You may not have heard the recent news about NPX Advisors. In a world where disruption is now a big yawn because it happens so often, the company has introduced something called “shock values” to Wall Street. Ted Williams and Catarina Schwab said in a Forbes article (news link at the end of this article) about the nonprofit sector,
“The nonprofit sector is woefully lacking in creative destruction. Weak and mediocre organizations continue to attract funding, and the best organizations are not accessing the funding they need to make a real impact. The only way to reach a more efficient and robust nonprofit market is to reward the good organizations and penalize the bad ones. This will only happen when there are economic consequences linked to the impact. “
Schwab continued: “The nonprofit capital market is opaque and inefficient. It is a trillion dollar industry and the money is being wasted. And it is being wasted at the expense of human lives and the environment. ”
In this world of philanthro-capitalism where Wall Street is taking on the philanthropic sector, as well as social enterprises, impact values will be issued by non-profit organizations and investment funds will only go to those organizations that demonstrate a result or impact. measurable. The philanthropic guarantor will provide benefits to investors.
I don’t know about you, but I think that’s quite attractive to the major donors because they don’t have to waste money on programs and initiatives that are not going to work.
Leadership is the Holy Grail
I think some nonprofit executives and board members are reading this article and telling themselves that this will never happen. Impact values will not get traction. Impact values will not affect my donors or my organization.
Think again.
It may have taken time, but much of what nonprofits in New York have been dealing with for decades with Wall Street bankers pushing metrics and the impact has spread throughout the nonprofit sector. Today, even small $ 10 donors are in no mood to donate to organizations that are not showing impact or in some way showing that they are making a substantial difference.
So where would you start?
The answer is simple: leadership.
The success of any organization has only one path, and that is through leadership.
Key Questions for Your Annual Board Meeting
See your annual meeting as an opportunity to clean up the house if board members who served their purpose at some point no longer do so. One of the easiest ways to find out where your board members are and suggest where they should be is to do an annual board survey. It’s an opportunity for your leaders to speak up and take responsibility, which sets the tone.
The following are some critical questions you can use for an annual survey to encourage board members to begin looking at their role within your nonprofit organization.
- Do you understand and support the mission of the organization?
- Do you feel knowledgeable enough to be able to communicate the work done by the organization to others (eg, individuals, corporations, foundations, the media) who are not familiar with the group or its work?
- Do you attend regular board meetings?
- Do you understand the financial statements provided by the organization, including annual reports, audited financial statements, 990s, etc.?
- What are your thoughts regarding your previous fundraiser or your efforts to help the group raise the financial resources it needs?
- Evaluate your effectiveness in talking to others outside of the organization, and have you been able to raise money or do you need additional support? That is how?
- What are your thoughts on your ability to raise funds or make a meaningful donation for the new fiscal year?
- List the areas where you can use your skills most efficiently to help raise money and describe how you can be helpful in these areas (eg, grant proposals, government fundraising, corporate contacts).
- What areas of fundraising are you willing to spend your time on (e.g. grants, special events, government fundraising, individual applications, etc.).
- Do you have a good working relationship with the CEO of the organization?
- Do you have a good working relationship with other board members?
- Do you serve on a board committee? If so, which one? If not, would you be willing to help and, if so, which committee would you like to join?
- Do you find your service from the board of directors to the organization rewarding to you? How?
- Do you know potential board members that you would like to refer to potentially serve?
- What do you recommend, in any case, to improve the performance of the entire board of directors?
Once you start enlightening your board members, you may see the possibility of removing any board member to save face or recruiting board members who will better serve your organization in these times. I don’t know if impact values will gain traction, but I have a feeling that when Wall Street is involved, it has a good chance. The best nonprofit leaders are those who understand that their role is to stay ahead, and in this environment, it all starts with a look in the mirror and all leadership.
Forbes article : New ‘impact security’ could revolutionize philanthropy