What is your agency's case for doing some planning?

planningAs someone with two degrees in planning, I catch myself all the time with my non-profit clients explaining that the solution to their problems is that they need a plan. It might be a strategic plan, resource development plan, or board development plan . . . but oftentimes I am amazed at how many times failing non-profit agencies just haven’t invested in creating plans.  I mean, come on folks! Who hasn’t heard the old expression, “If you fail to plan, then you plan to fail“?
In recent years, my point of view around planning has evolved slightly. I now believe there is a time and place for planning. When there is too much chaos in the external environment or too much internal crisis or turnover, planning is at best a wasteful exercise and at worst can contribute to the problems at hand.
Of course, I still bristle when I hear board members say something like:

“I don’t want my agency engaged in planning. In the end, all that happens is the plan gets put on the shelf to collect dust. We need less planning and more doing!”

When I hear statements like this, it is usually indicative of:

  • an agency without a culture of planning
  • staff without an understanding of how to engage a board
  • board volunteers without an understanding of implementation tools
  • a board who doesn’t manage or evaluate its staff
  • an agency that is either standing still (best case scenario) or in crisis (worst cast scenario)

When trying to make the case for engaging in some sort of planning activity to a board of directors, I typically talk about “roles and responsibilities” of the board of directors. As you might imagine, this approach is usually met with yawns and eye rolling.
However, I recently found a blog post by Nell Edgington titled “5 Ways Great Strategy Can Transform a Nonprofit” while clicking around on a LinkedIn group dedicated to strategic planning for non-profit organizations. It was in that post I think Nell makes a much better case for planning that might be better received by resistant boards.
Here is what she says:

“People and organizations that make large gifts to a nonprofit are in effect investing in the future of that organization. And if you can’t articulate your future plans in a thoughtful, compelling way, funders won’t make that larger investment.”

So, what has been your sales pitch to your board when trying to convince them to roll up their sleeves and engage in some planning. Please share your thoughts and experiences in the comment box below. We can all learn from each other.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC

Is your board of directors exceptional?

exceptionalOn Tuesday evening I found myself sitting in front of a group of board volunteers as well as prospects who were contemplating joining the board. What started off as a routine training about basic board roles and responsibilities morphed into a discussion about what makes an exceptional board.
According to BoardSource and other non-profit experts, the following principles go into making exceptions boards:

  1. Effective partnership between the board and its executive director
  2. Asking questions and engaging in respectful debates and discussions
  3. Strategic thinking and vision-focused discussions integrated into board meetings
  4. Mission-focused and driven with the agency’s mission infused throughout everything it does including fundraising, decision-making, etc
  5. Transparency in everything the board does with the community understanding all of its decisions
  6. Independent minded with conflicts of interest constantly being identified and mitigated
  7. Measuring the agency’s impact and ensuring that outcomes are achieved
  8. Life-long learners sit around the boardroom table and relish evaluation opportunities and want to learn how to do things better
  9. Focused on how to engage all board volunteers in securing more resources and linking the organization’s strategic plan to its budget
  10. Intentional in all of its actions including establishing the size of the board, committee structure, and other various governance questions
  11. Integrity rooted in an ethics policy, oversight and audit
  12. Planned turnover in the boardroom supported by thoughtful recruitment efforts

Do you think these things define an exceptional board? Is anything missing? What are the more difficult things to achieve on this laundry list?
Please use the comment box below to share your thoughts and experiences.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC

Is your strategic plan collecting dust on a shelf somewhere?

strategic planning implementationIf I’ve heard it once, I’ve heard it hundreds of times . . . non-profit board volunteers and staff hate strategic planning. Why? The reasons are all over the place, but some of the more popular reasons given are:

  • there is no time to go through such a time intensive process
  • the world around us is too chaotic and constantly changing to invest time in planning
  • it will just go on the shelf and collect dust

When I hear things like this, I can’t help but hear my third grade niece in the back of my head saying, “Really? Seriously?
It boggles the imagination to think that very smart people cannot figure out why their strategic planning efforts typically end up on the shelf collecting dust. Usually, when I ask people to speculate about why this happens, they often can’t come up with a good reason and just chalk it up to their belief that planning doesn’t work.
Well, here is a hint:

Take a good, hard look in the mirror and you’ll find your answer.

