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Nonprofits Must Think Money First! End the Culture of Scarcity

Posted by David Greco on Aug 25, 2017 1:51:28 PM

This post is one in a series written by nonprofit leaders who will be presenting sessions at the 2017 BoardSource Leadership Forum on October 18-20 in Seattle. We hope you will be joining us there.

Blog-Money-img.jpgFor many years, I led a nonprofit consulting team focused on improving the financial health of nonprofits, and we often had more work than we had staff to meet. After one particularly brutal stretch of multiple 60-hour work weeks, we were stressed and burnt out. In an attempt to lighten the mood, a colleague shared a comment made by a friend of hers who was completing her medical residency. In comparing their work stories, her friend said, “Well at least no one dies if you mess up.” Given that we worked as consultants and not on the “front lines,” she technically had a point.

But from a broader perspective, her comment is fundamentally not true. The repercussions of “messing up” may not be as immediate as they can be on the surgical table, but when we as a sector fail, there are consequences. Victims of domestic violence are turned away from shelters, children go hungry, and environmental degradation continues unabated.

One of the reasons that nonprofits, especially health and human service organizations, have to turn away people is that there is a persistent myth that somehow, and for some unknown reason, nonprofits don’t need profits, that they don’t need to pay their people, invest in systems, or put money aside for the future. And this archaic, unproven, and inherently illogical myth is a direct consequence of the culture of scarcity that has plagued the sector for decades. Nonprofits are afraid of losing funding, program officers are afraid of looking foolish, donors are afraid of wasting their money, boards are afraid of being seen as ineffective. So, they all cling to a set of practices and myths that are supposed to demonstrate effectiveness, but, in reality, result in less funding, wasted money, fewer people being served, and a weakened social sector.

Our role as social sector leaders and board members is to ensure that people continue to have access to the programs and services that are essential to creating a more just, equitable, and sustainable world. To truly lead, we need to shift from a scarcity mindset that starts from a position of weakness and insignificance to one that starts from a position of opportunity and strength.

We must shift our thinking

  • from a mindset that apologizes for the burden of asking for money to a mindset that offers investment opportunities to donors and funders
  • from a mindset that tolerates unproductive boards to one that seizes the opportunity to grow the skills and networks they need to succeed
  • from a mindset that exploits sweat equity to make ends meet to one that invests in its people, systems and infrastructure
  • from a mindset where funders and donors view each other as “them” to one where funders and nonprofits are equal partners in the social change work

We need to change how we think. We must embrace a sustainability mindset, an impact mindset, and unleash the potential of social sector organizations to ensure that no one is ever denied access to a safe shelter or a warm meal or medical care or a hand up the ladder of economic opportunity. We must own our possibilities and our vision of a more just and equitable world.

 

Topics: Board Best Practices, BoardSource Leadership Forum, oversight

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