nonprofit board of directors
I am amazed by the reaction of some nonprofit leaders when faced with a budget shortfall. Some simply shake their head in innocent confusion, some blame an “inexperienced” development director or a “checked-out” board, and others throw together a knee-jerk fundraising event in order to stem the tide.
But a much better approach, when you don’t have the money your nonprofit needs, is to step back and assess the viability of your nonprofit’s overall money function, which is the topic of today’s installment in the ongoing Financing Not Fundraising series.
If you want greater, more reliable funding for your nonprofit, you must get strategic. And the first step to any real strategy is analysis.
Instead of viewing the money that flows to your nonprofit as a side note, or worse, a completely uncontrollable force, you must view money as a very necessary and integrated function that is just as important as your nonprofit’s programmatic function. And in order to determine how well your money function operates and how to transform it, you must assess it.
A transformative financial model assessment uncovers how all aspects of the organization contribute to or detract from money flowing through the doors. It analyzes the financial impact of 7 areas of the organization, like this:
Does your nonprofit have a long-term strategy that integrates money, programs and operations? Does your strategy help articulate the value your nonprofit provides the community in order to compel outsiders to invest? Does your strategy include measures for whether that value is actually being created?
- Mission and Vision
Does your nonprofit have clear, compelling vision and mission statements? The two statements are not “nice to have” marketing language, rather they articulate the very essence of why your nonprofit exists. Does your vision paint a bold description of the social change you seek? Does your mission describe the day-to-day work towards that vision?
- Board and Staff Leadership
Does your board have the skills, experience and networks necessary to execute on your strategic plan? Are they engaged and invested? Are they actively connecting the organization to people, resources, partnerships? Does your staff have the knowledge and experience necessary to make money flow? And are they structured and managed effectively?
- Program Delivery and Impact
As a nonprofit you have two sets of “customers.” Those you serve (or your “clients”), and those who fund those services (or your “donors”). Without a compelling and effective delivery of services to clients, donors won’t fund those services. Is your nonprofit strategic about which programs to grow and which to cut? Do you measure the effect of your programs on clients? Are your programs financially viable, or are too many of your programs mission-rich, but cash-poor?
- Marketing and Communications
Do you make a compelling case for your work and for support of it? Once you’ve made the case, are you using the right marketing channels (website, social media, events, email, etc.) to attract and engage your target funders, volunteers, advocates, board members and other supporters?
- External Partnerships
In order to move the mission forward and in order to attract funders, volunteers, advocates you must be strategic about building alliances that make sense. Do you have the necessary external relationships to execute on your strategy? Are you constantly working to strengthen or grow the right partnerships in the right ways?
- Financial Model
And only now do we look specifically at money. Because without all the previous elements (thoughtful strategy, compelling vision and mission, strong leadership) money simply will not follow. Does your funding mix fit well with your mission and core competencies? Are there other revenue streams that make sense to pursue? Are there fundraising activities that are actually costly rather than profitable?
When money isn’t working the way you want it to, don’t stick your head in the sand. Wrest the money sword from the beast of chance by taking a hard look at your nonprofit’s money function.
If you want to learn more about the Financial Model Assessment I provide clients, click here. And if you want to learn more about the Financing Not Fundraising approach, download the newest e-book in the Financing Not Fundraising series, Financing Not Fundraising volume 3.
Photo Credit: Pen Waggener
I’ve been working with several clients lately to create a strategic plan, and I love the moment when the real value of the strategic plan and the process of creating one becomes blatantly obvious.
It’s the point at which board, staff, funders start to see the possibility that the plan holds for the nonprofit and the social change they seek. They get really excited about bringing that future to fruition.
But that only happens when you create a really smart, thoughtful strategy — a good strategic plan, instead of a poor one.
Smart nonprofit strategy can completely transform an organization, in at least 5 fundamental ways. It will:
- Create Momentum
It’s not the final plan that energizes people, rather it’s the process of analyzing the external environment in which a nonprofit operates, making some hard decisions about where to focus resources, articulating the value the nonprofit provides, connecting the dots between individual actors and the larger vision. If done well, the work done during the strategic planning process really energizes board and staff. And when they start talking with people outside the organization (funders, volunteers, stakeholders) about the plan, those outsiders become energized too. To really tap into people’s potential you must inspire them to larger heights and help them understand their role in reaching those heights. A great strategic planning process does that.
- Attract Deeper Funding
The difference between a nonprofit just scraping by and a nonprofit with a sustainable future is strategy. If you want to attract larger, longer-term funding, particularly from major donors, you simply must have a future strategy in place. People and organizations that make large gifts to a nonprofit are in effect investing in the future of that organization. And if you can’t articulate your future plans in a thoughtful, compelling way, funders won’t make that larger investment.