Too many of us treat the planning process as an end, but in reality it should be treated as the beginning.
The following is a list of mistakes that contribute to ineffective strategic planning efforts:

  • not aligning your agency budget with your strategic plan
  • not creating committee work plans (or committee charters) with the plan
  • not linking the executive director’s annual performance plan with the strategic plan
  • neglecting to develop tools such as dashboards and scorecards to monitor implementation
  • not aligning your other organizational plans with the strategic plan (e.g. board development plan, resource development plan, marketing plan, program plan, etc)
  • not including discussions about parts of your strategic plan on the board meeting agenda
  • neglecting to engage key donors in a conversation about implementation of your plan

So, what is the solution? Quite simply . . . start aligning your strategic plan with everything you can (e.g. budget, performance plans, committee work plans, agendas, etc).
If you are looking for a few external resources on this subject, you may want to check out the following:

What has been your experience with strategic planning? Is there anything you’ve done that helped your agency maximize its implementation efforts? Please share your thoughts and experiences using the comment box below.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC

The overhead myth is still alive and well

overhead1It wasn’t even a year ago when the CEOs of BBB Wise Giving Alliance, Guidestar and Charity Navigator all signed a letter encouraging donors to stop looking at the concept of “overhead” to determine the effectiveness and efficiency of non-profit organizations. This letter was the culmination of many efforts and lots of voices including Dan Pallotta, who is the author of “Uncharitable”. Bloggers and non-profit professional everywhere heralded this as a campaign that will put an end to what is commonly referred to a “The Overhead Myth“.
Over the years, I have written a number of blogs on this subject including:

At the end of my June 27, 2013 post, I wrote the following:

“I personally don’t think anything is going to change as a result of this “overhead myth” campaign push.  I think donors are set in their ways. I believe Dan Pallotta was right about the Puritan influence on our culture. I don’t think “culture” and “values” and “habits” are easy to change. AND I think talk is cheap.”

As you can imagine, I was roundly criticized for being a “negative, glass-half-empty” kind of person. That’s OK . . . I have thick skin.
Besides, I knew I was right which always goes a long way when it comes to swallowing criticism.  😉
overhead2As they say, the proof is in the pudding which is what inspired today’s blog post. The pudding, of course, is an article that washed into my email inbox from LinkedIn on November 30, 2013. The author was John Wasik and the article was titled “Digging Into Non-Profit Finances: Four Things To Check“.

In his post, Wasik talked about illegitimate non-profit organizations and the lack of real oversight for our sector. He shared four tips with readers/donors on what they should look for before making a charitable contribution.
Yep . . . you guessed it. He points to the classic definition of “overhead“. Here is what he said:

“What percentage of the non-profit’s income went towards it mission? This is also a key red flag. This percentage is also known as ‘the overhead ratio,’ which tells you how much was spend on non-program expenses such as fundraising and administration. A fairly well-run non-profit will spend at least 80% on its mission.”

The truth of the matter is that this morning’s blog post isn’t really a victory lap or an “I told you so…” article. The reality is that I am annoyed at my fellow non-profit professionals.
Did we really think that an open letter to the world was going to suddenly change everything?
I certainly hope not!
As I said back in June, “I don’t think “culture” and “values” and “habits” are easy to change. AND I think talk is cheap.”
All of this leads me to wonder . . . what have you been doing on the front line to educate your donors and bring an end to “the overhead myth“?
Ohhhhhhhhh . . . you don’t know what to do about it? Well, here are a few suggestions to get your creative juices flowing:

  • Post the open letter from BBB, Guidestar and Charity Navigator to your website.
  • If your agency runs a blog aimed at a donor audience, then blog about it.
  • During your year-end stewardship meetings with your top donors, figure out a way to talk about it.
  • Organize a focus group of board members around reading Dan Pallotta’s book “Uncharitable” and talking about it.
  • Stop highlighting and reinforcing “the overhead myth” in your annual report documents with pie charts showing how much you spend on programming vs. administration vs. fundraising. STOP!

