It’s no secret that nonprofits struggle with money. In fact, the Nonprofit Finance Fund’s most recent State of the Nonprofit Sector Survey found that 41% of nonprofit respondents ran a deficit in 2012. If we really want to rewrite this rule for the nonprofit sector, we need to make some pretty big changes.
So here’s a radical idea.
What if every nonprofit board were responsible for bringing in 10% of their nonprofit’s annual operating budget?
That means that if your nonprofit’s budget is $1 million, your board would be responsible for raising $100,000 each year. They could do that through a combination of give/get activities, meaning they could all write personal checks (at whatever level makes sense for them individually) and then use their unique skills, experience and networks to raise the remaining amount.
That’s a crazy idea, right?
I don’t think so. Here’s why.
The Board Must Really Understand the Money Engine
A board of directors simply cannot separate themselves from the financial engine of their nonprofit. The entire board must fully understand and contribute to how money flows to the organization. They cannot argue that money is the purview of the staff; money HAS to be part of the board’s job. Until we make the board really participate in making the financial engine run, they won’t be able to have substantive conversations about how to raise or spend that money.
The Board Must Share the Burden
I’m so tired of silly, small board fundraising goals. Does a 15 member board that brings in only $15,000 out of a $1 million budget really make a difference? Absolutely not. That’s pennies. If they are truly going to lead the nonprofit that they serve, they must share the financial burden. Ten percent of the operating budget starts to make a significant dent, so let’s start there.
The Board Must Tap Into Their Unique Assets
I am not suggesting that we force every board member to ask individuals for money. Far from it. Rather, I’m arguing that nonprofits start getting really strategic about tapping into each individual board member’s strengths and assets in order to make a bold fundraising goal a reality.
But you can’t just turn to the board and tell them to bring 10% in the door. Some things are going to have to dramatically change in order to make 10% a reality.
Here’s what you have to do:
- Work one-on-one with each individual board member to create an annual plan for how they will meet their part of the goal.
- Give the board lots of different ideas for how they can meet their goal.
- Provide the training, materials, and education they need to execute on that individual plan.
- Hold each individual board member accountable for their individual plans and goals, check in with them every month to see how they are progressing.
- Have the board report at every meeting about their progress on the 10% goal.
If we really want to see a shift in how the nonprofit sector is funded, we need to make some pretty radical changes to business as usual. So start to entertain the idea. What would it look like if your board brought in 10% of your annual budget?
If you want help transforming your board, check out the Board Engagement consulting services I provide.
Photo Credit: Richard Matthews
But it’s time to move beyond that. I’m starting a new series today about the many different forms of Nonprofit Fear and how to move the sector beyond them.
Because there are many:
- Fear of making an investment
- Fear of change
- Fear of losing a donor
- Fear of being honest
- Fear of money
- Fear of competition
…and the list goes on. Because these fears are so crippling and have the potential to really hold nonprofits back, I want to unpack each one in order to start a conversation about how we move past them.
So today, let’s discuss one of the most crippling, which is the fear of making an investment.
Most nonprofits live hand-to-mouth. They exist in a hamster wheel of raising just enough money to keep going. But if they took a step back, marshaled their resources and made an investment in real transformation they could break free from that hamster wheel.
Nonprofits come to me with a long list of woes: we don’t have enough money, our board isn’t doing anything, our funders are worn out, we can’t meet client needs, we are just getting by, we are worn out. They desperately want to break out of this endless cycle of not having enough and not being able to do enough. I explain that in order to make a significant change, in order to break free from this beast, in order to really transform business as usual, they must make an investment.
Not just an investment in help, but an investment of time, energy, and mind share. They need to rally their board, staff, funders, and advocates around a transformation plan. They need to be willing to take a risk and make an investment in a new way.
Some nonprofits decide that the risk is too great. That instead of overcoming their fear of investment they would rather pull back and continue on as usual. They may still cobble together a strategic plan, or write up a new board recruitment policy, or put together a fundraising plan, but nothing has really changed. They are still thinking and operating in the way they always have.
But the nonprofits that I do work with decide to take that first step. They decide to put a stake in the ground and chart a new direction for their organization. They release the status quo and instead make an investment in their future, a better future for their organization and the community change they seek. They are willing to ask hard questions, to make hard decisions, to take risks, to try a new approach.
Instead of shrinking from the opportunity, they stand up and say “enough is enough.” They decide that in order to achieve the vision that sparked their organization’s beginning long ago, they must make an investment in their future.
Photo Credit: briandeadly
Last week I spoke to a group of nonprofit leaders about 5 Nonprofits Trends to Watch in 2013 and a woman stood up and said “These trends are all well and good, but we need to talk about the fact that the money just isn’t there anymore. We are having to compete with more organizations for much less available funding. We need solutions to that.”
