Nonprofit Funding: Bad News is Good News

The bad news we know: funding is tight.

 

The good news is that some funders are finally using their selectivity to drive nonprofit boards to become more effective.  In fact, only nonprofit boards can truly elevate the performance of nonprofit organizations.  Nonprofits that provide our nation’s and our world’s communities with healthcare, education, social services, arts and culture, and nonprofits that fight poverty, injustice, and environmental waste. 

 

Even the best nonprofit CEO cannot maximize an organization’s potential without a highly effective board chair and board of directors.  Here’s a Seven Point Checklist for funders and nonprofit boards who seek to invest in and build a high performing nonprofit:

 
  1. Create and agree to a board member “statement of expectations,” with board members agreeing to attend meetings, “give/get” (contribute and raise money) at certain levels suitable to the particular organization (which is related to the revenue model, not necessarily the budget size), and provide additional (and clearly specified) organizational support.
  2. Install a qualified and committed slate of officers – board chair, vice chair, treasurer (with financial expertise), and secretary (an attorney) – who are role models in their commitment to the mission, their good judgment, strategic acumen, their giving/getting, and their diverse backgrounds and perspectives. 
  3. Build a board comprised of people with a mix of business experience and “industry expertise” (in the nonprofit’s area of work), from a variety of backgrounds, all fully committed to the mission and expectations of board members.
  4. Focus board meeting agendas on the vision of the organization’s greater potential, the revenue model, achieving strategic and financial results, demonstrating and articulating success for funders and the public, and specifying the roles that board members will play in advancing success.
  5. Engage an outstanding CEO, provide a fair and competitive compensation package, and work productively in partnership with the CEO.
  6. Explore, pursue, and establish organizational partnerships that will best serve the community’s interests.
  7. Provide legal, ethical, and financial oversight, transparency, and accountability.  (Beyond the legal test, I always recommend that boards consider “The New York Times test”: what will your donors think if they read about what you do or say in the media?)

 

Resources are dear.  A lesson learned in these times is that funding must be leveraged more purposefully by boards of directors and funders that invest in and steward our nation’s and our world’s nonprofit organizations. Less waste.  Higher impact.

  

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