OK . . . I got the ball rolling for you. Please scroll the down and use the comment box below to share additional ideas with your fellow non-profit professionals.
Not only can we learn from each other, but we can also inspire each other to solve bigger problems together. Please take 30 seconds out of your busy day to share one idea. Please?
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC

Finding the right non-profit board prospects might be harder than you think

strategic thinking2Sometimes I hear something that hits me just right, and it takes days to get it out of my head. This happened on Tuesday during the Fox West Philanthropic Network’s Philanthropy Day luncheon. The keynote speaker, Dani Robbins, was talking about the different modes of board governance and the importance of facilitating more strategic and generative discussions in the boardroom. Doing so will result in a more engaged board.
Easy as that! Right?
Well, that little voice inside my head started screaming at me. It was saying, “Whoaaaaa! Can strategic and generative discussions be done with any old board members? Or does it take a certain type of board volunteer?
So, I raised my hand and interrupted Dani’s keynote address. (Sorry, Dani!)
I was half expecting her to say that everyone is capable of engaging in these higher order discussions. I was also expecting her to put the responsibility back on the person(s) who facilitate those boardroom discussions to get the most out of the diversity of people sitting around the table.
However, I got an unexpected answer.
strategic thinking3Dani suggested that board volunteers who are “strategic thinkers” will have an easier time making the transition from traditional fiduciary modes of governance to more strategic and generative modes.
I suspect this means for many non-profit organizations, who want to make this adjustment to governance, that some thought needs to be put into adding more strategic thinkers to their board recruitment prospects lists.
Once I arrived at this conclusion, I got a mental picture of a committee meeting with board governance volunteers going through their prospect identification and evaluation exercises focused on finding strategic thinkers. As this mental picture became clearer, lots of questions flooded into my head including:

  • What does a strategic thinker look and sound like?
  • Where do strategic thinkers live, work and play?
  • How easy will it be for board governance committees to do this work, especially when most committees (in my experience) shortcut the cultivation and evaluation process and go straight from identification to recruitment?

As I normally do when issues like this start bothering me, I open up my internet browser and go to Google.  😉
I quickly found myself reading a post on CEB Blogs titled “5 Characteristics of Strategic Thinkers“. Here are those characteristics:

  1. Open yourself to perspectives from multiple sources
  2. Incorporate both logic and emotion into your thinking
  3. Seek options beyond today’s reality
  4. Question both the familiar and the to-be-determined
  5. Accept open issues

strategic thinking1If you’re scratching your head while reading this list and asking “what does THAT mean,” then click the link and read the CEB Blog post. It really is quite good. If you want to learn more, then I suggest you start Googling around.  😉  You also might want to click here and start with this interesting Wikipedia page on strategic thinking.
Let me bottom line what I’m thinking for you this morning.

  • This isn’t as simple as changing some of the criteria in your gap assessment tool
  • These characteristics are more subtle than questions of age, gender, ethnicity, occupation, fundraising experience, etc
  • Only people who know or work closely with board prospects know whether or not they are strategic thinkers, which puts a spotlight on who is serving on your board governance committee
  • Identifying strategic thinkers for your board recruitment process will require more time spent cultivating and evaluating prospects and less jumping straight from identification to recruitment

What is standing in your agency’s way of transforming its boardroom discussions from fiduciary to more strategic and generative modes of governance? What are you doing to over come those obstacles? Is your board governance committee approaching its job differently when it considers this question? If so, how?
Please use the comment box below to share your thought and experiences. We can all learn from each other.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC

Does your non-profit organization have a culture of philanthropy?

org cultureI love Monday mornings! I wake up, feed the dog and cat, grab a cup of coffee, sit down at my computer and open my email, and most Monday mornings involves watching “Movie Mondays for Fundraising Professionals“. This morning’s video was an interview with Andrea McManus who is the President of The Development Group, a Canadian resource development consulting firm. Within the first 15 seconds of the interview Andrea poses a great question about whether your organization has a “philanthropic culture” or “fundraising culture“.

