7 Things Board Members Can Do To Raise More Money

I am often asked by exhausted board members and executive directors what the board can do to raise more money. My answer, let me tell you right away, is NEVER to launch a new event.  Don’t get me started on my anti-events rant, that’s another post.

But there are other things that board members can do to raise significantly more money for their organization, in a much more effective way.  Here are 7 to get you started:

1. Invest. Make a significant financial investment in the organization.  This is so obvious, yet rarely does a nonprofit organization enjoy 100% giving from their board.  And those that do, often have several board members who are only making “token” gifts.  If the nonprofit on whose board you serve isn’t on the list of your top 3 nonprofits and you aren’t allocating your philanthropic dollars accordingly, then get off the board.




2. Open Doors. Open up your network to the organization. We all have friends, colleagues, co-workers, family members, neighbors.  They may not all be $10,000+ level givers, but you would be surprised at the capacity that probably does exist there.  If you really believe in the organization, then spread the word about your involvement to your network and encourage them to become involved.  If you’re uncomfortable doing this then perhaps you need to rethink how committed you are to the organization.




3. Get Strategic. Demand that your nonprofit create a strategic plan. Without an articulated direction and a strategy for getting there how are you going to get donors to invest? So many nonprofit organizations operate without a plan, and that’s probably why they struggle to raise funds. People donate to a cause, but they invest in a executable strategy for impact.  The former results in small gifts, the latter brings big dollars.




4. Expand the Revenue Model. Often nonprofit organizations take a narrow approach to thinking about bringing money in the door.  They may have a direct mail campaign, get some government and foundation grants and call it a day. Instead, take a bigger picture view of the business that you are in and the various ways you could finance, not fundraise for, the end goal. Executive and development directors are often so caught up in the day-to-day of funding operations that they don’t have the luxury of taking this big picture view, but that’s where the board can step in.




5. Fund Revenue-Generating Capacity. Make sure the organization invests in sufficient development capacity. Budget for and find a top-notch development director. Secure outside expertise to create a solid, executable development plan. Train the board on their role in fundraising. Don’t ask the organization to cut corners on development expenses, because you will just pay the price later.




6. Articulate Why Someone Should Give. It’s so obvious to you why you are involved in your nonprofit. But can you articulate that to others in a compelling way? Can you demonstrate how a significant community problem is being solved by your organization? Can you do it in 2 minutes? Can the other board members and the staff do it? If not, then you need to create a case for support.




7. Get the Board on Board. Once you’ve done all of these things, get your fellow board members on the boat. The nonprofit sector is structured to be led by consensus. So it isn’t enough for you as a sole board member to “see the light.”  You have a responsibility to convince your fellow board members that they can’t think small anymore. They have to invest, get strategic, open doors, and so on.  Once you are all on the same page, you will be a force to be reckoned with.

I promise you, there is an answer. It doesn’t have to be so hard. Board members can help their struggling nonprofits to find a path toward financial sustainability.

Tags: Board of Directors, case for support, development director, nonprofit, nonprofit events, raise more money

Building a Stronger Organization

We all know the nonprofit sector is really struggling.  Particularly in the midst of a deep recession it can be difficult to figure out how to get out of a vicious cycle of increasing demand for services, relentless fundraising, diminishing capacity and so on.

But there is hope.  In order to break free of the starvation cycle of trying to do more and more with less and less, nonprofits need to make big change.  And in order to do that they need to figure out what is holding their organization back.

Most consultants offer nonprofits what they call an Organizational Assessment.  But I hate the term, and I don’t hold much stock in the results. The solutions they offer to what’s holding a nonprofit back tend to be rooted in what the nonprofit sector has been doing wrong for too long.  Most Organizational Assessments are not bold enough, they don’t push nonprofits to understand and articulate their own theory of change, look at entirely new revenue streams, get rid of non-performing board members, completely revamp their mission, focus their marketing efforts, create a real strategic plan, and so on.

