Controlling the Future of Your Nonprofit

 

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Check out my article over at Nonprofit Hub.

How to Control the Future of Your Nonprofit (Even If Funders Don’t Grasp Its Challenges)

Go ahead. Take a look inside the crystal ball and don’t forget to check out the other great content either.


Cash Flow on Steroids: 4 Uncensored Secrets Every Small Wobbly Nonprofit Should Know

Wobbly Nonprofit Cash FlowWhy does your small wobbly nonprofit struggle with cash flow and what can be done about it? I already know what you are thinking. You just can’t seem to come up with enough funding. Times are tough. It’s out of your control and not much can be done.

Case closed. Or is it? Not in my book. That rationale just doesn’t register with me. Face it- you have tested positive. Now it’s time to fight clean and address those performance gaps before you take a real shellacking.

Inject Discipline. Put an immediate stop to impulse buying. Is the authority and procedure to purchase clearly spelled out in your organization? Have you shopped around? Can you get the item used? Do you have an alternative stashed away in your inventory? Have you tried to request an in-kind donation? The services of a volunteer? Checked with a larger purchasing group like NJPA? If you haven’t taken steps like those first, please don’t shamelessly request contributions. On the other side of the coin, if you have taken those preliminary steps and the need is critical, your nonprofit has a strong case for funding.

Understand when to save and when to invest. Yes, for every thing there is a season. But being penny-wise and pound-foolish is a smug management approach. Don’t offend staff by telling them there is little funding for pay increases or program activities while enriching management behind the scenes. Don’t cut back on volunteer recognition because you overpaid the contractor who is a friend of a Board member. Don’t save money on insignificant office supplies while at the same time clearly overspending on big-ticket items. Do invest in your people, your vision and the activities that can truly make a difference.

Avoid future shock. Monitor your cash flow carefully and regularly. Missing data, inaccurate information or just no data at all can prove to be catastrophic to a small wobbly nonprofit. Do you know how much unrestricted cash you have on hand at this very moment? How much do you expect to have next month or next year at this time? If there is a hole in the boat, fix the leak before it sinks.

Don’t let budgets vaporize. They are real and serve a purpose. A lack of accountability can result in overspending. Expecting the arrival of a bonanza at your doorstep to pay for it is foolish, risky thinking.

Stewardship is a serious undertaking. So face the music now. Be transparent. Be ethical. Be reasonable. Be balanced. And always be vigilant.

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Get your free copy of the Multiplying Good blueprint at Wobbly Nonprofit.


3 Budget Boo Boos Your Nonprofit Can’t Afford to Make

accounting-57284_150Why does your nonprofit organization prepare a budget anyway? Maybe to “stay on track”? Sometimes a budget is viewed as a way to promote positive cash flow. Or, maybe one is put together just because its required. You know- the standard yearly procedure that deep down everyone sees as nothing more than a distraction. Not many good reasons there.

So how do you bring your budgeting process back to life? Paying attention to the following budget boo boos can help you to get more from the process and product.

1. Look out! Its the big bad budget monster! 

Plenty of nonprofits continually question if they will be around for the long haul. For many, that is a valid question; however, instead of thriving, their focus is merely on surviving. Facing the difficulty of balancing a budget year after year can result in a process driven by fear.  This blinding of vision is accentuated when the nonprofit keeps looking in the rear view mirror at earlier years financial struggles. Releasing the fear and stopping the stories in your head can help move your nonprofit to a higher level.

Looking at chances for progress instead of possible calamities would be a good starting point. More specifically, preparing an Opportunity Budget can shift the focus from just surviving to thriving. An Opportunity Budget seeks to discover and capitalize upon timely, favorable circumstances. For the most part, that means always keeping your feet on the ground and your nose in the air. Then its time to roll up your sleeves and roll out the idea along with a responsible budget. As you follow this never-ending process, remember what H. Jackson Brown, Jr. said: “Opportunity dances with those already on the dance floor.”

Don’t miss that dance.

2. Distributing the Almonds.

When you allocate resources, don’t be the delivery person who drives everyone nuts! It’s important to make sure that every program “gift box” has just the right assortment and reaches its destination on time. Each dollar of budgeted income and cash reserves must be allocated as efficiently as possible.

Producing the greatest value of services with the given resource(s) should be a key objective for nonprofits.  To decide if you are meeting this objective, consider questions such as these.

