"There is another crisis, however – one not often covered by global headlines – that prevents local civil society from effectively addressing these challenges: a capacity crisis that keeps these local organizations from reaching their full potential as the change agents we desperately need."

-Conor Diemand-Yauman, Co-CEO at Merit America-

Tutorial 5: Strategies for Fueling Nonprofit

Some foundations engage in talent investing to improve nonprofit capacity; This often involves grants given to improve human resource talents and skills, and in particular, talent investing. (The word “investment” can be confusing. We are referring to investing to achieve impact, not financial benefits). In some cases, foundations with sufficient means have provided quite costly multi-year support to improve leadership ability across numerous, or all, departments within a nonprofit. In addition to the outlay of finances, this endeavor is time-intensive, complex, often requiring extensive consultative services, and outcomes could take years to achieve. However, the funders and nonprofits involved may see vast improvements during and after completing this process. Through this comprehensive approach, it is possible to change the culture and trajectory of a nonprofit – a change that could have a long-lasting or even permanent impact.

A less costly and time-intensive approach involves funding leadership or management training for a small team within a nonprofit. Doing so can nonetheless be complex, likely requiring retaining consultants for the project. A possible downside to this approach is that those trained may leave the organization without others having been prepared to take over their position. It is therefore important for those trained to pass along what they’ve learned.

Here is another quite powerful and considerably less expensive approach: Provide an assistant to an existing high-powered leader or senior staff member. Those most capable of growing their nonprofits often waste extensive amounts of time doing what others could do for them.

It would be a nonprofit leader’s dream to be handed considerable amounts of unrestricted funding; this would enable them to do what they believe is best for their organization. Most leaders would also be thrilled to have someone cover part or all of their operating expenses, allowing staff to finally be freed up to focus more intently on fulfilling the organization’s mission. Kathy Fulton, a long-time philanthropic consultant, put it quite strongly: “I am not kidding when I say that some of the best leaders on the planet spend 50, 60, 70 percent of their time just begging for essential operating funding.”

Hiring a development person to raise money and building strong, productive relationships with donors can have a hugely positive impact on the trajectory of a nonprofit. Doing so can also free up the time of other staff members who find themselves trying to bounce too many balls at the same time. Below is a list of considerations for achieving success whe engaged in this kind of hiring. Some of these suggestions also apply to other approaches to funding a nonprofit. This list includes:

  1. Finding a charismatic person who is good at working with people.
  2. Ideally, finding someone who already has connections.
  3. Making sure that with your donation the organization has two years of funding set aside for this person. Most high-level development people want the security of at least a two year commitment. Providing a sufficient salary increases the likelihood the hired person will stay with the organization.
  4. Picking a nonprofit with strong fundamentals in place; this includes nonprofits being focused on a cause that is at least somewhat popular among funders, having reserved funds, and not being overly depended on a single funding source.
  5. Picking a nonprofit that is providing a unique value rather than one that is competing to do the same or similar work as others. One big problem in philanthropy is redundancy of efforts.
  6. Ideally, having a network database already established. If not, the development person, or someone else could easily occupy six or more months putting one together. You will want to know if the development person or someone else will be doing this work. While paying to have a database set up may seem like an undesirable, doing so by itself is a capacity-building investment that could benefit a nonprofits for years to come.

Other ways you can fuel a nonprofit include covering the costs for technologies, training, strategic consulting, monitoring and evaluations, networking, traveling expenses, special events, marketing assistance, and social media support. One of the least expensive ways to support a nonprofit is by providing a volunteer coordinator who can galvanize a strong team of others willing to give of their time. However, success will depend greatly on the skill level of the coordinator and the knowledge of the staff on successful practices for recruiting and retaining volunteers. Nonprofits can also benefit from multi-year grants, an endowment, a loan, covering capital expenses, tangible assets, and legacy gifts.

As you think about what you are reading, remember that nonprofits are often best positioned to know what they need. It is easy to forget that they have direct experience with the cause at hand, particularly how it plays out in their local communities. And, they are the ones who might have already worked out extensive strategic plans.

It can be problematic when funders offer ideas or support that is not aligned with the nonprofit’s plans or mission. Even great ideas can be counterproductive if they cause an organization to backtrack from what the staff and those working with them have set into motion. This does not mean you can’t make additional suggestions. In fact, You may come up with something quite helpful that has not been considered. But it might be helpful to first understand how your plan fits in context with those you are considering supporting. Staff is more likely to welcome a thought partner who seeks to understand what they have planned, is open to learning, and attempts to build an equitable relationship with them. Issues pertaining to power dynamics creates considerable problems partly because it often leads to insincere aquiessence from nonprofits out of fear of losing a funding opportunity.

Proceed to Tutorial 6

  • Introduction

    Welcome to this series of mini courses. We hope to give individual donors a quick lay-of-the-land

  • Ten Approaches for Funding a Nonprofit

    1. Program Funding: This type of funding is given to cover the costs of running programs, which

  • Donor's Perspectives on nonprofit capacity building

    Many leaders in philanthropy support organizations (PSOs) believe that nonprofits could achieve a considerably greater impact

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