If you know me, you know that I love talking about money. I don’t care what people out there say. I like money. I love money and I think about it all the time. I want to know the revenues and expenses for my businesses at all hours. This drives me, and it should drive you as the executive director of a nonprofit.
Not too long ago I met with a couple of nonprofit leaders. I can’t tell you how many times I hear the “cash blues.” There’s never enough money to do what has to be done. There’s always more people they should be serving but can’t. There’s always a rush to try to patch a budget hole. Why in the world do nonprofits perpetuate this cycle?
I’m telling you it doesn’t have to be this way. And, nonprofits have to face reality. In other words, leaders have to talk about money, every day. They have to have honest conversations about it. They have to drive the search for investment money (i.e. donations) just as hard as they work their programmatic mission objectives.
Technology has changed everything. I don’t have to tell you that we live in a world where all bets are off. I’ve written at length in my books how business and for-profit models and practices are infiltrating the nonprofit sector. The changes are happening so quickly that in only one year’s time, fundamental shifts among the donor class are happening, and it’s having an impact. In other words, fundamental change is no longer happening in the nonprofit sector over the course of a decade or more. It’s happening in the span of months.
One of the most important changes, which involve money, has been around data. Technology, including data and social media, are pushing nonprofits to deliver to their constituents much more information and engage with them in ways they did not have to do a decade ago. That means there’s a greater need for nonprofit investment. I’ve been saying it, if nonprofits don’t deliver to their supporters what their donors want to see and how they want to view it, their champions can go elsewhere.
Gone are the days when philanthropic money was going exclusively to philanthropy. It’s not. Big money investment is going to for-profit ventures with social impact as well. And in addition, business is getting involved in corporate social responsibility in a big way now. They’re no longer just giving it lip service. There are those out there who think the solutions to society’s challenges can only be found in the for-profit space, because business understands money, investment, and scaling.
If you’re reading this as a board member, major donor or executive within a nonprofit, you have a responsibility to push constant conversations about money. The reasons are very simple:
Money brings brand recognition (and more money) – If you’ve got money to invest in your branding, messaging, and outreach, that means more donors will support your organization. Here’s the reality: people like winners. They don’t want to support struggling organizations because it makes them worried about how their money is being spent. If you have the money to have a well-oiled machine, believe me, you’re going to get even more money.
Money is measurable – you can see what you have or don’t have in black and white. Money does not lie. Either you have it or you don’t. With regard to programs and resources, you can even evaluate data to inform your decisions based on performance metrics. In other words, every dollar can be shown to have made some impact, or not, in every area of your organization. In today’s world, everything is measurable.
Money increases capacity – If you want to grow your nonprofit, it requires money. Period. If you want to develop a new program or get a new hardware and software system, you need money. Money helps you increase and expand the resources you have already within your nonprofit.
Money gives you a competitive advantage – I think there are many nonprofits out there that have the same mission their nonprofit competitor down the street has. However, one nonprofit can have the advantage of money. This competitive advantage, especially in a world of philanthropy where donors want to see scale and impact, helps you dominate over other nonprofits. And, why shouldn’t that be the case? People who use your services should receive the best. Money is one of the resources you need to help you become the best.
Money means engagement – If your supporters are giving you money, it means they’re engaged. Once someone gets into your donor pipeline, it doesn’t matter how small the gift, you’re engaged with them and you should figure out ways to develop the relationship. It costs more for nonprofits to get new donors than to retain current or even lapsed donors.
Author of “Not Your Father’s Charity: How to DOMINATE YOUR Fundraising to Create YOUR Success” (Free Digital Download)
© 2016 Wayne Elsey and Not Your Father’s Charity. All Rights Reserved.