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capacity capital

Investing in Nonprofit Leadership: An Interview with Rick Moyers

Moyers-PortraitIn this month’s Social Velocity interview, I’m talking with Rick Moyers, vice president for programs and communications at the Meyer Foundation in Washington DC – a regional grantmaker that is nationally recognized for its capacity-building programs. Rick is a co-author of the Daring to Lead 2006 and Daring to Lead 2011 national studies of nonprofit executive directors, and has written and spoken extensively on executive and board leadership. He currently serves on the boards of BoardSource, the Alliance for Nonprofit Management, and the Community Connections Fund of the World Bank Group.

You can read other interviews in the Social Velocity Interview Series here.

Nell: You write a lot about nonprofit boards of directors. As a general rule, because they are volunteers, nonprofit boards tend to be pretty ineffective and disengaged from truly leading their organizations. Can the current structure of nonprofit leadership be made more effective? Or is there a better structure, and if so, how would we undertake such a fundamental shift in the sector?

Rick: We can’t give up on boards just because many boards are ineffective, any more than we can give up on public schools just because so many are struggling. And the fact that board members are volunteers doesn’t necessarily account for their disengagement—some of the most passionate and productive contributors to the nonprofit sector are volunteers.

But just because I’m not ready to give up doesn’t mean we can just keep doing the things we’ve been doing to improve boards, hoping our efforts will produce better results, and wringing our hands when they don’t. We’ve heaped so many expectations and roles onto the backs of boards that I’m not sure it’s possible for any board to fulfill all of them all the time. A good place to start improving things would be to become much more focused and pragmatic about what we expect from boards. A clear set of expectations – one that’s not simply a laundry list of everything we wish boards would do – would be a start. Along with the recognition that organizations need different things from their boards depending on their circumstances.

We need to recruit board members with at least as much thought and effort as we put into recruiting employees, if not even more given that board service is a multi-year and often multi-term commitment. I know board members who have been invited to join the boards of organizations with which they were completely unfamiliar after a 15-minute conversation with the chair of the nominating committee—or a casual lunch with the executive director. And then we wonder why they have a hard time engaging. If we recruited board members as if the job mattered and their selection was an important decision, perhaps they would start taking the job more seriously. We can’t give up on boards without doing a better job of trying to help them function better.

At the same time, there would be enormous value in trying out alternative structures and talking openly about whether they worked any better than the current model. My hunch is that alternatives are being tried out quietly, but we don’t talk about them much. I’d be interested in learning more about very small boards (four or five carefully chosen people), the impact of compensation on board member performance, boards with greater staff representation, and boards that are more democratic and representative of the constituencies and communities being served. I’m not confident in suggesting any of these as an alternative to current practice because I don’t think we know enough. But we don’t know enough because most organizations don’t believe they have permission to experiment (and maybe they don’t). There’s enormous pressure for “normative” behavior in governance, even though we know that normative behavior often produces mediocre results.

I don’t have a good answer for how we break this cycle, but I think we need a “learning lab” for governance practices. We need to be bolder in our experiments, and more open in sharing the results, even when they are unsuccessful.

Nell: The Daring to Lead studies that you co-authored with CompassPoint demonstrate a deep leadership crisis in the nonprofit sector – nonprofit leaders are burned out, planning to leave, and lack support for leadership development. Is more money for leadership development the answer, and if so, how do we get funders to understand the need and fund it?

Rick: More money is the answer, but not necessarily more money for leadership development. My take-away from this body of work is that chronic under-capitalization is at the root of executive director burnout and dissatisfaction. The problem is not just that organizations don’t have enough money for leadership development. They don’t have enough money for anything.

While I applaud funders that invest in leadership development—and the Meyer Foundation is among them—there’s also a danger that funder-driven leadership development programs become simply another demand on already overextended executive directors. Funders need to recognize the importance of leadership development, but also need a keen understanding of the financial and organizational constraints that have a profound impact on executive directors who may already be accomplished leaders. One of the lessons from my foundation’s experience is that large grants for leadership development can be hard to use when executives are facing so many other challenges and distractions, many of which are related to finances and fundraising.

