Board of Directors
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
One of my resolutions this new year is to add more video to the Social Velocity site. I love watching video, and I’d love to see more nonprofits using the medium, so I thought I should probably follow suit. A few months ago I created a Social Velocity YouTube channel and will continue to add video to it over the course of the year. I also plan to do some video blogging this year, which I’m pretty excited about.
But today I want to introduce my new consulting video. Here I discuss how I consult with nonprofit clients. If you are reading this in an email, you can see the video by clicking here. Take a look!
I’m delighted to announce that I’ve just released the Financing Not Fundraising, 2012 E-book. This e-book is the second in the Financing Not Fundraising e-book series. While the Financing Not Fundraising, 2011 E-book laid out the basic elements of the Financing Not Fundraising approach, this new e-book, a compilation and expansion of blog posts in the Financing Not Fundraising blog series from 2012, goes deeper into the concept.
We are living in a new reality. And the old rules of nonprofit funding simply no longer apply. Those nonprofits that take a big step back and create a smart strategy for bringing enough money in the door to achieve their mission are the ones that will survive and thrive in this new environment. In creating that strategy they are moving to finance, instead of fundraise for, their organizations. And the result is a stronger, more effective, more sustainable organization with excited, energized, empowered board, staff and donors.
The 25-page Financing Not Fundraising, 2012 E-book expands on the basic elements of the Financing Not Fundraising model and helps those nonprofits that are ready to start moving away from fundraising to really dive into this new approach.
Here are the elements in this second level of Financing Not Fundraising:
- Stop Fearing Money
- Connect Money to Your Strategic Plan
- Fix Your Fundraising Plan
- Jump Start Your Board
- Align Executive and Development Directors
- Get Real With Your Donors
- Abandon Ineffective Fundraisers
- Kiss That Endowment Dream Goodbye
- Reinvent the Capital Campaign
Nonprofits, like any organization, are constantly faced with new opportunities. In a world that is moving faster, becoming more competitive and increasingly requiring solutions, new opportunities crop up all the time. Should you offer services to a different kind of client? Should you collaborate with a competing organization? Should you pursue a new potential revenue stream? Because nonprofits are consensus-based and have multiple “customers” they sometimes go after new opportunities that they shouldn’t.
The trick is to analyze whether the new opportunity makes strategic sense for your nonprofit. Here are 5 questions to help you:
- Does it fit our strategic direction? You don’t want a strategic plan that sets in stone your organization’s future course, particularly given the tremendously volatile world in which we now live. So if your strategic plan is a good one, you’ve created filters for analyzing new opportunities. If this new opportunity fits within those filters that’s great, but you still need to determine what resources you will reallocate in order to do this new thing.
- Does it fit our core competencies? Even more important than your strategic direction, this new opportunity must play to your strengths. If you excel at running a pre-K reading program, a new math program might not be a good fit. Included in this question is the follow up: Could someone else do it better? If so, let them. Focus on what you do best.
- Is someone pushing this because of their own interests? Let’s face it, nonprofits are made up of many people, some of whom have their own individual interests or pet projects. But once you start following one of those individual interests instead of the interests of the organization as a whole you are in big trouble. Take a step back and make sure this new opportunity is really going to get the organization further.
- Do you want to do this because of your own baggage? Leaders are only human, and we humans all have our weaknesses. Sometimes when a nonprofit leader is making a critical decision some of their personal baggage gets in the way. Perhaps you are afraid of how you will look to your peers if you don’t pursue this opportunity, or maybe you want to keep your fiercest competitor from gaining turf, or perhaps you have a really hard time saying no. Whatever it is, you need to recognize when your baggage, instead of smart strategy, is calling the shots.
- Will this new opportunity further your mission or long-term financial sustainability? If it’s not about mission or money, why are you doing it? Don’t get caught up in vague ideas about “community goodwill.” You will achieve community goodwill by working toward your mission effectively. And be careful about assuming any potential money is a reason to pursue an opportunity. Not all money contributes to the long-term financial sustainability of the organization. Make sure that this new opportunity doesn’t cost more than it brings in.
Nonprofits should not fear new opportunities. Indeed innovation, which the sector so desperately needs, requires a real openness to change and risk. However, nonprofit leaders must take a disciplined approach to making new opportunities part of their overall strategy.