When I’m conducting a resource development assessment for a client who doesn’t have a strong fundraising program in place, it isn’t uncommon for me to make an observation about the agency lacking a “culture of philanthropy“. When I watched Andrea’s interview this morning, it dawned on me that some of those clients might not have understood what I was driving at.

I love the distinction that Andrea draws in the video. I love even more that she takes the time to share with viewers the nine signs of a strong philanthropic culture.

Do you know what those nine signs are? Does your organization exhibit those nine signs?

OK, I have a confession to make. When I look for philanthropic culture, I use the less formal “smell test,” which is akin to sniffing what is in a Tupperware container in the refrigerator to determine whether or not it is still safe to eat leftovers. Essentially, I knew it when I saw it and experienced it. So, when Andrea said she was going to share her nine signs of a philanthropic culture with viewers this morning, I settled in and prepared to watch the entire 15 minute video.

I highly recommend that you take a moment to watch “9 Signs of a Strong Philanthropic Culture“.

To help whet your appetite, here are three of Andrea’s nine signs:

  1. Your board and agency leadership know how to spell “philanthropy” (While her tongue is planted firmly in her cheek, she makes a great point when talking about this sign.)
  2. Organizational leadership (both board and staff) understand the difference between philanthropy, development, and fundraising.
  3. When a donor calls the main phone line, the person answering the phone knows exactly what to do with that call. They know where to send those calls. They also recognize the importance of that person and treats them as such.

There are six other even more amazing signs. Aren’t you even a little curious? Click here to check-out Andrea’s interview and discover those six other signs.

I’m going to end today’s blog with the same question Andrea poses at the end of her video. What other things (aka signs) do you look for when assessing whether or not a non-profit agency possesses a philanthropic culture? Even more important, how are you trying to instill these things into your organizational culture? Please share one or two of those things in the comment box below.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC

Non-profit governance: The work of the board, part 5

Dani Robbins is the Founder & Principal Strategist at Non Profit Evolution located in Columbus, Ohio. I’ve invited my good friend and fellow non-profit consultant to the first Wednesday of each month about board development related topics. Dani also recently co-authored a book titled “Innovative Leadership Workbook for Nonprofit Executives” that you can find on Amazon.com. 

Governance: The Work of the Board, part 5

Setting the Mission, Vision and Strategic Plan

By Dani Robbins

strategic planningWelcome to the final post in our five-part series on Governance. We have already discussed the Board’s role in Hiring, Supporting and Evaluating the ExecutiveActing as the Fiduciary Responsible Agent, Setting Policy, and Raising Money. Today, let’s discuss the Board’s role in setting the mission, vision and strategic plan.

As previously mentioned, Boards are made up of appointed community leaders, who are collectively responsible for governing an organization. As outlined in my favorite Board book Governance as Leadership and summarized in The Role of the Board, the Fiduciary Mode is where governance begins for all boards and ends for too many. I encourage you to also explore the Strategic and Generative Modes of Governance, which will greatly improve your board’s engagement, and also their enjoyment.

At a minimum, governance includes:

  • Setting the Mission, Vision and Strategic Plan,
  • Hiring, Supporting and Evaluating the Executive Director,
  • Acting as the Fiduciary Responsible Agent,
  • Raising Money, and
  • Setting Policy.

One of my goals for this blog is to rectify the common practice in the field of people telling non-profit executives and boards how things should be done without any instruction as to what that actually means or how to accomplish it.

What “Board members being responsible for setting the mission, vision and strategic plan” means is:

The Board sets –meaning discusses and votes to adopt or revise — the mission statement, which answers why your organizations exist.