What nonprofits need is an Organization Building Plan. It can transform a nonprofit, give them an understanding of where they stand currently and what it will take to really strengthen the organization and their ability to make social change.  An Organization Building Plan gives a nonprofit a clear, executable road map for making their organization work better, smarter, more effectively, more sustainably.  It demonstrates how to integrate better all aspects of the organization (program, funding, marketing, operations, board, etc), make the organization more sustainable, expand the net of supporters (funders, volunteers, board members, friends), deliver programs in a way that increases social impact, and increase the strengths of the organization, while addressing the weaknesses.

If a nonprofit can strengthen their organization, they can deliver more social impact. Indeed, I would love to see every nonprofit organization with a well executed Organization Building Plan.  So what does a good one look like?

An outsider (it must be an outsider, because, as we all know, someone close to the organization won’t have the heart or the vision to see what is really wrong and how to fix it) interviews board, staff and funders, reviews organization processes, policies, procedures, documents. They then analyze and create detailed recommendations for improvement in the eight key areas of a nonprofit organization:

1. Mission and Vision: How these basic pillars of the nonprofit galvanize internal and external people to create change.
2. Strategy: How the organization comes up with and executes on a plan for the work of the organization.
3. Program delivery and impact: How the organization delivers social change.
4. Governance and leadership: How the board and key staff drives the organization forward.
5. Finances and revenue generation: How financially strong and sustainable the organization is.
6. External relationships: How strong and effective important collaborations and partnerships are in the work of the organization.
7. Marketing and communications: How well the organization gets in front of the right audiences in a compelling way that drives action.
8. Operations, systems and infrastructure: How well the organization makes use of resources.

Doing Organization Building Plans is one of my favorite services we offer at Social Velocity.  When I deliver the results to a client’s board and staff it is thrilling to look around the room and see the mix of shock, awe, relief, excitement, energy, innovation.  Finally someone has taken a hard look inside the organization and come up with a new direction that opens a whole new world to the organization.  Ideas start flying around the room “We could do this…”, “What if we did that…”  It serves as a rallying cry to begin to build the organization.

At Social Velocity we are all about big, not incremental, change.  An Organizational Assessment can make a nonprofit incrementally better.  An Organization Building Plan can transform how an organization works, dramatically increasing productivity, sustainability, and ultimately, social impact.

Tags: Fundraising, mission, nonprofit starvation cycle, organizational assessment, vision

5 Things Board Members Can Do To Build Organizations

I’ve discussed before how important boards of directors are to the effectiveness of the nonprofit sector. But I think they are particularly critical to overcoming the bias against nonprofit capacity.  Boards of directors are a largely untapped resource available to nonprofits.  If nonprofits could figure out how to tap into the expertise, networks, knowledge and resources that board members bring to the table it could be a new day for the nonprofit sector.

But, really, the burden for change lies with the board members themselves.  Board members must take a larger, more strategic role in the organizations that they serve.  And this could be particularly effective in the area of organizational capacity. Board members need to help their nonprofit organizations uncover, plan for and fund the staffing, technology, expertise and systems required to make the nonprofit more effective at creating social impact.

In  my work helping nonprofit organizations to build their capacity and infrastructure in order to grow their social impact, it is board members who sometimes stand in the way of that growth.  Board members tend to like to see most of the dollars that a nonprofit raises go back into programs, not organization building.  But if a nonprofit’s own board of directors doesn’t understand what a losing battle it is to continually starve nonprofits out of the most necessary kind of resources, capacity-building resources, then how will donors ever understand it?  And how will nonprofits ever be able to get better at tracking their results, communicating with staff and volunteers, increasing their fundraising function, marketing to their constituents, etc.?

I am encouraged by some of the organizations I meet with who have been able to convince their boards and major donors to make an investment in capacity and growth planning, but we definitely need to see more. We cannot simply leave it up to beleaguered, exhausted Executive Directors to push organization-building forward. The EDs are often the ones balancing organization needs against funders and board members who have no interest in those needs.

