Let’s sit down for a minute and envision nonprofit management and fundraising. Do you see yourself slaving away over mountains of grant proposals or coordinating ornamental butter sculptures at the annual fundraising gala? Do you see disappointment over failures – going the extra mile, coming back empty handed, eyes ever scanning the horizon for brighter days?
Who would’ve thought the theatrical image of a mid-1800s gold prospector could be, in some strange way, accurate? If your nonprofit management strategies are anything like most others (mis)guiding the charitable industry today, that metaphorical experience isn’t far from the truth. Panning for gold in dried-up rivers long since stripped of their riches. Meandering toward a prosperous future that always seems just out of reach for your organization.
Your nonprofit simply shouldn’t suffer to obtain the means to achieve community good. This article shows you how to re-imagine nonprofit management and fundraising to heartily support your mission and build scalability.
Why Do Most Nonprofits Struggle?
Chances are you represent a small nonprofit. How do I know? Well, you probably wouldn’t be here if your resources and avenues for impact were plentiful.
But that’s OK! You can work smarter (not harder) to get there. More than two-thirds (67 percent) of all nonprofits have annual budgets under $500,000. Many nonprofits fail altogether, with 30 percent closing after about a decade due to budget constraints.
Why are most nonprofits small? Why are so many unable to scale? Why do so many fail?
Lack of infrastructure and the money to build it. They have no plans to support their dreams and do not invest in technology, talent, marketing, or donors. Resources are scarce so they scrape by, not knowing if they will survive from day to day, praying for a miracle.
It may seem counterintuitive to small nonprofit execs who prioritize serving mission first, but your priority needs to be raising the money for the mission to exist in the first place.
I can’t tell you how many times as a consultant I’ve heard the phrase: “We’ll be fine once we get that grant.” Oh, yeah? Are you sure? While grant writing is a worthwhile endeavor – as PART of a well-rounded nonprofit fundraising strategy – it’s very competitive. There are no guarantees.
If an executive does prioritize fundraising, they typically don’t make the kinds of money they need because they don’t pursue major gifts. They do not see people of wealth as their main constituency, as we do at Major Gifts Ramp-Up where “Money Is Oxygen.”
So Let’s Realign Nonprofit Management Priorities
It doesn’t have to be that way for you. You just need to realign your nonprofit management priorities from where the expenses are to where the revenues are.
Knowing Where to Mine for Nonprofit Gold
With that new philosophy in mind, we now must know where to mine for precious nonprofit resources.
Regarding charitable funding, you have two groups you can mine: donors and clients. Donors are the people and institutions who pay to implement your nonprofit’s mission. Clients are the people who benefit from the services your agency offers without fully paying for them. For example, donors pay for the operations of a homeless shelter, while people who are homeless consume its services.
Donors have money to give. Those suffering from socioeconomic disparities haven’t any extra to spare.
So what’s your most likely path to revenue? Appealing to donors and other prospective funders! Your cost center is the programs you implement and services you provide. Successful businesses heed the principle to lead with your revenues, not expenses.
Think Like an Enterprise Business
A nonprofit is a business entity. The difference is that a 501(c)(3)’s surplus must be invested back into the organization rather than be distributed to individual business owners. So, why not adhere to sound business principles? Why do so many nonprofits lead with their costs? Why do they say their most important constituency is their clients when they need donors to make serving their clients possible?
As a nonprofit CEO, you must cater to the needs of your donors before you cater to the needs of your clients. It sounds backward, but it’s true!
Since 80 percent of the charitable dollars is from individuals, you must prioritize reaching individual donors. Start with major gifts. To appeal to business people, you must appeal to the local business community for partnerships and corporate giving programs. You must strategize marketing and outreach to court new donors – and then bring them back to the table for those elusive repeat donations. It’s how you get the money you need to get ahead in the game.
Otherwise, you’ll always be a poor agency, forever under-resourced and overworked. And you will not be able to achieve the scale you need to make a significant difference. You will be too busy living hand-to-mouth, never realizing abundance for your mission.
Investing in Good Tools
To some nonprofit executives, it may seem like a complete 180-degree turn from what we’ve been taught for decades. The “powers that be” stress so heavily that words like “overhead” are taboo in the charitable realm.
Execs are indoctrinated to flush all the money and resources into programs. But what’s left to market those programs? What’s left to build mechanisms for donor prospecting, research, and cultivation to MAKE MORE MONEY to scale? With a priority on fundraising, your nonprofit can have money to not only build good times, but also to weather the inevitable rough times.
Wrapping It Up
In your search for funding, never forget it is the donors who are important to securing the money you need to implement your programs, grow your nonprofit, and achieve financial stability. As the leader of your nonprofit responsible for its well-being, it’s the donors you must care for.
Your primary focus as CEO must be on fundraising and your nonprofit’s relationships with its donors. If you want to grow your nonprofit and take it to the next level, you must cater to the needs of your donors before you cater to the needs of your clients. Otherwise, your agency will be forever under-resourced.
Next Steps
Attend a Major Gifts Ramp-Up virtual event. MGRU’s live 2-Day Virtual Conferences will challenge everything you believe about the raising of money. Over 17,000 nonprofit CEOs, COOs, CFOs, CDOs, staff, board members and volunteers have experienced Major Gifts Ramp-Up. Check out the upcoming events!