The Board also sets the vision of the organization. A vision statement is a description of what the organization will look like at a specified time, usually 3-5 years, in the future. There are two minds in the field as to if a vision statements should be a Utopian view such as “an end to hunger” or a more concrete view such as “to be the premier youth development organization.”  I lean toward the latter; I find it challenging to set goals to get to Utopia.

The Board votes upon the strategic plan, after participating in a strategic planning process “in which the board, staff, and select constituents decide the future direction of an organization and allocate resources, including people, to ensure that target goals are reached. Having a board-approved, staff-involved strategic plan that includes effective measurements and the allocation of resources aligns the organization, provides direction to all levels of staff and board, and defines the path for the future of the organization. It also allows leadership, both board and staff, to reject divergent paths that will not lead to the organization’s intended destination.” (Innovative Leadership Workbook for Nonprofit Executives)

The process — and the document — can be very long or very short.  In fact, I have a new theory that the longer strategic plan is, the less likely it is to be used. For my clients, I recommend a 4-5 meeting process: We start with setting or revising values, vision and mission and end with assignments, measurements and due dates.

Please do not accept a plan that does not include assignments, measurements and due dates. If you cannot answer the question “How will we know when we get there?” you will not get there. A plan without measurements, assignments and due dates is just a list of goals that are unlikely to be accomplished.

For information on what should be included in the process, please click here.

A strategic plan should be a living document that guides the organization and provides a point for ongoing programmatic and organizational evaluation.  It should not sit on a shelf.

All organizations should have a strategic plan.

Strategic plans get everyone on same page as to where you are as an organization and where you are going.  They allow the group to decide the goals moving forward; create measurements to determine if you met your goals and assign responsibility and due dates for specific goals.

Strategic planning is a process that results in not only a document but also a shared understanding among key stakeholders.

In the absence of that shared understanding and agreement, there are still moving parts, but they’re not aligned. The absence of a plan sets the stage for people to do what they feel is best, sometimes without enough information, which may or may not be right for the organization.  It opens the door for one person’s vision to get implemented and others to feel unheard or unengaged.  The absence of a plan allows for major decisions to be made on the fly and for potentially mission driven decisions to be compromised.  As we all know, movement goes in other directions than forward.

What do you think?  As always, I welcome your insight and experience.
dani sig

Trends in non-profit governance?

great carnacI was reviewing some old non-profit board governance material this morning and came across a document talking about “trends in non-profit governance“. In other words, the person who wrote that paper thought s/he was able to predict the future. Of course, this document was written more than 10 years ago, which got me thinking it might be fun to review some of their trends and determine where they were right or wrong.

The following are just a few of the trends that I found interesting:

trends in nfp governance

As I review this list, there are a number of thoughts and questions running through my head. Let me spill those things out in the following bullet pointed list:

  • How many non-profit board have gotten smaller over the last decade? I wonder how that is going for them? Are they more effective or less effective?
  • Wow! They nailed the technology trend. I see many agencies conference calling people into meetings and doing some business via email polling and voting. (Not that I think it is very effective.)
  • Huh? The FROM-TO pertaining to fundraising is a little comical. I cannot tell you how many non-profit boards I’ve worked with who are very reluctant fundraising solicitors. 
  • Really? Once in a blue moon, I run into a non-profit board that has an annual performance evaluation process in place for their executive director. More often than not, I see boards doing everything in their power to NOT evaluate the CEO.

The following are a few interesting resources I dug up online pertaining to some of these trends:

While clicking around for these links, I came across another great document titled “Emerging Trends in Nonprofit Governance“. It looks like it was presented at the ASAE & The Center’s Annual Association Law Symposium in 2009. This document contains all sorts of best practices, and it is definitely worth the click.

I’m not sure if I would put any of these things under the classification of “trends“. I think most of the trends stuff that I’ve reviewed today can better be described as “best practices“.

So, let me go out on a limb this morning and identify what I see as a real trend in non-profit governance . . .

Serving on a non-profit board will
continue to be difficult and entail hard work!

