If I had one wish for the nonprofit sector in this new year it would be for nonprofits to get much smarter about money and finally start using it as a robust, strategic tool for creating more social change.
But you can’t get smarter about something that you fear, or don’t understand, or avoid, or can’t access.
Which is why I’m really excited about one of the new tool bundles I’m offering in the newly revamped Tools section of my website. The Develop a Financial Model Tool Bundle provides the guidance you need to create a financing plan for your nonprofit in this new year.
A financing plan (as opposed to a fundraising plan) is a long-term strategy for bringing enough money in the door to achieve your mission, ultimately bringing you closer to creating sustainable social change.
The Develop a Financial Model Tool Bundle will help move your board, staff and donors to truly understand a financing approach and give you the roadmap for developing your nonprofit’s own financing plan. It will help move your nonprofit from the exhausting hamster wheel of fundraising to a robust, sustainable financial model.
The tool bundle includes 4 components:
- The Financing Not Fundraising, vol. 1 E-book that describes the theory behind moving from fundraising to financing, why financing is a much more sustainable and effective approach, and how to begin moving your organization to a much more sustainable way of thinking about and securing money.
- The Financing Not Fundraisng, vol. 2 E-book expands on the ideas behind a financing approach, gives concrete examples of this new approach, and describes how to change your, and your board and donors’ thinking in order to fully make the switch to this new approach of financing your work.
- The 60-minute Create a Financing Plan On-Demand Webinar moves you from embracing the theory of a financing approach to fully understanding what a financing plan is, how it differs from a fundraising plan, the framework for a plan, and the steps necessary to create one. This webinar can be watched whenever you want and however many times you need.
- The Build a Nonprofit Financing Plan Step-by-Step Guide is the final piece of the puzzle. This guide helps you create your nonprofit’s own financing plan. The guide walks you, step-by-step, through the questions, calculations and frameworks you need to build your nonprofit’s financing plan.
This Develop a Financial Model Tool Bundle takes you from understanding the theory behind a financing approach all the way to creating your nonprofit’s own financing plan. As a bundle, the cost is 15% less than the cost of purchasing the e-books, guide and webinar separately. Download the Develop a Financial Model Tool Bundle Now.
This tool bundle, along with all of the other guides, e-books, webinars and bundles available on the Tools page, is designed for smaller and younger nonprofits that may not have the resources to seek customized consulting help, or just need some initial guidance to find a new way on their own.
But if you would rather find out about the customized consulting I provide for creating a financing plan and/or coaching your board and staff to adopt this new approach, let me know.
Note: 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
As 2013 comes to a close, and we all head off for some much deserved rest and relaxation, I wanted to thank all of you wonderful Social Velocity readers. You are an inspiring group of people working tirelessly to make this world a better place. I am very thankful to be able to work and interact with you all through the Social Velocity blog.
Before I take a break from the blog until January, I want to provide a list of the ten most popular Social Velocity blog posts from this year in case you missed some of them. You can also read the 10 Most Popular Posts lists from 2011 and 2012.
I wish you all a peaceful and relaxing holiday season. I look forward to talking and working with you in 2014. Happy Holidays!
The 10 most popular Social Velocity blog posts of 2013 were:
- 5 Nonprofit Trends to Watch in 2014
- 5 Taboos Nonprofits Must Get Over
- Why Your Board Should Raise 10% of Your Nonprofit’s Budget
- 5 Reasons Your Nonprofit Isn’t Raising Enough Money
- Addressing the Nonprofit Fundraising Elephant in the Room
- Find and Keep a Great Fundraiser
- 5 Questions to Get Your Board Moving
- Getting Real About Nonprofit Overhead Costs
- NextGen Donors and the New Golden Age of Philanthropy
- The Nonprofit Sector Needs to Get Over the Fear Thing
And if you want to make sure not to miss a single post in 2014, sign up for the Social Velocity e-newsletter (and download a complimentary copy of the Financing Not Fundraising, vol. 1 e-book in the process).
