10 Business Essentials for Nonprofits

It often seems that when otherwise business-savvy individuals become involved in a nonprofit organization, they set aside all they ever learned in business and proceed to operate their nonprofit as if business rules do not matter.  As most soon find out, they matter a lot.  In this post, let’s take a look (in no particular order) at 10 business basics that nonprofits ignore at their own peril.

lemmingsMoney. This may come as a shock to some, but being “nonprofit” does not, cannot, mean NO PROFIT.  With the notable exception of GM, AIG and a few others, a business must make a profit to survive.  Your organization was probably not on Tim Geithner’s list for TARP funding, so red ink should be regarded as impending doom.  With the uncertainty of this economy, you simply must be solvent.  You and your board may have to make some tough decisions.  Some programs may have to be scaled back or eliminated.  Fundraising must become even more focused and intentional.  I won’t repeat a lot of what we’ve discussed recently concerning funding…suffice it to say you must keep a lid on overhead…now more than ever.

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Thoughts on Nonprofit Leadership Part II

This is installment #2 in our ongoing series on leadership.  Our first installment was more of an introduction.  In this post, we are going to explore the concept of governance vs. management.

Governance and management:  For many, these are interchangeable terms.  They shouldn’t be.  And in far too many nonprofits, the leadership fails to understand the difference.  Properly separating the concepts of governance and management can be critical to the success of your endeavor.

Governance is leadership of the big picture.  Primarily the responsibility of the board of directors, governance describes the notion of governing.Several ideas are simultaneously embodied in the concept of governance, including: mission establishment, strategic development, planning, goal setting, responsibility, accountability, oversight…the list goes on.  Most successful organizations rely on a group of individuals with a diversity of talents who collectively chart the course for the organization and actively pursue the accomplishment of its mission.

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Thoughts On Nonprofit Leadership (Part I)

The word “leader” conjures up a variety of images:  your old Little League coach, a military general, your boss…even the president of the United States.  Regardless of who (or what) comes to mind, there is the common thread of someone who leads.  But what does leadership really mean?  Certainly it means more than just being in charge.  And in the setting of a nonprofit organization, is the meaning different?

I would submit that while the meaning is not so different, the goal of leadership often is.  For example, in a for-profit setting, the goal is the financial success of the company.  Sure, there are other intermediate goals and purposes.  But when you get down to brass tacks, it’s about the money.  The leaders expend their energy leading employees and influencing prospective customers in an effort to make a profit.  In politics, the goal may be the establishment of a political agenda.  Leaders attempt to influence voters to support their particular brand of government.  Just look at most election cycles.  Not that pandering is the same as actual leadership, but I digress…

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Is Your Nonprofit Repelling Donors?

Giving to CharityEvery nonprofit in existence needs money.  Your ability to pay the bills depends upon it, not to speak of your ability to accomplish your mission.  But do you really understand what it takes to be attractive to donors?  Is your organization truly fundable?  Or, have you inadvertently created an atmosphere that repels givers?

In this week’s article, we are going to explore key elements of fundability by looking at three areas of concern:  mission, structure and behavior.

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Common Myths Concerning Nonprofits

Just yesterday, I was interviewing a new student intern candidate in my office.  During the course of our wide ranging discussion, the conversation turned to some of the interesting misconceptions we encounter with clients.  I made the comment that we often feel like the crew of the Discovery Channel show, Mythbusters.  There is a never-ending supply of well-entrenched myths and misconceptions in the nonprofit world…and dispelling them is part of our job!  In this article, let’s take a look at a few of the more common ones.

MYTH: Build it and the grants will come.

FACT: Uh, good luck with that.

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Questions You Must Answer Before Starting a Nonprofit

So…you want to start a nonprofit.  Fantastic!  That puts you in pretty good company.  In any given year, as many as 75,000 applications for 501(c)(3) tax exemption are filed with the IRS.  Less than half survive the process, but there is certainly no lack of interest in doing something charitable.

But what does it really take to start a nonprofit?  What are the non-negotiables that simply must be in place in order to get started with any hope for success?  In this post, we are going to explore 5 essential questions that need answers before you get started on your journey.