Duh!   😉

I hope when non-profit bloggers revisit this post a decade from now they will be able to say, “That Erik Anderson really nailed that trend.”  LOL

When reviewing the initial list of “trends” that I shared at the beginning of this post, what questions and thoughts initially spring to mind? Has your agency made the “FROM-TO” transition on any of those trends? If so, which ones? Are you currently working on any of those changes in your non-profit governance? If so, which ones and what are you doing to facilitate the change?

Please use the comment box below to share your thoughts and experiences. We can all learn from each other.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC

What does the non-profit leader of tomorrow look like?

sleepless1Last week a dear non-profit friend of mine from California couldn’t sleep. She tossed and she turned. Ultimately, she got out of bed, turned on her computer and started talking into a microphone. When I woke up in the morning in my bed in Elgin, Illinois, there was an email sitting in my inbox with a voice file attachment. Her words have tumbled around in my head for a week, and I’ve decided to enlist your support in dissecting them.

The gist of her recording pertained to non-profit boards. Here is a synopsis of what she said:

  • There are too many non-profit boards that just don’t work.
  • Too many board members either don’t understand their roles/responsibilities or turn a blind eye to certain roles that make them feel uncomfortable (e.g fundraising and resource acquisition).
  • Are there occupations that are better suited for non-profit board leadership (e.g. finance people compared to artists)?
  • Should non-profit agencies incorporate personality testing into their board development process because certain personalities are better suited to serving on a non-profit board?

After a week of contemplative thought, I honestly don’t know how I feel about anything she said. I am looking forward to you weighing in with your thoughts using the comment box at the bottom of this blog.

Here is what I have concluded:

  • Boardroom diversity is important. We don’t need all of the same types of people sitting around a table in a simulated echo chamber. (I am not implying that was what she was saying, but I do worry that it could be an unintended consequence.)
  • Understanding roles/responsibilities and executing them are vital to non-profit health. The non-profit sector needs to get better at recruitment, management and evaluation or suffer the consequences.
  • The characteristics and traits of an effective non-profit executive director (aka CEO) are changing with the times, and hiring the right person might make all the difference in the world when it comes to board development, board governance and team cohesiveness from the front line to the boardroom.

sleepless2After listening to my friend’s recording, I started Googling around and searching for anything that anyone might have written about characteristics and traits of effective boards. I was especially intrigued by her question about incorporating personality testing into the board development process. After all, many workplaces are incorporating this type of assessment into their employee hiring process.

I didn’t really find much of anything that resonated, but there was some interesting stuff on Myers-Briggs personality testing that pertained to the non-profit sector. Here are some of the better links:

While I suspect you may find these links interesting, they still didn’t help me process what my sleepy California friend had ignited in my head. And then I came across an online post at Ivey Business Journal titled “Profiling the Non-Profit Leader of Tomorrow“.

This article focused on the executive director as the linchpin to what my friend had identified. They identified 15 “must-have” attributes that a non-profit leader must possess in order to be successful. Those attributes are as follows:


  • Strategic thinker
  • Relationship builder
  • Collaborative decision-maker
  • Entrepreneurial achiever
  • Effective communicator
  • Change leader
  • Inspiring motivator

Personality Traits

  • High integrity
  • Adaptable/Agile
  • Perseverant/Patient
  • Interpersonal sensitivity
  • Passionate about the mission


  • Financial acumen
  • Deep sector-specific knowledge
  • Understanding & valuing diversity

I suspect a number of these competencies and skill sets also can be applied to your board development process.

If I’ve piqued your curiosity — and I suspect that I have — then I encourage you to click-through to the Ivey Business Journal article and keep reading. Enjoy!

Take a good hard look in the mirror this morning. How many of these attributes do you possess? How do you know you possess them? Do you conduct 360 assessments asking for your employees’ feedback? If so, what do they say about you and these attributes? Does your board development process look for volunteers with these attributes? If so, what tools do you use to help identify these attributes?

