Money is key to any nonprofit that wants to have a lasting impact. It starts from being able to generate income to being able to keep financers happy with their investment. But it’s also about spending money on the team, professional development and necessary equipment. There are many stories, thoughts and beliefs about money in nonprofits. Here are 5 unhelpful thoughts about money in nonprofits that I hear a lot.
1. We do good so people must give us money
In your communication with donors it’s helpful to ask them to make a shared dream possible. Telling them they must give you money isn’t persuasive. It can even be a strong repellant. So this thought isn’t helping you generate more income for your nonprofit.
2. As soon as someone gives us money it is ours to decide how we use it
A project grant is given for the implementation of a specific proposal. You decided what you need money for when you created the proposal and budget. And that is how you should use the grant money you receive. The same is true for money donated to a specific campaign. So if you spend money in line with this thought, you’re not keeping trust with your donors that you’ll do as you promised.
3. Bureaucracy around money is a waste of time
Having checks and balances for how you manage and use money in your organisation is an investment in your reputation and credibility as a professional nonprofit that donors can trust. Also, it will help you make sure you use your money in the best possible way. This thought is not helping you in keeping trust with your donors. And it leaves you wide open to fraud, too.
4. We need more money
It’s true, with more money you can do more. But don’t underestimate that you can also achieve good quality work with less money. Also, you need to grow to be able to absorb more money. I’ve seen that getting big money when you’re not ready and unprepared can cause grave problems. So this thought is holding you back from moving forward.
5. We can only work with volunteers because earning a decent salary in a nonprofit is taking away money from the good work
I guess it would look weird to have millionaire salaries in a nonprofit. But that doesn’t mean that people working in a nonprofit cannot have a decent salary. After all, the community you serve deserves top-quality impact. And donors expect top-notch quality work for their investment. So you actually need professionals. And if you need them to work for you consistently, you’ll need to employ or hire them. And then you’ll need to pay them at the level of their expertise. After all, your nonprofit couldn’t actually do the work without them. And that includes good quality management and support staff, too. Thinking you cannot pay people a decent salary isn’t helpful for attracting and retaining professional staff. And that’s not helping you achieve the impact you need.
How I can help
If you would like simple steps to set up and organise your finance & admin foundations guidance by me, you can get a bundle of six simple and short workshops here: https://www.changingtides.eu/financeandadminbundle
If the bundle is too much for you at this moment, feel free to pick one or more of the workshops individually:
- Set up your financial processes: https://www.changingtides.eu/financialprocesses
- Understand important basics of bookkeeping for nonprofits: https://www.changingtides.eu/bookkeepingfoundations
- Be sure you are keeping all the documents you need for project donors, auditors, or officials: https://www.changingtides.eu/documentationfornonprofits
- Plan your cash flow for a year: https://www.changingtides.eu/cashflowfornonprofits
- Get a feel for how time sheets can be helpful to everyone in your nonprofit and set them up straightaway: https://www.changingtides.eu/timesheetsfornonprofits
- Learn how to calculate the price of time spent of your team members, including allocations for general costs that are used in different projects: https://www.changingtides.eu/feesfornonprofits
Please note, the bundle is cheaper than buying all six workshops separately: https://www.changingtides.eu/financeandadminbundle
Want to take about dilemmas you face as a manager, join the Nonprofit Management Confidence Club.
Watch my video Money mindset in nonprofits 3 common unhelpful thoughts about money.
You can also check out my YouTube channel here, and find a collection of videos on HR issues, fundraising, annual reporting, donations and other nonprofit operations topics.
Want to know more and ask questions?
If you want to discuss this more – jump into my nonprofit support community and get input from a wide range of peers and from myself!
Here is how you can join my free nonprofit support community
You can join my free nonprofit support community on the Heartbeat platform here. This group is a safe space for open exchange and discussion on potentially sensitive topics like boards, nonprofit management, fundraising, etc. You can visit the community via a browser or via an app. Here is the link to download the Heartbeat chat app in the Google Play store.
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