Photo Credit: mytmoss
It amazes me how board members can sometimes stand in the way of the nonprofit for which they are supposedly the chief supporters. And the executive director can be incredibly lonely when she sees, but the board does not, what the organization desperately needs.
This is often true with a strategic plan, which I believe is absolutely critical to a nonprofit’s success. Without an overall strategy, a nonprofit is relegated to the world of “doing good work,” instead of the world of “making a real difference.” And these days more and more funders, supporters, advocates, partners and decision makers are requiring that nonprofits do more than just good work.
So what is an executive director to do when her board of directors doesn’t want to invest time, effort and resources into creating an overall strategy? Get tough and tell your board what a strategic plan will do for you:
- It Will Bring Us More Funding. Donors will give bigger and longer-term gifts if they understand where an organization is headed and how they will get there. It is getting harder and harder to convince a donor to give based on goodwill or good works. You now need to convince a donor that 1) your organization is uniquely positioned to deliver a solution to a social problem and 2)you have a strategy to get there.
- It Will Put Our Staff to Their Highest and Best Use. Staff will be more engaged, invested and productive if they understand the bigger picture and their individual contribution to it. A good strategic planning process gets staff engaged and invested in the organization and helps them understand their unique contribution to its goals.
- It Will Get Our Board Moving. Without a strategy to guide them, a board of directors becomes a loosely linked group of volunteers who show up a handful of times a year to nod and slap each other on the back. If you really want to marshal this potential army and leverage all the resources, expertise, networks and mind-share they could bring, you have to give them a broader vision and purpose for their work. A good strategic plan gets a board both excited about the big picture and committed to their role in making it happen.
- It Will Bring Us Financial Security. A good strategic plan forces an organization to analyze and develop a comprehensive, long-term financial model for the organization. Without a long-term strategy for mission AND money you will continue to ride the hamster wheel of never having enough. And that’s exhausting.
- It Will Ensure We Create Change. Without a strategy you will end up somewhere, but it’s probably not where you wanted to be. A well-thought out strategic plan that begins with an articulation of the social problem(s) your nonprofit is trying to solve and how you work to solve it ensures that you get there. Without a strategy you will do a lot of work and use a lot of resources but may never actually create change.
It is really too bad that the words “strategic plan” have become so abused in the nonprofit sector that some board members are instantly turned off when the topic arises. To be sure, there are many bad strategic plans out there. But those nonprofit organizations that invest the necessary time and resources to create a really good strategy will be the ones that create lasting change.
You can learn more about Social Velocity’s strategic planning process here.
Photo Credit: Tambako
I’m delighted to announce that we’ve just released a new e-book called Money to Build Your Nonprofit: The Enormous Opportunity of Capacity Capital.
Capacity Capital is a fairly new concept in the nonprofit world that has the power to completely transform the sector by releasing it from the “starvation cycle” and making nonprofits more effective and sustainable at creating social change. “Capacity capital” (or “philanthropic equity”) is just a fancy term for the money so many nonprofit organizations desperately need. And it’s a topic I’ve written about many times on the blog.
Capacity capital is a one-time infusion of significant money that can be used to strengthen or grow a nonprofit organization. It can be money that grows a successful program to other clients, other cities, other regions. Or it can be money that strengthens the organization and makes it more sustainable.
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. It’s a one-time infusion of significant money to fundamentally and positively change the functioning of the organization.
But because this is such a new concept for the nonprofit sector, it can sometimes be difficult for boards and staffs to envision how this new kind of money could be used. Here are some examples to get you thinking:
- To plan and execute a program evaluation
- To plan and launch an earned income stream
- To create a strategic financing plan
- To hire a seasoned Development Director
- To purchase a new donor database
- To improve program service delivery
- To upgrade website, email marketing, and/or social media efforts
This Money to Build Your Nonprofit E-book explains what capacity capital is, what it can be used for, how to convince funders of its importance, and how to raise it. It includes the following sections:
- Overcoming the Bias Against Nonprofit Organization Building
- What is Capacity Capital?
- Uses of Capacity Capital
- Convincing Funders To Provide Capacity Capital
- The Steps to Raising Capacity Capital
- A Case Study in Raising Capacity Capital
- Getting Started
If you want to learn more about the enormous opportunity capacity capital holds for your nonprofit, download the e-book.
