2020: The year OVERHEAD became cool
This year, I’ve talked a lot about many misconceptions in the nonprofit sector that I dearly hope are left in 2020.
I started a little firestorm on LinkedIn last week when I posted a video about this topic.
The biggest one, perhaps? It's that silly conversation about the financial ratios or percentages in our sector . . . you know . . . that overhead discussion.
Yes, I want you to use your money wisely and transparently.
But when a donor said to my client “I’m not giving to your nonprofit organization this year because you’re spending a combined 25% on Admin/Ops and Fundraising”, I was just as frustrated as my client.
📣 Repeat after me: It’s ok that my Admin/Ops or Fundraising percentages are higher during some years than others.
Why?
Because you are investing in your growth. You’re growing a business.
So run this calculation for me:
If you want to grow your programs in the next few years, you may need to allocate anywhere from 15% - 20% of your expenses toward fundraising or Admin/Ops.
Seriously.
When you plan to invest money IN your Admin/Ops and Fundraising THEN you have more money for programs. It never fails.
“But my board wants as much money to go to program as possible this year.”
I know. I do too. But . . . have you done the math? I'm serious.
When this organization was spending 90% on programs, they were investing $1.6M into those programs...
But, once they started investing 15% and 18% into fundraising, what happened?
They nearly DOUBLED the program investment to $3.1M
Don’t buy into the fear of the percentages - allocate expenses in your budget that will LEAD TO you raising MORE MONEY that you can THEN spend on programs.
(Please re-read the above paragraph)
I see so many organizations stuck and not growing because they’re AFRAID to spend money on anything BUT PROGRAMS. It’s a backward approach and a bad misconception in the sector.
Do one thing for me as you make year-end asks and plan for 2021 - don’t limit your growth by responding to that one person who doesn’t understand your plans to scale your nonprofit.
How about you? Do you embrace spending money to make money?
Sherry
—-
P.S. Whenever you’re ready, here are 3 ways I can help you grow your nonprofit revenue:
1. Follow me on LinkedIn for content and resources first
I give away trade secrets and insider info every week - the same lessons I teach my clients about what they can do to start attracting larger dollars and generate more unrestricted money for your nonprofit.
2. Read my WHITEPAPER to see if your overall approach to financing your mission every year might be keeping you from growing.
Here you’ll learn THE BIG FUNDRAISING SECRET that keeps organizations from having the funds to achieve what’s in their strategic plans. Click here to get it.
3. Work with me to reimagine your overall approach to revenue generation
If you'd like to add 7+ figures of charitable revenue to your nonprofit, just send me an email at Sherry@QuamTaylor.com with the subject line “grow.” Tell me a little about your nonprofit and what you need to raise this year. I’ll get you the details! 🎯