Photo Credit: Wikipedia
Among other obvious things, December is a time for reflection on the past year and predictions for the coming year. There have already been some great forecasts about what 2014 will bring the social change sector (here, here, and here). And as is my tradition, I want to add my thoughts about the trends to watch in the coming year. (If you want to see how I did in past years, you can read my nonprofit trends posts for 2011, 2012 and 2013.)
Here’s what I think we should watch for in 2014:
- Growing Wealth Disparity
Evidence increasingly reveals that despite our best efforts the gap between the rich and the poor is widening, not shrinking. This growing disparity means that the work nonprofits do to address the ramifications of these inequities is in growing demand. The problems are simply too big and getting bigger every minute. At the same time government resources are shrinking so the greater burden for solutions is increasingly placed on the shoulders of the nonprofit sector. As problems get worse and money gets tighter the social change sector will take center stage.
- Greater Nonprofit Sector Confidence
As the nonprofit sector is asked to do more and more, nonprofits will no longer be a “nice to have” but an absolute essential component of any way forward. We will move squarely away from the idea of “charity” and toward an economy and a mindset that fully integrates the social. No longer sidelined as a small piece of the pie, the nonprofit sector will be recognized for the undeniable and pivotal role it plays in our economy, our institutions, our systems. As such, the nonprofit sector will stop apologizing for the resources it needs to do the job. The sector will rise up and take its rightful place as a critical force in shaping a sustainable future.
- Increased Movement Toward High Performance
As resources become tighter and we look to the nonprofit sector to solve mounting problems, public and private funders will increasingly want to see the return on their investments. And that can only be done by understanding what results a nonprofit is achieving. The growing push this year away from financial metrics and toward outcome metrics will continue to grow. Nonprofits will have to learn not only how to articulate the outcomes they are working toward, but more importantly, how to manage their operations towards those outcomes.
- More Capacity Investments
And if we are going to get smarter about achieving results in the social change space, more donors will start to recognize that they have to build the capacity of that space. There is no end to the list of capacity-building needs of the sector. From investing in more sustainable financial engines, to funding evaluation and performance management systems, to financing nonprofit leader coaching, philanthropists will increasingly recognize that if we are going to expect more from the nonprofit sector we must make sure they have the tools to do the job. A handful of savvy foundations and individual donors have already made capacity investments, and as those investments pay off, more donors will follow suit.
- Accelerated Effort to Enlarge the 2% Pie
For the past four decades private contributions to the nonprofit sector have not risen above 2% of the U.S. gross domestic product. In recent years there have been attempts to grow that pie. And the big question whenever a new funding vehicle enters the space (like crowdfunding most recently) is whether it will be the magic bullet to shatter that glass ceiling. But we are not there yet. As social challenges continue to grow, the wealth gap continues to widen, and a new generation of donors comes of age, there will be increasing pressure to channel more money (not just the same money through a new vehicle) toward social change.
Photo Credit: John William Waterhouse
It becomes increasingly obvious to me that the nonprofit sector suffers from a lack of confidence. Centuries of being sidelined as “charities” while the real work of the world (business) took center stage has made the nonprofit sector continually apologize for the work they do and how they do it.
Nowhere is this more true than in the financing of their work.
But for the nonprofit sector to start to demand a seat at the big money table, nonprofits must stop apologizing for needing money. To truly begin to use money as a tool, nonprofit leaders have to stop regretting their need of it and start demanding that they receive enough and the right kinds of money to successfully accomplish their work, which is the topic of today’s installment in the ongoing Financing Not Fundraising series.
Note that this post is included in the recently released Financing Not Fundraising, vol. 3 E-book.
You can’t simply decide to stop feeling bad about asking for money. Instead you have to find the confidence to identify and secure the right financing for your work.
Ask for Change, Not Your Organization
You shouldn’t be asking for money for your organizational needs, rather you should be asking for money as a vehicle to help your organization create social change. Everyone is uncomfortable when asking for a handout. If instead you are asking for resources to make positive social change, which a donor cares about, it is much more powerful, compelling and confidence-inspiring.
