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ARTS JOURNAL BLOGS
January 6, 2014 by Diane Ragsdale
Happy New Year! This is a condensed and slightly adapted version of a short talk I gave in October at an event called Blowup: Innovation in Extreme Scenarios, hosted by a hub organization called V2, located in Rotterdam.
INNOVATION TO WHAT END?
I predicted in an article I wrote in 2005 that “innovation” would become the next buzz word to emerge in US funding applications and I was right. Predicting the rise of innovation hardly required super human insight.  The whole world was striving to innovate—even before the great recession. And over the past few years the hunt for the next great product for the as yet untapped market has become ever-more-desperate.

Speaking of the recession, in 2008, Paul Light, a professor of public service at NYU wrote an article in which he speculated four possible futures for the subsidized sector in the US arising out of the recession:

1. Rescue Fantasy: nonprofits are saved by significant increases in contributions;
   
2. Withering Winterland: organizations starve themselves into a weakened organizational state;
3. Arbritrary Winnowing: survival of the largest, oldest, and best connected organizations; and
4. Transformation: a redesign of the sector that leaves it stronger, more vibrant, more sustainable, and more impactful.

At the end of the article, Light predicted that if we let the future take its course it would result in a Withering Winterland or Arbritrary Winnowing and noted that the benefits of transformation could only by reaped deliberate choice. The same prediction could have been made about the future state of the Dutch cultural sector following the government cuts in 2010.
READ MORE

Here is an interesting discussion…

By Nell Edgington - Social Velocity
Yep, it’s true, the nonprofit sector doesn’t have enough money. There are lots of reasons for that, but part of it stems from the taboos the nonprofit sector (and the staffs, boards and donors within it) perpetuates. But perhaps if we lay them bare, we can start to break free from them, which is the topic of today’s installment of the ongoing Financing Not Fundraising blog series.

If you are new to this series, the idea is that nonprofit fundraising is broken. Instead of continuing to hit their heads against the fundraising brick wall, nonprofit leaders must take a strategic approach to financing their work. You can read the entire Financing Not Fundraising blog series here.

Nonprofit taboos are so insidious because they are unwritten and unquestioned. But that has to stop. If we want to move the nonprofit sector forward, we must uncover certain taboos and determine whether they are really unacceptable anymore.

Here are the five most egregious taboos in the nonprofit sector:

1. Nonprofits Shouldn’t Raise a Surplus
   For some reason it is unseemly for a nonprofit to have more money than they immediately need. If a nonprofit is not just barely breaking even, it is somehow unworthy of raising more money. To the contrary, a nonprofit that has operating reserves can invest in a more sustainable organization, conduct R&D to make sure their solution is the best one, recruit a highly competent staff, and weather economic fluctuations. It is far better to invest in an organization that is well poised to attack a social problem than one that is barely able to keep the lights on.
2. Nonprofits Shouldn’t Pay Market Rate Salaries
   I won’t join the crazy controversy that surrounds nonprofit executive salary levels, but let me simply point out that nonprofits exist within a market economy, that is a fact. If someone is great at what they do, and they can make more money elsewhere, eventually they will do so. It is simple economics.  I understand that mission is a driving force for people attracted to the nonprofit sector, but as competition in the social change space continues to grow, the best and brightest will be lured away by other nonprofits, government entities, or for-profit social enterprises. So if you want to attract and retain a really talented employee, you’ve got to pay them accordingly.
3. Nonprofits Shouldn’t Demand Board Members Fundraise
   Why not? Seriously, I don’t get this one at all. If your governing body is free to make strategic and programmatic decisions without understanding, first hand, the financial implications of those decisions, you are setting your nonprofit up for failure. Mission and money must be strategically aligned, and the first and most important place that alignment occurs is at the board level. There are plenty of ways for board members to get involved in the financial engine of their nonprofit. Let’s stop apologizing for having to make money in the nonprofit sector and start requiring every single board member get actively involved in the process.
4. Nonprofits Shouldn’t Question Donors
   Donors hold the purse strings so nonprofit leaders are unwilling to tell them how it really is. But if the sector continues to act like a grateful recipient of a wealthy person’s or institution’s largesse, that power imbalance will continue, as will the dysfunctions that accompany it. If instead nonprofits and funders were equal partners working together to solve a problem, maybe we could get somewhere. But this will only happen if nonprofit leaders become more confident at telling their donors (and board members) how it really is. And if nonprofit leaders are more strategic about diversifying their financial model so they are no longer beholden to a few funders.
5. Nonprofits Shouldn’t Invest in Fundraising 
   In the nonprofit world the fundraising function is equivalent to the sales and marketing function of the business world. No one expects Apple to create amazing gadgets and then sit back and hope people show up and buy them. They have an extensive and well-financed marketing and sales function. But nonprofits are expected to spend as little as humanly possible on fundraising. Added to that, nonprofits are even more challenged because they have two, not just one, set of customers: 1) the clients they serve who often can’t pay for services, and 2) the funders who pay for those services. So we are telling nonprofits to recruit and serve two sets of customers on a shoestring. That’s crazy. We have to get over the idea that investing in fundraising (high quality staff, technology, expertise, planning, marketing) is a bad thing.

At the end of the day, we have to stop apologizing for the realities of the nonprofit sector. It’s time nonprofit leaders stand up and start demanding the end to some serious strictures that hold them back from doing their jobs. And, let’s remember, those jobs are to solve some of the most complex problems facing our communities. Those jobs are probably more easily and effectively done in the absence of crazy taboos.

Photo Credit: wheat_in_your_hair

- See more at: http://www.socialvelocity.net/2013/10/financing-not-fundraising-5-taboos-nonprofits-must-get-over/#sthash.sHLmOnop.dpuf

Stanford Social Innovation Review, By Curtis Chang | 1 | Aug. 1, 2013

The board meeting. Members secretly check their email on tablets while pretending to review documents. Those calling in offer only silence, their phones on permanent mute. Everyone feels the heaviness in the room as someone recounts minutes from the last meeting, another issues a plea to serve on the fundraising committee (yet again), and the treasurer tediously recites financial figures.

But the most important casualty of this boredom is not the time that board members spend at meetings. Unexciting board meetings are deadly because they sap the vitality of the mission.

Something is boring when nothing meaningful is immediately at stake. Yet meaning and urgency supply the oxygen for nonprofit efforts. An organization is alive when it throbs with the sense that lives are hanging in the balance. To stay alive, it must constantly renew this feeling in everyone involved.

Dull board meetings suck out this life-giving air at the very top. The board is the governing authority; when its meetings lack excitement, this dullness eventually pervades the rest of the organization. If board members are not passionately debating whether the organization is making enough progress, then the executive director must generate urgency by herself (a recipe for burnout). If board members aren’t imagining what doubling the budget could do—and throwing down the gauntlet before the others, based on their own fundraising efforts—it usually translates to staff members not feeling like they can dream big.

So how can executive directors and board chairs inject more passion into board meetings? Here are some ideas and resources to help make things interesting.