We Are Our Own GPS

Posted by Sharon Danosky | Posted in The Philanthropy Therapist | Posted on 28-03-2012

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Dear Friends,

How to motivate Boards, a donor, and even development directors is a question we all face from time to time.  I was lamenting this dilemma with a friend the other night, and she offered some words of wisdom.  “It seems to me,” she said thoughtfully, “that they need to understand what I explain to my own children.  You are your own GPS.  You control the direction of your own life.  If you don’t put in the right coordinates, you are not going to end up where you want to be.”

Ah-Ha – I said.  The most effective motivation comes from within – not from without.

It is something we in the non-profit world need to consider today.  For better or for worse, we control the destiny of our own organizations.  We may hit a few bumps along the way and take a detour or two, but we have to control our own destiny if we are to succeed in fulfilling our missions.

Today, non-profits are facing challenges that haven’t been seen in decades and didn’t happen overnight.  Over the past 20 years, there has been a proliferation of new organizations attempting to solve problems and issues that have been prevalent for a long time, often offering new solutions.  This proliferation, while well-intended, has caused significant competition in the marketplace.  If you layer the economic downturn and the pressure of budget cuts from state and federal sources on top of that, many non-profits find themselves in precarious and even tenuous positions. It is hard to imagine being the master of your own destiny in these circumstances.

However, this is the time to use your internal GPS to navigate the road ahead.  There are a few things to consider as you do so:

1)      Do you have a plan for the future?  This is the time to carefully evaluate your short-term and long-term prospects.  Is it a time for growth and are there opportunities for that?  Is it a time to re-evaluate where you are and what your options might be?

2)      Do you have a philanthropy plan?  Philanthropy is the best way to control your own destiny.  Whether you are moving into a growth mode, trying to stabilize your organization, or exploring options with other non-profits, philanthropic support allows your organization to approach the future from a position of strength.

3)      Is your team highly motivated to go the distance?  Every non-profit is only as strong as the sum of the people around them.  Do they understand what it takes to survive, succeed, and thrive in today’s environment?  This is a time for people to expand, grow, and step up to the plate in extraordinary ways.

4)      Is it time to align forces with another?  Mergers, partnerships, collaborations – these will be more than buzz words in the months and years ahead.  Controlling your own destiny may actually mean finding the best organizational alignment to continue a mission that is vital and relevant.

So, let’s plug in that GPS, make sure it is fully charged, input the coordinates you need and steer in the direction that makes sense.  Do this as individuals and on behalf of the people who depend on non-profits to help with their own internal GPS.

Introducing Christine Lent

Posted by Sharon Danosky | Posted in The Philanthropy Therapist | Posted on 14-03-2012

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Friends,

For most of my career, I have worked on the philanthropy side of a non-profit organization.  While philanthropy is vitally important to building the organizational capacity needed to fulfill a non-profit’s mission, I have also learned how critical it is to look at the entire picture.  Philanthropy is important, but philanthropy alone will not drive the engine.  Today’s thriving non-profit also requires astute financial management, the ability to forecast, manage risk, and balance contractual and philanthropic revenue.  For many non-profits, it is difficult to dedicate the resources required to accomplish these goals.  Day-to-day operations can impede the ability to invest in the planning that is required.

I know from experience that when such an investment is made in building philanthropic resources, the results are very effective.  I am pleased to announce I am expanding the services of Danosky & Associates with the addition of Christine P. Lent, CPA, to lead a new Financial Services Division. 

With over 16 years of professional experience in both the for-profit and non-profit sector, Christine’s mission is to help non-profit organizations develop and streamline their financial systems, business processes, and reporting so that they can unlock their full potential and fulfill their mission.  Through an integrated approach, Christine can help your organization accelerate growth, lower risk, address capacity, and ensure compliance.

It gives me great pleasure to introduce Christine in this issue with her own blog – The Financial Therapist:

Dear Readers,

My involvement with non-profits began with volunteering in college at the RI School for the Deaf and has continued through my recent involvement with the local library, among other places. I learned from an early age that it was much more fun and rewarding to donate time and effort to an organization than merely opening my pocketbook.  Now, I have a chance to make a difference by leveraging my business experience to assist non-profits in running more efficiently, maximizing resources, and increasing their financial return so they can best fulfill their missions.  Like many donors today, I truly believe that if most non-profits were run in a more business-oriented manner, they would have more time and money to fulfill their humanitarian mission!

Good financial reporting and analysis give all stakeholders, from the internal management team to external constituents, full visibility of the current financial condition.  This allows the organization to proactively develop an action plan. It is always better to act ahead of the curve rather than playing catch-up.

I am also a believer in the single-page financial dashboard which provides key data points for all to easily read at a glance!  The dashboard can answer questions relevant for each organization, such as:

  • What is our cash balance in the bank?  What are our cash flow projections?  Will we run out of cash at any point in the upcoming months?
  • What is the status of all current campaigns?  Are we meeting our goals to obtain pledges?
  • How is the collection of the pledges?  Do we have any delinquent pledges from donors and what actions may be needed?
  • How are current operating expenses compared to budget?  Do we need to make any changes in the operation to stay on budget?

Philanthropy has always been an important part of the American culture, and today it is critical if a non-profit organization is to control its own destiny.  I believe it is just as critical to understand, analyze and effectively manage the fiscal health of a non-profit.  Only then can we ensure it will be able to promote human welfare for a very long time!

Sincerely,

Christine Lent

 

Finance and Development– What Strange Bedfellows

Posted by Sharon Danosky | Posted in The Philanthropy Therapist | Posted on 07-03-2012

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Could there be two more different personalities in an organization?

