Monday, March 28, 2011

The Barricade: Solve Your Main Income Challenge

You are driving smoothly along on the interstate. Ahead you see orange and white saw horses blocking your path. Behind them, large earth-moving equipment moves mountains of dirt. You slow down and prepare to stop.

Almost every viable nonprofit confronts a barricade in the road ahead. The barricade usually concerns income. For established organizations, the barricade is lack of money to pay for one specific need. For many, it is operating expenses or some portion of it, like staff costs. For others, their barricade equals funds for their least-donor-appealing clients. Funding for children might be relatively easy but for young adult males difficult. Is your barricade funding for one of your yearly production? Or, is it a capital need? Organizations that provide housing units barricade is money to construct or buy more units. What is your barricade?

Whatever makes up your barricade, it keeps you from achieving your mission in quantity. To make progress, you need to remove or reduce it. Do you believe the barricade can be removed or improved? How have you sought to overcome it in the past? What steps are you taking now? Have you decided to build new road or create a detour?

Our work, for the last seventeen years, has been helping nonprofits identify ways to make progress on their most pressing needs—often reducing or removing income-related barricades. We can help you to identify the key ingredients required for your success, find innovative ways to solve them (perhaps borrowing from sources beyond the nonprofit field) and move ahead. Contact us if you need help removing a barricade, barricades, building a new road or finding a detour that works.

Monday, March 21, 2011

Can You Make Money with Your Mission?

Questions for Board Members to Ask

Are you a board member looking for earned or mission income opportunities? Before you start new income activities study your organization’s other mission income experiences. Has your organization earned mission income in the past? Were the efforts successful? Can their success be traced to marketing, the products or timing? Are the circumstances repeatable? What percentage of the cost of providing the service did or does the income cover? In short, what strengths and skills has your organization gained with mission income?

For more see March’s Added Value newsletter. It presents a quick overview of this nonprofit funding source for board members.

Saturday, March 12, 2011

How Twitter Makes You a Better Presenter

For a nifty exercise on how to hone the message you deliver when you present, see my new blog post for The Communications Network, How Twitter Helps Hone Communication.

Thursday, March 10, 2011

Need Money? Check Your Assumptions

From peers in the nonprofit world do you often hear assumptions about how nonprofits can or cannot earn income? Assumptions that hinder their ability to raise funds and earn money like:

“We could never charge a fee.”

“We can never get corporate money.”

“We can’t raise money from individuals.”

If your nonprofit can use more income (and which nonprofit can not?) it makes sense to re-consider the seven nonprofit income sources at least once yearly. Invest time to determine if conditions have changed. Identify any assumptions that need testing.

To help your review, here are the sources in order of the amount of revenue they provide for nonprofits sector as a whole:

1. Earned or mission income

2. Individual donors from annual appeals to bequests

3. Governments

4. Foundations and other groups

5. Corporations

6. Other income, non-mission related (the room that you rent and soda machine change)

7. In-kind, which is not cash but acts like it when matched to your needs

For more help see the most recent edition of Added Value and other fundraising and income related articles on our website.

Saturday, March 5, 2011

Our Boards Must Understand How They Operate

I just finished analyzing a governance assessment completed by 15 different organizations participating in a board building program sponsored by our local Community Foundation. It was fascinating. In many cases there would be one person from an organization that would answer the question in the affirmative about whether that organization had a Whistleblower Policy or a Records Retention policy – policies every organization must have. The rest of the respondents would answer “no” or “I don’t know.” In each of these cases, the executive director/CEO completed the survey along with board members. While I didn’t have the access required to manipulate the data, I’d bet my bottom dollar it was the executive director/CEO that was correctly answering the question because he or she was the one who ensured compliance. Even the answers to questions such as whether the organization employs term limits or a consent agenda revealed that oftentimes more than half the board members did not know if they did or didn’t.

While not surprised, I must admit I’m a bit disappointed. Clearly the majority of these organizations are operating according to proven practices, but the board is not aware of it. According to their answers to the question about the ease of getting a quorum, it doesn’t appear the problem lies with nonattendance. It seems as if the chief administrative officer is implementing the right policies and procedures but failing to share this with the board along the way.

What is the answer? First, maybe it’s time that the executive director/CEO turn over the implementation of board-related responsibilities to the board. Using the example above, this would mean that the development and dissemination of policies would be done by the board. And, if the board handles the job, the members would know the policies exist.

Second, perhaps the content of board education should be changed to focus more on proven practices and how the board complies with such practices. The bylaws committee might mention what section in the bylaws is guiding each action. The board development committee might create more or different talking points or initiate a short quiz at each board meeting designed to test whether the board knows how it is/should be operating. The orientation might be enhanced to ensure new board members understand what is expected and why.

Finally, there has to be a better communication. At meetings the board chair might make it a point to explain why certain actions are being taken. Committees might use a report form that spells out how recommendations relate to the organization’s strategic initiatives the budget, staffing and so on.

Hopefully, by working together more as a board each member of the board will know exactly how the board operates and why. Ultimately, that has to result in a more effective board.