One of the biggest complaints I hear from nonprofit leaders is that their board is not working well enough for them — most often around fundraising. From board members who are largely in name only, to others who refuse to fundraise, to those who meddle or micromanage, to those who don’t understand the organization or its programs, there can be a large list of grievances that nonprofit leaders have about their board. So nonprofit leaders often look for a magic bullet to get their board in gear.
Just last week a nonprofit leader approached me seeking help getting her board engaged. She thought that if she hired a consultant to rewrite their board by-laws and rework the board committee structure, all would be well.
But it just isn’t that simple.
An ineffective board is often just a symptom of a larger problem at your nonprofit. And while nonprofit boards can be incredibly frustrating, it is often not their fault that they aren’t working harder for you.
If you are frustrated with your board, ask these questions to uncover the larger issues at play:
Do We Have a Compelling Case?
You simply cannot get people excited to help further your nonprofit’s cause if they don’t fully understand and embrace that cause. Have you had a conversation with your board about why your nonprofit does the work it does? Have you articulated together your nonprofit’s Theory of Change? Have you involved your board in creating your nonprofit’s Case for Investment? It surprises me how often I see nonprofit leaders leaving these critical and investing conversations at the staff level. The number one way to get your board excited about your work is to get them involved in articulating to others why that work is so critical.
Do We Have a Long-Term Strategy?
But it’s not enough to articulate what you hope to accomplish as a nonprofit, you also need to create a strategy for bringing those goals to fruition. You must involve your full board in your nonprofit’s overall strategy. They must buy in at the ground level to the goals of your strategic plan. And then the board must be in charge, as is their true leadership role, in monitoring in their ongoing board meetings whether those goals are actually being realized. Give your board the opportunity to create and then drive the overall organizational strategy, and then see how they start to come alive.
Do We Have Clear Board Responsibilities?
And they will truly come to life when they understand how each of them individually can and must contribute to bringing that larger strategy to fruition. You simply cannot expect a board to engage when they don’t understand how and where they can be helpful. Give the overall board specific goals and responsibilities and then talk one-on-one with each individual board member to determine together where their unique skills and experience can be brought to bear on the larger strategy. With a clear roadmap for how they can help, you will see your board start to pick up the pace.
Do We Have the Wrong Board Members?
However, you may find that some of your board members are simply taking up space. It may be that some are disengaged because they simply don’t have the skills, experience and networks necessary to achieve your goals. That’s why you have to do the analysis and look at every single board member against the skills, experience and networks you need to deliver on your strategic plan. Please, please, please don’t fall for the temptation of filling your board with warm bodies. Make sure that you are recruiting the type of board members that you truly need to deliver on your organization’s strategy.
Are We Afraid of Asking For What We Really Need?
Nonprofit leaders sometimes fear their board members as much as they fear their donors. Rather than insisting their board members step up to the plate and effectively contribute their time, energy, and resources, nonprofit leaders may be overly grateful for ineffective board members. But when you operate under that dysfunctional power imbalance, you are setting the bar incredibly low for your board. And when a person is confronted with a low bar, there is nothing compelling him to get engaged and get working. So be very clear with your board members about what you want from them, and then be equally clear when they aren’t delivering. There is a nice way to tell a board member that you need more from her. And if she isn’t willing, then it is probably best that she walk away and leave room for more effective board members.
If you are fed up with your board, use frustration as an opportunity to dig deeper to figure out what is really causing their uselessness. And if you need some help to get there, check out the nonprofit leader coaching I provide.
Photo Credit: Peter Alfred Hess
My focus this month at Social Velocity is nonprofit leadership. As I mentioned earlier, May’s webinar is Reinventing the Nonprofit Leader. And I’m delighted to release today, as promised, the companion book, Reinventing the Nonprofit Leader.
Here is an excerpt from the new book:
The new millennium has been a difficult one. A crippled global economy, threatening climate change, crumbling education and healthcare systems, and a widening income gap comprise a few of the social problems we face.
And as our social challenges mount, the burden increasingly falls to the nonprofit sector to deal with the fall out.
