Pacific Business News

January 6 , 2006

Ten tips for nonprofits as they begin 2006

by Sally Little

With tsunamis, earthquakes and hurricanes, 2005 will be remembered as a year when Americans gave generously to those in need on our own soil and across the world. Nonprofits and non-governmental organizations served as first responders alongside government agencies

These natural disasters were a reminder of the struggle and poverty that many Americans and those throughout the world face every day, such as homelessness, hunger and lack of medical care.

These disasters also reminded us of the importance of a vibrant and robust nonprofit sector. Nonprofits must have the capacity, infrastructure and financial sustainability to meet the day-to-day demands of their communities and assist when the unexpected happens.

Here are my top ten tips from 2005 to help nonprofits meet the never-ending challenges that 2006 will present.

1) Concentrate on your area of expertise and find others to do the rest. Drifting from your mission and core competencies may confuse your donors, stretch your financial resources and dilute the effectiveness of your programs. Secure corporate and other nonprofit partners to augment your deficits.

2) Use due diligence when recruiting board members. Make sure potential board members have a passion for your nonprofit’s mission. Share your financial statements, audits, giving requirements and any specific challenges your organization is facing before securing a commitment from them to serve as a board member. Above all, make sure potential members have the time to serve-- being a board member is time consuming.

* Encourage expansive thinking in developing your strategic plan. It is easy for board members to diverge to day-to-day concerns when working on the plan. However, stay in the big picture. A strategic plan is a forward-looking document and board members need to stay directed to the future as they create it.

* Embark on a social enterprise wisely. Select an earned income venture that is within your mission. Be clear about your goals for the project from the outset. Capitalize on underutilized resources. Listen to your customers. Your success will depend on the customer’s demand rather than your nonprofit’s perceived need.

* Develop a succession plan. The average tenure of an executive director/CEO of a nonprofit is four years. With two consecutive terms for most board members, it is likely they will experience an executive turnover once during their tenure. Unfortunately, poorly managed executive transitions can result in repeated executive turnovers and an extended period of organizational underperformance. Have a transition plan in place. Groom someone from your staff or hire an interim to fill in for your departing CEO.

* Create an inclusive organizational culture. Listen to your employees and engage them in the active management of the organization. This is particularly important when recruiting employees under the age of 40. Unlike the boomers, those under 40 were schooled in group projects and appreciate actively participating in goal setting and project implementation.

* Enter a business plan competition. These offer an opportunity to refine an earned income venture and engage new partners. The awards also provide unrestricted income. Pay attention to the competition’s eligibility requirements. Seek the assistance of coaches, consultants and those outside the competition. Allow ample time to research and write your business plan.

* Build relationships with potential donors, the money will follow. Make each fundraising event memorable, affordable, fun and an opportunity to learn about your nonprofit. Pay attention to details in planning your event. Thank those who attend personally and then follow-up with a written thank you note. Invite attendees to become planners for subseq u ent events and give them an opportunity to direct the proceeds.

* Actively manage possible risks. Nonprofits face risks every day that could result in financial losses for the organization. To mitigate some of these risks, purchase employment practices liability insurance. Institute monthly site safety checks. Be mindful of your employees’ work loads. Stressed workers are more injury prone. Remember to keep your virus and firewall software updated. Consider storing your databases electronically at off-site locations.

* Inspire your board members. Highlight a success story at every board meeting. Even those nonprofits that are struggling financially or managerially have a client or customer who has benefited from the organization’s services. Promote and build on these successes; they are the energy that supports the board of directors.

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