Nonprofit Management 101: Understanding the Basics of Running a Nonprofit
Workshop: Nonprofit Management 101: Understanding the Basics of Running a Nonprofit
- Who: Quinn McKew
- Date: Wednesday, June 9th
- Time: 10am EDT / 2pm UTC+0
- Language: English
- RSVP Here: https://digitalrights.formstack.com/forms/cks44
Digital rights is an emerging field, with many young organizations still navigating how to establish the essential protocols and processes needed to be effective, within a context that requires extreme attention to security, privacy and working with sensitive profiles. It can be overwhelming, especially in a context where many of us have to wear multiple hats, one of which is constant fundraising.
Join us to hear from Quinn McKew, she is one of the few women EDs in the digital rights space running one of the largest freedom of expression nonprofit organizations in the world. She will provide an overview of nonprofit management, share lessons she has learned throughout the years, and answer questions folks may have about nonprofit management.
// We will be hosting a 20 minute post-workshop networking exercise to allow folks to meet others who share their interest, and strengthen collaborations across various lines. Make sure to schedule in 20 minutes extra on your calendar, if you are interested in joining //
Quinn is Executive Director for ARTICLE 19. She has a Masters of Business Administration from Georgetown University focusing on global non-profit management and a BA in International Relations and the Environment from Stanford University. Prior to joining ARTICLE 19, she worked for the largest non-profit management consultancy in Europe, and was a campaign manager for leading environmental organisations in the United States.
- Video that reflects the nonprofit reality: https://www.youtube.com/watch?v=-gELZnORV4U&t=209s
- Nonprofit management is much harder than for profit.
- Managing mission driven individuals is really challenging, and makes us different than for profit.
- We have little or no access to easy capital. We have to scrape for every money we get.
- Donors expect of free work, or it feels that way. However, when doing things with less money than it actually costs, we as nonprofits have very high repetitional risk. Also, folks have very high standards they expect from us, and if we do not reach those standards, we suffer seriously.
The following are 5 things we need to do well to succeed as nonprofit management leaders
1. People Management:
- People management side of our job takes most of our effort. Its so critical to get that right. Basic metric you can look at is:
employee turnover. Average turnover is 19%. How do you stack up?
- Losing an employee can cost between 1.5 to 2.0 of the employee salary. It also impacts employee morale.
- People need to see a career with you. You can never spend too much time thinking about how to make this happen. People need to know they can grow with you and give to the mission.
- What nonprofit employees care about is so different than for-profit care about
- Nonprofit people want to have a voice. They want to be heard, to a cause that is meaningful to you. Worker wanted to be treated as three dimensional person. They want to work with you to set goals and expectations and succeed. They also want to be paid.
- Three dimensional management is one of the top things we can do. If people fundamentally disagree with you, if they feel listened to, it goes a long way. So they feel engaged and part of the mission. People want to be seen as people not workers.
- Key issue of trying to cost this management of people into our budgets. One of the tricks is really cost all those tangible benefits into the salary cost of donor budgets. Don’t see health insurance, childcare benefits etc, as separate. They are staff costs.
- Training and development budget is one of the first things to be cut. A lot of time we need to put together training and development plans by doing with less. We need to make do with less. We can focus on mentoring, making the most of existing skills, and space in the workplace. Skill share is easy because there is variety skill-share in any org. Make explicit to people that they need to make space in that workplace for professional development. And make sure their success is based on that. You build skill share in staff time and running
- Final thing is benefits: do they reflect your desired culture and values.
- Why are people promoted in nonprofit organizations? its because you do your job really well. This does not mean you know how to manage people really well. Then you feel stressed and it causes challenges. Its a big issue in nonprofit. This is why its important to have mentors. You can even find mentors outside of your organization. If you have resources, you can put together an emerging management program.
- Basic Metrics to look at:
- YOY Growth and operating resilience. Operating Resilience = unrestricted income/total expenses. What is the ideal ratio for you.
- Management accounts: This is a financial tool. Its monthly and quarterly statements, and doing it by program. how often do you review them?
Who reviews them? Do you have agreed triggers for actions? What is the story by issue? What are the numbers showing Who is reviewing them? You may need training for staff on how to read this. They can be signals that something is wrong. What are the numbers telling you
- Understand how the balance sheet and financial statement work together.
- The most annoying metric is program efficiency. Donors want 90% efficiency, they want it directly to go to the ground. But really its more like 70% because 30% is used to run the organization. The key is cost recovery. Are you paying to do work for donors or are they paying you. How do you incorporate those costs as part of programing costs? how do you make it clear ed, marketing, etc is necessary.
- Know your numbers!! These are some to look at:
- Basic Metrics: ROI, Efficiency, and donation growth rate
- ROI=(funds raised in campaign-total costs of campaign)/Total costs of campaign.
- Fundraising efficiency = fundraising expenses/amount raised OR $ raised/# of proposal submissions.
- Donation growth rate = (2020 $ raised-2019 $ raised) / 2019 $ raised x 100. At a minimum, you want to have at least 5% growth every year
- Fundraising is also understanding your organization’s definition of success. Its all about the story!! People want to know that they are part of a hero journey. How are you telling that story.
- Key to success in FR is the same as key to success on social media. Its about engagement. What do the funders career about? Why do they want to fund you?
- Goal: Is to get as much unrestricted money as possible.
4. Tech and Operations
- You have limited money to invest in technology and operations, so make damned sure it reflects your values.
- Are they reflective of who you want to be. We fail to look at this. There will be trade offs.
- Don’t forget about risk. We have to manage so much risk every day. But the risk you take as an organization has to be reflective of your values. You need to have values and risk discussions. It needs to be based in what you need to do, and you care about.
- Its also very critical to know where you are as senior leader versus your board. Boards will have much more risk averse approach to our work. There is a lot of hand holding and getting them to the same place. But sometimes they help us re think where we need to be.
- Measurement: How do you know what you are doing is too risky. What are the triggers? How do you know if its become too challenging.
- Its key that you have a good board. what do they need to be effective partners. usually you need to have good committees, finance, fundraising etc.
- The board should have regular assessment of their performance. encourage them to do that assessment. You can bring in a consultant.
- Board culture and makeup should reflect your values and organizational culture. Boards love meeting staff and partners. This is why they are here. Balance meetings around operational and programmatic concerns.
- No staff person works every billable time of the year. there is vacations tc. You need to ensure that timing is including the costing.
- How and when do you take the next step of creating a board. The growth and the change from the founders to the next step is really hard. Founder syndrome is real. Look at it from a risk based perspective. The more you operate, the more you understand the risks you have. It's important to have expertise on the board to speak to. Make sure the board skills reflect the risks you have. You need to make sure that leadership sees the need for this.
- If you are trying to look at taking an org from unpaid to paid people, they need to be good at raising money. They need to understand how to make the case for the story for funders. Explaining why volunteers are not cutting it anymore. You need someone who is dedicated to this full-time. Explain mission impact will be greater.
Team CommUNITY will be updating this blog post as we collect more resources: https://www.digitalrights.community/blog/resources-for-managing-nonprofit-organizations
Bridgespan has a lot of resources for nonprofit management. Much of it is applicable for US-based orgs but many of the management resources is applicable for all: https://www.bridgespan.org/bridgespan-services/supporting-nonprofits-ngos-strategy-growt