It seems to me that more individuals are striking out and starting their own businesses, which include social enterprises and nonprofit ventures. As an entrepreneur, I think it’s great to have more people creating something for themselves, especially when it helps society.
I think we can all agree that most of us we live in a competitive and wired world, but one of the things that I don’t think will ever change are the small “mom and pop” shops. Just as you have organizations starting from nothing and within a few short years becoming large multi-million nonprofits, there are countless small organizations. These organizations may be run by a handful of people and serve fewer numbers than their large counterparts, but they are no less important.
The small nonprofits and social enterprises tend to be highly flexible. Because they do not have layers of bureaucracy, they are typically able to make decisions quickly. If something happens in their local community, they are usually networked in and are able to rapidly respond to an urgent need.
I write a lot about money and I believe it is a very important tool and resource. However, sometimes I meet the founders of these small organizations and they may not view their nonprofit as a business. They understand that money makes the world go round, but they light up when they talk about the people they are serving. They see their mission is purely about helping or saving souls. Everything else will work itself out.
I know these small organizations often have exceedingly limited resources. So, if you happen to work for a small nonprofit or social enterprise, there are some things that are important to keep in mind.
• Risk assessment – Small organizations may not have the funds to hire large accounting and legal representatives. However, they should always assure themselves that they have access to a lawyer, for example, to read through legal contracts and a certified public accountant, to help with necessary legal filings. Small nonprofit organizations can turn to their local state associations to find low-cost access to these types of resources. Also, asking a professional or two who are lawyers and accountants is good way to have quick access to advice on more technical matters. Make sure you are always complying with all regulatory laws and building in best practices in order to provide the highest level of transparency to government, your supporters and the general public.
• Policies – No matter how small a nonprofit or social enterprise is, there should be policies in place to deal with various issues. For example, board and staff should sign conflict of interest disclosure forms. Additionally, today’s world is all about transparency. Other policies that should be written deal with volunteers, staff, whistleblowers, fundraising, data information, etc.
• Public face – Even if you are a small organization, in today’s world, something can quickly come back to bite you. If you are, which you should be, communicating with your supporters and the general public on social media or through the use of technology, it is important to have a cohesive plan. You want to make sure that your messaging is always on target and that the people whom you have asked help you present your public face understand how to do it well. If you don’t have the funds to hire marketing and public relations pros, that are also important if there should ever be a crisis, ask a marketing professional to join your board.
• Financial – Many small nonprofit leaders do not like to fundraise. They are more interested in delivering the mission. That’s okay, but when thinking about fundraising, think about it as necessary to ensuring that you are able to successfully complete your mission. Remember, you are not asking for you. You are asking for your organization. You want to try to avoid being at financial risk. This means that you should fundraise as much as you can, in varying ways. Maintain a membership with your local Association of Fundraising Professionals or access the online Foundation Center tools so you can educate yourself on varying ways to raise money. Stay current on new ways to fundraise and try different strategies.
• Reserve Fund – Financial stability also means that you want to create a rainy day fund. Sit with your financial advisors and see how much from your general operating revenue you can set aside into a reserve fund. Or, a simple strategy that your organization can use in order to help hedge against tough times is to actively ask in all of your material for bequests. Many of the large organizations standing today have developed reserve funds by taking any gifts they received through bequests and restricting it to this type of account.
We live in very exciting times and I write a lot about the innovation and changes that continually happen in rapid-fire succession. However, there is something to be said of those small mom and pop shops that will never likely grow. They are guardians in our local communities trying however they can to alleviate suffering or save a life.
© 2015 Wayne Elsey and Not Your Father’s Charity. All Rights Reserved.