So it is time for a new kind of nonprofit leader, one who has the confidence, ability, foresight, energy, and strength of will to lead the nonprofit sector, and our communities, forward. Indeed it is up to the leaders of our great nonprofit sector, to face, rather than shrink from, these many challenges.
It is time we move from a nonprofit leader who is worn out, worn down, out of money and faced with insurmountable odds, to a reinvented nonprofit leader who confidently gathers and leads the army of people and resources necessary to create real social change.
So in the hopes of inspiring nonprofit leaders to claim their rightful place as true heralds of social change, I have written this book. It is based on my many years of coaching nonprofit leaders to success. This book lays out the elements that those nonprofit leaders have learned in order to embrace their role as reinvented nonprofit leaders.
The reinvented nonprofit leader:
- Unlocks the Charity Shackles and demands to be treated as an equal and critical part of the economy, the community, the solution.
- Refuses to Play Nice and gets real with funders, board members, partners, and staff who are standing in the way of progress.
- Embraces Strategy that moves beyond just “doing good work” and gets real results.
- Uses Money as a Tool because big plans will not come to fruition without a sustainable financial engine behind them.
- Demands Real Help and the tools necessary to achieve the mission because the best leaders recognize weakness and solicit help to address it.
- Breaks Down the Walls of the organization and lets the world in as fully engaged partners, advocates, and supporters.
- Remembers the Dream that got them here in the first place because often it is the big idea that propels great leaders forward.
It is a tall order, but true leadership is.
We no longer have the luxury of mediocre leaders. These times demand confident, capable, engaging leaders who are a beacon to a society whose mounting problems are overwhelming at best.
While it may seem like an impossible transition to become a new kind of nonprofit leader – one who is more entrepreneurial, innovative, confident and strategic – let us remember that nonprofit leaders have always been entrepreneurs. They have recognized some sort of disequilibrium in our society and have created, out of nothing, an organization, a solution and an assembly of staff and volunteers to fix it. In essence, I am simply encouraging you, the nonprofit leader, to claim your rightful place.
The reinvented nonprofit leader is confident, engaged, and savvy. She will, I have no doubt, lead this great nonprofit sector, and all of us who benefit from it, to new heights.
So how do you become a reinvented nonprofit leader? Let’s take these one by one…
If you want to read more, download the Reinventing the Nonprofit Leader book now.
And if you register for the webinar before May 21st the companion book is free. You can register for the Reinventing the Nonprofit Leader webinar here.
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.
It used to be that a nonprofit leader receiving a check from a donor would smile politely, say a big “Thank You” and go on her way. But just as (seemingly) every aspect of the world as we know it is changing, so too is philanthropy. We are starting to question long-held assumptions about how money is given and how it should be spent.
As a nonprofit leader, if you want to start securing and using money in a more strategic way, if you want to move from fundraising to financing, you need to bring your donors along with you.
It is up to you to enlighten your major donors about how they can use money more effectively. So that instead of being merely the recipient of your donors’ largesse, you become a true partner in putting their money to work for real social change, which is today’s topic in the ongoing Financing Not Fundraising blog series.
The Financing Not Fundraising blog series encourages nonprofits to move from the exhausting hamster wheel of fundraising to a long-term, sustainable financing strategy for their work. You can read the entire series here.
We simply can’t sit around and wait for philanthropists to suddenly understand the hurdles nonprofits face. So the next time you meet with a major donor (an individual, foundation or corporate donor with whom you have a one-on-one relationship), make time to have a deeper, different conversation aimed at enlightening them about the realities you face.
Here are some ways to start that conversation with your donors:
“Overhead Isn’t a Dirty Word Anymore.”
The notion that “overhead” expenses, like administrative and fundraising costs, are unseemly in the nonprofit sector is becoming antiquated. Instead there is a growing effort to evaluate nonprofits based on the results they achieve, not the way they spend their money. And effective nonprofits need strong organizations behind their work. Take some time to educate your closest donors about this growing movement to support all aspects (including staffing, systems, technology) of a nonprofit organization.
“These Are The Hurdles Standing In Our Way.”
