A Nano- Micro- Mini- Nonprofit MBA (Course 1)

Many of us have sought advanced degrees to further our professional pursuits. Yet many of us also know there is other education we could pursue that would benefit our staff and organizations. But the investment is significant and our time is precious. For those of you lamenting this reality, we have a solution you may appreciate. In a series of blog posts, we will provide a Nano- Micro- Mini- Nonprofit MBA. We have challenged members of our professional staff to each take a turn outlining five crucial financial management topics vital to the success of any nonprofit leader. This is installment one in your latest higher education endeavor.

1. Nonprofit organizations are economic entities.

Like it or not, the basic activity of any nonprofit comes down to an exchange transaction. Whatever you call it, whatever the latest term of art (output, outcome, impact, etc.), there is something your organization is providing to a client, a funder, or community that someone else is paying for. You ignore the forces of supply and demand at your peril. Whatever you supply must be in demand or you will fail. If the product you offer does not have value, or if someone else provides better value, or if someone else provides it for lower cost, then you will suffer the harsh realities of the market. Find a way to hold on to the core mission that drives your passion for this work, while at the same time having a realistic view of the market.

2. Your finances are your mission.

I have yet to meet the founder of a nonprofit who started the organization because she or he wanted desperately to become a savvy financial manager. We come to the nonprofit sector to accomplish good – whether that is to care for a client or champion a cause. But causes require organizations and organizations require staff and staff require payroll and so on. Six months of a good thing is a bad thing. If you are serious about your mission then do what it takes to fund your work for more than six months. Avoid being a flash in the pan by planning and acting as if your mission is worthwhile and your organization will be here for a long time.

3. Embrace a system.

Organizations are a conglomeration of systems. There are systems for program delivery, systems for management, systems for communication, systems for data, and systems for finance. A good system matches policies and procedures, data entry and reporting to the work your organization actually does. Any system should mirror what you already do – what you already want to accomplish. If your time and energy is being drained off by manually having to create reports or processes or communication that should be coming directly out of your systems, then invest in redesigning those systems. Solid, efficient infrastructure will save you time and money over the long-haul and ensure your mission continues.

4. Become bi-lingual (with numbers).

Treat numbers like they are the language of your newly adopted home country. As nonprofit leaders, we are debilitated if we aren’t proficient in our de facto second language. Numbers are just another way to express reality. And like any book written in a foreign language, once we learn to translate, or better yet, once we learn to think in the new language, we can unlock the mysteries hidden there. If you prefer, hire a good translator in the form of an experienced financial leader. Or learn to use dashboards, graphs, charts, and reports in a way that plays to your strengths in understanding.

5. Educate up, rather than dumb down.

We can’t hide from our areas of weakness by claiming we are concentrating on our core competencies. Sticking to our core competencies is not the same as ignoring the necessary complexities of a financial system we don’t understand. Sticking to our core competencies is not the same as avoiding an important political event because we are uncomfortable around people we don’t know. While it is perfectly acceptable to delegate responsibility, delegation should not be our excuse for remaining ignorant of topics vital to our leadership. We should constantly strive to increase our own capacity.

Visit Course 2, now posted on our blog! And while we do not promise a diploma or convocation, we do hope you’ll be inspired and challenged by your continuing higher education.