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Nonprofit Scarcity Thinking Will Get You Nowhere

By Nell Edgington



Scarcity thinking is incredibly pervasive in the nonprofit sector. And it makes sense that it would be. Nonprofit leaders have been told for so long that they must scrape by, are not worthy of real investment, and deserve only the leftovers. No wonder the belief that resources are scarce is baked into their DNA.

This scarcity thinking is the starvation cycle in which nonprofit leaders often exist – we can’t attract enough money so we skimp on staff and systems, becoming less effective, forcing us to serve fewer clients, resulting in less social change. It is a vicious downward cycle. And one that funders certainly play a key role in as well.

But when a nonprofit leader chooses instead to come from an abundance mindset – the idea that there are an abundance of resources and you need only to get crystal clear about what you want to achieve and those resources will come to you – it is amazing to see what she can accomplish.

Most recently I saw this with a national membership organization that had spent years either just barely scraping by or having to cut staff and budgets because they simply could not attract enough support. But once they got crystal clear on their goals for the future and what it was going to take to make those goals happen, they attracted some significant new and long-term investments from funders.

Moving from the pervasive scarcity mindset to the incredibly powerful abundance mindset can be a game changer.

And we can start by flipping some of the most common conversations happening each day in nonprofit boardrooms around the country, crossing out the typical scarcity mindset and fully embracing an abundance mindset, like this:

Scarcity Mindset: “How much money are we able to raise?
Abundance Mindset: “How much money will it take to accomplish our goals?”

Rather than thinking of money as an extremely scarce resource, figure out what social change your organization truly wants to accomplish. Chart your future course, figure out what it will take (in terms of staff, systems, technology, dollars) and then use that strategic plan to engage donors and others to invest in bigger ways. The excitement you generate from board, staff, and funders when you think big and long-term will translate into the money you need to accomplish your future goals. This is the cornerstone of moving from a fundraising approach to a financing approach.

Scarcity Mindset: “Let’s not add fundraising staff until we have the money”
Abundance Mindset: “Let’s fully invest in our fundraising infrastructure”

So many nonprofit leaders are unwilling to take the risk of hiring a top-notch fundraiser (or securing the best donor database, or revamping their online presence, or investing in other critical fundraising infrastructure) because they don’t have the money. But without making improvements to how you raise money, you will never raise more money. So figure out what it will take to upgrade your fundraising infrastructure and how much those improvements will cost and then convince a couple of close donors to provide the capacity capital necessary to get you there. And keep in mind, the right improvements to your fundraising infrastructure will pay for themselves (many times over) after 12-18 months, so it is really just a short term investment you need to take your financial model to the next level.

Scarcity: “We can only breakeven”
Abundance: “We will create a healthy reserve fund”

It amazes me that there are still nonprofit leaders who believe (and funders who insist) that the ideal nonprofit income statement show only a slight net income. On the contrary, a healthy, effective, and sustainable nonprofit organization should have a robust (at least 3-6 months of operating) reserve fund. This reserve allows a nonprofit leader to feel secure about cash flow, invest in program development, and engage in other normal and necessary activities as a successfully functioning organization. And donors tend to be more attracted to organizations that demonstrate sustainability (like having a reserve fund), than organizations that can barely breakeven.

 Scarcity: “There just aren’t enough hours in the day to get the work done”
Abundance: “Let’s engage more people and organizations in our work.”

Because of their perception of resource constraints, often nonprofit leaders isolate themselves and their organizations from others with similar social change goals – those entities who may be competing with them for limited funds. But instead of thinking that you must go it alone, break down your walls and connect with other people, organizations and networks that have similar visions for the future. Figure out how you can combine efforts for much larger gains. Because a networked nonprofit is far better positioned to create sustainable social change than an isolated, solitary organization is.

Scarcity: “Given the difficult political climate, we must limit our goals.”
Abundance: “How can we seize the opportunity of this challenging political climate to engage new people in new ways?”

Since the 2016 election and the resulting and ongoing blows to progressive social change agendas, I have seen some nonprofit leaders bury their heads in the sand, figuring they will wait out these punishing political winds until something better comes along. But if you have a compelling social change vision, there is an abundance of outrage and activity that you can tap into now — in fact some argue that nonprofit advocacy is enjoying a rebirth. And while the federal government may be outside your current purview, there is opportunity for policy change happening at the state and local levels. In fact, research suggests that a state-by-state strategy is often the way real social change happens in this country anyway. So stop seeing what isn’t possible and instead embrace what may be.

Certainly there are real challenges facing every nonprofit leader. But you do have agency. You can choose to see the limits in front of you, or the opportunities. And in seeing the opportunities, and the abundance, you can accomplish so much more.

Photo Credit: Pixabay

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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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