Nell: Why is leadership development taken as a given in the for-profit sector, but taboo in the nonprofit sector? Why do we assume that nonprofit leaders should be able to go it alone? And how do we change that attitude?

Rick: In the for-profit sector, there are more vehicles for ensuring adequate capitalization and leaders have greater discretion over how they can use that capital, with the mandate of producing the greatest return for owners, investors, and shareholders. That said, it’s very telling that so many large companies spend freely on leadership development without questioning the return on investment, while nonprofit leaders are conditioned to question every penny spent on anything other than program delivery. Boards can be especially shortsighted in this regard, under-investing in current executive directors without considering the costs—in money, organizational reputation, and lost momentum—of an untimely transition. We need more evidence, both anecdotal and quantitative, of the ROI for leadership development in the nonprofit sector. Producing that evidence and telling that story will require resources, but I’m concerned that without that investment we’ll never be able to make a convincing case to boards and funders that are increasingly focused on evidence-based approaches.

Nell: Do you think as Millennials age into leadership positions in the nonprofit and philanthropic sectors they will fundamentally change nonprofit leadership? And if so, how?

Rick: While not wanting to sound cranky, I object on principle to making generalizations about a group of 80 million people as if they were a single thing. And as a member of Generation X, I also must point out that we’re the ones who are currently aging into leadership positions. What about us, damn it?

Crankiness aside, as someone who works with younger leaders every day, I have noticed some differences that hold promise for the future. Many in the rising generation are much more socially aware, passionate about social change, and optimistic that they can make a difference than I was at their age. They are choosing careers in the nonprofit sector with more thought and intention than previous generations. The dramatic increase in the number of academic centers and degree programs focused on the nonprofit sector and philanthropy over the past 20 years is producing accomplished young leaders with broad skill sets and considerable insight into nonprofit work.

I do notice a more conscious commitment to work-life balance, and more intentionality around achieving it, which I hope will help reduce burnout and abrupt departures of nonprofit executives. Just within the last six months, I’ve watched three younger executive directors transition out of their jobs because they were seeking greater work-life balance. The difference from what I’ve seen in the past is that these executives decided to leave after successful tenures of more than five years, and after working intentionally to develop a strong board and staff leadership team that could handle the transition. These leaders stepped down before they burned out, and handed off strong organizations that were prepared for the change. That’s very encouraging, and I hope it’s a trend.

A committed and talented cadre of younger leaders is already in the nonprofit leadership pipeline – not by accident, but because they want to be here. Daring to Lead and many other studies have highlighted the challenges inherent in being an executive director, so these younger leaders know what the role entails. And they still want to do it. I think that bodes well for the future, and I’m optimistic.

Photo Credit: Meyer Foundation

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5 Questions Every Nonprofit Leader Should Ask

nonprofit leaderOne thing the nonprofit sector desperately needs is more people asking hard questions. A lot of time is spent skirting issues or sugar coating situations. If nonprofit leaders instead forced some challenging conversations, with hard questions as the impetus, the sector could become more effective.  And the place to start is with a nonprofit leader questioning herself.

I’ve written before about questions to ask your board, and questions to ask your nonprofit, and questions to ask before you pursue a new opportunity, but there are also some key questions a nonprofit leader should ask herself.

On a fairly regular basis a nonprofit leader should ask:

  1. Am I Leading or Managing?
    A manager shuffles resources around, waits to be told what to do, and focuses on checking things off her list. But a leader crafts a larger vision for her organizationarticulates what her nonprofit is  trying to accomplish, and then marshals all the resources at her disposal (board, staff, funders, partners) toward that vision. And when some of those resources won’t align to the vision (board members who aren’t performing, donors who want to veer off course) she confidently tells it like it is. A manager will deploy resources, but a leader will ensure that the deployment results in social change.

