Without money, there is no mission and there is no team. Fundraising and development have to be run by the best and the brightest team members. Fundraising activities should also be viewed as a portfolio. If your fundraising is too dependent on one event or one single donor, your organization should diversify.
Non-profits must have clarity in their mission and know exactly who is a partner and who is not. The mission must permeate the mindset of employees so that if any of them are asked what it is your non-profit does, they would all have the same answer. This provides momentum in the marketplace and makes volunteers feel as though their efforts are going to exactly the cause they care about.
Healthy teams can get a non-profit through just about any transition. Adaptability is a key element of an enthusiastic team. Teams that have high character people view change and challenge as an opportunity. Build up a team of next generation leaders so you are never in a position of depleted human resources.
Great non-profits have a Board of Directors that give regularly, network with their peers to encourage giving, show up to meetings on time every time, and are engaged with the mission. It’s not enough to stay the expert in your field and be a friendly face on the website. Great organizations get the Board of Directors to think critically about how the organization could be even better than it is today. The Board of Directors also needs to be engaged in governance and financial oversight with clear policies established for how the organization will handle funds between programming, overhead, grants, investments, and more.
Leadership and Succession Planning
Nonprofits that are serious about their own sustainability will also be serious about planning for the next Executive Director or CEO. Only 34% of non-profits have a succession plan in place. The team needs to be aware of the items that must be done for the organization to be successful, and the Board of Directors should be committed to managing any transition whether surprise or planned with careful consideration. We often help non-profits draft a timeline for filling a leadership position and establishing a great description of the organization and the role. If the Board already had this information they would be more prepared for the transition. Cross-training needs to happen before someone says they are leaving, so invest in cross training throughout every year. Finally, make sure your organization has a plan to support new employees, even the leaders! Onboarding is crucial to gaining traction in an organization.
As the Stanford Social Innovation Review Puts It, “Organizations that build robust infrastructure—which includes sturdy information technology systems, financial systems, skills training, fundraising processes, and other essential overhead—are more likely to succeed than those that do not. This is not news, and nonprofits are no exception to the rule.”
We all know that funders are cognizant of how much of their dollar goes towards overhead. That said, no one wants to give money to a non-profit that is failing at achieving what their programming set out to accomplish. We must be careful not to starve our non-profit of systems, training, and process development. If we invest in the right systems, training, and processes, then as opportunities come along to serve in bigger and better ways they can be met with excitement! Too often we are stuck on strategy as non-profit leaders and can’t scale without the systems in place.
Financial Understanding of Costs and Overhead
There are good costs for a non-profit and there are bad costs. Good costs are tied tightly to the programming activities and fundraising activities and scale up or down depending on how many constituents are served. Bad costs rise without being kept in check by the current leaders and have no correlation to how many constituents are served. Understanding your balance sheet and being able to benchmark not just on passed years but on industry comparable organizations is critically important. Non-profits should not have a lot of costs tied up in areas that are not key drivers of their mission. If a non-profit is holding too much real estate or paying too much for debt service, a financial crisis that temporarily affects the entire world of philanthropy could cause them to let go of their best talent. If that talent is what is driving the mission of your non-profit, then this is catastrophic! Be careful not to deplete liquid funds thinking that the portfolio of investments the organization holds is something you can bank on to help multiple years in a row. If the organization is not trending up and burdens of costs continue to rise the organization is not sustainable.