The Development person is often seen as outgoing, gregarious, and people-oriented. Gee, aren’t they the ones planning the gala, going to lunch, dinner, breakfast, whatever?  They are seldom in the office, and if they are in the office they’re either on the phone or talking with someone in their office.  They bring in the money, don’t they? We love them for it!

What about the Finance person?  They are always in the office, seldom out – though most of the time you can’t really tell because they are hidden by file cabinets and mounds of paper stacked on their desks. Yet, amazingly enough, they can always find that exact piece of information when asked.   They are always looking at the computer (even if you’re talking with them) and all they really care about is the bottom line and if everything is on budget.  Thank goodness we have them in our world too!

No wonder the myth prevails that Development people and Finance people don’t get along.  Yet, I contend that the most highly functioning organizations are those where these two powerhouses do work well together as they are simply opposite sides of the same coin.

Both Development and Finance have a critical role to play in achieving organizational capacity and excellence.  While neither have anything to do with the services that a non-profit performs, they fuel and run the engine responsible for moving the organization forward.  The liaison between the two should be seamless.

When Development brings in the revenue, it may be allocated to one of several areas (note: these are not the actual accounting terms, but will suffice for the purposes of this blog):

1)      General operating revenue – unrestricted funds to be used to cover day-to-day costs

2)      Capital revenue – to be used for buildings, facilities and capital expenses

3)      Restricted revenue  – which may be used only for a specific purpose – no other

4)      Endowment – funds and the interest on those funds set aside  for a host of purposes

It is the responsibility of the Development Office to know how those funds are to be used when they are being raised, to allocate them appropriately when recording those gifts in their development database, and to provide financial reporting to the Finance Office so they may be sure the revenue is expended in accordance with how or why the funds were raised.

The Development Office should also understand how much revenue is needed in each category.  Every Finance Officer will say: “Just raise the funds – I’ll figure out where to put it.”  Unfortunately, that is not always the wish of a donor.  So, a good meeting of the minds is necessary to provide the Development Officer with the tools to raise the funds needed.  The Finance Office could make a significant contribution by providing data and information on how the funds were used that could also be shared with donors.  Then, there is the most basic transaction between Development and Finance – reconcile on a monthly (or at least quarterly) basis , and make sure you’re counting the money the same way.

Development and Finance – the two offices most concerned about money.  It’s important they get along.

“Money is always there but the pockets change; it is not in the same pockets after a change, and that is all there is to say about money.”  Gertrude Stein

Are You Victims of the Teflon Plan?

Posted by Sharon Danosky | Posted in The Philanthropy Therapist | Posted on 01-03-2012

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Dear Friends,

How many of you have strategic plans are sitting on shelves gathering dust?  I’m almost afraid to ask.  They are what I refer to as the Teflon Plans.  Lots of good ideas and words, but nothing sticks.  For a plan to be relevant, it must be tied to actionable items that can be measured toward a meaningful goal.  However, very few plans are set up that way.

I am often asked to facilitate Board retreats, and I enjoy doing this immensely.  There is always so much energy and enthusiasm within these events.  The creativity flows and the problem-solving goes into high gear; lots of great recommendations and good intentions come forth.  Everyone compliments each other at the end and often leave experiencing that kumbayah moment.  Everyone goes back to their lives, the plan gets typed up and delivered then sits somewhere on that shelf gathering you know what.

It doesn’t have to be that way.

It is said that life happens while you are planning.  That is true.  Yet, planning is still critical if you are to have a blueprint for moving your organization forward.  The strategic planning process is one that helps an organization crystallize its vision for the future and identify the specific strategies it must undertake to realize that vision.  The planning process should be designed to achieve the following outcomes:

  1. Establish Board consensus around a shared vision
  2. Establish long-term objectives and priorities
  3. Outline the strategies you will implement to achieve your vision within three to five years
  4. Assess the need and resources required to build capacity and infrastructure
  5. Identify the short-term priorities and tactics to undertake each year that will move you strategically toward that vision
  6. Implement outcome measures by which to assess progress

These principles work even if you decide to hold a retreat that isn’t necessarily about developing a strategic plan.  The ultimate goal is to ensure that everyone is on the same page, seeing the same vision while becoming willing to work in tandem and taking very specific steps to help ensure that you arrive where you want to be.  The process is true for those who are trying to build a sense of team among Board members, address issues of governance, or help members of the Board become more comfortable and productive with fund raising.

The real success of a planning retreat, however, is how well you plan before the retreat and what you do after the retreat.

Before the retreat, be sure you are planning to “plan.”  Understand the issues you are going to address and that everyone involved in the planning process has had a chance to share those issues in advance.  If using a professional consultant or facilitator, they may recommend different methodologies for doing that.  Sometimes the best methodology is one that includes an organizational or needs assessment.  Other times, you can arrive at understanding key issues by asking three simple questions:  what is working well, what is not working well, and what should be done differently?

Once the planning process is over, be sure that the action steps you have identified are well defined with measurable outcomes that move your organization toward its ultimate goal.  Again, these can take a number of forms: well-laid out strategies that have defined timelines and outcomes, or a clear set of goals where business plans or mini-plans will be developed and measured.  Don’t be afraid to assign defined areas of a plan to a specific Board committee which has the responsibility to report progress at every meeting.

The bottom line is that if you are about to invest the time and energy in planning, make sure your plan is going to stick, not slide around like a scrambled egg on Teflon.