Let’s face it, most nonprofits struggle with some key organizational challenges. Perhaps you struggle to secure sustainable funding; or you can’t recruit and engage an effective board; or you want to grow, but lack an effective growth plan. Whatever your challenges are, start being more open with your funders about those challenges. It is a risky conversation, to be sure. But I bet that your long-term funders have probably already recognized some of those roadblocks, and your open and honest approach to facing them might start a new conversation about solutions.
“Here Are Some Solutions to Those Hurdles.”
You don’t want simply to tell your donors a laundry list of woes. As my mother always said “Don’t come to me with your problems, come to me with your solutions.” So before you tell your close donors what is holding you back, do your research about how you might overcome those hurdles. If you struggle to bring enough money in the door, perhaps a Financial Model Assessment could help. If you can’t effectively track and communicate with donors, you may need new technology and systems. If you don’t have enough staff to grow your programs, analyze the additional expertise you need and calculate how much it would cost. Put together a thoughtful plan for how you can overcome the obstacles you face.
“Here is How You Can Help.”
Which brings me to the key conversation you need to have to enlighten your donors. You cannot execute on a change plan if you don’t have the resources to do so. That’s where your key donors come in. If you’ve spent the time educating them about organization-building, the key obstacles in your way, and your plan for overcoming those obstacles, then the next logical step is to ask them for help. If you have invested them in the need and direction for change, you are ready to ask them to invest in the solution.
I know it’s difficult for nonprofits and their major donors to have open and honest conversations. But we will never move forward if nonprofit leaders don’t start initiating some difficult, but potentially game-changing conversations with their donors. Indeed, effective social change depends on it.
Could it be that philanthropists and nonprofits are starting to have real conversations about what nonprofits need? I was encouraged by GuideStar, Charity Navigator and BBB Wise Giving Alliance‘s open Letter to the Donors of America earlier this week asking donors to stop focusing on nonprofit overhead expenses.
It is so exciting to see a national conversation emerge about what donors can do differently.
To that end, I think there are 3 key things that philanthropists can do to move nonprofits forward:
- Create Financially Sustainable Nonprofits
The majority of nonprofits lack a sustainable financial engine that strategically and effectively supports their mission. Grantmakers could provide nonprofits the runway necessary to find the right financial model for their organizations. Two-phase capacity capital funding could do this. Phase one would be a capacity capital planning grant to analyze a nonprofit’s current money-raising activities and come up with a plan for transforming those into a sustainable financial model. Phase two would be a capacity capital grant to make the investments necessary (staffing, technology, systems) to revamp the nonprofit’s financial model. The end result would be that nonprofits with a great solution to offer suddenly have the ability to grow the solution in a sustainable way.
- Fund Management Expertise
Nonprofit leaders often come to their positions with a passion for the cause and specific program-related expertise, but a lack of critical management experience. As a result, nonprofit leaders often exist in a reactive, as opposed to strategic mode; are challenged by financial decision-making; struggle with poor board engagement; have limited external partnerships; can’t articulate their value proposition; and lack strategic filters to guide decisions about the future. Management coaching is often a given in the for-profit world, but nonprofit management coaching is only starting to be explored, even though it holds tremendous potential for the sector. It can provide desperately needed strategic perspective, problem solving and expertise that can supplement and ultimately build the management abilities of a program expert who would otherwise struggle to bring a great solution to scale. If more funders provided management support dollars, more nonprofit leaders could grow their solutions.
- Seek Real Conversations with Nonprofits
But these two hurdles will never be cleared if the communication impasse between grantors and grantees is not addressed. There is an often unspoken catch-22 in the nonprofit sector where nonprofit leaders are not comfortable asking funders for what they really need, while funders lack enough on-the-ground experience to recognize and address nonprofit challenges. This lack of honest, open conversation holds the sector back from producing effective funding partnerships and prevents grantors and grantees from marshaling resources to their highest and best use. There need to be many more conversations like the Donors Forum, hosted by intermediaries, where nonprofit leaders and philanthropists can come together to talk openly about what the sector really needs.
