I had the chance to spend time with a board of a fairly young non-profit organization recently. This particular NPO has not spent a lot of time developing a culture of philanthropy. They have an annual event that has been successful and is growing, but that is about it.
They have big dreams for expansion that equates to big dollars needed. Our time together was focused on how to build a culture of philanthropy for the organization. The big Ah Ha! for the day came when the board looked at the pie chart of their revenue and expenses and truly began to understand the gap in their annual funding not to mention the funding needed for expansion.
Now, you may be saying to yourself, how could a board not understand that? But, I can tell you that this is not unusual. Aside from the treasurer and active members of the finance committee (and many boards do not have finance committees) most board members truly do not understand the numbers. It is our job as staff and board chairs to not only make sure they do understand, but equally important, it is our job not to make assumptions that they do!
Once this board came to terms with their own numbers the next Ah Ha! was . . . “If we did not know this, then our constituents don’t know this either.” True!
It is hard to build a culture of philanthropy if your constituents do not understand the need. Transparency is a very important part of the equation, especially within small non-profit communities with a limited pool of donors. How you communicate the need is also critically important. Be transparent for sure, but also focus on the impact of the additional investment needed not just the need itself.
So, the major action step that came out of this session was communicating the financial realities both for the annual operations of the organization and its dream for the future in a way that highlights the impact of the organization and inspires the stakeholders to invest in its future. It is a process that won’t yield success overnight, but this organization is now on the right track:
- The board truly understands its own financial picture.
- The board understands the importance of communicating its finances and financial goals in a transparent and inspiring way with their stakeholders.
- The board has made a commitment to be more transparent and has identified concrete ways to share this information with their stakeholders.
This board has taken important first steps toward strengthening their culture of philanthropy! I look forward to seeing how they grow.
What are you doing to strengthen the culture of philanthropy at your organization? Join our conversation!