- Filter Future Decisions
If you create your strategic plan correctly it becomes a tool for analyzing and making decisions about future opportunities. Most nonprofits are regularly fielding new opportunities (new funding streams, new programs to develop, new alliances to forge), but without an overall strategy it’s difficult to know which opportunities to pursue. A great strategic plan doesn’t tie an organization’s hands, rather it becomes a tool — a lens — through which you can thoughtfully analyze future decisions and make the best moves for your organization. One of my clients uses growth criteria we developed during their strategic planning process to determine when and where to add new sites. These criteria ensure that they are growing in a strategic, not reactive, way.
- Become a Management Tool
When done right, a strategic plan can drive the operations of the organization and the activities of the board and staff. At the board level, you can regularly track progress on the goals and objectives of the strategic plan through a dashboard (like the one at top of this post). At the staff level, you can monitor the activities and deliverables of the plan through an operational plan. An effective strategic plan doesn’t sit on the shelf, but rather is a living, breathing guide to the daily work and decisions of the organization. It’s not a final product, it’s a way of life.
- Realize More Change
At the end of the day you operate your nonprofit in order to address a social issue, to see some sort of change to a social problem. But the only way you will truly create that change is if you have a strategy that puts all of your limited resources (money, staff, board, volunteers) to their highest, best, most focused use. A great strategic planning process forces you to do the analysis, conduct the research, make the hard decisions, and track your progress so that at the end of the day you actually are making a difference.
Honestly, I don’t know how you operate a nonprofit without a strategy in place. In an increasingly competitive, resource-strapped world great strategy is less a luxury and increasingly a necessity.
If you want to learn more about what a strategic planning process looks like, check out my Strategic Planning page.
I’ve recently witnessed some behavior from nonprofit leaders that made my jaw drop:
- A board chairman convinced the rest of his board to turn away a donor who wanted to give the nonprofit a significant amount of money to fund organizational capacity (strategic planning, coaching, fundraising training) because he felt the nonprofit already knew how to do the work internally for free.
- An executive director who was really struggling with wrangling her board and developing a strong financial model bravely asked a close foundation donor for advice and support. When the foundation offered to fund some leadership coaching, the executive director rejected the offer for fear her board would think she didn’t know how to do her job.
- A board charged their nonprofit’s Development Director with increasing revenue in a single year by 30%. When she asked for a donor database to help more effectively recruit new and renew current donors the board said “No” because they felt she should already be able to do that without the aid of new technology.
More often than not it is nonprofit donors who hold back efforts to build stronger, more sustainable nonprofits by not providing enough capacity capital. I talk about that all the time (like here, here and here).
But sometimes, and more shockingly, nonprofit staffs and boards stand in their own way.
It takes courage for a nonprofit leader to admit that she doesn’t know how to do something and needs help. I am reminded of a fascinating interview I heard on NPR earlier this fall with Leah Hager Cohen who recently wrote the book, In Praise of Admitting Ignorance. She describes the freedom that comes from admitting when you simply don’t know how to do something. That moment of honesty can lead to transformation, as she says, “I think those words can be so incredibly liberating…They can just make your shoulders drop with relief. Once you finally own up to what you don’t know, then you can begin to have honest interactions with the people around you.”
I would love to see nonprofit leaders take this advice to heart. Once you have the courage to admit (to your board, to your donors, to your staff) that you don’t know how to do everything, you just might finally get the help you so desperately need.
Nonprofit leaders have been given the Herculean task of: developing and managing effective programs, managing a diverse and underpaid staff, crafting a bold strategic direction, creating a sustainable financial model, wrangling a group of board members with often competing interests, and recruiting and appeasing a disparate donor base. All with little support along the way. It is easy to see why the position of nonprofit leader is such a lonely one.
So instead of continuing to bear that enormous burden, take a step back and admit that you simply don’t know how to do it all. You need help, guidance, advice, support, organization building. If you are lucky enough to have funders, board members or others outside the organization that want to help, admit (to yourself, to your board, to your donors) that you need that help. And don’t let anyone (including, and especially, yourself) stand in your way.
If you’d like to learn more about the leadership coaching I provide nonprofit boards and staff click here, and if you’d like to schedule a time to talk about how I might help move your organization forward, let me know.
Photo Credit: Wikimedia
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.
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.
There is such a hunger in the nonprofit sector for help wrangling the board of directors. Because the board is a disparate group of volunteers, it can often seem impossible to get their attention, let alone get them all pointing in the same, effective direction. This is even more true in fundraising. But if you can get your board members all on the same page, it can transform your nonprofit.
So as we approach the end of the year and the height of nonprofit fundraising I wanted to offer some ways you can get your board more involved, not just for the next couple of weeks, but for years to come.
