October, 2008Dear Nonprofits,
Focus on activities and expenditures that are sustainable in the long run. I've seen non-profits get excited in good years. They go out and hire staff or undertake projects that are very hard to maintain in bad years. When these ended, the entire organization collapsed. You need to be turtles, not rabbits. Don't ever spend money you don't have or can't afford to lose. Designate money you CAN afford to lose for more "entreprenurial" activities. Make sure your membership dues cover the cost of each member. I know a couple of organizations that have run for decades on dues of $5.00 because they have controlled costs.
If you start your projects in bad years and keep a careful eye on the balance sheet, your chances of continuing on in good and bad years are much better. If you start your communications system and set your goals in bad years, you are prepared when good fortune strikes. It often arrives unexpectedly.
Organizations function very poorly if their leadership is not unified. You get much more done when your board members and/or volunteers feel trusted and respected. That doesn't mean that the ordinary financial controls should be ignored, but if you have someone who is volunteering to do a job you should let him/her get on with it without too much back seat driving unless and until they screw up. Most board members who serve small non-profits are doing it for love--so make sure their experience is pleasant. They will come to meetings to see their friends there, and resign if they don't feel appreciated. This may sound trivial, but it is very helpful to provide refreshments at board meetings. People interact better when they are not hungry or thirsty.
Make sure everyone is very clear ahead of time about when it may be acceptable to make a commitment for the organization and when it is not. Have a clear, well-defined mission and make sure you communicate that mission to all your members.
Experience is very important. Make sure that your nonprofit has a member or two on the board who has been there for a while--don't ever turn over the whole board. Members with experience can explain why certain decisions were made in the past. They remember why certain initiatives didn't work as expected. and can warn the organization against launching projects that may have a low return. For example, one nonprofit I know has tried different sorts of advertisements. Most proved to be a waste of time or money. In small non-profits important information such as "this ad didn't work" is often never written down.
Having said that, it is also important to keep good records. This includes financial records, past decisions, and information that is helpful in planning future projects. For example, if you keep a record of past events including location, attendance, admission, and topic, it will enable you to make a better estimate of what sort of attendance you will have for your next event and how much you can afford to spend on it. Make sure you can find your bylaws when they are needed, that you read them at intervals, keep them up to date, and follow them! If you have a 501(c)3 make sure the board members know the rules about spending, fundraising, lobbying, conflict of interest, etc.
Every organization needs to recruit and educate the next generation of its leaders. Come up with ways to involve both members and potential leaders, starting with small tasks and building up. Converting passive members to active volunteers and leaders is just about the hardest problem that small organizations confront.
Good management is much more important than good fortune!
Margaret DeLacy is an author and National Cathedral School Classmate who lives in Portland Oregon. She has been Chair of the Portland School District (parent) Talented and Gifted Advisory Committee from 1999-2003, a board member (mostly ex officio) of the National Coalition of Independent Scholars from 1992 until 2007, a board member of the Oregon Association for Talented and Gifted from 1999 until the present, and president of the Northwest Independent Scholars Association from 1986-8 and 1991 until the present.