  • What use of the resource(s) could best advance the mission?
  • What program(s) and/or beneficiaries could receive maximum benefits from this resource?
  • What programs(s) and/or beneficiaries would suffer the most without it?
  • What program(s) could face closure absent this resource?
  • When is the resource needed by the program/beneficiary? (In your budget, always take seasonality factors into account.)
  • Should a limited resource be shared by programs/beneficiaries to produce the greatest value of services?
  • How much of our available resources will be committed to programs? How much to administration? How much to fundraising activities?
  • What return on investment can we expect on each allocation of resources?

3. Get Out the Colored Markers.

Failure to invest in the highlighting of accomplishments and the efforts of those who contributed may be the biggest boo boo of all. OuchAnticipate milestones and be ready with the funds to celebrate. Have fun while you are at it too. There is nothing wrong with being visible in the community either. Just don’t try to be overly thrifty here: the return associated with allocating resources to this area is often hard to quantify yet arguably holds a value above all else.

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More Reading

72 Killer Resources for Multiplying Good

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New Release of Multiplying Good Blueprint

Don’t forget to pickup your FREE copy of the Multiplying Good Blueprint. The updated presentation is now released!

Just click on the sidebar at the right or visit Wobbly Nonprofit to claim your copy.


Leveraging Limited Resources in Your Wobbly Nonprofit: Exposing the Keys to Unlock the Power

Leveraging limited nonprofit resourcesReady to advance your mission? Here’s a fresh look at leveraging limited resources in your wobbly nonprofit.  I will start with 7 locks that can keep your organization from moving forward.  Then I will reveal the 7 keys that can unlock the power that resides within your small nonprofit.

Lock #1- Immobilized Board Resources

Common expectations of nonprofit Board members are to make monetary donations and to open up their rolodex file to the organization. The number of business contacts and amount of money an individual can offer to the nonprofit are often used as barometers to gauge the true value of a Board member. There is no question that these resources could be of value; however, this is merely a discounted value. Consistently applied, this approach can in fact alienate and dishearten Board members with much more to offer. This in turn can lead to poor governance and increased turnover of Board members.

In my experience, the 5 main reasons people join Boards are as follows.

  1. a mission they care about and a vision that stirs them
  2. fulfillment of a corporate responsibility in the community on behalf of their employer
  3. an avenue to personally give back to society in some fashion
  4. the belief  a contribution can be made by offering their skills and sharing life experiences
  5. gaining valuable expertise and new connections 

Of these, I consider #4 to be the most underestimated, and sometimes most overlooked reason. Of course, there are many others.

Financial contributions provided or secured by Board members are certainly valuable; however, over the long-term will those gifts be maximized if the Board member simply attends meetings?  The failure to look beyond the rolodex file and check book to properly tap the collective wisdom of Board members is clearly a waste of time.  Nonprofits  that foster this approach risk stagnation. That inaction can filter down to the working levels of the organization. Employee morale and the quality of services ultimately suffer. In the end, the very image of the nonprofit itself can become tarnished.  Yes, a small nonprofit organization can be blinded by its own financial needs and fail to discern this dangerous path.  Consequently, there can be an especially high risk of forfeiting future benefits-financial and otherwise- due to an underutilized Board.

Lock #2- Cash Flow 

Perhaps more than any other factor, cash flow problems can impede the progress of a small nonprofit organization. When attempts are made to uncover the reason(s) for these cash flow difficulties, two general explanations commonly arise.

  1. Overspending.  There is wasteful spending (sometimes widespread) that is draining the bank account. Budgets are not being properly monitored or adhered to.
  2. Fundraising difficulties. The organization is receiving an insufficient amount of revenue and support.

Of course, there are many other possible causes; however, the cause and effect relationship is not always studied close enough to find the root cause(s). It is these underlying problems that must be addressed.  Not enough income and/or too much cost doesn’t offer enough color to do that.

Funders, corporations, individual contributors and communities expect a prudent use of funds and to realize acceptable returns on their financial and social investments. Failure to do so destroys confidence levels.  This in turn has a potential negative impact on future cash inflows from these very sources.

When small nonprofits fail to live within their means, cash flow difficulties become inevitable. Engendering the support of donors becomes a trying task, debt levels may rise, employee wage increases may be reduced or foregone and/or critical services curtailed. The time spent addressing these cascading effects can be substantial and redirect focus away from the mission.

Lock #3- Meeting Increased Demand for Services

Economic weakness has resulted in a greater number of people seeking the kind of help many nonprofit organizations offer. Nonprofits scramble to keep pace in meeting this rising demand.  And limited resources have made this struggle even more difficult.

This creates a need for nonprofits to maximize the use of available resources. Failure to take this important first step results in poor stewardship. In particular, time management is a prerequisite and becomes a more critical issue as labor resources get stretched beyond original expectations.