Find the Right People
It surely can be awkward asking for money if you are asking the wrong person. Don’t fall into the trap that many nonprofits do by thinking that anyone with money is a potential donor to your nonprofit. People give based on values, therefore you only want to target people for whom your mission and your work resonate deeply. No matter who your target is (an individual, a foundation, a corporation) think about whether they have the Capacity to give at the level you need, have a Connection to someone at your nonprofit, and have a Concern for your nonprofit’s mission. Being strategic about who you are targeting makes you much more confident when you finally make the ask.
Tie Money to Your Goals
If you know as an organization what you are trying to accomplish and how much that will cost, you will have much more confidence asking for money. Instead of just asking for money, you will be asking for the financing necessary to accomplish your strategic goals. If you have a smart organizational strategy you can confidently ask a potential donor to invest in a solid, well-thought out plan for creating change to a problem they care about. And that’s much less awkward than asking someone to just give, right?
Take Out the Middle Man (or Event)
So many nonprofits sidestep the awkwardness of asking for money for their mission by holding a big gala event instead. The thinking is that if they camouflage the ask inside twinkly lights, great music and food, and a loud band that people won’t mind opening their wallets. Aside from the very real fact that you are leaving money on the table, events simply enable the lack of confidence I am describing. Instead of feeling so guilty about asking for money that you run your board and staff ragged by staging a huge event, take out the middle man and identify, cultivate and solicit donors who truly care about your work and will give more significantly through a major donor campaign.
Share Your Results
If your nonprofit is truly creating social change, then you can very confidently ask others to join you as partners in making that change continue to happen. Collect, analyze and share the results of your nonprofit’s programs. Demonstrate the change that you are creating and that donors care about. With solid results to point to, you can confidently ask other people to invest in your successful work. At the end of the day, if your nonprofit is creating positive community value then you should confidently be asking for the money necessary to make that value grow.
Stop apologizing for needing the financing necessary to do the work and start finding and confidently inviting interested investors to partner with you. In so doing you will be moving your nonprofit from fundraising to financing.
Photo Credit: myguitarzz
I am delighted to announce today’s release of the newest volume in the Financing Not Fundraising e-book series, Financing Not Fundraising, vol. 3.
The idea behind Financing Not Fundraising is that the traditional way nonprofit leaders, boards and donors have approached funding the work of nonprofits doesn’t work anymore. Traditional nonprofit fundraising forces nonprofits to work harder and harder for a smaller and smaller return. Nonprofits must break free from this vicious cycle and take a much more strategic approach to securing the overall financing necessary to achieve their goals.
The first step in this process is to fully integrate money with the mission and core competencies of the organization. In creating such a strategic financial model for her organization, a nonprofit leader will be setting her organization on a path towards financial sustainability, growth, and ultimately change to the social problem her nonprofit attempts to address.
The Financing Not Fundraising, vol. 3 E-book expands on the basic elements of the Financing Not Fundraising model and helps those nonprofit leaders who are ready to start moving away from fundraising to really dive into this new approach.
Contained in this e-book are new ways of thinking, new tools of analysis, new questions to ask. All with the intent of pushing your staff, your board, even your donors, to fund your work in a more effective and sustainable way.
Here are the chapters in the Financing Not Fundraising, vol. 3 E-book:
- Overcome Nonprofit Taboos
- Remove Money Hurdles
- Find and Keep a Great Fundraiser
- Recruit a Money Raising Board
- Set a High Board Fundraising Bar
- Enlighten Your Donors
- Break Free From the Starvation Cycle
- Create Donor Personas
- Calculate Opportunity Costs
- Stop Apologizing
- Get Started
If you are tired of hitting your head against the unmovable fundraising wall, I invite you to explore a new way of sustainably financing the critical work you do.
As we head off for the Thanksgiving holiday and the start of the consumer-driven holiday season, it’s important also to give back. And there’s a movement to help you do just that.
