Episode 87: The Nonprofit Success Roadmap: Stage 7 – Build a Sustainable Nonprofit
Are you self-funding your nonprofit organization? Learn what it takes to get consistent, outside funding that leads to a sustainable nonprofit.
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NONPROFIT SPOTLIGHT:
This week's episode highlights the nonprofit "DiDi Hirsch".
"DiDi Hirsch" is a mental health service organization that focuses on free suicide prevention services as well as mental health substance use disorder services.
Check out DiDi Hirsch! 👇🏿👇🏿👇🏿
Website: https://didihirsch.org/
Instagram: https://www.instagram.com/didi_hirsch/
Facebook: https://www.facebook.com/didihirsch.org/
Twitter: https://twitter.com/didihirsch
YouTube: https://www.youtube.com/didihirsch
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Podcast Transcript
Speaker 1 (00:02):
Hey fam, it's your girl, Amber Wynn, Philanthrepreneur, and I'm excited about 2024. A lot of changes are in store here on air with Amber Wynn. And as I wrap up with new episodes and some new additions to the format, I wanted to revisit probably the most important episodes on the show, the nonprofit Success Roadmap path. Because when you stage your nonprofit, you save yourself hundreds of hours in sweat equity and thousands of dollars out of your pocket because you're not focusing on work, your organization isn't ready for it. Here's the thing, you have to be honest. If you've been self-funding your organization for the past 5, 10, 15, 20 years, don't say, oh, I have an accurate budget, or I have a clear mission. Because if you did, you wouldn't still be self-funding your organization do something different to get a different result. Okay? So take a look at the seven stages of the nonprofit Success Roadmap path to determine where your organization is and work to move toward the next stage and look out for new episodes.
Speaker 2 (01:15):
Welcome to On Air with Amber Wynn, where nonprofit leaders learned to fuse passion and commitment with proven business strategies to create long-term funding impact and sustainability. And now here's your host and resident, Philanthrepreneur, Amber Wynn.
Speaker 3 (01:39):
Welcome to On Air with Amber Wynn, your resident Philanthrepreneur. And I'm in full sass mode today. Why? Because we have made it. We've made it to stage seven, the nonprofit Success Roadmap path, and I'm super excited. And if you've been rocking with your girl, I'm here to say congratulations. Stage seven is building a sustainable nonprofit. And what's interesting about this stage y'all, is sustainability means being able to continue to fund your organization over time. And a lot of my nonprofit founders jump right into funding without strategically planning for long-term consistent funding. What do I mean by that? I mean, there are fundraisers, but the fundraisers aren't connected to the budget and it's choppy. It's choppy. And this stage, stage seven, is going to talk to you about how to keep your doors open. Here's the thing, you can start a nonprofit. You can get your community just really comfortable with you being a resource, but if you're not getting outside funding, if you're self-funding your organization and you're doing your community a disservice, because at some point you won't be able to maintain your household and maintain your nonprofit.
(03:04):
And so what's going to happen is you're going to close your doors and then what's going to happen is you won't be a resource for your community. So stage seven is about building a sustainable nonprofit. The world needs nonprofits, the world needs you. And so I made sure that stage seven talked about how we're going to keep your doors open forever. A part of a sustainable nonprofit is succession planning. Sometimes people start nonprofits thinking that it's their business, it's not. It's a public charity. And at some point in your evolution, you need to think about the organization being around. Even if you're not around, that is a part of a sustainable organization. If you drop dead tomorrow, heaven forbid what's going to happen. If you've been funding your organization yourself, if you've been the only one making sure that the services are delivered, if you die tomorrow, then your community is going to miss out on your resource. And so we don't want that. So today, stage seven, we're going to talk about building a sustainable nonprofit. But before we jump all into it, let's hear from one of our sponsors.
Speaker 4 (04:19):
This is you and this is your business. From invoicing your first client to your 10th club to your hundredth client, you'll need to get paid quickly. Pretty soon you'll be ready to hire some help and you'll need to pay them. As your business grows, wave is there to grow with you.
