What does it take to BE financially savvy right now? Especially with continued uncertainty surrounding funding sources and for some, “off the charts” increases in the need for programs and services?
Three things can help you be a financially savvy organization: Monitor, Stay Focused, and Ask Good Questions that lead to action.
What to monitor? Throughout the year but definitely in times of uncertainty some things to take a look at:
1. Financial track record.
2. Be aware of changes to income source(s) and cost structures.
3. Note how diverse & flexible your financial support is or isn’t.
4. Know pledge redemption history and be prepared for changes.
5. Note how financially sophisticated the board, staff & donors are.
And for more, last week, colleague Laura Deaton from Third Sector Connector posted a great list titled: 20 Questions That You Should Be Able to Answer At Any Given Time About Your Organization’s Financial Health.
Stay focused on core programs & services. Remind yourselves why you exist in the first place. Then identify any weaknesses in funding for core or peripheral programs. Reach out into your community to shore up collaborations or partnerships if necessary to maintain what is core to your mission. For some groups I’m working with this has been a difficult conversation because state or federal funding cuts are eliminating programs. Now is when it’s critical to have your strategic plan front and center to guide the decisions that may need to be made.
Ask questions. Your organization may or may not have the answers to all the questions you are asking, but asking the right questions is key. Financially savvy organizations know the costs of their programs, where the strengths and weak links are, what the contingency plans are for cost cutting and they share that kind of information with more than just the “insiders.” I’m a fan of sharing the good news and the not so good news with donors, volunteers, board members, staff – virtually anyone who is a stakeholder.
Just a week ago, a CEO I work with, we’ll call him Charlie, shared with me that he was surprised and proud that two of his board members made it a point to ask about the funding gap for the organization. The board members brought up the topic at a recent board meeting, Charlie didn’t.
What Charlie said is: “we’ve really trained our leadership to be asking questions and aware of what our financial situation is so they can share it with others and help us to raise the dollars we need.” Sounds like a great board to me.
The second part of asking the questions is being able to make decisions and take action when you’ve collected the information. Don’t let the indecision paralyze your organization.
One of my passions is to raise awareness of the “money” conversation that often goes on behind closed doors and doesn’t get shared until it’s too late. I believe talking about finances and fundraising costs & goals allows others to see that you have a place for them when they are ready to give.