Tuesday, December 3rd is the second annual Giving Tuesday, an exciting experiment that started last year to “create a national day of giving to kick off the giving season on the Tuesday following Thanksgiving, Black Friday and Cyber Monday.” Last year’s first Giving Tuesday saw some impressive results:
- More than 2,500 recognized #GivingTuesday™ partners from all 50 states
- Blackbaud processed over $10 million in online donations on 11/27/12 – a 53% increase when compared to the Tuesday after Thanksgiving the previous year.
- DonorPerfect recorded a 46% increase in online donations and the average gift increased 25%.
- More than 50 million people worldwide spread the word about GivingTuesday – resulting in milestone trending on Twitter.
The video below explains the movement and how to get involved. To learn more go to community.givingtuesday.org.
Earlier this month, there was a great post by Linda Wood from the Haas Fund bemoaning the fact that 73% of nonprofit leaders in a recent Center for Effective Philanthropy study said they lack resources to build their leadership skills. And the recent Meyer Foundation Executive Director Listening Project found that nonprofit leaders’ biggest challenges are fundraising, human capital management and board of directors management — all leadership challenges.
This doesn’t surprise me at all.
I constantly witness the lack of support nonprofit leaders receive for building their leadership skills. Leading a nonprofit is an incredibly demanding task and the challenges are only growing. Nonprofit leaders are expected to magically solve the world’s problems, on a shoestring, while herding a disparate group of volunteers, funders, clients.
Which is why I think nonprofit leader coaching holds so much promise for the sector. If a struggling nonprofit leader had a strategic partner who could help her think through staffing, fundraising, board management and strategic decisions, instead of having to figure it out all on her own, it could be transformative.
Nonprofit leader coaching is one-on-one strategic counsel from someone with deep management, financial, and strategy expertise. With a strategic coach, a nonprofit leader can find solutions to issues like how to:
- Create the most effective staffing structure for growth
- Recruit and engage an effective board
- Diversify and grow funding streams aligned with the nonprofit’s specific mission and operations
- Analyze strategic opportunities for the organization
- Develop effective collaborations that build on the organization’s assets
The return on investment of coaching can be really exciting. Let me give you some examples:
Increased Board Fundraising
Fundraising is such a tricky business. Often nonprofit boards are fairly ineffective at it, largely because they and their nonprofit leader don’t know how to focus the board’s efforts. This was true for one of my clients whose board didn’t understand fundraising and was confused about their role. Through coaching, both with the executive director and board members, the board now understands how each of them individually can contribute to bringing money in the door. They also understand how to focus their efforts on the most profitable activities and now have the skills and knowledge to move the organization’s financial strategy forward. As a result, the board has dramatically increased the number of new donors to the organization.
Clearer Strategic Thinking
Nonprofits are constantly bombarded with new opportunities, new partnerships, new funding ideas. A coach can help a nonprofit leader think through how a new opportunity might fit with the overall organization strategy, ask hard questions and analyze the costs and benefits. In this coaching role, I encourage nonprofit leaders to take a step back and examine all of the implications of a decision, how it might draw resources away, what impact it will have on the larger work, how it moves the organization closer to or farther away from strategic alignment, and so on. Coaching can get nonprofits away from group think and towards making smarter, more strategic decisions.
More Productive Staff
Management of staff is one of the hardest jobs of being a leader in any setting, but I think it’s particularly tricky in the nonprofit sector where resources are tighter and nonprofits are often encouraged to play nice at all costs. In coaching around staff challenges, I help a leader create an effective staffing structure for the organization, analyze and resolve staff conflicts, and make sure all staff are playing to their strengths.
Strategic coaching is not right for every nonprofit leader because it takes a real commitment to change, a willingness to analyze situations, and an openness to making difficult decisions.
But coaching is right for a leader who:
- Leads an organization that is ready for change
- Is open to trying new approaches
- Wants to have difficult, but important, conversations with board, staff and funders
- Needs a thinking partner to help make strategic decisions
- Recognizes that she doesn’t have all of the answers
- Is ready to build her leadership skills
Photo Credit: PhilanTopic
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