Think Money First

dollarBy Sylia Obagi, director of operations, The Annenberg Foundation

The eighth in our series of blog posts written by BLF 2013 speakers/presenters/sponsors.

Think money first and mission last.

Sounds heretical, I know. But I want every board member to adopt it as a mantra during this year’s BoardSource Leadership Forum, taking place November 7 & 8 in Los Angeles. What’s more, I want you to take the “money first, mission last” approach back to your organizations to engage your colleagues and nonprofit staff in a new kind of conversation.

Why?

Thinking “money first” is the only way to put an organization’s sustainability first. It’s also helps nonprofit organizations make the greatest difference with every dollar that passes through their hands.

In 2007, the Annenberg Foundation launched Annenberg Alchemy, the free leadership training program for nonprofit board chairs and executive directors. Since then, we’ve trained more than 700 nonprofit organizations and 1,700 nonprofit leaders. Over those seven years, I’ve seen the genuine dedication board members feel for the mission of their chosen nonprofit. That dedication often manifests itself in a culture of “mission first, money last” — just the opposite of the paradigm I am now proposing.

Nonprofit leadership is dedicated to service and helping others, but good intentions are not enough by themselves.  Many of us have witnessed wonderful organizations falling into the trap of delivering more and more services without raising matching revenue. Certainly, training and education are vital to good board governance. (http://www.huffingtonpost.com/sylia-obagi/what-nonprofits-need-most_b_3737870.html.) But so is courage. The courage to face a simple fact: Mission cannot be carried out without financial planning and adequate fundraising.

“Money first, mission last!” That’s the real way to deliver ongoing service. We must be grateful for the talent, passion, and perseverance of our nonprofit leaders as they operate in one of the toughest fiscal and economic climates we’ve ever seen. We must always value the compassion and inspiration that motivate such leaders to improve lives and communities. But let’s face it, when it comes to board leadership, there is nothing more important than being willing to get out and fundraise for your cause.

Today’s economic reality gives us all a strong motivation to act. If we take a look at just three federal agencies —  the Department of Labor, the Department of Education, and the Department of Health and Human Services — we see spending cuts amounting to $62 billion dollars due to the sequester. To make the story even bleaker, this reduction does not include city cuts, county cuts, and state cuts! All of which are plaguing cities everywhere.

Private foundations provide about $40 billion per year in grants, most of which goes to the nonprofit sector. The math is clear. Even if all foundation dollars went to offset government spending cuts (and they don’t), there would still be a $22 billion shortfall.

While federal funding shrinks, charitable giving from individuals has remained relatively consistent at about $300 billion per year over the last decade. This is almost eight times more than what private foundations give to the sector. So the money is there, but you won’t get it with a grantwriter! To access this larger pool of money, you need motivated board members as part of an effective fundraising team.

I saw Rip Rapson, CEO of the Kresge Foundation, speak recently, and he mentioned that he asks grantees: “What are you really committed to?” Then he looks at their actions to see if they correlate with their words.

We can apply this simple idea to board service. If nonprofit board members support the financial strength and sustainability of their organizations, then their actions, logically, should align with their commitment.

In this way, thinking money first establishes credibility as well as sustainability.

I think we already know what we need to do. We don’t need another study to tell us that successful organizations have engaged, motivated, fundraising board members. Now is the time to start thinking about the role you can play to help your nonprofit bring in the money it needs. Now is the time for board members to get advice, get training if needed, and take action.

You’ve made the commitment, now get ready to make the ask.

The Annenberg Foundation is a sponsor of the BoardSource Leadership Forum.  We thank them for their support.

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1 Comment

  1. Tiffany Keimig

     /  October 31, 2013

    This surprises me. We train our member agencies to stay true to their mission and to not pursue funding for the sake of funding if it does not align with their core mission, vision, values and beliefs of their organization. We also train on the board’s responsibility to provide financial oversight, ensuring the organization has adequate resources to carryout the mission. I struggle to believe that the mantra of “Money first mission last” could equate to meaningful results. I propose it instead would lead to mission drift and an organization that is unclear about it’s ultimate end goal. Unless the end goal is money. For our organizations the end goal is to assist people in reaching their full potential and gaining economic security.

    Reply

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