Planting Seeds for Organizational Growth

Each month, Nonprofits Assistance Fund hosts the Financial Management Network.  These free, informal gatherings are opportunities for members of the nonprofit community to get together to discuss different financial topics and network with peers. Key takeaways from these discussions will be posted and form an archive to help promote healthy financial practices.

Planting seeds for organizational growth (Jan 24, 2010)

What's Happening at Your Organization?

This discussion began with a brief conversation about how things were going.

  • Cutting expenses
  • Trying to generate additional income
    • Earned income - consulting, unique services
  • Cash reserve
  • Look to other states for opportunities

More information about what's happening in Minnesota and elsewhere:

Sustaining Growth

  • There are growth opportunities, but organizations are unsure whether or not they can afford to expand
    • Funders may not increase support to hire staff
  • Growth is scary right now
    • Some organizations that had expected to raise additional funds are now cutting staff
  • Fewer large donors, so organizations are focusing on smaller donors. Coupled with a smaller staff it's harder to meet fundraising goals.

Earned Income

  • People keep talking about earned income, but how can an organization get started?
    • Learn about Fostering a Culture of Entrepreneurship
    • The easiest way to start a social enterprise or an earned income strategy is to build off of something you are already doing.
    • Starting a new venture is risky. Just because social entrepreneurship is the hot thing, it doesn't mean it's a good fit for your organization. Do your due diligence like you would with any new program or expansion.
  • Replication: Taking a Social Venture to Scale

True Costs

It's important to understand the true costs of funding streams (as well as the costs of the programs they are supporting).

  • Some grants require a match, which can create a hole in an organization's finances. Other grants have extensive reporting requirements.
  • Overhead costs - recognize the costs of administration and fundraising, and find a way to ensure they are funded. They are costs of doing business.
    • Government grants and contracts may not cover overhead. An organization with primarily government funding may need to find additional sources of revenue to subsidize these operating costs.
  • Staff costs

Sponsorship

Sponsorships can be a way to form relationships with businesses when their charitable dollars are restricted.

  • Mutually beneficial, the corporation gets to be aligned with your brand and perceived as engaged in the community
  • This can be the beginning of a larger philanthropic partnership

Innovation

Read Judy Alnes' blog post, Ready, Set Innovate to learn more about why innovation matters and how to get started.

Contingency Planning

  • People are nervous and knowing that the organization's leaders are thinking strategically can help mitigate anxiety.
    • Staff are particularly interested in job stability and security. Smaller staffs are already pressured by increased demand for services.
    • Some executives and board members are reluctant to engage in "worst case scenario" planning
    • Crisis, contingency, and succession are scary words
  • If you have one major funding source, you have to consider what would happen if it was significantly reduced or eliminated entirely
  • Things are moving fast and it's important to be nimble. Rate of change is quick, every week things are different.
  • Resources: A step by step guide to nonprofit contingency planning by Nonprofits Assistance Fund

Interested in Learning More?

View our Resource Collection or check out the Discussion Archive for notes from other Financial Management Networks.

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