We suddenly have a real opportunity to address the obstacles standing in the way of more social change. But to get there, donors and nonprofits have to recognize and openly address what holds the sector back. More effective philanthropy stems from more productive partnerships between philanthropic and nonprofit leaders and a willingness to remedy together the hurdles in the way.
Photo Credit: applejan
The majority of nonprofits struggle to bring money in the door. And they often don’t know why. When you are on the inside of an organization that is used to doing things a certain way it can be nearly impossible to see new opportunities, to understand what you could do differently. There can be many reasons why a nonprofit doesn’t bring enough money in the door.
But here are the top 5 reasons a nonprofit struggles financially:
- Too Many Programs Drain Money From Your Organization. It sounds like a truism — you struggle with money because your programs cost money. But the reality is that few nonprofits analyze their programs to determine each one’s individual impact on the bottom line. Often they will add a new program because it has an impact on the mission (or because a single funder wants the program), without understanding how the new program fits into the organization’s overall financial picture. The end result is an organization that is stretched to the breaking point. Nonprofits must analyze all of their programs to understand their impact not just on mission, but also on finances, then they can make decisions about where to more sustainably focus resources.
- You’re Leaving Money Up to One Person. The financial engine of a nonprofit must be a team effort. Yes, it is important, if you are large enough, to have a staff member whose sole job is to think about money, but you cannot leave it all up to her. The entire organization, from the front line program staff all the way up to the chair of the board must understand the critical importance of money and what role they individually play in securing it. Although program staff won’t actively solicit donors, they can still share client stories with donors, write blog or newsletter articles, participate in program tours with donors, and even suggest new ideas for tying money to their programs. And there are countless ways for board members to bring money in the door, but you have to make sure they are aware of and doing their part.
- You’re Not Effectively Telling Your Story. It is so common for nonprofit staff and board members, who believe so passionately in their cause, to think that it’s obvious to outsiders why they should get involved. But it isn’t. And in an increasingly crowded social change marketplace it is more important than ever that nonprofits be able to articulate, in a compelling way, what value they are providing a community.
- You’re Doing What Everyone Else Does. It drives me crazy when a nonprofit that is struggling financially witnesses another nonprofit’s fundraising activity and tries to replicate that perceived success, without analyzing if it makes sense. Just because it looks like a recent gala or a new thrift store rakes in the money doesn’t mean a) that it did actually make a profit for the nonprofit and b) that it would make a similar profit for your nonprofit. The key is to make the best use of your specific assets as an organization. Think about what value you have to offer and who might be interested in paying for that value. For example, a homeless shelter could financially partner with local businesses to move people away from storefronts and into more stable and life-changing accommodations. You have to analyze what you have to offer and who specifically would be willing to pay for that value.
- You’re Not Investing In Your Money Raising Function. If you don’t have enough or the right kind of staff in place to raise money it is little wonder that you struggle. And if you’re not giving them effective tools they will be at a loss. Think about your financial engine and the various revenue streams you employ. Do you have the technology, staffing, systems, materials, space you need to raise money well in those ways? For example, if you want to raise money from individuals you need an effective database system that tracks contact information, interactions, history, interests. Whatever ways you bring money in the door, you need to ensure you have enough and the right kind of tools to do it well.
If you’d like help to both assess why your nonprofit isn’t raising enough money and create a plan to raise more, join us for the Financing Not Fundraising E-Course. I’ll analyze how your organization brings money in the door, give you ideas for increasing your financial engine, and help you put together a new financing plan. You’ll also get to hear from and work with other nonprofit leaders in your shoes. Find out more about the Financing Not Fundraising E-Course here.
Photo Credit: tuppaware_001
This month’s Reader Question is about convincing people to give. A reader wants to know why it’s so hard to get people to understand that their nonprofit’s work is important.
Here’s the question:
I am tired of trying to convince people who don’t understand the importance of our work to give us money. It’s so obvious that the work we are doing in the community is important. How do I get people to understand?
And here’s my response:
You can see other reader questions and my responses on the Reader Questions page of the website.
And if you have a question you’d like to see me answer on the blog, submit it to firstname.lastname@example.org with the subject line “Reader Question.” I look forward to hearing from you!
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