Nonprofits Must Stop Fearing Money
I was in Birmingham, Alabama this past weekend showing a nonprofit board of directors how to finance, not fundraise for, their organization. I love leading these sessions because there is always a point, about 45 minutes into the session, when I see the light bulb go on around the room. Board members become energized when they realize that instead of fearing money as they have always done, they can employ it to create more social change.
Like it or not, money is an incredible tool. If nonprofit leaders could better understand, stop fearing, and learn how to wield money effectively, the results could be transformative.
Here’s what it means for a nonprofit to wield the money tool:
- Add Money to Every Conversation
When you have a board meeting to discuss a new potential activity, make sure someone is asking the question “What are the financial implications of this decision?” And when you are developing a new strategic plan, make sure you spend as much time on program goals as you do on financial goals. Money should never be far from your thoughts because there is no mission without money.
- Create a Financing Strategy
To effectively use a tool you must have a strategy behind it. You cannot just hope that the right amount and kind of money will magically appear at your doorstep. Instead, you must develop a financing strategy that answers the question “How will we raise the money we need to achieve our goals?” A strong financial plan demonstrates how much money you need, over what time frame, how it will come in the door, and what activities are required to make it happen. A comprehensive financing plan creates long-term sustainability for your organization, which means you are more likely to create social change.
- Ask For Investments, Not Donations
If you are begging for money you aren’t using money as a tool. Money is what makes your theory of change a reality. So don’t put out the tin cup, rather create a message of impact that describes how your organization takes community resources and transforms them into better lives and better communities. Your organization is about solving problems. Articulate that and find partners who want to invest in that social change work.
- Raise Capital, Not Just Revenue
A critical, but rarely employed, use of money is to build a nonprofit organization. Nonprofits can no longer scrape by with inadequate technology, staff, materials, systems. They must create strong, sustainable organizations around their mission. And they need capital (money for technology, revenue-generating staff, systems, etc.) to do that. Instead of piecing your infrastructure together day after day, launch a capacity capital campaign to raise the money you really need.
Money doesn’t have to be a feared, uncomfortable element in the nonprofit sector. It can be an incredibly powerful tool for creating social change. Indeed, the only way for a nonprofit to really succeed is to embrace all that money has to offer.
If you’d like me to come speak to your board about getting over their fear of money, send us an email.
Photo Credit: romainguy