  2. How Can I Address My Weaknesses? 
    A great leader recognizes when he is falling short and where he needs complementary abilities. A leader who doesn’t know how to fundraise hires a rockstar Development person, or gets fundraising training. A leader who struggles with strategic decisions finds a leadership coach. A leader who can’t build an effective board, asks fellow nonprofit leaders for counsel. Most importantly, if there are costs associated with addressing his weaknesses, a leader raises the money he needs, instead of doing it on the cheap.

  3. Am I Selling Myself (and My Nonprofit) Short?
    I see so many nonprofit leaders not fighting for what their organization really needs. From not articulating the true costs of their nonprofit to funders, to allowing the board to shirk their fundraising responsibilities, to addressing capacity constraints with a band-aid, to burning out from long hours with not enough staff, nonprofit leaders are constantly giving their organizations, and themselves, short shrift. A true leader finds the confidence to stand up for herself and her organization and demand what is truly required to achieve the vision for change.

  4. Which Other Leaders Should I Align With?
    It amazes me how many nonprofit leaders exist in a bubble. They may collaborate with others on a programmatic level, but they are not regularly analyzing the larger marketplace in which they operate (emerging competitors, new technologies, changing needs) and figuring out with which other leaders impacting the field (policymakers, organization heads, advocates, influencers) they should forge alliances. Social change requires much more than any single organization can accomplish. It is critical that nonprofits become fully networked in their area of social change. A nonprofit leader makes that happen.

  5. Am I Still The Right Person for The Job?
    This is such a hard question. But if you simply don’t have the skills (or the energy) to lead the right road ahead, then you must step aside. Don’t hold your organization and the vision back because of your ego. If you are a true leader, you have assembled a whole army of board, staff, supporters and allies that can continue to move forward in your wake. It’s not easy to recognize or admit, but if you really care about the cause and want to see real change happen, then you should regularly be assessing this.

A true nonprofit leader drives the vision, marshals resources, forges alliances, inspires support, and, ultimately, leads the charge toward social change. Because now more than ever we need real social change leaders. People who are willing and able to find the best way forward and the confidence, smarts, and humility to lead us there.

If you want to learn more about nonprofit leadership, download the Reinventing the Nonprofit Leader book.

Photo Credit: iwona_kellie

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10 Great Social Innovation Reads: August 2014

social innovation readsBetween my own time away from social media in August, the general end of summer quiet, and of course, the glut of posts about the Ice Bucket challenge (of which I have already said my piece), my list of great reads in August is admittedly slim.

But there was some interesting debate, most notably about “strategic philanthropy” and about ratings agency Philanthropedia. Also, calls for more nonprofit leadership development and for nonprofit leaders to get out of their own way by taking the Overhead Pledge. Throw in a little Mark Twain, some sharing economy, and a dash of Millennial analysis and you have a pretty good month in the world of social change.

So below is my pick of the 10 best reads in the world of social innovation in August. For an expanded list you can follow me on TwitterFacebookLinkedIn or Google+. And you can see past months’ 10 Great Reads lists here.

  1. Leadership development is a woefully underfunded need in the nonprofit sector. Indeed from 1992-2011 only $3.5 billion of the nearly $287 billion dollars granted by foundations went to support leadership. In order to get more foundations investing in leadership development, Rusty Stahl offers case studies of 9 foundations who already do.

  2. In the summer issue of Stanford Social Innovation Review, the lead article “Strategic Philanthropy for a Complex World” caused quite a stir in the philanthropy world with many arguing that there is not much new there. In August, Alliance Magazine ran a series of editorials by philanthropy leaders as counterpoints. Most interesting among them was Avila Kilmurray’s, former director of the Community Foundation of Northern Ireland, response, in which she said “Can we not just recognize that when any funder sets her/himself the task of addressing complex issues…there needs to be provision for continuous consultation, practice, reflection and change?”

  3. An interesting article in the New York Times paints the Millennial generation as a very communal-minded one, where “the highest value isn’t self-promotion, but its opposite, empathy — an open-minded and -hearted connection to others.” From working, to eating, to shopping it seems Millennials bake social into everything they do. How will the world be different if that holds true as they age?

