Jul 7, 2014
Nonprofit boards have different goals and needs compared to their for-profit counterparts but common challenges offer overlap with solutions that can maximize donations - and increase the impact of charity work. Board decisions, according to Kathy Ridge at NonProfit Quarterly, are often at fault when charities are in financial trouble. Adjusting board members' mentalities and tackling what Ridge called magical thinking can go a long way in increasing the efficacy of charity work and nonprofit payments.
Reporting on a study by Deloitte Touche Tomatsu on "Selected Challenges for Boards of Directors in the Current Environment" in the Huffington Post, Eugene Fram, Professor Emeritus at Rochester Institute of Technology identified a number of obstacles charities and businesses have in common. Crucial is what he described as "overseeing enterprise risk management," meaning the choice between financially viable programs and dropping needed programs in response to decreased donations. Ridge called for nonprofit board members to treat the charity as a small business and make the necessary "sound decisions," demanding facts and so-called proof of life.
A corollary of this approach is the need for nonprofits to focus on strategic planning, creating time to assess and plan progress, complete with benchmarks and criteria with respect to operation budgets and revenue assumptions. Accountability for donations and grants is huge, said Fram, as are investments in new technology - online donation services being one of the most useful.
Finally, Ridge warned nonprofit boards of putting their staff on a pedestal and allowing the mission of the nonprofit to cloud their judgment. The board is responsible for the financial well-being and sustainability of a nonprofit and, to Ridge, a pragmatic outside opinion could be a board's most significant contribution. A charity's good work is both the impact of and the instigator for donations, lightly model the nonprofit board off its business counterpart and use the two to their greatest effect to maximize online donations.