Will your own organization be ready to rise to the occasion as needs arise?

Lock #4- Over-reliance upon Government Funding

U.S. governments at all levels – federal, state and local- are facing budget crises.  With a long-term shift in jobs and business activity to other countries, tax receipts have markedly declined while spending has spiraled out of control.  This has resulted in financial shortfalls, increased debt loads and less funding available for nonprofit organizations.

Attempting to increase the amount of government funding seems to be a high-risk, low-return strategy. Competition for a smaller pot of government funds will likely intensify. Cost based contracts may increasingly transition to performance based ones as well. Late payments remain a looming concern too.

Time spent securing government contracts will need to be closely monitored.  Operations will need to show the highest levels of efficiency and a competitive advantage will be necessary to secure funding.  Too many eggs in the government funding basket may prove to be catastrophic for small nonprofits in the future.

Lock #5- Lack of Infrastructure Funding

The funding of nonprofit infrastructure has traditionally been difficult to get. Administrative expenditures are clearly treated differently than pure program expenses when proposals are evaluated.    Nevertheless, proper infrastructure is a necessary foundation to assure sound programming.  In fact, due to the reluctance of funders to pay for infrastructure, small nonprofits tend to under-perform in this area.

In response to this trend, small nonprofits lean towards investing fewer resources in infrastructure.  A weak infrastructure can result in excessive costs due to rework, duplication of effort, lack of training and compliance issues.  When the administrative support for programs is weak, their overall image tends to become tainted.  Confusion often results with a spillover effect to the quality of services being provided as employee time is misdirected.

Lock #6- Staff Burnout

Unrealistic workloads can take a heavy toll on nonprofit  employees.

Leaving staff mentally and physically exhausted is a high price to pay in accomplishing missions.  Burnout typically reduces productivity.  It also causes resentment, hopelessness and cynicism.

Lock #7 – Lack of Visibility

It is common for small nonprofits  to spend a great deal of effort on various marketing and public relations activities.  The quest to create awareness consumes the time of many people associated with the organization. While increasing visibility is certainly a worthwhile goal, the time and cost to obtain it should be carefully monitored.  Limited resources can easily be wasted on this activity.

When fee for service activities are involved, the situation becomes even more complicated.  Marketing-bringing together buyers and sellers- can become confused with development activities like communications and fundraising initiatives.

A lack of visibility prevents a nonprofit organization from successfully reaching those in need.  Conversely, too much promotion can financially cripple one.

Many small nonprofits find themselves at one end or the other of this spectrum.


Keys to Small Nonprofit successThis is the last of the 7 locks. Next I will offer 7 keys to help you unlock the power that resides within your small nonprofit organization.

KEY #1- Endear, absorb and mobilize Board members. 

The process of endearment is a prerequisite to tapping the strength of a Board. Impart the goodness of your nonprofit organization to each Board member, allowing every person to intimately learn about your mission and the people behind it. Next, absorb the responses of Board members. Learn in detail what they see, hear and feel. Finally, use these shared experiences to call your Board members to specific action.    

KEY #2- Fuel in-kind contributions.

Clearly identify your unfunded expenses. The two categories of expenditures to examine are:

  1. budgeted items paid through operations or reserves and
  2. items not budgeted that could further enrich a program.  

Match and endear potential contributors-preferably well in advance of planned purchase activity. Cash conservation will be a benefit.

KEY #3- Get better.

It’s been said that those who know how always work for those who know why. With this in mind, start to focus upon why activities should-or maybe should not– be completed. Then move on to the question of how by carefully evaluating inputs and the associated outputs. This will help your small nonprofit to respond to demand issues at any point in the business cycle. Make this an ongoing activity to be ready for periods of rising, falling or constant demand.

Remember that getting better means you don’t leave anything on the table.  Also remember that getting better is a never-ending journey without a final destination.

KEY #4- Be flexible.

Be ready to respond to financial crises before they occur.  Budgetary measures should be put into place that adjust for changes in activity, funding, legislation or economic circumstances.  Resources can then be successfully reallocated and any opportunities seized.

Introducing financial flexibility that extends beyond the standard static budget is a prudent measure.  

KEY #5- Break new ground on infrastructure.

Efficiently expanding administrative support can be helpful to a small nonprofit organization.  Since output is typically low and input high, the cost per unit tends to be high. Options should be explored to streamline processes, consolidate output and broaden the range of in-house administrative services.

KEY #6- Incessantly nourish employees and volunteers.

Recognize the value of people as your greatest asset. Select people carefully, tap their energy and link performance to reward. 

