How charity leaders can build for sustained financial health
One of the most important concerns and challenges for any nonprofit leader is sustainability. If you want donors to fund you, they need to trust you. If you want to make an impact, you can’t do it as a flash in the pan. You need to build well and develop a plan for the long haul. That takes financial leadership, a vision implemented in a sustainable way that takes what you have and carefully and wisely builds on it in order to not just achieve growth but to sustain it.
You have to develop and stick to a fair and honest budget. Hopes and dreams are great, but they have no place in math. Numbers don’t lie, and they don’t care how much you lie to yourself. If you want to be a strong and responsible financial leader, you need to set and stick to a budget. Further, you need to be certain your staff, especially your leadership team, understands the whys and wherefores of the budget. It has to be more than numbers on a page. Those figures must mean something, and if they don’t understand what that meaning is, your people will become hindrances to, rather than champions of, this vital first step.
But remember, a budget should be more than just “what we have to spend.” It must also include a plan – not an idea, a written, considered plan – to increase your resources, both in people and finances. If you are not working toward being able to do more next year, you will probably end up having to settle for less.
Speaking of settling for less, you don’t have to settle for one single stream of income. And, in fact, you should not. As a financial leader, you should always be looking for ways to bring in not only more income but also more types of income. Have a successful annual fundraiser? Terrific, why not try a drive or a walk or another sort of fundraising effort? Successful nonprofits have both individual and ongoing donation efforts. Don’t leave money on the table by failing to diversify.
Put that money to work. This is not all about Doing More With Less, though that’s often the mantra of charity organizations. The real mantra should be Doing All We Can. This mindset will change the way you look at your money. Instead of a negative focus – this is all we have, so make it stretch – you have a positive outlook – what can we do with what we have? Focus on investing, rather than just spending the money. Find work that pays big dividends for your chosen cause, so you can share those successes with your donors, encouraging them to invest more in a winning work.
So, what do you think? How have you applied these ideas in your nonprofit? How are you set up for sound financial health over the long haul?