  4. Writing in Forbes, Tom Watson asks whether nonprofits should participate in GivingTuesday. As he puts it, “Is #GivingTuesday a well-meaning marketing promotion – or is it a real, organic movement for change?…[Does it] seek to increase U.S. giving from 2% of GDP (where it’s been stuck for two generations) to some higher point?” Amen to that!

  5. Rating nonprofit effectiveness is such a tricky challenge. Philanthropedia, one rating system that is driven by crowdsourced feedback from experts, comes under fire from the clean water space for being just “a popularity contest.” But others claim it’s an improvement over previous evaluations.

  6. Writing in the Chronicle of Philanthropy Nicole Wallace shows the value of sharing data by profiling Crisis Text Line, which gives other nonprofits, researchers and government agencies access to their data of 60,000 counseling sessions with teens in crisis to use in their own programs. It begs the question whether other social change data could be shared and how we make that easier to do.

  7. Sue Dorsey from Water for People was among a group of nonprofit leaders at the InsideNGO conference who took the Overhead Pledge in August, vowing to fully disclose the true costs of their nonprofits. And she encourages other nonprofit leaders to follow suit. This is exciting because it is not enough for funders to get over the overhead myth, nonprofit leaders must as well.

  8. I am always a sucker for connecting literature and/or history to social change, and even better both, so David Bonbright’s post about how Mark Twain would have viewed recent trends in business is fascinating. Bonbright argues that Twain wanted American business to fully integrate profit and community. And we are beginning to witness this trend again where companies are “embracing the full implications of what they are – what they mean for the environment, for communities, for the most marginalized people affected by their supply chains…[because] this is best way to remain competitive and successful over time.” Let’s hope!

  9. The new “sharing” economy is not all good, but not all bad either, as Daniel Ben-Horin argues that “there are enormous opportunities for the social sector to engage with the values-driven segment of the sharing economy.”

  10. Finally, some guidance on making your nonprofit email marketing more mobile friendly and your website better able to connect people to your cause. It’s all about responsive, engaging design.

Photo Credit: Seth Anderson

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Fundraising’s Shiny Object Syndrome

shiny objectI have to be honest. I am so sick of hearing about the ice bucket challenge that I am loathe to write about it. But I wonder if many in the nonprofit and philanthropic sector are falling victim, yet again, to shiny object syndrome, so I feel compelled to say something.

To me the ice bucket challenge is yet another example of what happens so often in the world of fundraising. Nonprofit board members and staff hate fundraising, so they desperately search for a magic bullet to make it all go away.

Sometimes that magic bullet is “an endowment,” sometimes its “earned income,” more recently it has been “crowdfunding.” This month it’s a form of crowdfunding taken to the extreme, the ice bucket challenge. Some have been so swept up in the hype that they have gone as far to say that the challenge is “rewriting the charity model.

Oh boy.

The reality is that if you want to create social change you need to develop a sustainable financial model that aligns with your long-term goals. It’s not sexy, it’s not easy, and I’m probably one of the few people on this planet who thinks it’s fun. But there it is.

While many nonprofits are scrambling to figure out how to create their own ice bucket challenge, and some thought leaders are offering tips along the way, maybe we should all just take a step back.

Let’s be very clear. ALS’s close to $100 million windfall is not a revenue stream. It is a one-time infusion of money. Yes, ALS may try to replicate the ice bucket challenge on a regular basis, but the stars will never align in quite the same way, people will move on to the next shiny object, and the money will eventually fade.

Because this pile of money is not a revenue stream, ALS can’t and shouldn’t add long-term staffing or programming because the money won’t be there next year. At the same time, they probably can’t create an endowment because the donors’ intent was not for the money to sit in a bank account. Regranting the money is also tricky, again because donor intent was for it to go specifically to ALS. In all of this ALS will be under the microscope, because as Ken Berger of CharityNavigator cautioned, a year from now everyone will be asking where the money went.

One of the few paths that I see for ALS is to treat the money like capacity capital. This could be an opportunity to invest some of the windfall in building a stronger organization by investing in technology, infrastructure, and systems. And they could do the same for their affiliates. They could require capacity building plans and budgets and invest in those plans accordingly. They could, in essence, create a $100 million capacity capital investment fund for the ALS system.