KEY #7- Open your doors.

A straightforward yet overlooked concept by many small nonprofits. Be cautious not to fall into the trap of over-weighting communications with stakeholders via electronic means. Steer away from convenience and revert to the old-fashioned face-to-face variety when appropriate. Don’t create obstacles. Just open the doors to the real essence of your organization.


72 Killer Resources for Multiplying Good

crystal-162608_150Keeping in mind the power of compounding and the rule of 72, I have delved deep into my work, trying to unearth a few diamonds in the rough. Now I am back with an earth shattering headache but ready to unload some treasures on your small nonprofit’s pristine shores.  My hope is that you find an inspirational gem or two here that peak your interest. Just stick what you don’t like in Davy Jones’ locker. Let’s open the chest containing my 72 Killer Resources for Multiplying Good.

CUT TO THE CHASE

The first step in my Multiplying Good program is Abbreviate. So let’s get started by remembering that life is a temporary assignment. Helping to put things into perspective, Candy Chang’s Before I Die is at #72. Who knows- maybe you will build your own wall. Next up at #71 is Stephen Lafond’s blog called 36525 Days To Live. Don’t miss his post “Dare To Change Your Mind!”. As you try to develop a laser focus, #70 helps you learn Why Organizations Are So Afraid To Simplify. Next, take a look in your closet. #69 comes to us courtesy of Catapult Magazine. Where do you want to go next? Try #68 the Exile Lifestyle blog. Every 4 months, Colin Wright moves to a new country decided upon by his readers. Think about #67 Not Buying Anything and simplifying your personal life too.  Do you have #66 an eight-word mission statement? Noboby wants to be known as a meat-head says #65 DON! the IDEA guy. He has 100 “what-if” questions to help you unmuck your mind. Has all this got you ready for a retreat? Think about following #64 designer Stefan Sagmeister‘s lead (but maybe not for a full 52 weeks). Know the story of #63 William Borden? No regrets here.  Now take a look and get focused courtesy of #62 visual.ly. Then take a closer look at your organizational culture. #61 Nonprofit Hub explains Why Designing Your Nonprofit Culture is Do or Die. The true bottom line according to #60 Tom Peters: it’s about people serving people. In #59, he gives the choice to Innovate or Die and provides 121 innovation tactics. Interested in leaving more? Watch the #58 Jacksonville Legacy Series from WJCTAt #57, read about how Father Nelson Baker did his fundraising and left a legacy of service. #56 C.G. Jung said: “Your visions will become clear only when you can look into your own heart. Who looks outside, dreams; who looks inside, awakes.”  Michael Mercer reveals at #55 TAPPI 3 vital signs for compelling vision statements and provides examples from a few US companies. Look to spaghetti sauce for some clues according to #54 Malcolm Gladwell.  Josh Dormont of #53 Collaboration for Good tackles nonprofit collaboration. #52 The Nonprofit Times blog reveals 6 Steps To A Brand Identity. Maria Popova at #51 Brain Pickings shares the Holstee Manifesto. #50 I Have a Dream Foundation was featured on 60 Minutes. Focus on the essential and put yourself in a better position to help your nonprofit organization. Joshua Becker at #49 Becoming Minimalist writes about The 10 Most Important Things to Simplify in Your Life.