Therefore, I challenge board members to start putting their time, effort and resources behind organization building.  And here are five things they can start doing today:

1. Determine the True and Full Costs of Effectively Running The Organization. Stop asking nonprofit staffs to get by with less and less.  Stop telling an Executive Director to lower the salary they can offer a talented Development Director.  Stop telling EDs they shouldn’t be spending money on technology, that they should use a free database instead of buying a more effective database. Stop encouraging nonprofit staffs who lack expertise in a certain area (fundraising, evaluation, strategic planning) to use volunteers instead of consultants to help them.
2. Encourage the Organization to Create a Capacity-Building Plan. Nonprofit EDs are often so caught up in the day to day that they don’t have the luxury of stepping back and figuring out what is required to make the organization more effective.  Ask your ED to spend some time coming up with a capacity building plan that will take the organization to the next level.
3. Make a Significant, Personal Financial Investment in the Organization’s Capacity. Stop asking that your annual gift to the organization go to your favorite program.  Organization building dollars are very difficult to find.  So those closest to the organization should be the first to step up and invest in capacity.  And don’t just give the required amount.  Make an investment that is significant to you.  If you truly believe in this organization, take out your checkbook and make it hurt.
4. Convince Your Fellow Board Members to Follow Suit. Boards are often led by a vocal few who convince the rest to go along with their plans. If you can be that vocal member who can articulate the need for organization building, how it will result in greater social impact over time, and how the board must be the champion of and seed investor in organization building, you can marshal the organization’s greatest resource (its board) toward becoming a strengthened, healthier nonprofit.
5. Tap Into Your Network to Find Organization-Building Dollars. Think strategically about who you could convince to join you in strengthening the capacity of this organization you serve. Then pitch them and get them to invest with you in the capacity plan.  Make the case for why a Development Director, or a strategic plan, or an evaluation study or new technology will expand the social impact that your organization is making. One of the reasons there aren’t more capacity-building investments made in the sector is because board members are not making a compelling case to their friends and colleagues about the importance of capacity and how those dollars can actually provide much greater impact down the road than a direct service grant can today.

The nonprofit sector is struggling, as are many of our institutions and systems.  So things have got to change.  Board members can be an instrumental driver of the change that results in stronger, healthier, more effective nonprofit organizations creating real, successful solutions for the problems we face.  But in order to get there, board members have to understand and embrace the power of organization-building.

Tags: Board of Directors, Capacity Building, capacity plan, nonprofit, nonprofit capacity, organization-building

Overcoming the Bias Against Nonprofit Capacity

It amazes me how much the funder, government, and even sometimes nonprofit leadership, bias against nonprofit capacity building holds the sector back. It seems like such a simple thing: in order to get more results you need to devote time, energy and resources to organization building.  In order to find the resources required to deliver programs, you need to invest in fantastic fundraisers.  In order to track program results, you need a system which includes technology and staff. In order to have a fantastically talented staff, you need a human resources function that takes the time to vet great candidates. A nonprofit cannot exist on direct program dollars alone.

The idea that the vast majority of nonprofit funding should go to direct program expenses is ludicrous.  Why is there even a distinction between program and non-program expenses?  Doesn’t a nonprofit exist to deliver programs?  And doesn’t that mean that everything they do helps to make those programs better, stronger, bigger, more effective?  Why is capacity such a dirty word?

I met with a nonprofit Development Director earlier this month who has had a really hard time convincing their CEO and board to let them spend money on a donor database and some fundraising materials. Yet, at the same time the Development Director is expected to raise millions of dollars in revenue. That sounds completely crazy, doesn’t it?  But in the world in which I work that is often the rule rather than the exception. Infrastructure, capacity, fundraising, marketing, and operations dollars are somehow bad, dirty, not necessary, dismissed.

