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What Kind of Nonprofit Leader Are You?

nonprofit leaderAs the year draws to a close, and you (I hope) make time to relax, reconnect with friends and family, and reacquaint yourselves with some much-needed quiet, you may also want to reflect on your role as a social change leader. Effective leadership is really, really hard work, but it is also incredibly necessary and needed.

So if you find time over the next few weeks to take a look at your role as social change leader and you want some help along the way, download the Reinventing the Nonprofit Leader book.

Here is an excerpt:

Chapter 3: Refuse to Play Nice

As a by-product of the charity mindset, nonprofit leaders often suffer from being too nice. The thing I love most about nonprofit leaders is that, for the most part, they are truly good, decent people. They are trying to make the world a better place, so by definition they are considerate of others. But sometimes you can take being nice too far. Being nice to the donor who leads your nonprofit the wrong way, or the staff member who is not performing may work for the individual relationship, but is detrimental to the larger organization and ultimately your mission.

Indeed, according to a 2010 study by researchers at Stanford University, nonprofits are perceived as “warm, generous and caring organizations, but lacking the competence to produce high-quality goods or services and run financially sound businesses.” In other words, we think nonprofit leaders are nice — but not competent.

But this reality is often imposed on nonprofit leaders. Nonprofit leaders are encouraged to collaborate instead of compete, hold onto under-performing staff, accept martyr-like salaries, smile and nod when funders push them in tangential directions, and keep quiet when government programs require the same services at a lower price.

This demand that the nonprofit sector play “nice” is the result of (at least) three aspects to the sector:

  1. A Focus on the Social. The sector exists to address and (hopefully) solve social problems. Thus, by definition, it is socially oriented and has an inclusive, consensus-based approach to doing business.

  2. More Customers. Nonprofits have two customer groups, as opposed to the single customer for-profits have: 1) those who benefit from the services a nonprofit provides (clients) and 2) those who pay for those services (funders).

  3. Multiple Players. In addition to their customer groups, nonprofit leaders must corral their board of directors, which often includes individuals with competing interests, and external decision-makers (policy makers, advocates, leaders of collaborating organizations) who have an impact on the change the nonprofit seeks. The end result is that multiple players must somehow be brought together and led in a common direction.

But in order to work toward real solutions and get out from under consensus-based mediocrity, you need to break free from the niceness trap. Rest assured, I am not asking you to get mean and ugly. But there is a way to politely, but assertively, make sure you get what you need to succeed.

In other words, the reinvented nonprofit leader needs to:

  • Say “No” to funders who demand new programs or changes to programs that detract from your nonprofit’s theory of change and your core competencies.

  • Diversify revenue streams so that you are not beholden to any one funder or funding stream.

  • Demand that board members invest significant time and money in your nonprofit, or get out.

  • Fire under-performing staff. This is such a taboo in the sector, but with limited resources and mounting social problems to be addressed, we do not have time to invest in people who cannot deliver.

  • Be brutally honest with funders and board members about the true costs of running operations effectively and stop apologizing for, or hiding, administrative expenses.

  • Create a bold strategic plan that will drive your nonprofit toward social impact and sustainability, not mediocrity.

  • Make an honest assessment of your nonprofit’s core competencies, competitors and consumers so that you understand and can articulate where you fit in the marketplace — and act accordingly.

  • Stop waiting for your board chair, or a big donor, or a government official to allow you to do something that you know is the right way forward.

  • Refusing to play nice is not easy. And it often culminates in a difficult conversation, perhaps with an underperforming staff member, an ineffective board member, or a time-consuming funder.

In order to manage these difficult conversations for success, you need to approach them in a thoughtful and strategic way. Here are the steps…

To read more, download the Reinventing the Nonprofit Leader book. Or you can download the on-demand Reinventing the Nonprofit Leader webinar.

Photo Credit: Satish Krishnamurthy

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How to Create Capacity Builders on Your Board

Nonprofit capacitySomething really interesting happened the other day to an executive director I know.