A little over a year ago I started introducing tools on the Social Velocity web site to help nonprofits, who might not be able to afford consulting services, grow their programs, create a financing strategy, revamp their board. I am blown away by how popular these tools have become.
I started Social Velocity almost four years ago because I saw a real hole in the nonprofit sector. Small and medium nonprofits working on social change lacked access to expertise and resources to strengthen and grow their solutions. The Teach for Americas of the world were building impressive organizations and replicating their solution far and wide. But they were doing so with the help of deep networks of experts and money. They were the lucky ones.
But there are equally impressive solutions housed in much smaller, less resourced nonprofit organizations that aren’t really seeing the light of day. Because these organizations don’t know how to put a growth plan together, figure out how to finance the impact they want to have, or create a compelling ask for money to build, their solutions are not reaching as far as they could.
Social Velocity exists to help those small and medium-size nonprofits who want to be entrepreneurial, grow their programs, get their board engaged and invested, raise money to build their organization, break out of the starvation cycle.
And there are some nonprofits that are so small or so new that they aren’t ready yet for a customized solution. So our tools are there to help them start creating momentum on their own.
Our Step-by-Step Guides help a nonprofit to:
- Create a theory of change, which is the fundamental backbone of any nonprofit effort to get more strategic and garner more external support.
- Develop a case for support, a clear, well-articulated, compelling argument for why a donor should give to your nonprofit.
- Craft a sustainable financing plan, that lays out how enough, sustainable money will flow through your doors to support your mission.
- Create a business plan for an earned income venture to result in new, unrestricted revenue for your nonprofit.
And the E-books we have developed describe:
- How to move from the exhausting hamster wheel of fundraising to a more strategic, sustainable effort to finance your nonprofit, and
- How to create a groundbreaking board of directors that can strengthen and grow your impact
And our Monthly Webinars describe how to find individual donors, evaluate earned income potential, create a message of impact, raise capacity capital and much more.
You can learn more about all of our tools here.
I’m committed to continuing to expand our inventory of tools so that more nonprofits can strengthen and grow their impact. So I’d love your ideas for other tools you would like to see.
Photo Credit: Andrew Morrell Photography
I’m excited to announce something a little different on the Social Velocity blog: a contest! Mario Morino, author of one of my favorite new books, Leap of Reason: Managing to Outcomes in an Era of Scarcity, has generously offered to give away a Leap of Reason board package to three lucky nonprofit readers of the Social Velocity blog. You can read my past review of the book and why I like it so much here and my past interview with Mario here.
The Leap of Reason board package will include a copy of the book for each board member and other supplemental materials to get the board discussing how to manage toward outcomes. If you would like to be entered into the contest, simply respond in the comments with a brief (1-3 sentence) description of why you think your nonprofit is ready to start managing toward outcomes.
In Leap of Reason, Morino, co-founder of Venture Philanthropy Partners, argues that every nonprofit MUST, if it wants to survive in this new environment of “brutal austerity,” create a culture of performance. Many nonprofit organizations simply exist to “do good work.” But that is just not enough anymore. It’s not enough for those that fund the work, and it’s not enough for those who receive the services. Nonprofits must determine what they exist to change and whether they are actually creating those changes. Mario is ever-mindful, however, that large scale evaluation projects are simply unrealistic for the vast majority of nonprofits. They don’t have the money or time to devote to such projects. He and other experts in the book provide key initial steps and case studies to encourage nonprofits to develop their own ways to manage to outcomes.
So, if you think your nonprofit is ready to start managing to outcomes, and you’d like the Leap of Reason board package to help you along, respond in the comments with a short (1-3 sentence) explanation of why you think your nonprofit is ready.
I will then pick three winners. Each nonprofit winner will receive:
- A Leap of Reason book for each board member
- A Leap of Reason User Guide for each board member
- A Leap of Reason Supplemental Reading Packet for each board member
- A Leap of Reason Board Package Overview (a how-to guide for the executive director or board chair leading this process)
Update on February 21, 2012: The response to this contest was so great that Mario Morino graciously agreed to increase the number of winners to 20. Those 20 nonprofit winners have all been notified with the specifics about how to claim their Leap of Reason board packets. Thank you so much to everyone who participated! And I look forward to future Social Velocity blog contests!
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