But the point is that far from being a great thing that all nonprofits should strive to emulate, the ice bucket challenge creates a complex and potentially damaging problem.

So instead of spending board and staff time trying to dream up the next ice bucket challenge, please, please, please spend that time and those resources building your financial model, by creating a long-term financial strategy, raising capacity capital to build your revenue-generating function, developing a compelling strategic plan in which people will want to invest, and growing and educating your board.

These are the ingredients for a robust, sustainable financial model. Not a bucket of water, a video camera, and a social media stream.

Photo Credit: StoiKNA

 

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How to Fundraise for a Stronger Nonprofit [Slideshare]

In order to add to the growing Social Velocity Slideshare library, I’m delighted today to offer How to Fundraise for a Stronger Nonprofit.

If you want to get your nonprofit out of the (all too common) starvation cycle of never having enough money to achieve your goals, you must raise capacity capital. Capacity capital is not the day-to-day revenue you need to keep your doors open. Rather, capacity capital is a one-time infusion of significant money that can help you grow or strengthen your nonprofit. It is money for things like: technology, revenue-generating staff, systems, a program evaluation.

This Slideshare helps you understand capacity capital and how to raise it. And if you want some additional guidance for launching your own capacity capital campaign, download the Launch a Capacity Capital Campaign Step-by-Step Guide.

You can see the growing library of Social Velocity Slideshare presentations here.

How to Fundraise for a Stronger Nonprofit from Nell Edgington
Photo Credit: 401kcalculator.org

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10 Great Social Innovation Reads: July 2014

social innovation readsDespite being the height of summer, July was far from the month to put our brains at rest. The blogosphere created some really great pieces.

A couple of fascinating debates – one about the role of philanthropy in democracy, and one about the value of nonprofit evaluation – were fascinating reads. And I always love a good controversy, so July gladly provided at least two. The much heralded “sharing economy” came under fire and the hype around social impact bonds was called out.

Below are my 10 favorite reads from last month. If you want to see a longer list of great reads, follow me on TwitterFacebookLinkedIn or Google+. And you can see past months’ 10 Great Reads lists here.

  1. There was a really interesting debate on the Markets for Good blog (always a place for thoughtful conversation) between Andrew Means and Patrick Germain about the value of program evaluation and performance measurement in the nonprofit world. Andrew Means kicked it off here and here and Patrick responded here.

  2. I absolutely love it when someone makes you think about something that you took for granted in a whole new way. Conventional wisdom is that the sharing economy is a democratizing development. But Max Holleran, writing on the OpenDemocracy blog, argues that perhaps it is the complete opposite. As he says, “Our concept of what sharing means has gone from The Gift to the paid-for lift…How we assess public goods has also changed dramatically: urban commons have been ceded to private-public management initiatives.”

  3. The Hewlett foundation announced a new $50 million initiative to “strengthen representative democracy in the U.S.” And that announcement inspired a thought-provoking back and forth about the role of philanthropy in democracy among Daniel Stid and Larry Kramer (both from Hewlett) and Maribel Morey (assistant professor of history at Clemson University), via a Stanford Social Innovation Review blog post and the subsequent comments to the post. No matter your politics or your views on philanthropy, it is refreshing to see such an open discussion about a foundation’s efforts.

  4. On a somewhat related note, Amy Schiller argues that we cannot allow philanthropy to be a “workaround” to the “friction of democracy, ” which is necessary for truly solving social problems.

  5. To get more funders to invest in nonprofit organization building we need more data and case studies on the return on investment. Building the case for funder investment in nonprofit technology capacities, Berta Colón, Cynthia Gibson, Michele Lord, and Geraldine Mannion examine recent data on building nonprofits’ digital reach, and the Knight Foundation provides a case study on how National Public Radio (NPR) built their digital skills.

  6. I love New York Times food columnist Mark Bittman for his fabulous recipes and views on food, but recently he’s become somewhat of a food activist, and his article on the the true (social) costs of a burger is eye-opening.

