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Nonprofits CAN Raise Money for Operations

“We can’t raise money for operations.  Donors don’t want to pay for salaries.” 

I have heard it all too often.  The well-connected, respected, influential (and often affluent) board member makes the statement that virtually kills the fundraising for an organization.  I know you’ve heard it too.

I have a request of my fellow nonprofit fundraisers and executives.  The next time you here this, please speak up.  Please inform your board members that your organization’s entire operating budget is your organization’s mission.  “Salaries” is the largest line item in an organization’s budget.  That’s because it takes people to do the mission of the organization.  And yes, they need to get paid.  If you need an example, use mine.

I work for a psychiatric hospital.  We don’t have operating rooms or fancy equipment.  We do however, have expert doctors, compassionate nurses and mental healthworkers who have choosen to work in field that requires a special kind of person.  With out these people, my hospital couldn’t function.

Donors will pay for salaries.  They will pay for programs. And they will pay for organizational missions that make an impact.  I have included part of a presentation on “Raising Money for Operations” on my blog.  Please watch it, share it and use it to become empowered to raise money for operations.

 

 

 

Windows not Mirrors

Ask a small nonprofit why they do what they do and most likely you’ll get a response like, “to help those that walk through our doors”.  Ask a larger nonprofit why they are building a new building or creating a new program you could hear, “to better serve those who need our services”.  These responses are examples of looking in mirrors. They are internally focused views that do not impact people or entities outside the walls of that organization.

Take the same two examples and look through windows.  Answer the question, “how will my organization benefit the community?”  The small nonprofit might respond this time be answering, “we provide culinary training to low-income individuals to help them get a job, which in turns benefits the local economy”.  Or, “our new building will increase access to health care services – statewide”.

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Avoid looking in mirrors when developing your organization's case for support

When developing your organizational case for support or program case statements do so while looking through windows.

Don’t Eat Your Chickens!

A Question all Non-Profit Organizations should ask regarding their Board Members… 

Are We Eating Our Chickens?

Non-profit board members are organizations’ most important volunteers.  When properly recruited, trained and engaged, they act as the body with the greatest amount of influence and can positively impact the non-profit with which they are affiliated.  Yet, board members’ fiduciary responsibility of legal, financial and ethical obligations to the non-profit positions them as those with the most to lose.

Regardless of this risk, many non-profit organizations tend to regard their board members as a bottomless well in terms of resources (time, talent and treasure). Too often, organizational employees, including management, expect board members to know exactly “what to do”.  They expect board members to give to the annual fund, to the gala, and the capital campaign…every year…at the highest level.  They are expected to act as advocates in the community, ask their friends to come to events and give to the organization. Additionally, board members are expected to serve on committees, and give of their talent and time. In short, non-profit organizations have a lot of expectations.  Unfortunately, too often, these expectations go unmet.

The reasons expectations are not met are simple; board members are not properly recruited, trained and engaged.  The result, non-profit organizations end up eating their chickens!

Chickens and Eggs

What would you do if all you had for a food source was a chicken?  You could cook it and eat it, or you could nurture it so that it produced eggs.  The second option provides you with a continued food source, where the first option might be faster and easier, but will be exhausted quickly.

The Chicken/Egg analogy is often used in referral networking (www.BNI.com).  A “Chicken” is a business referral that keeps producing through repeat business, thus an “Egg” is a purchase.  A good example is a locksmith with a large apartment complex as a customer.  The complex is the chicken and every time a new tenant moves in, the locks need to be changed, and hence “lays an egg”.

We can also apply the analogy to philanthropy and non-profit governance.  The chicken is someone who has a strong link to the organization, has tremendous influence and many times, is of means.  In non-profit organizations, chickens are primarily board members, but can also be regular donors, former board members, former agency beneficiaries etc.  In this analogy, the chicken’s contacts are the eggs.

The saying, “people give to people, not causes” acts as a proponent for the Chicken/Egg scenario in non-profit fundraising.  Chickens are more likely to secure philanthropic contributions for their favorite charitable organization because they have an illustrated, commitment to the organization.  Their contacts (i.e. eggs) view the chicken’s affiliation to the organization as a stamp of approval and are more likely to entertain a relationship with the organization.

How Non-Profits Can Stop Eating Their Chickens

Step #1 – Identify Your Needs

Like humans, non-profit organizations are different, thus have different needs.  Identify your organization’s needs and how your board can help to meet those needs.  From here, identify the attributes (e.g. political influence, industry knowledge, affluent leader, passionate advocate) of an ideal director for your board.

 Step #2 – Board Member Job Description

A formal document that outlines the Board Member expectations – specific to your organizations needs – is a helpful recruiting tool.  Keep in mind the 3 T’s (time, talent and treasure).

 Step #3 – Training

Board Members are volunteers; they are not professionals in your organization.  Give them the training they need to be successful and orient them about your organization, the industry, trends and challenges.

Step #4 – Individual Board Member Goals

Not all board members are alike, nor do they have the same capacity, talent or connections.  The organization CEO should meet with each board member, individually, to establish individual goals in terms of time, talent and treasure.

 Step #5 – Evaluation

After one year, board members should (1) evaluate the performance of the CEO, (2) the board as a whole and (3) their individual performance based on their own goals.

Impact vs. Super PAC

Enough is enough!  As a nonprofit professional dedicated to building successful, sustainable organizations via philanthropy, I hear the comments all too often.  I hear that donors want their donations to create positive impact.  I hear that benefactors don’t want their money to dump into black holes.  I hear that accountability, care and intention must be adhered to.  And, I hear that outcomes and changes in society must be acheived with philanthropic dollars.

But why doesn’t this standard also apply to the uber-rich? Or for the private sector?  Super PAC money might be powerful enough to elect the next president, but really, what outcome will be achieved?  Who will be accountable? And, what positive impact will be realized?

The nonprofit sector bridges the gap between the private and the public sector.  Better said, nonprofits do what the private sector won’t (because they won’t make a margin) and the governament can’t (because they don’t have the funding).

As the economy continues to struggle, and government funding continues to shrink, the nonprofit sector is increasing.  Super PAC donors – please look to this sector.  Your donations will make an impact.  You will create jobs, keep people healthy, teach children to reach and care for our elderly.

Super PAC donors – make an impact today and support a nonprofit organization.