I am an advocate of nonprofits and social enterprises operating like businesses, because they are businesses. I have heard some of the reasoning why some believe this is not the case: nonprofits are stringently monitored, nonprofits are not meant to operate with major infusions of money, etc. That’s all well and good, but I respectfully disagree. I grew the nonprofit I founded from zero to $70 million in five years.
Savvy small and medium sized nonprofits understand they need to operate like a business. However, sometimes, while they see this importance, once they land a high-profile business executive on their board, they are not really certain what to do with them.
In my opinion, every nonprofit and social enterprise that has a board of directors should ensure there are a number of leading business men and women serving. These individuals will be able to work with organizational leaders to create financial firewalls, checks and balances and best practices – especially around finances. This is critically important for any for-profit or nonprofit venture.
But working with high-profile executives, or people I affectionately call whales, who lead national and multi-national firms brings with it opportunity and challenges. With respect to opportunity, they likely have become interested in your cause for a reason. Perhaps they care about the cause for personal or for societal reasons.
For example, many high-level financial executives in New York, which is a city dense with nonprofits, care about education. They support educational endeavors because they believe that an educated population will lead to a strong workforce for them in the future. They also believe it costs less to educate and train youth than support social services if the young are poorly educated and dropout of school.
These executives bring money and they will open doors for your organization that could have remained closed for a very long time. Captains of industry hold those positions because they are “movers and shakers.” They believe in getting things done. There is no “can’t” in their vocabulary. So, they will likely support your organization with significant financial gifts, open the doors to fundraising opportunities and they will recruit others to join them.
However, they want results and they want metrics. This can be a challenge to some. They will immediately look at your financials. If your house is not in order, it does not matter what the mission is or how much they care about the work, they will expect everything to be organized and presented transparently, efficiently and effectively. The numbers mean everything to these sorts of individuals.
Once they are satisfied that your financial house is in order and you can present solid profit and loss statements, budgets, annual reports, audits, understand your return on investment and can present projections, etc. they will look at your program metrics.
These people filter the world through a numbers lens.
They will want to see how many individuals you are helping, for example. Then they will want to understand the costs involved for every individual served. They will want to know about how you expect to grow the organization and how you will be able to serve more people with more investment.
These individuals will want to know everything you have thought about and they will also challenge you on aspects of your work that may have not have yet crossed your mind.
Their time is limited. They are not for spending time shooting the breeze. They want meetings that run efficiently. They need your support in ensuring they are able to meet their goals and objectives as board members. A side note – their executive assistant should become your new best friend. They want to know that you know what you’re doing and have set the course for the future.
In my opinion, these are some of the best sorts of people to have on your board because they bring a business ethic and energy that may not otherwise exist. They are not shy to voice their opinion and they continually challenge a nonprofit CEO’s skills. They also help to take your organization to the next level in every conceivable way.
If you don’t have a whale serving on your board, I would encourage you to go out and recruit one. This individual will only serve to make you better at what you do.
Author of, “The Rise and Fail of Charities In the 21st Century: How The Nonprofit World Is Changing And What You Can Do To Be Ready.” Get your copy here.
© 2015 Wayne Elsey and Not Your Father’s Charity. All Rights Reserved.