financial sustainability for nonprofits
Especially in challenging economic times like these it is critical for nonprofits to have a solid, well-thought out plan for bringing money in the door. But many organizations either don’t have a comprehensive fundraising plan, or they aren’t sure whether the plan they have is really going to effectively result in enough dollars.
In our on-going effort to provide tools to help nonprofits grow their impact and become more financially sustainable, we are releasing today a new Social Velocity step-by-step guide: Creating a Financing Plan. This step-by-step guide, like our other step-by-step guides, walks you through a process for creating a stronger, more effective organization. With this guide you will be able to create a strategy for strengthen and growing the revenue that flows to your organization.
We are committed to creating tools that are useful to nonprofits, so check out the ever-expanding Tools page of our website. Some of our others tools include:
- Step-by-step guides to creating a case for investment, a theory of change, a business plan, and a major donor campaign
- Monthly webinars on getting your board to fundraise, creating an overall financing plan, launching an earned income stream, overcoming founder’s syndrome, and much more
- E-books on financing not fundraising, raising capacity capital, and creating a ground-breaking board
As always, let us know what you think of our tools, or what additional tools you would like to see, either in the comments below, on our Facebook page, via Twitter, or email us at firstname.lastname@example.org.
Photo Credit: hans s
If this recession has any silver lining it could be that it’s forcing nonprofits to completely re-evaluate how they use money. There is a tendency in the sector to shy away from, ignore, fear or dismiss money. But when there is less of it, you are forced to learn how to use it more effectively.
And it is up to the board, who has a legally-defined fiduciary duty, to step up to the plate and provide a strategy for how money is used. But because boards are such a bizarre mingling of volunteer strangers it can be difficult for the group as a whole to take a leadership role, especially in the taboo area of money. The solution lies in encouraging a single individual board member to rise up.
Several recent articles have illustrated the need for nonprofit boards to become better financial managers. From Jan Masaoka’s (Blue Avocado) call for boards to use a budget more strategically, to Rick Moyer’s argument in the Chronicle of Philanthropy that boards need to find “crystal clarity about their financial situations,” to Bob Carlson’s warning that poor nonprofit financial management can end up with legal nightmares.
But what all of these articles fail to address is that boards are ineffective fiscal managers largely because of their group dynamics. Countless times have I seen a nonprofit board of directors suffer from group think, head off in tangents, or avoid difficult conversations.
The opportunity lies in getting a single board member to play a leadership role. A nonprofit’s executive director can be instrumental in encouraging this coup d’etat by finding an individual board member who:
- Is passionate about the cause and the organization
- Has the respect of the majority of the other board members
- Understands, or is willing to be educated about, the basics of financial management
- Is confident enough not to be easily dismissed or swayed
And what does it look like when an individual board member takes a stand to move the board towards better financial management?
- Interrupting the annual rubber-stamping budget approval meeting to ask how the budget fully finances the overall strategic plan of the organization
- Asking for, and ensuring creation of, monthly financial statements that are understandable
- Ensuring basic nonprofit financial management training for board and key staff so everyone speaks the same language and understands the key ratios they should be analyzing
- Standing up to board members and staff who dismiss or discourage deeper conversations about how the nonprofit budgets, uses financial vehicles, handles financial reporting
- Interjecting, cajoling, persuading, and inspiring fellow board members to USE money to strengthen the work of the organization
As David Bornstein said, social change is often driven by “one obsessive individual who sees a problem and envisions a new solution.” So, too, in the world of the sometimes intractable nonprofit board. It may require a single board member to stand up and demand that financial business as usual doesn’t work anymore. If it takes a recession to make money a true tool for social change, so be it.
Photo Credit: faungg
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