As nonprofits plan for growth in a struggling economy, they must take a careful approach to change. Failing to do so could result in a loss of donors, a missed opportunity in structuring their boards, or the potential misuse of social media, says Herzl Ginsburg, CPA, manager, not-for-profit group at Skoda Minotti.
“As nonprofits look to grow, it is critical that they not lose sight of the key resources and assets that they already have in place,” says Ginsburg. “It would be a real shame to lose something of value in your efforts to grow the organization.”
Smart Business spoke with Ginsburg about the keys to successful growth for nonprofits.
Is there a process that is critical to allow for growth at a nonprofit?
It is vital to identify your key resources, the risks to those resources as you grow, and strategies that allow you to mitigate those risks. For example, if launching a new marketing campaign might alienate a key donor, have you identified this donor and this risk? Have you planned for this risk as a part of your campaign? As appropriate, consider engaging your staff, donors and board in this process. Ask, ‘What really matters to us? What could we not do without?’ Whether that is a key donor, staff person or piece of property will vary. But the process always involves asking those questions and having a meaningful discussion around them. Organizations are working hard to change in order to meet the current economy. In that mindset, it is easy to lose sight of the related question: ‘As we grow, what will we do to safeguard our key resources and people?’
What role should professional service providers play as nonprofits looks to grow?
Your service providers should serve as your advisers. They can best fill that role when you keep them informed of what your organization is doing and planning.
You do not want to surprise the banker with financial issues, or the attorney with legal issues. Give your advisers the opportunity to plan rather than react. But beyond that, if you are working with the right advisers, they should be offering suggestions and challenging the details of your plans. The more discussions your advisers have with you, the easier it is to see where the organization is trying to go and to identify the risks it will face along the way. At that point, with the path forward clear, you can work together to plan for successful growth while mitigating your risks.
What opportunities and challenges does the use of social media present to nonprofits?
Social media offers what may be described as a double-edged sword to nonprofits. On one hand, it provides a relatively inexpensive way to reach out to a large audience, which is enticing given the cash shortfalls that many nonprofits are facing. On the other hand, there is a potential pitfall in embracing social media, that the messages will not go through the same checks and balances that traditional marketing would. For example, if a nonprofit were putting out a flyer about a new fundraising campaign, its staff and executive director would likely spend time drafting the flyer, reviewing it, ensuring everything is spelled correctly and checking that it includes the correct information. That process will need to be modified to properly and effectively capture your message in your use of social media. Nonprofits should think about this issue — balancing the ease of the message with its quality — and have processes and policies in place as they grow and use social media.
What role should the board play in its nonprofit’s plans for growth?
The board should be viewed as a pool of resources and talent, to be cherished, nurtured and grown for the benefit of the organization. Board members have talents and experience, such as in financial and legal matters, which prove beneficial to the organization. These skill sets may allow the organization to forgo, or at least curtail, the expense of a third-party adviser in the organization’s growth process.
Given this role, this impacts the selection of new board members. As you identify critical areas for the organization where additional expertise would help, take stock of your board members and how they can participate. If the need is not met by existing members, consider targeting future members who have the needed skills. Much as you develop a job description when hiring an employee, draft a description of your ideal board member, including what background would benefit the organization, as you begin your search. You may choose to select a person with passion for the organization over someone with a particular skill set; planning out the process will better equip you to weigh the factors involved and make an informed decision.
What advice would you offer nonprofits regarding employees and volunteers?
Your staff may be your strongest and most important asset; treat them that way. Given tight budgets and uncertainty in existing funding sources, many nonprofits have staff performing multiple roles, freeing up funds that would otherwise have been spent on salary. Over time, this can prove taxing for your people. You should know if your staff is overburdened, and they should know you care. Make a point of checking in and talking with each staff person on a regular basis. When I meet with nonprofit executives, I enjoy asking them what their vacation plans are. The question is innocuous and friendly; more often than not, the response is innocent as well. However, when the response is, ‘I really cannot take a vacation; I am needed here,’ we have a heightened risk of this person burning out and we need to plan for it.
Some questions to consider: If this person is essential to the organization, what can we do to remove some of his or her burden? As we are attempting to grow, will we be asking too much of this person in the process? Do we have an alternative approach we can try? Particularly when nonprofits are looking to change and grow, care should be given to their staff — and all of their key resources — to not harm them in the process.
Herzl Ginsburg is a manager of the not-for-profit group at Skoda Minotti. Reach him at firstname.lastname@example.org or (440) 449-6800.