Speaker 3 (04:52):
And we're back. And today we are talking about stage seven, which is the last stage of the nonprofit Success Roadmap path. We have stage zero, which is thinking about starting a nonprofit all the way through to building a sustainable nonprofit organization. And I'm a fund developer, right? I'm not a fundraiser, I'm not a grant writer. All of those things come up under the umbrella of a fund developer. I believe you got to do a whole bunch of things to keep your organization going. And as a fund developer, my primary focus is on the dollars and people get a little irritated with me because, oh, it's a nonprofit. You're not supposed to make a profit. You are supposed to. You're supposed to take that revenue that you make and put it back into your organization. But nonprofit does not mean no profit. It means that the money that you generate goes back to build out your organization.
(05:48):
So today we're talking about building a sustainable nonprofit, and what that really comes down to is creating a funding strategy that consistent funding from outside sources. You can consistently fund your nonprofit organization, but that's not sustainable. Number one, because that's going to impact your quality of life. And I am your cheerleader and I am your coach, and I'm here to tell you that your quality of life should be just as good as the quality of life you're providing your clients. And so the way that you do that is you make sure that you have money coming in from the outside to fund your programs, to fund your operations, to fund purchases of vehicles and resources and supplies. And so sustainability can only happen if you have a diversified funding stream. How many funding streams is every nonprofit supposed to have at minimum? Wait for it, wait for it.
(06:49):
For those of you who set 10, you were correct. Not one, not two, not three, 10. I said it. Why 10? 10? Because number one, if you're just getting grants, it takes anywhere between six months to 12 months to get that grant funded. You can't survive off of money you don't have then if you're getting corporate sponsorships, it's a chunk of money, but you need money coming in all the time. Diversified funding stream for a nonprofit is the same as a diversifying funding stream for profit. You need multiple ways for revenue to come in so that you can keep your operations going. So when we talk about sustaining your nonprofit, that's essentially what we're talking about having 10 or more funding streams. We want to make sure also that you are constantly reviewing your annual budget constantly. When we call a budget a financial statement, it's because it has a purpose.
(07:52):
The first purpose is to let a funder know how much it costs to run your organization. But the second most important purpose for you as a founder is to use it as a tool to help you determine what your priorities are. If you look at your budget and you see that we haven't been able to purchase that van, but that van is essential to your programs, then that becomes a priority. If you look at your budget and you see, okay, in our bank account we have $70,000, but to pay the rest of our staff, we need 120. That's going to help you shift some priorities. So that annual budget is supposed to be used to help you look real time at what's going on in your bank account and what you need to do as a leader. Also, that budget is going to help you create that strategy.
(08:44):
My saying, hope is not a strategy. You need to look at what you need to do short term, medium, and then long term. So when we're talking about building a sustainable nonprofit, it can only be sustainable if you understand how much you need to keep your organization operational. Some founders are out there like money come in, money goes out, money come in, money goes out. That's not sustainable. You need to have a reserve so that if anything happens, cough, cough, pandemic, and you have to shut down your organization. You have some money that you can be agile around. Running an organization is sort of like running your household. They tell you you're supposed to have six months of savings in the house just in case something happens. You can stay agile. It's the same thing. You can't be living hand to foot because you've got people who are dependent upon you. The world needs nonprofits. And so I'm here to share with you that in terms of sustainability, the goal outside of having the diversified funding sources is to make sure that they're consistent. How do you do that? I'm so happy you asked. It's by creating a fund development plan, a fund development plan, and that's going to be my offer for you today.
