By Brittany Robinett
We’re all familiar with the adage, “Money isn’t everything.” What life experience more often affirms, however, is its caveat, “Money isn’t everything, but it’s certainly something.” For nonprofit organizations, that “something” is the chance to survive and impact the communities that rely on them. While this impact seems immeasurable, the operating costs certainly come with a number attached.
The majority of nonprofits in the United States classify as “small” nonprofits. Financial stress is almost a given for small nonprofits, who are often forced to operate on limited budgets. Because most revenue is immediately used rather than invested in long-term resources, structural shortcomings arise out of these budget constraints. One of these shortcomings is the inability to afford financial expertise at the executive level. Basically, nonprofits often suffer from the top down, because their executive directors cannot provide the necessary financial support.
What are some characteristics of a successful executive director? Google lists of traits, and they will all boil down to enthusiasm for organizational goals, good communications skills, motivational skills, the ability to strategize, and financial acumen. The absence of any one of these traits could cripple an organization; yet, financial savviness seems to hold a greater slice of the pie. Simply put, you can’t compensate for what you can’t afford. Too often, nonprofit executives stretch themselves thin “handling” finances without the knowledge or experience to effectively do so. Because they can neither afford training nor outside expertise, they find themselves misinterpreting data and making decisions that negatively affect the organization’s purse.
Of course, it isn’t necessary for an executive to have any financial expertise. (In fact, executives who lack understanding and conviction for the goals at hand are less than desirable to organizations that aim to have a local – even global – impact.) However, it is important that the executive have a plan to make such expertise easily accessible and to rely upon it. When orchestrating a game plan, executives should keep three tips in mind:
First, give your passion and your pocketbook equal attention. (After all, an organization cannot further goals that it cannot afford to promote.) Focus your energy on selecting staff members who can actually further the organization’s vision. Nonprofits naturally attract passionate people, and while it’s important to pack your organization with goal-driven individuals, it is more important for those individuals to understand and develop strategies necessary to achieve those goals. It’s not always affordable to bring in financial experts to bookkeep or interpret audit data. However, it is possible to model the qualities of an organization that can afford such experts. Hire staff with backgrounds in finance management. Rather than stretching yourself thin by struggling to complete tasks you’re not qualified to do, distribute the responsibility among employees who can see your blind spots.
Second, your board should consist of individuals who actively serve. While it is tempting to surround yourself with fundraising aficionados or folks with strong community influence, it is important to surround yourself with individuals who offer more than the appearance of power. Your board is a reflection of your organization, so you want to build a well-rounded group of individuals who can effectuate its goals. Build a board with strong financially-geared minds, enthusiastic individuals, and people who are willing to roll up their sleeves and take on the not-so-lovely “staff” tasks that come their way. Although board members hold a higher rank, a servant’s heart holds a value all its own.
Third, “know when to hold em’ and know when to fold ‘em.” Executives could circumvent a number of financial challenges by not jumping at every deal that pops up. Cheap (or free) isn’t always better, and it’s important to know when to accept a bargain and when to reject it. Consult with more financially savvy staff or board members before investing in resources – particularly cheap ones. While the price tag looks attractive in the beginning, there may be long-term costs that make them prohibitively expensive in the long run. Sometimes, donations and volunteers are best left declined, particularly when there is no plan to replace them once they’ve diminished.
There’s no room for excuses in leadership, only responsibility. Don’t make your budget your excuse.
Bexley Law Firm, LLC
About the Author: Brittany Robinett is a rising third-year law student at the Georgia State University College of Law.