  7. Is there hope for the famously dysfunctional nonprofit board? A new report from Urban Institute suggests we need to raise our expectations of nonprofit boards. Let’s hope!

  8. I know I’ve been including Steven Pressfield in my round ups lately, but this man really knows how to inspire people to fight the demons that face them in order to create whatever they were put on this earth to create. His recent blog series entitled “Why” does just that. I think social changemakers, more than anyone, need this kind of inspiration.

  9. Curt Klotz from the Nonprofits Assistance Fund argues that nonprofits must price their services according to value because “there is no virtue in self-imposed austerity that leads to mediocrity in our programs, and constant turmoil in our finances.” Amen to that!

  10. Writing on the PhilanTopic blog, Laura Callanan pulls back the curtain on some of the hype around social impact bonds and social innovation in general. Instead of falling victim to shiny object syndrom she asks that “we all bring our critical minds – as well as our open hearts – to the job of social change. Let’s celebrate the potential in the new approaches but also integrate them with prior experience and test them with our constituents…Let’s remember that a tool is just a tool.”

What thought-provoking or controversy-inspiring read caught your eye last month?

Photo Credit: Josue Goge

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Speaking About A Changing Nonprofit World

Nell EdgingtonOne of the things I love most about what I do is the opportunity to speak around the country to nonprofit and philanthropic leaders about new approaches. The nonprofit sector and the philanthropy that funds it are changing dramatically, which can be unsettling, but can also be an incredible opportunity for nonprofit leaders to find a better way to reach their goals.

This Fall I’m particularly excited about some great speaking opportunities I have coming up. If you will be at any of these events, please let me know, I’d love to connect there.

And if you’d like to learn more about having me come speak at your event, or to your board, staff or donors, check out the Social Velocity Speaking page.

Here are my upcoming engagements:

Ecotrust

August 1st, Portland, Oregon

I’m delighted to have such a groundbreaking nonprofit, Ecotrust (which inspires more resilient communities, economies, and ecosystems around the world) hosting me at a lunch event for Portland nonprofit leaders. I’ll be speaking to the group about new ways to finance their work. I’ll describe how clarifying the work their nonprofit does and connecting that to a robust financial model can transform their organizations’ financial sustainability and ability to create social change.

AFP Symposium on Major Gifts

October 10th, Seattle

I’ll be kicking off the symposium with a talk on “Moving From Fundraising to Financing,” where I’ll show nonprofit leaders a new, more effective way to fund their work. As donors shift from a “charity” mindset to an impact and investment view, nonprofit leaders must articulate the social change they seek, develop a robust and sustainable financial model for their mission, and make their donors partners in the work. We’ll discuss how to uncover the most important building blocks of creating an integrated approach to engaging people in the mission.

Philanthropy Southwest Conference

November 5th-7th, Phoenix

At this year’s annual conference of grantmakers, I’ll be serving on a panel titled “The Power of Investing in Nonprofit Capacity.” Ellen Solowey, Program Officer at the Virginia G. Piper Charitable Trust; Darryl Tocker, Executive Director of the Tocker Foundation; and I will discuss foundations that make capacity investments in nonprofits. We will explore how funders can collectively address nonprofit capacity constraints such as financial instability, disengaged boards, lack of funding for professional development, and the need for long-term planning.

Nonprofit Education Initiative

January 22, 2015, Hailey, Idaho

At this gathering of nonprofit leaders I’ll be leading a session titled “Messaging Impact.” More and more donors are interested in funding organizations that can demonstrate impact, or change to a social problem, as opposed to organizations that only talk about their needs. If a nonprofit leader can create a message of impact, she will be able to raise more money over a longer period of time. I’ll explain how to create a message of impact to encourage more donors to invest in the long-term work of a nonprofit.

It’s going to be a great Fall. I hope to see you at one of these events!

