Building Smart Nonprofits, A Roadmap for Mission Success, by David J. O'Brien and Matthew D. Craig, Rowman & Littlefield, 2020
The challenge for non-profits is becoming clear - YMCAs, colleges, public schools, homeless shelters, churches, medical assist groups - they are all hurting from the revenue downturn. Is there any help for them financially now?
We know there is money out there, tax deductible in most forms, but more difficult to capture. Where to begin?
First, lets think about the supporting constituencies who have grown these "outside" institutions to become vital members of our communities. They are not corporate shareholders, and yet they participate in the financials. "They should be governed by different standards and practices than for-profit businesses," say the authors.
Published in August of 2020, Building Smart Nonprofits includes examples of nonprofits deploying best practices and emerging industry trends to position their organizations for the long term.
The USS Midway Museum, a converted WWII-era aircraft carrier in San Diego uses the word "guests," inviting management to capture and understand what visitors are most interested in and what they most value in exchange for contributions.
AVID, a college readiness program for disadvantaged students, collects data on student performance to quantify the benefits its curriculum provides. The idea is to help school districts clearly see the value of AVID's contributions, most especially during the budgeting cycle.
Feeding San Diego, a food bank, uses its logistical know-how to create a more efficient food distribution system to integrate a network of profitable partnerships.
Barrio Logan College Institute, a group that aids Latino students prepare for higher education, gathers diverse entities with strong interest in helping those students achieve higher goals. The idea is to identify those entities and form a strong coalition that supports the Institute; the partners may come from business or other non-profits such as colleges and universities, but the plan is to make the connection clear.
The authors make the point that it is extremely important to develop a financial plan that is not dependent on a single source or type of funding. In fact they say that all well-run non-profits exhibit similar characteristics: diverse revenue streams, strong financial management, personal relationships and storytelling, quality leadership. But did you know that non-profits can also apply for and be approved for credit? That's right - loans, credit lines, direct purchase bonds, commercial credit cards. If the non-profit is managed professionally and well with a strong support base, the authors present the use of credit cards as not an outrageous idea. But they warn readers to remember the 5C's of Credit to be sure that your application is approved - capacity (cash flow), capital, collateral, conditions and character.