(10:04):
I'll put a link in the section on how to develop your fund development plan. Now, I developed this resource probably four or five years ago when I was executive director. We hired somebody to come in and create this strategic plan. It was like 25 pages, 16 exhibits and appendices, and it just never got used right? And I'm like, okay, thank you board. But I could have done something with that $25,000. And so I created this fund development plan. It is a one pager, it's an Excel sheet. It gives you everything you need to know at a glance. So if you're having a staff meeting or if you're having a board meeting as the founder and executive director, you know exactly everything you need just from this one plan. So this fund development plan, let's talk about it. It's about five columns, and the first column is where you identify your organization's expenses.
(11:07):
So these actually are going to be your budget line items, right? Because you need to know how much money it costs to run your organization. I'll have people say to me, oh, about $25,000. That's not running an organization, that's not a salary. Who can live off of $25,000? Then we're not even talking about programs when we talk about sustainability. Sustainability means that your organization is fully funded. Salaries, benefits, merit increases, all of your supplies, everything is fully funded. If it's not fully funded, then your organization is not sustainable. So when we talk about that, when we identify all of the expenses, we want to make sure that they're all there. So that's the first column. The second column is you want to prioritize what is important. So you're going to list everything, but you can't pay for everything. You just don't have the money. We want to make sure you understand what needs to be funded though.
(12:11):
We don't want to exclude anything because that's going to mess up your fundraising strategy. So first column, what needs to be funded? Second column is the priority. This is how you determine the priority. If it's zero to six months, it's urgent, right? If it's a year to two years, it's important. And if it's three years and on, then it can wait. So for me, salaries would be important. You want to fund a salary right away, but it's going to take some time because that's a hunk of of money. So you are going to put in that second column important, and now you have a strategy. You're not focusing all your energy on zero to six months getting overwhelmed because you're trying to fund everything. You are very clear. You're going to fund all of those things that you clicked on for zero to six months.
(13:02):
That's going to be utilities, that's going to be rent, that may be mileage, all of those things that have to be funded right now, and that's how you create your strategy and that's how you let your board not get overwhelmed that they've got to fund a $300,000 budget because it is, it takes $300,000 to fund it, but you are saying to them, but we're not doing it all at once. So the next column is when are you going to fund it? So it's urgent, it's important, or it can wait. So now you're going to say, so if it's urgent, we're going to fund it in Q1. If it's important, we're going to fund it in Q4. So now your board, your volunteers, you can breathe because you have a strategy on when it is you're going to do your fundraisers, and then you get to plan them out.
(13:55):
And that takes us to the next column, which is what is the funding strategy? Remember we talked about having 10 different funding streams. So you're going to identify what those funding streams are, and now in this category, you're going to drop them into this column and say, we're going to have a golf tournament. We're going to have a GoFundMe, we're going to have naming opportunities. You just list them all, and this is where it's key. Whatever that funding strategy is, it needs to cover one of those budget line items. You don't want to have opportunities to fund a budget line item and not being intentional. Some people will have a fundraiser and say, oh, we just need to raise some money. No, no, no. Your fundraiser needs to be attached to a line item. For example, that golf tournament, as a board, your board needs to determine we're going to raise $80,000 from that golf tournament.
(14:53):
40,000 of it is going to go for our executive director. 40,000 of it is going to go for our program director. And that's how you fund your organization with this fund development plan. It's laid out what the expenses are, what the priorities are, what funding strategy is going to fund it, and then the last column is who is going to lead the committee? This column I created, well, I created the whole plan, but I specifically put this column on here because as founders especially and as executive directors, we tend to take on too much. And so this last column is to help give you work-life balance. You have this column and you want your board and your volunteers to look at all of the funding strategies and select which ones they want to chair. Why do you want them to select it? Because you don't want to burn your people out.