A couple of board members approached her to ask what she needed to continue to move forward. They wanted her to be blunt about the obstacles in her way. She was equally honest, telling them she could really benefit from leadership coaching on how to manage a staff, grow an organization, continue to develop the board, build financial sustainability. The board didn’t bat an eye. They told her to figure out how much it would cost so they could foot the bill.

How amazing is that?

A group of board members not only recognized that their executive director might have challenges that she wasn’t expressing, but also listened to those challenges and invested in their solutions. What a dream scenario!

How great would it be if more board members, and even some donors, did that?

There is some hope. A small subset of funders are recognizing and investing in the tremendous need for leadership development in the nonprofit sector.

But a nonprofit leader who is really struggling doesn’t have the luxury of waiting for her board (or donors) to wise up and ask her about the challenges she is facing. So in lieu of a truly enlightened board of directors, here is what you can do to encourage your board (and close donors) to become capacity builders:

Identify a Few Allies
As executive director you probably have at least one or two board members, and perhaps a couple of donors, who are very supportive of what you do. They strongly believe in the work of your organization and your ability to effectively lead that work. Meet with them one-on-one to discuss the challenges you are facing – not in order to vent your frustrations, but rather to explore proactive solutions.

Describe the Capacity Challenges
Really analyze what is holding you and your organization back. Where do you struggle? Why are you hitting your head against the wall? Describe in an honest (but not whining) way the capacity constraints (lack of adequate staff, effective technology, long-term planning, verified program results) and how those issues keep you from delivering more social change.

Quantify the Capacity Building Solutions
Figure out what it would take to clear those hurdles. How much would a Development Director cost? Or an evaluation program? Or a strategic plan? Then break those costs into investable amounts. A single board member or donor may not be able to fully fund a $50,000 evaluation program or a $75,000 Development Director. But if 3-5 board members made their own investments and then identified a couple of other people who could also invest, you would quickly get there. Show your allies how achievable, with their (capacity capital) support,  the solution is.

Create Champions in the Cause
But don’t let them off the hook when they write that check. Enlist their help in convincing others inside and outside the organization why you need to invest in capacity building. Have them articulate to others how important this next step is and the potential return on investment to the organization, and the social change you all seek. Create an army of champions who will advocate for your capacity building cause.

The challenges you face as a nonprofit leader are very real. But they won’t get any better unless you become proactive. Find partners among your board and donors to help you remove those obstacles standing in your way.

If you want to learn more about the leadership coaching I provide nonprofit leaders, click here, and if you want to learn more about raising capacity capital, download the Launch a Capacity Capital Campaign guide.

Photo Credit: Paul Keheler

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What Nonprofits Really Need From Their Donors [Video]

My hope in creating the growing library of Social Velocity videos is that nonprofit leaders will use the topics as a jumping off point for honest discussions with boards and donors. It can often be intimidating for a nonprofit leader to raise a controversial question like:

A nonprofit leader could set aside 30 minutes in a board meeting agenda for a discussion kicked off by a 2-minute video. Play a video, and then simply ask “What do you think?” Or you could show a video to a donor when you meet and ask for their opinion.

Some will disagree vehemently with what I have to say, but others might agree, or at least be open to thinking in new ways. An interesting, thought-provoking conversation might ensue. From that discussion you might start to plant seeds for change.

So to add to the library of conversation starters, today I offer this video on What Nonprofits Really Need From Their Donors.  And if you want to see other videos in the series go to the Social Velocity YouTube channel. Good luck!

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How to Fundraise for a Stronger Nonprofit [Slideshare]

In order to add to the growing Social Velocity Slideshare library, I’m delighted today to offer How to Fundraise for a Stronger Nonprofit.

If you want to get your nonprofit out of the (all too common) starvation cycle of never having enough money to achieve your goals, you must raise capacity capital. Capacity capital is not the day-to-day revenue you need to keep your doors open. Rather, capacity capital is a one-time infusion of significant money that can help you grow or strengthen your nonprofit. It is money for things like: technology, revenue-generating staff, systems, a program evaluation.

