Certainly, these are uncertain times for many nonprofit organizations. It didn’t take long for the weak economy to trickle down and impact (in many cases devastate) the one sector almost entirely dependent on the generosity of others for success (whether that means through donations, grants, volunteers or corporate sponsorship). Scarcity replaced abundance as the guiding principle among the giving sector and many charitable organizations were left scrambling for survival.
Although the concept of social entrepreneurship is gaining momentum (using traditional free-market ideals and strategies in order to fund humanitarian or other philanthropic ventures), for the most part, a majority of charitable endeavors rely on the traditional nonprofit model and may find it to be an outdated paradigm in the (soon-to-be) post-recession landscape.
The traditional nonprofit model looks something like this: a need in a community exists whose solution falls outside the scope of the free-market, supply and demand, revenue-generating formula; a charitable organization is consequently devised; its leadership does its best to convince others to support it.
To their credit, many organizations took this “opportunity” to re-evaluate the traditional model and some have re-invented themselves to fit better in today’s climate – some in order to survive, others because of shrewd leadership (or both).
Listed below are the five most important assets nonprofit organizations need to have in place in order to succeed in 2018:
1. Superman (or Woman) at the Helm
First and foremost, nonprofit leaders must be shrewd, savvy business people. Running a nonprofit is running a business. Period. If the executive director can’t find her way around a P & L Statement, the organization is in big trouble. This doesn’t mean that leaders can’t come from within the industry or within the organization. And not every administrator needs an MBA to be successful.
It does mean, however, that boards must understand the importance of providing the agency head with the tools, training and support he or she needs to be successful. And an MBA wouldn’t hurt.
It’s a tough job. Executives must be an expert on the topic for which the organization is identified. Plus, be a skilled manager, an excellent communicator, a dynamic fundraiser, work well with the board, and be a bridge-builder and collaborator. The good ones should be well-compensated and appreciated by the board and community.
2. Diverse Funding Streams
Gone are the days when ANY nonprofit organization should feel comfortable relying on one (or a few) funding sources. There was a time when a community-based agency could depend on a United Way or a City contract exclusively for its funding. Ancient history.
Smart nonprofits know that a broad-based, multi-faceted funding stream is critical these days. Ideally, the development plan includes a balance of income from as many of these sources as possible: earned income, grants (private, corporate, federated, government, community), major donors, special events, corporate partners, on-line giving and more. In addition to revenue, resources should include capable volunteers, access to (free) media and a steady diet of pro bono help.
Earned income refers to revenue generated internally. Examples vary from third-party reimbursement for services to hocking t-shirts with the organizations logo on them at a local festival. Earned income has never represented a very big piece of the pie for most nonprofits fundraising chart. It should.
3. A Dynamic, Engaged Board of Directors
Face it: staff at most nonprofit organizations are overworked and underpaid. They need a good board in order to succeed. A good board is comprised of a combination of influential people in the community who add clout and entrée; worker bees willing to come in and stuff envelopes until midnight to help get ready for the big fundraiser whenever they’re needed; and directors representing a variety of critical vocations (and who are willing to provide expertise and counsel liberally). Important vocations every nonprofit should have in place include: attorney, accountant, corporate CEO, media professional, banker (preferably from the bank in which the agency does business), and a marketing/pr/advertising pro (at least).
Boards should also have small, nimble time-limited committees to keep members active and engaged.
4. Collaborative Partnerships
Collaboration has always been smart. Now, it may be the difference between surviving or dying. Note: Collaboration doesn’t just mean sitting on the same committees and being friendly to one another. True collaboration is about sharing RESOURCES. And bright ideas. Nothing irks funders with limited resources to contribute more than duplication of services. Nonprofits who share and play well with others are the ones more likely to succeed.
5. Eagerness to Improve
Most athletic coaches understand that you’re either moving forward or moving backwards (sitting still is moving backwards). Smart nonprofits must be able to see the forest for the trees and vice versa and must be able to adapt to changing trends (in philanthropy, politics, service delivery, reporting, etc.). Its leaders must be visionaries who can be plotting out 24-36 months while simultaneously tending to today’s chores.
Chances are, whoever is adjusting best by the end of the 4th quarter will be winning. And these days, winning may simply mean staying afloat and meeting payroll for another month.