Nonprofit CEOs: Where’s Your Ah-Ha Moment Hiding?
Nonprofit CEOs - What’s the last “AH-HA” moment you’ve had?
Mine is a good one. And it happened after starting to follow personal finance coach Ramit Sethi on Instagram. Ramit was talking about how many of us have learned how to SAVE our money, but we didn’t necessarily learn how to SPEND money.
[AH-HA!]
The last person I want to be is the one who saved blindly for decades, penny-pinched at every corner, and just kept my head down in a stockpiling strategy... but never enjoyed it.
You must learn how to spend well, too. Not only to enjoy the fruits of your labor, but know that, “If I take a risk with my money, it won’t be catastrophic.”
I can’t stop thinking about this in the two months since I heard it.
Could the River(Bank) Run Dry?
Ramit says it’s common in personal finance to focus on running out of money.
But, here’s what he said that got me: “...Another problem is ending up with too much money and no ability to use it strategically. Scarcity is being fluent in all the things you WON'T do with your money and not knowing what you WILL do with it.”
It’s a lesson that has been good for me personally. But, the bonus AH-HA for me was him articulating it in such a way that exposed this as a huge issue for the organizations I serve.
You know one of the main themes I hear from the nonprofit CEOs and board members I work with? Exactly what Ramit said: running out of money. Things like:
We couldn’t do that, it’s not in the budget.
We couldn’t ever spend that amount on a [website, consultant, technology].
But, what if spending on these things helped you raise millions more?
I see it ALL. THE. TIME. The largest commonality of nonprofits that come to me--that aren’t growing their revenue as fast as they’d like--aren’t spending enough money.
Saver vs. Spender (Or Can You Do Both?)
Here’s the truth: There are plenty of nonprofits that have too much money in the bank, but they don’t know how to use it strategically. I have multi-million dollar nonprofits come to me with millions in reserve (not kidding), but all they can focus on is, “What if it goes away?”
What should they be focusing on instead? Using a portion of it as strategic gasoline in their growth engine.
I don’t want you to take this as “reserve funds are bad.” They aren't. In fact, after 2020, I want you to have 9-12 months tucked away. Think of it as disaster preparedness.
But, if an organization has too much money in the bank and is still struggling to grow their charitable revenue each year, they have to come to terms with these key facts:
They aren’t spending enough money to make more money.
They fear the bank will bleed out.
They’re understaffed, under resourced, and under spending.
This is why they aren’t fully funded each year--and it is the very definition of a scarcity mindset.
Face the Fear (then Act)
Nonprofit CEOs: It’s time to educate everyone about what we should do with the money our organizations have in the bank… from advancement teams to board members.
It may seem like a tall order, but as the leader, YOU. GOT. THIS. Because you know:
What’s best for your organization
What you (actually) need to be successful
That there will be years (yes, years) where your program percentage might be perceived as too low
Even if spending the money feels scary, or causes your board members indigestion, or creates more questions during donor conversations . . .
Do it.
Learning how to spend and invest money in growing (traditionally, overhead) results in more money within 2-3 years for programs.
How do I know? With this strategy, my clients regularly add seven-figures to their bottom lines… more dollars than they ever thought possible for program growth.
But, first, it took investing in overhead. Too often I watch organizations avoid spending money on things that would actually help them run better businesses and secure more funds.
Instead of hesitating to spend on growth strategies like . . .
CRM
robust financial management
online tech for an easy giving experience
mission-focused photography from a professional
graphic design services to create stronger communication templates that compete
major-gifts training for your staff who are great grant-writers, but aren’t soliciting individuals
. . . the most successful nonprofits feel confident in these types of investments. Sure, sometimes volunteers can do these things, but not for the long-haul.
To be clear, I’m not suggesting any organization haphazardly turn their budget into a “wish list” of frivolous expenses. What I’m saying is that the risk of growth costs money.
Where Can You Be Brave TODAY?
I get it… this can seem counterintuitive. Spend money to make money, even in a nonprofit?
Yes. Every single time my clients extend the bravery to invest in themselves and their organizations they grow.
This journey my clients take is a pretty practical one, but it pushes against lots of misconceptions in the nonprofit sector. The tricky part is your entire fundraising team must be able to articulate this in solicitations. That’s where I come in.
Whenever you’re ready, here are THREE things you can do next:
👣 Follow me on LinkedIn here where I share the same lessons I teach my clients about attracting larger gen-ops dollars and adding 7-figures + to their bottom line.
🍎 Read my GUIDE! THE TRUTH ABOUT GIVE/GETS :: Top 5 Reasons Your Board’s Give/Get Is Leaving Thousands (Sometimes Millions) on the Table. See how limiting board members to the Give/Get model restricts gifts and keeps your staff from reaching their full fundraising potential. Here to get it.
📈 Work with me to scale your org's revenue by 2-5X and fund your organization’s Strategic Plan // If you’re a business-minded CEO already raising MILLIONS but need to diversify revenue and secure more general-operating dollars to invest in growth, you can apply to work with me here.