(15:44):
If they can go in and you have 10 funding strategies and each person picks two, one to lead and one committee to sit on, then they're not going to be burnt out and they know for the rest of the year what their commitment is. So you're not calling them up. Can you go to this fundraiser and then next month can you come to this fundraiser? And then the month after that, can you buy this chocolate? We're trying to raise funds. That's how you burn your people out. That's when people stop picking up your phone calls. So this fund development plan has been designed to accomplish multiple goals, but mostly for me it was making sure that we had work-life balance, diversified funding streams, consistent revenue coming from outside sources and making sure that every expense in your budget is covered. It's so sexy, I just have to say it. I know I'm tooting my own horn, but it's sexy. So I want you, when we are talking about long-term sustainability, to think about the whole package, not just here and now, and this fund development plan is going to get you there. Alright, so we're going to pause for a minute to hear from another sponsor, but when we come back, we are going to, I answer the question from Ask Amber, so I'll see you when we get back.
Speaker 5 (17:03):
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(17:29):
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Speaker 3 (18:14):
Welcome back to On Air with Amber, your resident, Philanthrepreneur, your girl on the scene. I got you. I'm so excited. I'm on full Sass mode today because we have reached stage seven of the nonprofit Success Roadmap path. It's zero to seven and it helps nonprofit founders to get rid of the overwhelm, to get over, to get past the stress of trying to figure out this thing called the nonprofit. It's a lot y'all. People make it seem like it's easy. Oh, just start a nonprofit and you can get grants and it's not that simple. I'm never going to lie to you. I've been doing this for 30 years. I've done everything from emptying the trash can to giving out money and I'm not going to lie to you. It's not easy, but it is doable. And so we've reached the top of the mountain top and let me just tell you, when you reach stage seven, it's not over.
(19:09):
It's constant. It's just like a business. You're constantly reinventing yourselves. You're constantly trying to create a solid foundation so that your organization can go on and on and on. And at this point in the session, we're going to do a session that's called Ask Amber, and it's where you get to ask me any question that you want and if you're interested in asking me a question, hit me up on social media, post it there, let me know what it is that you're interested in hearing about because I can talk all day about anything nonprofit because I just love it and I've been in so many different positions. I can talk from that experience, but I want to make sure that I'm covering topics that are interesting to you because at the end of the day, that's what I'm here for is to support you. But today's question and ask Amber is how do I answer this question on grants? How does your organization plan on sustaining this program after funding ends? So when you apply for a grant, usually in the end, the funder wants to know how are you going to continue the program when they stop giving you money? Invariably, I have funders say the same thing. Well, you need to give me more money. That's not the right answer. When we talk about mindset, and we're going to talk about this in our mindset, minute funders expect you to fund your nonprofit.
(20:45):
Nonprofit founders have got to shift their mindset in thinking that the funder's purpose is to give them money. It's not the funder's purpose is to meet their funding goals and objectives, and they're partnering with agencies and organizations out there who align with their mission. Once we get our nonprofits to the place where they understand that it's not the responsibility of the funding agencies to fund their nonprofits will be in a better place. They want to know, okay, I'm going to give you $250,000 for three years to fund this program, but how are you going to continue the funding this program after I give you the money? And you can't say, I'm going to reapply and you give me more. What you need to let them know is that they're not wasting their investment. If you can't share with them how you plan to keep this nonprofit program going, then that's a waste of their investment.
(21:42):
They've given you $250,000 over three years, and once they stop funding it, that program's going to end. Why would you do that? You wouldn't. So what they want to know is what do you have in store to keep this program going? How would you answer that? They're like, well, I don't know. Well, hope is not a strategy you need to know and you need to go in with the strategy. And if I were answering this question, this is what I'd say. Well, number one, we have different grants out there looking to continue to support. That's one. I would give them the names of the funding agencies that I'm actually reaching out to. You don't just write a grant to one nonprofit funding agency. You write to three or four and you customize those grants and you don't know which one may fund you. So you've got other feelers out there, but that's not enough because like me, they know you can't live off of grants.