MAKE IT HAPPEN

The second step in my Multiplying Good program is Orchestrate. As #48 George Bernard Shaw said, “People are always blaming their circumstances for what they are. I don’t believe in circumstances. The people who get on in this world are the people who get up and look for the circumstances they want, and if they can’t find them, make them.” Need more inspiration? Check out #47 Carry On at ESPN.  #46 National Council of Nonprofits features 3 ways nonprofits can learn from first graders. The #45 Enoch Pratt Free Library in Maryland shows you How to Find Grants for Your Nonprofit Organization. For more on fundraising, be sure to listen in to #44 Joe Garecht’s podcast series. The #43 MacArthur Foundation highlights 13 nonprofits demonstrating exceptional creativity and effectiveness. What can you learn from them? Others need your assistance and #42 Create The Good from AARP can help you find them. Yet more reflections- this time from Henry Ford. Read his book My Life and Work at #41 Project Gutenberg. Next is some deep thinking from #40 “the philosopher”. He’s only 9 years old and featured at Open Culture. From deep thinking, head out to the deep sea. This free resource from #39 Lori Jacobwith depicts the steps to reeling in a big donor. Get out the spaghetti, tape and marshmallows. The topic of this #38 TED talk by Tom Wujec is Build a tower, build a team.  #37 is a slideshare presentation by Chris Houchens at Shotgun Concepts covering marketing fundamentals for nonprofit organizations. Find out what’s been planted at #36, the Fundraising Farmer video blog by Jimmy LaRose.  Have you visited #35 the Free Management Library? #34 The Urban Institute presents Developing Community-wide Outcome Indicators For Specific Services. Quickly get the pros and cons of 5 models of business change courtesy of  #33 PeopleWiz Consulting. Keep up with the latest nonprofit thinking at #32 Alltop. Nonprofit/charitable organizations guide Joanne Fritz lists 12 Ways to Embrace the 21st Century Nonprofit Workforce at #31 About.com. If all of this work is tiring, here’s 31 Charts That Will Restore Your Faith In Humanity from #30 Business Insider. Ready to delegate tasks? Brad Egeland offers The Responsibility Assignment Matrix at #29 Project Management Tips. Do you need a Concept Map to capture, communicate and simplify ideas? Louise Rasmussen of #28 Global Cognition provides you 3 Ways Concept Maps Help You Learn. The #27 Volunteer Spot Blog offers up 10 Ideas for Volunteer Recruitment.  #26 NPR asks: Can Federal Funds Help Social Service Groups Work Smarter? Scott Adams sketches out some thoughts about doing more with less. See if what he depicts strikes a chord with you. Lighten things up with these #25 Dilbert cartoons.

SHOW YOUR STUFF

The last step of Multiplying Good is Illuminate. With that in mind, no list is ever complete without including that magical phrase “social media”. So it is only fitting that, at #24, Cassandra Campbell gets you jump-started and moving in the right direction with The Complete Guide to Developing A Social Media Policy for Your Business. #23  “Creating Enchantment”  is a talk given by Guy Kawasaki that’s sure to flip on your switch. Get on the newspaper rack at #22 paper.li. Don’t forget to keep your website updated either. According to a survey conducted by #21 The Chronicle of Philanthropy, young donors are ready to learn more about your nonprofit. See how you are doing at the web information company #20 Alexa. Tom Peters is back at #19 and #18. See what he has to say about Acknowledgment and Memories that Matter. Matt from #17 The Exodus Road talks about 27 million modern day slaves. #16 Marathon Oil shows how they engage stakeholders.  This Anne Frank quote comes from #15 goodreads.com. “Look at how a single candle can both defy and define the darkness.” From down under, #14 AICPG shares Performance Indicators for your not-for-profit organisation. At #13, KnowHow NonProfit presents Developing a communications strategy from DHA Communications. Here is a copy of a quarterly performance report from #12 DC Youth Link. Best practices in charity annual reporting: Top ten tips comes from #11 Charity Village via Best Practices in Charity Annual Reporting, 2012. #10 Branded Out Loud shares 8 Types of Infographics and How Nonprofits Can Use Them. #9 Take a look at what The Urban Institute has done in 42 years. #8 Mark Twain was quoted as saying “I didn’t have time to write a short letter, so I wrote a long one instead.” #7 is Nonprofit Newsletters that Engage from Caroline Shahar at Constant Contact. Go from Dry To Dazzling with your Annual Reports in this slideshare presentation from Kivi Leroux Miller at #6 Nonprofit Marketing Guide.com. Here is a Nonprofit Board Welcome Information Packet Example by #5 Darren Ryan. As we complete the list, here are three last quotes to ponder at #4, #3 and #2. “To change, that is the most difficult thing to accomplish.” (Isabelle Adjani) “Humility is not thinking less of yourself, its thinking of yourself less.” (C.S. Lewis) “No legacy is so rich as honesty.” (William Shakespeare)

What better place to end than here in Pittsburgh? At #1, the last lecture. Unmissable.

 

 


Don’t Mark Down Your Wobbly Nonprofit: Stop Chasing Money

Those who are of the opinion that money will do everything may reasonably be expected to do everything for money.” ~ Edward F. Halifax

Look out.

When chasing money becomes the primary focus of your wobbly nonprofit, you discount the value of the organization. You can also dilute-sometimes even unintentionally-other critical efforts. Throwing more money at problems without addressing the underlying issue(s) can be harmful too. At its very worse, chasing money can create a lack of confidence on the part of potential contributors and be viewed as toxic to long-term success.

Instead, simply focus on getting better.

That can help you to generate positive momentum toward your mission and vision. Yes, money is clearly important, yet sharper focus can help you to attract it. Your small nonprofit will not become instantly successful solely by finding more money; however, it can more easily attract money by being successful. Bring that kind of eye-opening success to what you do.

Now, is it time to put your limited resources to work on new priorities?