Here are some strategies to get your board fundraising for your nonprofit:
Start a Game-Changing Board Discussion
One way to plant the seed of change is to engage the board in a thought-provoking discussion. If you’re interested in kicking one off at your next board meeting, ask your board a question like:
- Should the board be responsible for raising 10% of our budget?
- Should we institute a minimum give/get requirement?
- What should the board’s role in our financial engine be?
And if you are uncomfortable starting the discussion yourself, let me do it. Share my video Why Every Board Member Should Fundraise at the meeting and see how board members respond. Be prepared for some disagreement, perhaps even anger and frustration. But I believe it’s far better to get the demons on the table so you can examine them rather than pretending they just don’t exist.
Give the Board Options
If you have board members that are scared of fundraising, or that hate to ask people for money, there are plenty of other things they can do to help. I believe there is an endless list of ways board members can contribute to the financial engine of the organization, from writing a business plan, to negotiating with a vendor, to hosting a friend raiser, and the list goes on. If you want to help your board think outside the fundraising box, these lists (here and here) of ways board members can raise money (without fundraising) can help.
Educate the Board on Fundraising
Often a board’s inertia comes from a lack of knowledge. Very few people know how to fundraise effectively. So remove that barrier by educating your board about how money flows in the nonprofit sector, how other boards raise money, how to ask for money, etc. The Getting Your Board to Raise Money webinar, the Finding Individual Donors webinar, and the 10 Traits of a Groundbreaking Board e-book can all be useful tools to help your board understand how things work and how they can be more helpful to the financial sustainability of the nonprofit they serve.
Involve the Board in Making the Case
You can’t expect the board to raise money if they can’t make a compelling argument for why people should give. And you can’t just hand board members a brochure and expect them to effectively articulate the message. If you really want to get your board excited about raising money for your cause, involve them in making a case for investment. Bring them together as a group to ask and answer a series of questions about why people should give to your nonprofit, what your organization is working towards, why it matters, and so on. The Draft a Case for Investment Step-by-Step Guide will give you the framework to use. At the end of the exercise you will have not only a compelling case to make to prospective donors, but, more importantly, an army of board members excited about making that case.
It is an unfortunate reality that almost every nonprofit leader faces. Boards of directors, as a rule, are not effective fundraisers. But you can move beyond that by getting your board to talk, think and act differently about bringing money in the door.
Photo Credit: Wikimedia Commons
There are some exciting things happening at Social Velocity. I have spent the last several months revising and expanding the e-books, webinars, and step-by-step guides I offer nonprofit leaders in the Tools store of the website. These Tools help nonprofit leaders, board members and donors understand the trends facing the nonprofit sector and how to become more strategic and sustainable at creating social change.
And we are moving to a brand new shopping cart system to make the purchase and download of the Tools much easier for you, with additional payment options, a streamlined process and more. I will reveal the brand new Tools store in the next week or so.
But if you want to hear about the launch of the new Tools store first (and enjoy a discount on Tools purchases) sign up now for the Social Velocity e-newsletter. Prior to the official launch of the new Tools store, we will send all subscribers an early bird announcement and discount code to use.
And, as an added bonus, if you sign up for the Social Velocity e-newsletter now you can immediately download the revised and expanded Financing Not Fundraising, volume 1 E-book (a $9 value) for free. Here’s what one reader of the e-book had to say about it:
“I felt a lot of affirmation when I read your e-book as I too believe fundraising as we knew it is history and sometimes that is hard for the board to understand and accept. Your series was incredibly powerful for me and will have a huge impact on us. I think your e-book will give [board and staff] some confidence to make tough decisions. On lots of different levels your e-book was exactly what I think we need right now.”
So if you haven’t already, sign up now for the Social Velocity e-newsletter.
And stay tuned for our new and improved Tools store coming soon!
I mentioned earlier this year that I would start using Google Hangouts (on the Social Velocity Google+ page) for interviews, videos, Q&As, etc. Well, I’m excited to share with you my first video from the Social Velocity Google+ page. I want to begin doing regular videos that describe an aspect of moving your nonprofit forward. And next week I’ll share my first video interview.
Today, I’m talking about why I think every single nonprofit board member should be involved in bringing money in the door. I know this is a controversial topic, so take a look at why I believe it so strongly.
My hope is that these videos will spur new discussion in your nonprofit. So, you might consider having your board watch this video at an upcoming meeting and then discussing whether your board starts moving in this direction. If nothing else, it’s food for thought.
If you have a topic, issue or question you’d like me to cover in an upcoming short video, let me know in the comments below. And if you want to be notified whenever there is a new Google Hangout, join the Social Velocity Google+ page.
- Download a free Financing
Not Fundraising e-book
when you sign up for email
updates from Social Velocity.
Sign Up Here
- Do You Want to Find
for Your Nonprofit?
Make it happen with the
Develop a Financial Model