Creating Successful Nonprofit Boards, Staff and Programs—Take a Cue from Successful For-Profit Businesses
Keith O. Jennings has his hand in both the for-profit world and the nonprofit world—serving as a certified public accountant for for-profit businesses, as well as serving on nonprofits boards as treasurer. He proves that not only can you have the best of the both worlds, but you can share them as well. Borrowing from for-profit best practices, Jennings explains how you can revamp your nonprofit board, staff and programs in 2014 for your most successful fundraising year ever.
The very nature of a nonprofit organization requires a strong focus on mission achievement. Many factors go into successful mission achievement but this cannot be realized without the right people and the necessary funds. While nonprofits may be structured differently than for-profit businesses, there are some elements they have in common such as business needs for operational efficiencies, processes, and sustained results. Effective enterprises have clear goals, practical plans for achieving them, measurable indicators to tell them if they’re on the right track, and accountability to performance standards at every level. Like any business, in order for a nonprofit to be effective in its operation it must have the necessary funds and the staff in place who believe in the organization, its mission, and its vision.
This belief in the organization’s direction should start from the top and permeate through the ranks of the organization. For that reason, building and maintaining a strong board is essential to the success of a nonprofit organization. To be successful, nonprofits must ensure the board is comprised of a diverse group dedicated to the organization’s mission. Ideally you want individuals who place short-term and long-term focus on the organization and make decisions based on the effect it will have on the organization’s goals, including fundraising. It is important that the make-up of the board is reviewed regularly to make sure it maintains the right balance of independence, fundraising ability, business specialization, technical skills, diversity, and any other preferred qualities. As an organization evolves, the right mix of qualities may change, so employing a special nominating committee is a great approach to help maintain a strong board.
Boards should be willing to put themselves through planned turnover, thoughtful recruitment, and inclusiveness as a way to grow effectively. Some things to consider when looking at the make-up of the board is whether it includes members that are financially literate, including at least one member with sophisticated knowledge of financial accounting and reporting. The board should also contain individuals who do not have business or family relationships to key donors and constituents, so as to ensure the organization's goals are put before management’s goals. Continually evaluating the board will help keep ideas fresh and the people working to find the best ways to reach the organization’s mission.
Selecting Your Board Leader—Key to Success
When selecting a board leader, take into consideration their capabilities and their ability to develop strong, objective working relationships with management. A board leader should also be effective in guiding the board to a consensus when planning and setting goals, while continually encouraging open and honest dialogue. Keep in mind that while successful boards are results-oriented, it’s the people on the board who ensure the final outcome. These outcomes provide the basis for measuring the organization’s advancement towards the mission and evaluating the performance of major programs and services.
In addition to keeping the board motivated and on track, a capable board leader will also create opportunities for open dialogue with individual board members about their interests, needs, desires, and resources, and find a way to use these attributes for the organization’s benefit. For example, if a board member has an interest in making connections with other people and is effective at sharing ideas, they could be extremely helpful in the organization’s fundraising campaigns. Building a smart, engaged, and energized board takes time, energy, planning, follow-through, and continuous communication.
Take a Step Back and Evaluate—It Might Be Time to Change Things Up
A strong board is also a critical asset when it comes to fundraising. Fundraising can be a difficult task to undertake as there is a lot of competition for those dollars, and it is essential to have the proper board and staff in place to position the organization for success in the fundraising arena. Just like a for-profit business, a nonprofit should begin by creating a plan in order to outline its fundraising goals and objectives, along with the responsibilities and expectations of employees and board members. Some organizations even require board members to give or get, meaning they need to donate themselves or get donations from others—however, this may not work for all boards.
It is important to set realistic and cost effective fundraising goals. A nonprofit does not have the resources to sponsor a special fundraising event that only breaks even. Thus, it is important to set a realistic revenue and expense budget, with regular monitoring so that any mid-course correction can be made timely. The plan could be a major capital campaign or it could be for a couple of major events over the course of 12-18 months. Many organizations hold annual events because of past successes. It is important for the nonprofit to consider what changes and improvements need to be made to the event to reduce costs and increase participation. Just as large companies improve their products and services, or as an entrepreneur sees a new market niche, the nonprofit must continue to look for ways to be innovative and challenge the status quo when it comes to successful fundraising. So it is essential to schedule a timely review of the event to evaluate the successes and respond to opportunities for improvement.
Part of the fundraising efforts should include identifying funding sources, whether they are current sources that can be leveraged for additional funds, or new sources. Identifying these early can allow more time to plan and reach out to those sources, whether as donors or as a way to manage special event expenses. Identify the cost of putting fundraising plans into action, including the cost of events or additional staff that may be required. Depending on the size of the organization or the type of event or campaign, it may be useful to hire an outside professional firm.
Nonprofit organizations have unique challenges to face, and while not all strategies utilized by the for-profit world will work in a nonprofit environment, the ones listed above are some practices that transfer effectively and target key components of a nonprofit organization. An organization’s board and fundraising skills are essential to the strength and longevity of the organization. Combining some of the business world's proven management practices with an effective volunteer board offers a nonprofit a much better chance of achieving its mission effectively and efficiently.
Keith O. Jennings is a certified public accountant licensed in Virginia and has ten years of experience in public accounting, including the planning, performance, and supervision of audits and tax preparation for both nonprofit and for-profit organizations. He is a member of both the American Institute of Certified Public Accountants (AICPA) and the Maryland Association of Certified Public Accountants (MACPA) and currently serves as treasurer of SEEC, a charitable organization. Keith can be reached at JenningsK@snydercohn.com. Visit the Snyder Cohn web site at www.snydercohn.com.
Related AFP ResourcesUPDATE: The Canada New Horizons Transition Task Force
What Did You Just Say?! Learn How to Communicate So Your Board Understands You!
Lions, and Tigers, and Boards – Oh My!
How to Build the Winning Team (Board)
Looking Beyond the Board For Champions, Fundraisers