This Slideshare helps you understand capacity capital and how to raise it. And if you want some additional guidance for launching your own capacity capital campaign, download the Launch a Capacity Capital Campaign Step-by-Step Guide.

You can see the growing library of Social Velocity Slideshare presentations here.

How to Fundraise for a Stronger Nonprofit from Nell Edgington
Photo Credit: 401kcalculator.org

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Why Do Nonprofit Leaders Get in Their Own Way?

men hurdlesCan we talk about crazy for a minute?

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

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New Tools to Build Your Nonprofit

Build an Engaged Nonprofit BoardA couple of years ago I recognized that there was a real need in the nonprofit sector for tools to help nonprofit staffs, board members and donors make their organizations more strategic and sustainable.

So I began developing e-books, guides and webinars to explain new concepts (like Financing Not Fundraising), demonstrate how to use new models (like a theory of change) and guide nonprofit leaders to a better way (like better engaging their board).

Today, I am really excited to announce, as promised, the launch of the expanded and streamlined Tools store at Social Velocity.

I have spent the last several months revising and expanding many of the e-books, step-by-step guides and on-demand webinars available for download at the Social Velocity Tools page. And we’ve completely revamped the shopping cart experience to make it easier to find the tools you need and to offer additional payment options.

There are four categories of Tools available to you.

  1. On-Demand Webinars
    These can be viewed whenever and however many times you’d like. Some of the webinar topics include:

    How to Build a Fundraising Board
    Creating a Message of Impact
    Finding Individual Donors

  2. Step-by-Step Guides
    These take a complex concept (like a theory of change) and show you step-by-step how to create one for your organization and how to use it to garner more support, chart a strategic direction, and much more. Some of the Step-by-Step Guides include:

    Design a Theory of Change
    Craft a Case for Investment
    Build a Nonprofit Financing Plan

  3. E-books
    These explain new approaches, the theory behind them, and how to start implementing a changed approach in your nonprofit. Like the:

    Financing Not Fundraising, vol 1
    Financing Not Fundraising, vol 2
    Ten Traits of a Groundbreaking Board

  4. Tool Bundles
    I’m most excited about these bundles where I’ve grouped e-books, webinars and guides around a particular goal a nonprofit leader wants to achieve, saving you 15% off the individual tool prices. For example:

    Attract More Donors Bundle
    Build an Engaged Board Bundle
    Raise Capacity Capital Bundle

But there are many more e-books, guides, webinars, and bundles available on the Tools page, so I invite you to check it out.

I hope these Tools are helpful to you as you work to move your nonprofit forward. Please let me know if you have questions as you explore.

And as always, please let me know what other tools would be helpful to you.

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A Monster List of Social Innovation Conferences

A Monster List of Nonprofit ResourcesToday is Halloween, which, in my world, means that beyond candy, and trick or treating, and pumpkins it’s time for my annual “Monster List of Resources.” A few years ago I started the tradition of offering a list of resources for nonprofit leaders on Halloween (you can see past lists here and here). Each list is culled from the much larger, constantly evolving list of conferences, organizations, articles, books, blogs, and reports on the Social Velocity Resources Page.

This year I want to focus on the ever-growing number of conferences in the social innovation space. I’m really excited by how many really interesting gatherings are occurring.

But what did I miss? Please add to the list in the comments below. And don’t forget to check out (and add to) the much larger list of resources here.

Happy Halloween!

Social Innovation Conferences

Photo Credit: Wikipedia

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Financing Not Fundraising: 5 Taboos Nonprofits Must Get Over

5 Nonprofit TaboosYep, it’s true, the nonprofit sector doesn’t have enough money. There are lots of reasons for that, but part of it stems from the taboos the nonprofit sector (and the staffs, boards and donors within it) perpetuates. But perhaps if we lay them bare, we can start to break free from them, which is the topic of today’s installment of the ongoing Financing Not Fundraising blog series.