Agreed — fewer resources and more competition for those shrinking resources is the reality we are facing. But it’s not going to change anytime soon. So it is up to nonprofit leaders to embrace and adapt to that new reality. Instead of beating our heads against the wall of change, let’s adapt to meet it.
In fact, it is time for a new kind of nonprofit leader, one who has the confidence, ability, foresight, energy, and strength of will to really lead the nonprofit sector forward.
This new nonprofit leader:
Moves to Impact. She realizes that it is no longer enough to just “do good work.” Nonprofits must create a theory of change and then find a way to measure and articulate the outcomes and impact they hope they are achieving.
Finances the Work. He works toward completely integrating money into the mission his nonprofit is trying to achieve, understanding that big plans are not enough, he also must finance them. And beyond just recognizing his lack of infrastructure, he puts together a plan for raising capacity capital and convinces donors to start investing in a stronger, more effective organization behind the work.
Refuses to Play Nice. She overcomes the nonprofit norm of politeness at all costs and gets real with funders, board members, or staff who are standing in the way of the mission and impact of the organization.
Looks Outside. He understands that a nonprofit can no longer exist in a vacuum. He and his board and staff must constantly monitor the external marketplace of changing client needs, demographic and economic trends, funder interests in order make sure their nonprofit continues to create community value.
Gets Social. She embraces the idea of a networked nonprofit and is willing and able to open her organization and let the world in as fully engaged partners in the work her nonprofit is doing.
Asks Hard Questions. He constantly forces himself, and his high-performing team of board, staff, funders and volunteers to ask hard questions (like these and these) in order to make sure they are pushing themselves harder, making the best use of resources and delivering more results.
This new nonprofit leader is confident, engaged, and savvy. She will, I have no doubt, lead this great nonprofit sector to new heights.
If you need help figuring out how to adapt to this new reality, let me know.
Photo Credit: John Morton
As 2012 winds down I wanted to take a minute to thank you, the Social Velocity community, for an amazing year. You are an incredibly smart, innovative, inspiring group, and I’m honored that you take time to read, comment and engage with the Social Velocity blog.
As I did last year around this time, 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. Then I’m taking a break from the blog until January, but I’ll be scheduling some archive posts while I’m out of the office.
I wish you all a fun and relaxing holiday season. I look forward to another year of interacting with the great Social Velocity community in 2013. Happy Holidays!
The 10 most popular Social Velocity blog posts of 2012 were:
- 9 Ways Board Members Can Raise Money Without Fundraising
- Why I Love Pinterest and Nonprofits Should Too
- Jump Start Your Board
- Tools to Build a Stronger Nonprofit Sector
- How to Raise Money To Strengthen Your Nonprofit
- How to Rebut Crazy Donor Demands
- Connect Money to Your Strategic Plan
- 4 Times When a Nonprofit Needs a Strategic Plan
- 10 Traits of a Groundbreaking Nonprofit Board
- 7 Mistakes in Your Nonprofit’s Fundraising Plan
Photo Credit: ccpixel.net
I’m delighted to unveil the Social Velocity Fall Webinar Lineup. I received an amazing response to my call for webinar ideas last month with lots of really great ideas. Thanks so much to everyone who submitted an idea. Four lucky winners had their ideas chosen and will be receiving a free registration to the webinar they suggested.
Below is the lineup for this Fall. In addition to continuing to add to the Financing Not Fundraising webinar series, we are also adding other nonprofit management webinar topics. These include “Moving Beyond Your Nonprofit’s Founder” about overcoming founder’s syndrome and creating a succession plan for your organization, and “Leading Difficult Conversations with Funders, Board Members and Employees” that will help you be more assertive in telling people what they need to hear.
And remember if you can’t make the date or time of a live webinar, all of our webinars are available 24-7 as recorded webinars. So you can still sign up and get everything you would get if you could be there live. Similarly, don’t forget to check out our library of past webinars. You can see the entire list of upcoming and past webinars here.
When you register for a live or recorded webinar, you will receive:
- Access to the live, interactive webinar (live webinars)
- A link to a recording of the webinar, which you can watch as many times as you like
- The PowerPoint slides from the webinar
- The ability to ask additional follow-up questions after the webinar (recorded webinars)
And we are constantly adding new webinars to the list. If you have a new webinar idea email us at email@example.com.