1.  Why are you doing this? Let’s begin where the rubber meets the road.  Are you doing this to meet a need that exists in your community?  To use the buzz word of the day, are you looking to “give back” in some way?  Are you looking for a more fulfilling career path?  If this is a religious nonprofit, do you feel “called”?  It is likely that one of these questions fits your situation…and one is not necessarily better or more “right” than another.  The point is this:  If you do not resolutely know the answer to this question, you are not ready to start a nonprofit.

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Why Marketing Is So Critical To Your Fundraising

Sandy Rees, CFRE

Friend of FG, Sandy Rees

Developing a proactive, comprehensive fundraising plan to make sure your organization is fully funded is just one part of a total plan for your organization. There is another plan you need to create – one that is just as important and could make your fundraising goals easier to reach.

The plan I am referring to is a marketing plan.  It is your game plan to communicating with your donors, potential donors, media, public officials and anyone else that matters to your organization.

To effectively market your organization, you must first know a few things about yourself:

Determine what business you are in. Can you boil your mission statement down to something really short and sweet?  For example, Habitat for Humanity is in the business of building decent, affordable homes for families in need.

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When The Going Gets Tough

We all have our moments of discouragement.  There are times when we are getting beaten up so badly that we would rather throw in the towel than continue to get pummeled.  This situation can occur in just about any area of our lives…personal and professional.  But what do you do when it happens in your nonprofit?  How do you know when to press on or when to give it up?

As it happens, I had this very conversation a few days ago with an acquaintance of mine who runs a small nonprofit ministry.  He and his wife started the organization about 15 years ago and what little momentum they had back in the early days has long fizzled out.  They find themselves practically alone in keeping it going.  Anymore, they are struggling to figure out why they even keep on trying.  Bill is very discouraged and, for the first time, is seriously thinking about hanging it up.  Maybe you are there, too.  How do you know what to do?  Predictably, the answer is not so simple.

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What is Your Nonprofit Thankful For?

funny_turkey_dayThanksgiving is a wonderful, home-grown holiday.  It is a time for family and friends, eating way too much and, most importantly, a time for reflection about all the things we have to be thankful for.  I heard someone mention this a few days ago, and it is very true:  Thanksgiving is about the only major holiday in America that is not, almost cannot be, commercialized…so much so that retailers just overlook it and start hawking Christmas stuff about 1 minute after Halloween ends!

Instead of just looking at what you are thankful for personally, how about reflecting upon a few things your nonprofit can be thankful for this year?  Here are three things if you cannot think of any:

A giving spirit. The citizens of this great land give more to need around the world than all other countries combined.  Sure, we are a blessed people…rich by the standards of most other countries.  But did you know that as a percentage of GDP, private philanthropy in the US is 1.7%…2 1/2 times the percentage of the next highest countries, Canada, Great Britain and Australia (average 0.7% each).  Other wealthy nations barely register on the radar by comparison.  Did you know that 3 out of 10 Americans gave to the tsunami relief efforts a few years back?  That ordinary citizens donated $1.4 billion to 9/11 charities in the days following the attacks on New York and Washington, DC?  That nearly four times that amount has been donated to Katrina relief efforts?  Even in these tough economic times, the number of people giving to charity has not decreased, only the amount they can afford to give.  That’s something to be thankful for.

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Conflict Within Your Nonprofit – Handle With Care

fragileThe honeymoon is over.  It seems like yesterday that everyone was full of passion, vision and warm fuzzies.  You were going to save the world and nothing could stand in your way.  Now, passions have cooled, visions have diverged and the warm fuzzies have been replace with contempt and backbiting.  How did things go south so quickly?

Operating a business, especially a nonprofit, is a lot like a marriage…minus the romance.  What starts out with mutual respect and unity of purpose can descend into open hostility.  And, it can threaten your organization’s effectiveness…even its very existence.  Conflict management is an essential skill that every nonprofit leader must learn and utilize.  What follows are some key points to consider regarding effective conflict management:

Conflict is inevitable. Learn it, live it, love it.  The sooner you dispense of the notion that conflict can be avoided, the sooner you can manage the realities of it.  Conflict is inevitable because people are involved.  And where there are people, there will eventually be conflict.  Just like in marriage, you and the other leaders in your organization have different ideas, backgrounds and experiences.  These all color the way you approach life, including your approach to running your nonprofit.

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