This is the second post in our five-part series, Lessons on Leadership, authored by Executive Director Eliza Pesuit as she celebrates her 10-year anniversary leading Global Glimpse. If you have not started from the beginning, click here to watch the short introduction.
The bottom line is nonprofits are businesses. Passion can do incredible things, but it won’t pay the bills!
Successful nonprofits are successful businesses and they require courageous, committed leadership to balance a double bottom line; mission and money. One does not exist without the other, unfortunately too few nonprofits use the story of their numbers to support their work and strengthen their teams.
Balancing mission and money requires buy-in and ownership at every level of the organization. Develop robust financial models and cultivate a number of different revenue streams that include earned revenue and traditional philanthropy. At first, you may have to throw a lot of ideas on the board to see what sticks.
Don’t be afraid to experiment and pilot new financial models, it’s dangerous to depend on any one revenue stream to hold up the financial weight of your organization as it grows. Funding streams can be fickle and organizations that remain agile and innovative weather the storm. Once you have identified viable sources of revenue, double down and put processes in a box so that others can easily understand, maintain, and grow.
At Global Glimpse everyone has a stake in the financial health of our organization – from board chair to field staff. We share monthly financial updates with all full-time staff and board to ensure that they understand how our financials align with strategy and have context on decisions that are made around resource allocation. Team members at every level of the organization are expected to manage budgets, meet revenue targets, and be able to speak confidently about our financial model to external stakeholders. We run frequent financial trainings for all staff and we pride ourselves on building a culture of financial transparency and accountability.
Our staff understand the organization’s finances and as a result, they are more invested and better equipped to weigh decisions in their day- to- day with a financial lens. Too often in the nonprofit sector, financials are kept behind closed doors. I don’t believe this serves anyone. If you’re doing the right thing with your resources, there should be nothing to hide.
It is my goal to prepare every single one of my team members to ask the hard and important questions around finances; if I cannot answer these questions with confidence and honesty then I’m doing something wrong as a leader. Financial health is more than planning, budgeting, and expense tracking. It is building a culture that supports each staff member to be a steward of the organization’s mission.
Key Takeaways: Find Diversified Revenue Streams. Empower Your Staff to Own Their Finances.
Stay tuned for the next in our series, Lessons on Leadership: People Are Everything (coming August, 2019).