(22:42):
So you want to tell them that, number one, we've got grants out. But then number two, our board is committed to this program. And not only are they providing a give, which are board dues, but they're constantly out there looking for resources to help fund the program, which is why in the beginning when we talked about building your leadership, you need to have people who are out there looking for resources to fund this program. That's why the IRS discourages you from having friends and family on the board because they're not fundraisers. So it all starts to tie in together. But from a funder's perspective, to know that the board is committed to keeping this program going by sustaining it with their board dues, which are unrestricted, that says a lot. Another thing that I would say is we're going to do other things like requests, corporate sponsorships, looking for opportunities like advertising and naming opportunities.
(23:44):
I'd let them know all of the things from those 10 diversified funding streams that I'm going to do to help make sure that this program is funded. And then lastly, I may look into some of those 10 funding sources that I'm doing and share that with them as well. So they just want to know that you have a plan for keeping the nonprofit program going after their funding ends, and I think that's completely reasonable, right? So, all right, let's move on to our next session, which is the nonprofit spotlight. As you know, I am the biggest cheerleader for nonprofits out there doing the work in the community, and this organization has been around for quite a long time. Here in LA County, it's Didi Hirsch. And Didi Hirsch is a mental health services organization that's provided free mental health, substance use disorder, and suicide prevention services since 1942. They are a mainstay in our community, and I'm excited to provide this spotlight on them because they do the work, y'all, let's check it out and you can check it out for yourself.
Speaker 6 (25:02):
When I was really young, probably four years old and didn't know where it's like stigma or trauma or alcoholism, I was trying to figure out the world and what was normal and not normal. I was playing marbles with a boy, and I asked him, does your daddy beat your mommy too? My older sister took me aside and said, don't ever talk about that. So that's the first time I learned there are things that stay in the family and that aren't supposed to be known in the outer world that they're not okay. When I got to be in my twenties, I realized that I needed help, and I realized there were psychologists and psychiatrists and people like that. I think the idea that if I took medication, it would mean I was really, really sick and I didn't want to be a really sick person. I finally got up the nerve to try medication. I remember saying to the psychiatrist afterwards, I thought, what I wait so long? And I mean, there's something called internal stigma. I mean, we grew up in our society and we all absorb it. And so the research shows that by knowing people, then your whole attitude towards something changes. So telling your story is the most powerful thing you can do.
Speaker 3 (26:18):
That's Dei Hirsh, and if you guys want to support them or you need more information, consider making a donation. Please visit them at www.deihirsh.org or call them at (310) 751-5455. And now we're going to wrap out this episode with the Mindset Minute. And really it comes down to, at the end of the day,
(26:51):
Hope is not a strategy. We're talking about stage seven and building a sustainable nonprofit. And hope is not a strategy. As a nonprofit leader, it's important for you to know that your organization is a business and that your business requires revenue to operate. You need to own the responsibility of that. It's not enough to say, well, I didn't know that. If you are running this nonprofit organization, you need to do the research to understand what it is that the IRS and what your funders expect of you. That is your responsibility as a leader. And then secondly, you need to learn what needs to be done. If that means developing your board, if that means developing your fund development strategy, if that means creating an annual budget, you need to own that. You need to be responsible for learning what that is, and you need to get it done because your community depends on you.
(27:47):
And if you don't have the foundation, if you don't have what it takes to keep your organization going in your community, you are doing it a disservice. Stopping starting, stopping starting is disruptive to your community. So I want you to know that I'm here for you, that I am a resource. Visit my website www.amberwynn.net to learn more, to learn what you should know, but it is your responsibility, and I'm going to encourage you to own that and take it on powerfully. And that's it. I'm so excited. We're wrapping up the nonprofit Success Roadmap path. If you've missed any episode, be sure to go back and check them out because I really want you to stage your nonprofit to know where you are so that you don't get overwhelmed, and you can just focus on being in that one stage and moving up to the next and up to the next until you're to this stage of creating a sustainable nonprofit. All right, I'm proud of you and I'll see you on our next episode.
Speaker 2 (28:55):
Thanks for listening. If you enjoyed this episode, subscribe and leave a review on iTunes. Head over to www.amberwynn.net/podcast for the links and resources mentioned in today's podcast. See you next time.
