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There is always pressure for nonprofits to bring in funding, expand funding sources and increase membership. Financial stability is as much a concern for a nonprofit as it is for a for-profit organization. Despite this, many nonprofits do not focus their efforts on developing their fundraising capacity and rely instead on individuals within the organization to write grants or promote membership. Research into factors that affect the sustainability of nonprofits has revealed that this may be a costly oversight.
However, there are other more fundamental factors that go into creating a financially stable organization.
In order to be positioned to improve your revenue development capacity, it goes without saying that your organization must have a strong commitment to its organizational capacity. That is to say, an organization must have a strong strategic plan, a plan for organizational learning and leadership succession/development plan in order to be positioned to develop, sustain and expand its development capacity. This capacity can be broken into three categories:
Strong leadership that provides a clear vision and connects programming and activities to the mission explicitly is a major factor in organizational capacity. Through strong leadership the organization operates from a shared vision with input from employees and accountability to the mission on all levels of organization.
This structure creates an energetic, motivational environment that creates room for reflection and innovation from employees at all levels. Employees are engaged and thus fully embrace the organizational mission and values. This leadership includes a strong, dynamic board of directors that are actively engaging other members of the community to donate to the organization. The ability to do this effectively also rests firmly on a strong understanding and commitment to the organizational mission and the perception of a shared stake in the outcome of the fundraising efforts.
Organizations that have the ability to monitor, assess and respond to the changing climate of the organization both externally and internally are much more likely to succeed. The ability to assess the effectiveness of your programs and make necessary modifications is critical to the wellness and stability of any organization.
Further, the continued skill development necessary for employees and managers as the programmatic needs and delivery methods respond to the results of internal assessment cannot be emphasized enough. As your programs expand and change, so too should the skills of your staff and aligning these appropriately is the result of good management and oversight.
As organizations roll out their programs and efforts, it is important that they have the resources to execute their strategies effectively. That is, the organization must have the knowledge, technology, staffing and experience to deliver programs in a manner that appropriately reflects the mission of the organization. The ability to accomplish this rests not only on careful planning, but on the ability to reflect, adapt and upgrade the necessary skills, knowledge or technology as any resulting challenges or success are revealed.
Once these fundamentals are in order, an organization can begin to think about expanding in its fundraising capacity. One of the most common scenarios in nonprofit organizations is fundraising efforts that are left to the executive director or the programmatic staff. It is often difficult for these organizations to find the time or devote the effort to funding a full-time development position. It may seem like “time-off-task” for organizations committed to their programs and to their constituents.
However, the efforts necessary to commit to funding a development director or department are never misguided. These efforts are a deliberate commitment to the long-term financial stability of the organization and to staying abreast of the changing national/ international climate that affects funding. This is not to suggest that the executive director and staff should not be closely involved with fundraising efforts or that staff should not be aware of the strategic fund development planning.
Organizations with employees that understand the cost-effectiveness of their programs and the financial development plan of the organization are frequently more engaged and tied to the mission of the organization. Engaged employees are more likely to see their relationship with the organization as dynamic and can contribute fundraising efforts that are personal appeals to both immediate contacts and potential donors. However, nonprofits with a solid, development department and financial sustainability plan are more likely to succeed and generate the revenue necessary to flourish.
Nonprofit Software helps nonprofit organizations make smart and cost-effective decisions regarding their software purchases. We understand that there are many considerations outside of software, so we developed this resource to take the guesswork out of nonprofit software, with everything from nonprofit volunteer management tips to donation management software advice.
The preceding is a guest post by Lindsay Nichols, Vice President of Marketing and Communications at America’s Charities, the leader in workplace giving and philanthropy. As a member of the organization’s senior leadership team, Lindsay guides and oversees the strategy and execution of all marketing and communications efforts with a major emphasis on strategy and tactics that support increased growth for the organization. Lindsay has been quoted in the New York Times, Wall Street Journal, Chronicle of Philanthropy, NonProfit Times, St. Louis Post-Dispatch, St. Louis Public Radio, Dallas Morning News, and more.