By Melissa Lagowski
Big Buzz Idea Group
With all the tasks that are on your to-do list, how often are you able to take a step back and think strategically about where the association is headed and what you hope to accomplish?
Too often, nonprofit leaders are rushed for time, so to meet all the demands on their time, they wash, rinse and repeat yearend planning documents without much consideration. But if you keep doing what you have always done, you will get what you have always gotten.
According to the National Center on Charitable Statistics, more than 30 percent of nonprofits fail within 10 years. Strategic leaders make time for planning because proper planning breeds success. The most successful nonprofits – the eight percent that have over $1 million in annual revenue – are incredibly intentional about planning for their success.
This year, we want to help more organizations function like the businesses they are. When the nonprofit community thrives, more jobs are created, more lives are changed, and more impact is made toward a better world.
These six tips will help you thrive in the year ahead so that your organization will grow while more people are able to benefit from the great work that you are focused on.
1. Know Your Goals
It all starts with intention. If you don’t know where you are going, how will you know if you have arrived?
One exercise I learned from business guru, Allison Maslan, is to draft a vision for your nonprofit three years from now. What will it look like? How many employees will you have? What programs are offered? How many clients will you serve? What will your annual revenue be?
You want to write about your organization three years from now as if everything you are envisioning has already happened. This simple exercise will provide clarity about where you are going. And I love the three-year model. One year is too short of a timeframe and five years seems too far away to realistically predict. Three years is just right.
After creating this vision for your organization, identify three or four big goals to accomplish this year to move you toward your big-picture vision. This will keep you focused for the year ahead so that you are continuously moving toward your goal.
2. Identify Existing Gaps
Once you know where you want to go, it is time to make a list of what is needed to get there. Where are the gaps within the organization that are preventing you from achieving maximum growth and attaining your goals?
One organization we worked with recently tried this exercise and found that everything that was standing in their way revolved around technology. It became clear that they needed to invest in tech because this deficiency was holding them back.
Some organizations may need more employees or need to increase marketing to serve more people. Whatever it is, be brutally honest to realistically address any obstacles that might be standing in the way of your success.
3. Manage Revenues
Diversify and grow your income streams. The most successful businesses have a variety of strong revenue sources so that if one stream dries up, there are others to protect the cash flow into the business. You want to do the same for your organization.
If you have one or two wealthy donors, what will happen if they disappear? If you have a single fundraiser that bankrolls your organization, what happens if the event is unexpectedly canceled? Some of these scenarios used to seem unlikely, but the pandemic has taught us that things can change on a dime so we need to be prepared.
Once you have established a nice mix of revenue sources, review each one to determine how to grow it. Assess the growth plans to determine where you can minimize risk and maximize funding so that you can then prioritize which opportunities to pursue first.
4. Control Your Expenses
Start with a budget and stick to it! When you spend a little here and a little there, it may not seem significant in that moment but expenses can add up quickly.
It is important to think about where you need to invest for the growth of your association. If you need people, be sure to reserve a portion of the budget to allow you to hire the team you need to succeed. Some organizations invest in technology, others in facilities or transportation. This will look different for every nonprofit, but you want to review if the percentage of spending in each category aligns with your goals.
Is there anything that could be cut or reduced in the budget? Have you done any supplier comparisons to ensure that you are getting a fair and reasonable price for the services and supplies you need to secure? We generally recommend seeking competitive bids every three years to ensure that you are not overpaying for items in your budget. Many organizations can save thousands of dollars when they compare pricing.
You also want to devote some reserves for a rainy-day fund, as well. Savvy organizations set up investment funds to allow their money to work for them as yet another revenue stream over time. It is a best practice to save up six months of reserve funding to protect your nonprofit for any hard times that might come. And if you can’t do six months, start with one and build up the reserves over time.
5. Work in Your Zone of Genius
We have all heard the stories of the overworked nonprofit employee who is stretched and pulled in a million directions. It is critical that association leaders focus on what their organization needs from them to succeed.
Nonprofit CEOs and Executive Directors often try to cover the gaps on their team, but that is not the highest and most effective use of the leader’s time. Associations thrive when their leaders are working in the space that is the highest and best use of their time (often referred to as their zone of genius).
High-level staff members need to stay focused on the work that only they can do. When leaders are doing junior-level work, they are costing the organization significantly in its growth. Build a pool of resources that can help with smaller assignments when needed. Cut projects or tasks from the to-do list that detract from meeting the most important goals you are trying to achieve.
For example, it may seem only a minor inconvenience to perform a menial task like getting the newsletter out. But spending a few hours per month on the newsletter ultimately adds up to several days per year. Instead, what could you have done with those hours to advance the organization toward the goals you are trying to accomplish?
When leaders are doing junior- or entry-level tasks, the nonprofit is losing money. Therefore, it is crucial to have each team member working in their zone of genius while temps, volunteers or board members can fill in other gaps when necessary.
6. Leverage Your Team Efficiently
You may wish you could hire more employees to reach your goals, but it just isn’t in the budget to do so. While it may not be feasible to hire someone, could you find help in another way?
What about a part-timer instead of a full-time employee? Would a board member be able to take on a volunteer assignment to handle a portion of the work that needs to be done until you can hire someone long-term? Could you divide up the work between existing staff members to secure the help you seek without crushing a single employee? Perhaps a contractor or an intern could help fill a void for a short period of time?
We often have preconceived notions of what a certain role should look like, which sometimes prevents us from reviewing all the possibilities. It may not be ideal in the long run, but a short-term option could be enough to move things in the right direction until you can eventually secure the team you desire for the long haul.
These six tips are critical to running your nonprofit more like a business. When you do the work and get intentional about what your plan is, then it gets easier to achieve the mini-feats that will help you reach the larger milestones.
Give this methodology a chance and let us know how high you soar this year!