Key to any smart nonprofit financing strategy is an analytical approach to focusing on your most profitable activities. To do this, you must know how to calculate the cost of fundraising for every revenue-generating activity your organization engages in. This webinar will help you:
- Calculate the return on investment of all your revenue-generating activities
- Give you the net revenue raised and cost to raise a dollar formulas you need
- Analyze which are effective fundraising activities and which are not
- Articulate to board and staff why this analysis is important
- Provide case studies of other nonprofit ROI calculations
- Give you a process for analyzing and categorizing all of your fundraising activities
Moving Beyond A Nonprofit’s Founder
Founder’s syndrome is a real problem in the nonprofit sector. It happens when the organization’s founder, or a leader who has been there for a long time, becomes the sole decision-maker. And even if a nonprofit isn’t suffering from founder’s syndrome, they likely don’t have a succession plan in place for what happens if or when their leader leaves. The lack of a succession plan or an over-reliance on a founder puts an nonprofit’s future at great risk. Nonprofits must learn how to vest leadership not in one person but in the broader organization. This webinar will help nonprofits to:
- Determine if they are suffering from founder’s syndrome
- Move organization leadership from one person to a more sustainable, diversified leadership model
- Create an effective succession plan
- Communicate the plan to funders and other external stakeholders
- Integrate your succession plan into your strategic plan
Financing Not Fundraising: Creating a Financing Plan
If you want to move your nonprofit from the exhausting hamster wheel of fundraising to a sustainable financing model, you need a financing plan to get there. This webinar will help you create an overall financing plan to bring enough money in the door to achieve your mission, including:
- All revenue streams flowing to the organization
- A strategy for funding programs and operations
- Opportunities to raise money for infrastructure
- Tactical steps with activities, deliverables, people responsible
- How to divide tasks by staff and board members
- Ways to monitor the plan going forward
Let’s face it, leading a nonprofit organization can be a very lonely, thankless job. And it often involves really hard conversations like telling a funder you can’t launch that new program, asking a board member to resign, correcting or firing an employee. But in an increasingly resource-strapped environment, your job demands more of these hard conversations. This very interactive webinar will give you tools to respond in these tricky situations. Participants can submit scenarios ahead of time, as well as during the webinar itself. Learn how to approach sticky situations in an assertive, graceful way, while positioning your organization to thrive. This webinar will give you:
- Concrete language to use with funders, board members, staff and others
- Case studies and examples of difficult situations
- A process for thinking through future scenarios and focusing on what’s best for your nonprofit
- A forum for putting your toughest situations to the test
- The opportunity to hear what challenges other nonprofit leaders face
This webinar builds on the earlier Financing Not Fundraising: Evaluating Earned Income webinar. It is intended for those nonprofits that have a business idea and are ready to pursue an earned income stream. This webinar, complete with case studies of other nonprofits that have launched earned income businesses, will show participants how to:
- Pilot a new business idea
- Find customers
- Price products/services
- Project future business income and expenses
- Create goals for the business and monitor progress on them
- Report progress on the business to the board
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
As summer winds down, I’m starting to plan the fall lineup of Social Velocity webinars, but I need your help. I started offering monthly webinars a little over a year ago and have been amazed by their popularity. Several of the webinars sold out and had to be repeated. And all of our past webinars are available 24-7 as recorded webinars (you can see the whole list here).
And here’s where you come in. I need your help determining the content for the next round of webinars. What problems or issues do you struggle with? What would you love to learn more about? What challenges you in the worlds of raising money, strategic planning, board development, business planning, donor management, social innovation, philanthropy? What do you need direction on? I’d love to hear your ideas.
And just to show you how much I appreciate your input, I’ll award a free registration to anyone who submits an idea that turns into a Social Velocity webinar.
So send your webinar ideas to firstname.lastname@example.org with the subject line, “Webinar Idea.” And if we turn your idea into a webinar, you will attend for free. I can’t wait to hear your ideas!
And in the meantime, be sure to check out the Getting Your Board to Raise Money webinar:
Financing Not Fundraising: Getting Your Board to Raise Money
Wednesday, May 22, 2013. 12 noon – 1pm EST
Here’s what some previous attendees had to say about this webinar:
“The webinar was very concrete and actionable – gave specific suggestions regarding engaging board members. This was very useful. Well done.”
“This really opened my eyes to new possibilities – thank you so much!”
This webinar will give you tactical steps for how to:
- Set up a structure for effective board involvement in fundraising
- Get every board member raising money
- Create a compelling fundraising message for board to deliver
- Develop a system for moving prospects to donors
- Give every board member a job
- Overcome board fear and inertia
Photo Credit: urbanshoregirl
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
- The Nonprofit Sector and the
Philanthropy That Funds It Are
Find Out How to Keep Up
in our June 25th
Embracing the Future of the
Nonprofit Sector Webinar