How to Get Over the Nonprofit Fear of Money

I started a new blog series in March about overcoming the many fears that cripple the nonprofit sector, the first one being the fear of investment. Today I want to talk about the nonprofit fear of money. Because the nonprofit sector is focused on mission, as opposed to profit, money is often ignored at best, or feared at worst. Many nonprofit boards and staff find money distasteful, burdensome, and avoidable.

But money can be used as a powerful tool to create more social change. In order to overcome the fear of money and start using it effectively, nonprofit boards and staffs must:

Embrace Its Power
Without money, your compelling, inspiring, world-changing mission is only a sentence on paper. As much as we might like to deny it, nonprofits very much exist in a market economy. So instead of trumping all, mission is merely one of the things nonprofit leaders need to be thinking about as they are working toward social change. Because without a smart strategy for how you will secure and use money you are sunk.

Really, Really Understand It
Of course money is scary if you don’t understand it, and most nonprofit leaders don’t have a finance background. So learn all you can about money. Find an accountant who speaks English and can explain how money flows in and out of your organization. Make sure you are receiving and sharing with your board monthly financial statements that are understandable. Ensure board and key staff all have basic nonprofit financial management training so everyone speaks the same language and understands the key ratios they should be analyzing. This common understanding should serve to generate substantive conversations about the best use of money to further the work of the organization.

Involve Everyone in Raising It
I know I sound like a broken record, but EVERYONE at a nonprofit should be involved in bringing money in the door in a way that fits well with their skills and experience. Every board member should have a money responsibility. Be strategic about putting each individual to their highest and best money-raising use. And every staff member, even program staff, can be enlisted to explain the program to potential donors, gather client stories, or provide data about the program so that you can garner more support. No one at the organization should be allowed to say “I don’t do the money thing.” Money is everyone’s job, because with no money there is no mission, remember?

Budget for Having Too Much of It
It is unseemly for a nonprofit to operate a surplus. Funders don’t like to see an organization too far into the black, and board members become uncomfortable when “too much” money sits idle. But money sitting in a bank account means the organization no longer lives hand to mouth, continually putting out fires, and focusing only on keeping the doors open. Operating reserves allow an organization to think strategically, take some risks, streamline the business model, innovate the solution, and weather economic uncertainty all in the name of delivering bigger, better social impact. So overcome the taboo and budget for a surplus that creates operating reserves.

Talk About It. All. The. Time.
Because money is so central to mission you cannot make decisions about the organization, about programs, about staffing, really about anything without understanding the financial implications of those decisions. Therefore, you must be talking about money all the time. Not just when the finance committee of the board meets, or when you are reviewing the monthly financial statements, or when your latest fundraising event falls flat. Money must be a constant conversation. It must be fully integrated into everything you do.

The key to financial sustainability, and ultimately significant social change, is being smart about managing money. But you cannot be smart with money if you are afraid of it. Money can be a beautiful, powerful tool for creating social change. Embrace it.

Photo Credit: orudorumagi11

Tags: nonprofit board of directors, nonprofit fear of money, nonprofit finance, nonprofit fiscal management, nonprofit fundraising, overcoming nonprofit fear

The Nonprofit Sector Needs to Get Over The Fear Thing

It needs to be said, and I’m going to say it. The nonprofit sector must get over the fear thing. The sector is known for being risk-averse, and that comes from a lack of resources. I get it.

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

Tags: investing in nonprofits, nonprofit board, nonprofit fear, nonprofit fear of change, nonprofit leadership, nonprofit risk aversion, nonprofit roadblocks, nonprofit strategy, overcoming nonprofit fear, Philanthropy