In addition to sharing your thoughts about these questions in the comment box below, I welcome your thoughts about the question I asked earlier in this post about my friend’s online recording.

We can all learn from each other. Please take a minute out of your busy day to share with your fellow non-profit friends.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC

What revenue model is your non-profit agency using?

source of fundsMore than a year ago, I stumbled upon a fun article published in the Stanford Social Innovation Review (SSIR)  titled “Ten Nonprofit Funding Models“. It provided clarity for me around what I was seeing in the non-profit sector. So, I bookmarked it and re-read it from time-to-time. Recently, I’ve found myself talking to a number of different non-profit professionals and board volunteers about this article, which is usually a sure sign that I better blog about it.

As you know, there are many different types of organizations calling themselves members of the non-profit sector.

  • Churches
  • Universities
  • Hospitals
  • Arts organizations
  • Membership organizations (e.g. chamber of commerce, etc)
  • Human Services/Social Services

Each of these types of non-profit organizations look very different. Each board has different wrinkles, and their revenue models also take on a different complexion.

The SSIR article by William Landes Foster, Peter Kim, & Barbara Christiansen names and describes ten different funding models:

  1. Heartfelt Connector
  2. Beneficiary Builder
  3. Member Motivator
  4. Big Bettor
  5. Public Provider
  6. Policy Innovator
  7. Beneficiary Broker
  8. Resource Recycler
  9. Market Maker
  10. Local Nationalizer

Some of you are probably wondering what each of these models means. I encourage you to click-through to the SSIR article and read it for yourself. Those authors do a great job of breaking down each of the models.

What I’ve found myself talking to many non-profit professionals and board members about lately isn’t which revenue model they’re using. My conversations have been rooted in what the authors of this article say in their final few paragraphs:

In the current economic climate it is tempting for nonprofit leaders to seek money wherever they can find it, causing some nonprofits to veer off course. That would be a mistake. During tough times it is more important than ever for nonprofit leaders to examine their funding strategy closely and to be disciplined about the way that they raise money. We hope that this article provides a framework for nonprofit leaders to do just that.”

In my opinion, it is so true that many non-profit organizations have sought money wherever they can find it, especially once they realized that the economy isn’t going to just snap back into place and we now find ourselves in a “New Normal”.

board of directors4So, the conversations I’ve been referencing throughout this post have to do with board development and not the actual revenue models.

I believe that non-profit organizations build their boards around their revenue model. For example, if your agency is highly dependent on fees, then you probably haven’t recruited world-class fundraising volunteers to sit on your board. The same holds true for organizations with a government funding revenue model.

So, when you start tinkering with your revenue model (e.g. adding an event, pledge drive, direct mail, etc), I believe it creates tension in the boardroom for two reasons:

  1. You’re asking people to do something that wasn’t part of the original deal.
  2. You’re also asking people to do something they aren’t likely good at doing.

If you find yourself in the position of having to tweak your revenue model, I suggest the following:

  • Facilitate a conversation in the boardroom and build consensus around the idea of changing or tweaking your revenue model. Make sure all consequences are understood and appreciated.
  • Ask your board governance committee to complete a new gap assessment based upon some of the new roles you’re asking board members to take on.
  • Focus your board recruitment efforts on bringing in new board volunteers to help fill your newly identified gaps.
  • Allow current board members to step off the board gracefully and help them find a new seat on the bus where they can still participate in your mission.
  • If you need a blended board to make your blended revenue model work, then deliberately talk about roles and responsibilities in the board room to avoid misunderstandings between volunteers.

The New Normal may have thrown your organization a curveball, but it doesn’t mean you need to go through a dysfunctional transition. A little bit of thoughtfulness and board engagement can go a long way.

Did you click-through and read the Stanford Social Innovation Review article? If so, what were your thoughts? Which revenue model is your agency using? Do you find yourself tweaking your revenue model in an effort to adapt to The New Normal? How is your board handling the transition?

Please scroll down and share your thoughts and observations in the comment box below. We can all learn from each other.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC