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How to Move Your Nonprofit Board from Fundraising to Financing

By Nell Edgington



boardroomNote: I was asked to write a guest post for the Nonprofit About.com site about how to move a nonprofit’s board of directors from fundraising to financing. An excerpt of this blog post is below, and you can read the entire post on the Nonprofit About.com site here.

 

Nonprofit boards of directors are notoriously fundraising averse.

There are often countless excuses nonprofit staff and their board members give about why some board members should be excused from fundraising. Some of the most popular excuses include:

  • “We want client representation on our board, but our clients don’t have money.”
  • “Some board members aren’t good at fundraising.”
  • “We want board members with program expertise to focus on mission, not money.”
  • “Some board members are uncomfortable with asking for money.”

Fundraising is hard, I get it.

But it is absolutely critical that the entire board of a nonprofit understand how fundamental money is to the work — without it, nothing else matters. And you simply cannot understand something that you only observe from afar.

Which is why I strongly believe that every single board member should fully understand and contribute to how money flows to the organization. The board cannot argue that money is the purview of only the staff; money HAS to be part of the board’s job. Until the entire board really participates in making the financial engine run, they will be unable to have substantive conversations about how to raise or spend that money.

I know that this is a fairly controversial view, but perhaps it would be less controversial if we moved away from fundraising for nonprofits and worked to finance nonprofits instead. Just changing the terms can make a huge difference for a board.

We have to recognize that fundraising is a broken model. Most nonprofits chase low-return fundraising efforts that keep them from achieving financial sustainability. Instead nonprofits and their boards must together create and execute on an overall strategic financial model for the impact they want to achieve.

And in so doing, perhaps we will find that nonprofit boards become much more effective, willing, and confident contributors to financially sustainable nonprofits.

A financing approach that effectively involves the entire board looks like this…

You can continue reading the entire article on the About.com site here. And to learn more about moving your nonprofit board from fundraising to financing download the Financing Not Fundraising, vol. 3 e-book.

Photo Credit: ShellVacationsHospitality

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About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.


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