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Jun 11, 2010

We Are What We Are Funded to Be—Is Your Nonprofit Linking Mission to Money?

At this year’s Franklin University Mason Leadership Symposium, I had the honor of presenting to several nonprofit professionals on issues of nonprofit finance. It is my hope that these invaluable nonprofit pros realized their organizations’ incredible importance in the community; that without their tireless efforts and organizations’ missions to succeed, the community would experience a great loss.

You Must Link Mission to Money
Nonprofit leaders, remember: the purpose of a nonprofit is to be a reliable provider of a service that fulfills a useful need in the community. However, financial viability requires that you also do some things that more than pay for themselves—you must link mission to money. In order to keep the ship moving on course according to your mission, you must invest in profitable activities.

Unfortunately, national trends have made the public service “buck” stop with the nonprofits—nonprofits are now the public goods provider of last resort and philanthropic and grant trends have weakened them financially. So what’s the solution? How do you link mission to money and maintain your services to the community?

Repeat after Me…
Nonprofits are a key component of the public service supply chain: government, corporate and philanthropic grant-makers need to maintain their supply chain.

To link your mission to money, you must educate and reform your donors. Remember:

  1. You are the authority on what the community needs
  2. You need donors to support your mission priorities
  3. Partial funding makes you the philanthropist, and you don’t have the money to do that
  4. Grants that pay by reimbursement or in arrears make you the donor’s bank, and your balance sheet can’t support loans to donors

Have questions? Need some help coming up above sea level to see the big picture? E-mail us to find out how we can work with you or present a workshop to hone these ideas. Check out our book, Linking Mission to Money: Finance for Nonprofit Board Members, a must-read for nonprofit finance leaders and endorsed by the Battelle Memorial Institute, The Ohio State University and COSI, to name a few. Click here for more on linking your mission to money.