If you are new to this series, the idea is that nonprofit fundraising is broken. Instead of continuing to hit their heads against the fundraising brick wall, nonprofit leaders must take a strategic approach to financing their work. You can read the entire Financing Not Fundraising blog series here.

Nonprofit taboos are so insidious because they are unwritten and unquestioned. But that has to stop. If we want to move the nonprofit sector forward, we must uncover certain taboos and determine whether they are really unacceptable anymore.

Here are the five most egregious taboos in the nonprofit sector:

  1. Nonprofits Shouldn’t Raise a Surplus
    For some reason it is unseemly for a nonprofit to have more money than they immediately need. If a nonprofit is not just barely breaking even, it is somehow unworthy of raising more money. To the contrary, a nonprofit that has operating reserves can invest in a more sustainable organization, conduct R&D to make sure their solution is the best one, recruit a highly competent staff, and weather economic fluctuations. It is far better to invest in an organization that is well poised to attack a social problem than one that is barely able to keep the lights on.

  2. Nonprofits Shouldn’t Pay Market Rate Salaries
    I won’t join the crazy controversy that surrounds nonprofit executive salary levels, but let me simply point out that nonprofits exist within a market economy, that is a fact. If someone is great at what they do, and they can make more money elsewhere, eventually they will do so. It is simple economics.  I understand that mission is a driving force for people attracted to the nonprofit sector, but as competition in the social change space continues to grow, the best and brightest will be lured away by other nonprofits, government entities, or for-profit social enterprises. So if you want to attract and retain a really talented employee, you’ve got to pay them accordingly.

  3. Nonprofits Shouldn’t Demand Board Members Fundraise
    Why not? Seriously, I don’t get this one at all. If your governing body is free to make strategic and programmatic decisions without understanding, first hand, the financial implications of those decisions, you are setting your nonprofit up for failure. Mission and money must be strategically aligned, and the first and most important place that alignment occurs is at the board level. There are plenty of ways for board members to get involved in the financial engine of their nonprofit. Let’s stop apologizing for having to make money in the nonprofit sector and start requiring every single board member get actively involved in the process.

  4. Nonprofits Shouldn’t Question Donors
    Donors hold the purse strings so nonprofit leaders are unwilling to tell them how it really is. But if the sector continues to act like a grateful recipient of a wealthy person’s or institution’s largesse, that power imbalance will continue, as will the dysfunctions that accompany it. If instead nonprofits and funders were equal partners working together to solve a problem, maybe we could get somewhere. But this will only happen if nonprofit leaders become more confident at telling their donors (and board members) how it really is. And if nonprofit leaders are more strategic about diversifying their financial model so they are no longer beholden to a few funders.

  5. Nonprofits Shouldn’t Invest in Fundraising
    In the nonprofit world the fundraising function is equivalent to the sales and marketing function of the business world. No one expects Apple to create amazing gadgets and then sit back and hope people show up and buy them. They have an extensive and well-financed marketing and sales function. But nonprofits are expected to spend as little as humanly possible on fundraising. Added to that, nonprofits are even more challenged because they have two, not just one, set of customers: 1) the clients they serve who often can’t pay for services, and 2) the funders who pay for those services. So we are telling nonprofits to recruit and serve two sets of customers on a shoestring. That’s crazy. We have to get over the idea that investing in fundraising (high quality staff, technology, expertise, planning, marketing) is a bad thing.

At the end of the day, we have to stop apologizing for the realities of the nonprofit sector. It’s time nonprofit leaders stand up and start demanding the end to some serious strictures that hold them back from doing their jobs. And, let’s remember, those jobs are to solve some of the most complex problems facing our communities. Those jobs are probably more easily and effectively done in the absence of crazy taboos.

If you want to learn more about moving your nonprofit from fundraising to financing, check out the Financing Not Fundraising page.

Photo Credit: wheat_in_your_hair

 

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