 Photo Credit: Social Velocity

 

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Moving Beyond the Starving Nonprofit

Volunteers_of_America_Soup_Kitchen_WDCEver since last year’s release of the Letter to the Donors of America it seems there is an increasing drumbeat against the “Overhead Myth,” the idea that nonprofits must keep their overhead and administrative costs as low as possible. The fact that we are now openly talking about overhead as a myth is very encouraging.

But I think it will take a good deal of time before donors actually embrace the idea that nonprofits should stop starving their organizations of the resources they need to create and execute effective programs.

To move donors along, nonprofit leaders must lead this conversation with their own donors. Those nonprofit leaders who need more money to build a stronger, more effective and sustainable organization behind their work should educate themselves, their board members, and their donors about capacity capital.

“Capacity capital” is a one-time infusion of significant money that can be used to strengthen or grow a nonprofit organization. Capacity capital is NOT the day-to-day operating money nonprofits are used to raising and employing. Rather, capacity capital is money to build a stronger, more sustainable organization.

A nonprofit could use capacity capital in many ways, for example to:

  • Plan and execute a program evaluation
  • Plan and launch an earned income stream
  • Create a strategic financing plan
  • Hire a seasoned Development Director, or other revenue-generating staff
  • Purchase a new donor database
  • Improve program service delivery
  • Upgrade website, email marketing, and/or social media efforts
  • Launch a major gifts campaign

But raising capacity capital is not like traditional fundraising. It involves determining how much capacity capital you need, creating a compelling pitch, deciding which prospective funders to approach, and educating those prospects about the power of capacity capital. In so doing, you are not only raising the money you so desperately need, but you are also leading your part of the nonprofit sector away from the overhead myth.

Capacity CapitalThe Launch a Capacity Capital Campaign Guide can show you how to raise capacity capital for your nonprofit.

Here is an excerpt from the guide…

 

Section 1: Create a Capacity Building Plan

You cannot raise money without a plan for how you will spend it. Funders need to be convinced that you did your homework and have a clear, actionable, measurable plan for how you will invest capacity capital dollars to result in a stronger organization that can deliver more impact.

To get there, start by answering these questions:

  1. What is holding our nonprofit back from doing more and being more effective?
  2. What could we purchase to overcome these hurdle(s)?
  3. If we were able to purchase these items how would we use them and over what time frame?
  4. What can we reasonably expect to be the changes in our effectiveness and/or impact because of these things we purchased and implemented?

With your answers to these questions, put together a plan.

Start by creating 1-3 goals around the hurdles you identified in #1 above. For example, you may have identified in #1 that you don’t have adequate staff to raise enough money to achieve your mission.

So your capacity plan goals might be:

  1. Create an overall money strategy to raise $450,000 per year.
  2. Hire a Development Director to implement the plan.
  3. Secure the technology and materials necessary to raise this money (database, website, etc.)

Or, if you are a much smaller nonprofit, your goals might be more modest:

  1. Create an overall money strategy to raise $100,000 per year.
  2. Train the board on their role in fundraising.
  3. Upgrade our website to attract online donations.

Once you’ve developed your goals, make a laundry list of activities and purchases necessary to make each goal a reality. In some cases you may need outside help to determine how to get there. For example, you may not know how to put together an overall money strategy to raise $450,000, so you may have to hire a fundraising consultant to help you create that strategy. Also note roughly how long each activity will take.

So, your list of activities with a timeline for each might look something like this:

Goal 2: Train the board on their role in fundraising

  • Discuss and get buy-in from board on a fundraising training (October)
  • Find a date/location (October)
  • Research fundraising trainers (November-December)
  • Hire a trainer (January)
  • Hold training (February)
  • Follow up with each individual board member on the next steps resulting from the training (March-April)

Once you have listed all of the activities to achieve each goal of your capacity plan, highlight activities that would require new purchases. Research a ballpark figure for what each one would cost and then attach that figure to those highlighted items, like this…

 

To learn more, download the Launch a Capacity Capital Campaign Guide. And if you’d like more guidance, you can also view the Raising Capacity Capital Webinar.

Good luck!

Photo Credit: Franklin D. Roosevelt Presidential Library and Museum

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