Advice for Nonprofit Organizations
The nonprofit sector has been under attack for years now, and it continues to be today. The challenges and roadblocks facing nonprofits are daunting.
- There are continuing cuts in public sector support.
- There is a greater need in the community than ever before.
- There are too many nonprofits out there competing for too few donor dollars.
The other major problem is that nonprofits often can’t seem to get out of their own way. Too many nonprofits are led by passionate individuals who are trying to make a difference, but have little to no experience in running an organization. They have plenty of experience in creating or implementing programs that serve an important societal need, but things fall apart when it comes to managing a real operation.
If a nonprofit is going to survive in our modern society, they need to start thinking and acting like a business. Just because they are a nonprofit does not mean that they can’t earn profit. There is a culture and a mindset that is adverse to innovation, to taking risk, and to creating sustainability. Recent studies revealed that the average nonprofit nationwide still produces less than 15% of its revenue from earned income. Furthermore, an average nonprofit has less than 3 months of operating reserves at any given time.
That is why traditional nonprofits are being surpassed or supplanted by the social enterprise model, which is essentially a socially-minded mission with a business mindset.
Act Like a Business
Carl Terzian is a business leader in Los Angeles who runs Carl Terzian Associates, a boutique PR Firm that represents business, and is also the larger PR firm in the country for helping nonprofits to staff their boards. He matches over 500 working professionals to various nonprofit organizations every single year. He also provides public relations work for certain nonprofits.
He advocates for nonprofit organizations to shed the mentality of a charity or a social worker, and to adopt the mentality of a start-up business. “If nonprofits are going to survive, they need to be marketed and managed like a business. Those that don’t do that are going to fail.” It may be harsh, but it’s true. This is still a dog-eat-dog world, no matter what the sector is.
Terzian cited three major issues, which comes down to marketing, management, and board building.
Board Maintenance
“This is controversial, but building a board is easy. There are thousands of people, particularly young people, who want to serve on boards,” says Terzian. There are many talented individuals out there, with a whole range of passions. The truth is, there is a professional that is looking to get involved in that line of work, and the nonprofit must make it known that they are available.
The issue that organizations usually run into is maintenance of the board. Too many nonprofits don’t know how to handle working professionals. There are several very easy steps that nonprofits can take to prove they are competent, well managed, and worthy of your time:
Better Board Meetings
As anybody in an office environment knows, meetings can kill a perfectly good day. This is doubly true for board meetings, which don’t happen that often, and tend to cover a lot of ground. Meetings must be exciting to attend, they must have substantive agendas, and they must be respectful of people’s time. Really, the question for any board member becomes: is this worth my time to be a part of this? Does this feed my passion and make me feel fulfilled. A well-run and substantive board meeting will make members feel that way.
Clear expectations and responsibilities
The other area where nonprofits suffer is from a lack of clear expectations and responsibilities for members. A good board will have a board packet that members receive when they first begin. There will be a contact that members sign, so that they are aware of and agree to these expectations. Fundraising should be a required part of any board members expectations. There should be time in every meeting for members to get to know one another better. New members should introduce themselves, members should interact and network and bond. Finally, there should be a pecking order of officers positions, such as President, Vice President, Treasurer, Secretary, etc. It allows members to move up the ranks to increasing responsibility. There should also be term limits to allow members to step down and new members to step up.
What are the benefits?
This comes back to one of the original problems with nonprofits, which is the inability to market and tell their story. Many nonprofits do an inadequate job of promoting themselves. Why are you the best agency in town to provide this service? Why should a wealthy professional want to be a part of your organization? What is unique or special about your culture? These are all benefits of being a part of the organization. Of course, the benefits are not monetary. But people don’t expect to join a nonprofit board to get paid. They do expect to be fulfilled, and to be inspired. They want to provide an important service to the community. They want to serve. A nonprofit provides them the tools which allow them to serve and be inspired.
There are lots of potential board members out there. They tend to come from a business background, and are interested in innovative, forward-thinking, inspiring organizations that adopt best business practices and have a track record of success. The organizations that attract the most talented board members will have better financial stability over time, and will better fulfill their mission.