Which is why the recent article in the Stanford Social Innovation Review by Bridgespan Group’s Ann Goggins Gregory & Don Howard was such a breath of sanity-infested fresh air. If you are nonprofit staffer, board member, donor, or volunteer, I really encourage you to read the whole article.  They have studied what they call the “Nonprofit Starvation Cycle”–nonprofit organizations’ continual drive to do more and more with less and less– and come up with a path out of the insanity.

What seems like such an obvious statement, its almost a truism–”Organizations that build robust infrastructure—which includes sturdy information technology systems, financial systems, skills training, fundraising processes, and other essential overhead—are more likely to succeed than those that do not”–is so often overlooked by nonprofit organizations.   But I think most nonprofit leaders would tell you that they would love to spend money on infrastructure, that they absolutely understand the return on investment, but funders and board members have a hard time allocating money to those projects.

In their work with nonprofits at Bridgespan Group, Gregory and Howard uncovered three reasons for this inability to build capacity in the nonprofit world:

• Funders have unrealistic expectations about how much it costs to run a nonprofit
• Nonprofits need to conform to these unrealistic expectations in order to receive funding
• Nonprofits underreport infrastructure expenditures on tax forms and in fundraising materials

The end result is a vicious circle where few fund or spend money on infrastructure in the nonprofit space: “This underspending and underreporting in turn perpetuates funders’ unrealistic expectations. Over time, funders expect grantees to do more and more with less and less—a cycle that slowly starves nonprofits.”

The solution, Gregory and Howard argue, is to begin at the source of this vicious cycle: the funders.  They argue if funders can be educated about the true costs and infrastructure necessary to build organizations to solve social problems, then we can break out of this destructive cycle. I strongly agree with that. It is difficult for nonprofits to turn to the hand that feeds them and tell them that they need more in order to do more, but such conversations are absolutely critical if we are to get beyond the starvation cycle.

But funders aren’t the sole impediment. Gregory and Howard argue that nonprofits play a part in this dysfunctional view of capacity, and there are a number of things that they can do to turn things around.  Nonprofit leaders should analyze their real overhead costs and infrastructure needs, educate their boards about these real needs and then engage their board in communicating these needs with funders.  And board members are just as culpable. They must encourage nonprofit leaders to develop strategies to address their true infrastructure needs and then take responsibility for encouraging funders (often board members’ friends and colleagues) to be realistic about what is required to make the nonprofit highly functioning.

I actually think that funders are much more receptive to these capacity conversations than some nonprofits give them credit for.  My work at Social Velocity is all about organization building, and I often encourage nonprofit leaders to tell their board members and their closest donors what they really need to succeed.  I have found that those donors who really believe in an organization will understand when a compelling case that it takes resources to take an organization to the next level is put before them.

I think the bottomline is that we have to stop playing games. Stop underreporting infrastructure costs, stop telling funders its ok to ask nonprofits to do more with less, stop telling the public that direct program costs are better than indirect program costs, stop telling boards of directors that its ok to ignore infrastructure needs. It’s a difficult conversation, there is no doubt, but what’s the alternative? We all know how a starvation cycle ends.

Tags: Board of Directors, Bridgespan Group, Capacity Building, Fundraising, infrastructure, nonprofit, program expenses, Stanford Social Innovation Review

What About Boards?

Key to the needed restructuring of the nonprofit and philanthropic sectors is significant change to nonprofit boards of directors.  Indeed, change at the board level can provide some significant improvement to the effectiveness of the sector.

Too often board members are one of two things.  They are disengaged (bored, not invested, only in it to benefit themselves or their career, or simply missing in action) or overly engaged (micromanaging the nonprofit staff, clamoring to move the organization towards their own personal gain).  I have seen boards of directors that buck this trend and are engaged, invested, committed to making the organization better, stronger, more successful.  They give significant financial gifts, devote many hours to the work of the organization, and leave the Executive Director and her staff to handle the day-to-day operations unobstructed.  But this is the exception, not the rule.

