informal leadership, real influence patterns, impact of actual expertise and diversity on decision-making.
3. Mission-Led (What's possible) The ideal, where governance is purposefully designed to maximize nonprofit impact. Examples: Clear roles and delegation, strategic skills mix aligned with mission, mission-driven decision frameworks.

"The magic happens when these three systems align," notes Benita. "When your formal structures, daily practices, and mission-driven aspirations work in harmony, your nonprofit can make decisions with both agility and integrity."

💡 Understanding where these systems align—and where critical gaps exist—is essential for nonprofit success. That's why our Excellence Framework evaluates governance through four specific sub-criteria:

1. Effective & Agile Decision-Making: Do governance bodies make timely, informed decisions that balance responsiveness with quality, compliance, and stakeholder interests?
2. Inclusive & Compliant Governance System: Are governing documents and structures clear and legally sound? Do formal requirements align with actual practices?
3. Engaging Governance Culture: How do behavioral aspects like transparency, conduct, participation, and collaboration dynamics influence impact and trust?
4. Efficient Governance Administration: Are procedures in place to support volunteers in smart decision-making, including preparation of materials, record-keeping, consultation processes, and follow-through on decisions?

👉 Together, these criteria provide a comprehensive lens to assess how well a nonprofit's governance supports its mission, legal obligations, culture, and operational effectiveness.

Good governance doesn't exist in isolation. That's why our Excellence Framework places governance within a broader ecosystem of nonprofit excellence, alongside three other essential pillars:

1. Strategic Direction & Impact: Clear mission and vision, strong leadership, effective planning, and meaningful advocacy
2. Membership Value & Engagement: Member satisfaction, engaging communication, participation opportunities, and retention strategies
3. Smart Operations & Resources: Robust processes, appropriate resource allocation, healthy team dynamics, and sustainable funding

Each area is evaluated through specific sub-criteria using a structured rating scale from "Not Met" (significant gaps) to "Exceeds Expectations" (innovative practices with evidence of stakeholder satisfaction).

"What makes our framework different is that it's specifically designed for European nonprofits," explains Benita. "We understand the unique challenges of operating in multiple jurisdictions, navigating EU institutions, and managing diverse stakeholder expectations across different cultures and languages."

The Excellence Framework isn't just a diagnostic tool—it's a roadmap for transformation. When working with nonprofits, we gather data through multiple, complementary methods:

1. Stakeholder Engagement: Surveys capture broad quantitative insights, while in-depth interviews provide context and deeper understanding
2. Document Analysis: Review of internal documents reveals historical patterns and formal structures
3. Observation: Direct observation of meetings and interactions offers firsthand insight into organizational behaviors
4. Benchmarking: Comparison with similar European nonprofits highlights strengths, gaps, and opportunities

💡 This comprehensive approach allows us to identify where governance systems align or diverge:

1. Are formal rules (de jure) reflected in daily practice (de facto)?
2. Do actual practices align with what would best serve the mission (mission-led)?
3. Where are the gaps creating inefficiencies or reducing impact?

👉 With these insights, organizations can take targeted action:

1. Adjust formal documents to better reflect effective practices
2. Develop leadership capacity to better support mission goals
3. Build decision-making processes that are mission-driven and impact-focused

When a long-established European expert network decided to formalize its activities by creating a legal entity under Belgian law, they faced a critical challenge: How to convince informal contributors to commit formally—with both time and money—without losing the network's collaborative spirit?

Our assessment revealed a strong strategic vision and exceptional member engagement—the network's core strengths. What they lacked was a sustainable operational model and formal governance structure. The challenge was significant: how do you shift from "everything for nothing" to "focused action against a fee"?

💡 Rather than imposing a structure, we listened. Through surveys and interviews, we explored what members valued most and how they wanted their voices to be heard. This led to designing decision-making processes that celebrated the network's diversity while creating purposeful impact that benefited everyone's daily work. The key insight? Replacing "everyone is equal" with "everyone contributes to the best of their abilities"—shifting from equality to fair equity. This meant those with greater means to contribute gained appropriate channels to have their voices heard, creating a value proposition that justified financial commitment of formal membership.

We presented three governance scenarios online, allowing everyone time to digest the options before the annual in-person conference where final details were discussed and agreed upon.

👉 The results speak for themselves. Despite initial skepticism about paying for something previously free, two-thirds of the network joined as formal, paying members. While maintaining free access to events and key information for the broader community, the new legal entity gained strength through stable decision-making and more reliable income streams.

The final validation came two years later when they secured a prestigious grant as lead partner in a key EU consortium—something impossible without their formalized structure.

When a European Federation representing national associations in a consumer-focused sector approached Novya, they were caught in a frustrating cycle. Decision-making had become painfully slow due to diverse member opinions, while some members felt unheard and underrepresented at the EU level.

Applying our Excellence Framework revealed that - while the federation had both strengths and weaknesses across all dimensions - it was their governance that was holding them back. The reality of decision-making didn't match their formal structures — which meant that time-sensitive reactions to key policy developments were sometimes critically delayed or they were just pushed through by the most vocal members. Adding to the confusion, the federation's articles of association and their internal rules were in conflict with each other.

We mapped the gaps between reality, legal requirements, and mission needs, presenting these findings to help members understand both the challenges and opportunities for alignment.

💡 Rather than imposing solutions, we facilitated a member-led approach. We started by focusing on the "why"—better decisions for better impact—ensuring everyone aligned around the federation's common goals. Members then sent their representatives to a task force dedicated to governance reform, which Novya moderated and provided expert guidance to. Through regular online meetings and several written feedback loops, we developed three governance scenarios ranging from minimal adjustments to comprehensive reform. Each option clearly outlined the benefits, level of risks and disruption, and potential rewards.

What made this process successful was the emphasis on consultation and transparency. Task force members personally connected with their peers to address questions and gather input. This investment in relationship-building created trust in the process and ownership of the outcomes.

👉 The result? Despite the high bar for changing articles of association in a federation (requiring supermajorities and quorums), members unanimously approved the most ambitious reform scenario without a single objection or abstention at their next annual general assembly. The new governance system included not just updated legal documents but also a visual governance handbook with flow charts mapping decision-making processes, timelines, and connections between different bodies.

Beyond the structural improvements, this process strengthened member engagement, trust, and shared purpose. By investing in governance reform, the federation created both a framework and a culture equipped to handle increasing complexity and shorter windows for action in their sector.

Ready to transform your organization's governance from a compliance exercise to a strategic asset? Here are three practical steps to begin:

1. Assess the alignment between your formal structures (de jure), actual practices (de facto), and mission needs (mission-led). Where are the gaps creating friction or limiting impact?
2. Engage stakeholders in meaningful conversations about governance. What frustrates them about current decision-making? What would help them contribute more effectively to your mission?
3. Focus on culture, not just structures. Even the best-designed governance system will fail without trust, transparency, and shared purpose.

👉 Remember that governance reform isn't about creating more bureaucracy—it's about creating the conditions where purpose-driven organizations can make decisions that advance their mission with confidence and speed. As one client told us after completing their governance transformation: "We used to spend our board meetings arguing about procedures. Now we spend them discussing how to create greater impact. That's the real value of good governance."