4 Things Every Nonprofit Needs
3. A financing plan
It is not enough to have big goals and a plan for the future; a nonprofit must understand the price tag associated with its strategic plan and how it is going to bring enough money in the door to finance that plan. And a good financing plan analyzes all potential sources of money, lays out a clear road map for bringing that money in the door, and fully integrates the securing of money into the other work of the organization.
4. A pitch for capital
Capital is money to build the nonprofit organization infrastructure, as opposed to revenue, which helps the nonprofit provide more services. Most nonprofits simply raise revenue, but few raise money to build a stronger, more effective and efficient organization. This kind of money is capacity capital. If more nonprofits put together a pitch to persuade funders to invest in organization building, we would start to see many more effective solutions to social problems grow.
In the for-profit world we understand that you can't just sell widgets.You need an infrastructure behind those widgets (staff, technology, systems, sales). But in the nonprofit sector we insist on starving organizations and forcing them to spend every last dime on services, with no money for infrastructure. With a compelling pitch for capacity capital, that can change.
I don't think I'm oversimplifying things. The nonprofits that will emerge from this recession stronger, more effective and better able to really tackle the many problems facing us are those organizations that have taken a step back and put in place the building blocks that will move them forward.
Nell Edginton is president of Social Velocity .