I wonder if many of the struggles the nonprofit sector faces stem from the fact that the staff reports to a group of volunteers who have other, higher priorities in their lives.  I’m not sure if there is an answer to that reality. But if a board of directors can become more engaged, more energized, invested and committed to the organization, the nonprofit can expand its network, increase its revenue, strengthen and expand its programs, and ultimately provide more social return.  There are some things that a nonprofit Executive Director can do to make their board more effective:

• Determine what kind of board you want. Don’t leave board recruitment up to the board.  Create a board matrix that analyzes what skills, experience, networks the current board has and where the holes are.  Then actively  work with the nominating committee of the board (another must) to research and network with good potential board candidates who fill these holes.  Provide a thorough vetting process (interviews, reference checks, etc.) before putting them in front of the full board.  And be honest and up front with the candidates about the time and resource requirements of a board position.
• Create and enforce roles and responsibilities. Create a roles/responsibilities document for each individual board member that they agree to and sign.  This document should make it crystal clear what the staff and board expect each member to contribute, from meeting attendance, to fundraising, to serving and contributing to committee work, and so on.  If a board member is not delivering on their roles and responsibilities, the board chair should give them a warning and then ask them to resign.
• Create and enforce a stretch give/get requirement.  If a nonprofit’s board is not giving or fundraising in a significant way (let alone at all) then how can an organization expect any other donor to make an investment?  The board of directors should be a nonprofit’s closest friend and staunchest supporter.  They must demonstrate this support through financial means in order for the organization to have any hope for financial sustainability. Some nonprofit organizations argue that they want some board members from their client community and sometimes those board members can’t afford to make an investment.  First, anyone can afford to contribute $1, which simply says I believe in this organization and am putting whatever I can into it.  Second, a client board member would be an excellent fundraiser.  Take them on major donor fundraising visits and have them passionately explain the impact the organization is having.
• Engage the board in strategic, not tactical, activities.  Not every board is at a stage where they have the luxury of being strategic.  A startup board is by necessity tactical, they are just trying to make the organization viable.  But as soon as possible a board should leave the day-to-day operations to the staff and take on the big picture, strategic, visionary questions of the organization:  should we expand our operations, should we start a new program, should we launch a new business venture, where do we want to be in 5 years?  These are the questions for the board. A nonprofit ED can move the board in a more strategic direction by working with the board chair to set an agenda that focuses on strategic issues.  And a good board will become energized and engaged by the bigger picture questions.
• Constantly remind them of the impact of the organization.  Just as you want to focus your messaging to donors on impact, you want to focus your board members, at every meeting, on the impact the organization is having.  This reinforces why they got involved and how they are helping to make change in their community.
• Use them wisely in fundraising. Don’t have your board pick decorations for your next fundraising event.  Rather, use them to open doors to major donor asks.  One of the key things a board of directors provides is access to a desirable network of people in the community that have resources.  Use them to connect you to those people.  Don’t squander that resource on things your staff could be doing.
• Effectively train them.  Many boards of directors focus on the tactical because they are afraid or don’t know how to tap into their network.  So train them.  Find a good fundraising trainer to educate the board on the importance of their role and make it easy and exciting for them to open doors to the organization.  You also need to provide a board orientation when they first join the board to give them an in-depth understanding of the organization’s programs, finances, operations, activities, history, mission, vision, etc.  Then, pair them with a seasoned member of the board to meet with on a regular basis that can bring them up to speed.  Finally, provide the entire board at least annual trainings in fundraising and their role in the organization.

The board is one of the most important, and typically ineffectively used, resources a nonprofit organization has.  An effective board provides a nonprofit a broad network, financial strength, long-term vision, and all important strategy for on-going success.

Tags: Board of Directors, Fundraising, nonprofit