Are You Slowly Going out of Business?

How strong and effective is your organization? How well do you cope with demographic and economic change? How effectively do you respond to societal and technological changes, and government challenges? Here’s the bottom-line question: How well does your organization adapt? What’s your adaptive capacity? Or are you slowly going out of business?

Too many nonprofit organizations (NGOs) trade upon the presumed value of their missions and the bold, implicit statement that “we do good.” Indeed, most nonprofits do good work for their communities. But to continue such work and flourish, nonprofits have much more to do.

For example, nonprofits must better understand their constituents and create lasting value for them. In a sense, your constituents—your community, your donors and volunteers, the people you serve—are your shareholders. The sense of entitlement won’t work anymore. Inadequate management and weak governance threatens credibility more and more. And the transactional nature of fundraising—and the poor understanding of what fund development really means—threatens organizational health.

Fund development is more than a set of strategies and techniques designed to get quick gifts. Yet too many organizations value short-term, bottom-line contributions over the long-term returns made possible by building relationships. Boards focus on the cost to raise the charitable dollar. Development professionals spend lots of time pursuing the best direct-mail letter, the right special event, and the newest phone-a-thon tactic. But all of this doesn’t get you very far. This short-term approach is necessary, but not sufficient to ensure your organization’s health. Instead, an organization moving full speed ahead into the next millennium will need to develop four key relationships:

Your internal relationship creates the holistic infrastructure that produces a healthy enterprise. Your internal relationships provide the foundation for all your work, allowing you to develop the other three relationships. This means agreeing on shared values and creating a corporate culture and systems that reflect those values. Ensuring individual and team learning. Encouraging dialogue and shared decision-making. Rewarding critical thinking. Welcoming pluralism. Building adaptive capacity. And, accepting uncertainty and complexity.
Your relationship with the community ensures your organization’s continued relevance and clarifies its position within the community. Nurture this relationship through ongoing strategic planning and implementation. Learn while doing. This means identifying and responding to community need. Effectively collaborating to meet community needs and eliminating redundant services and organizations. Regularly testing your mission.
Your relationship with constituents develops and strengthens connections with individuals and groups to produce loyalty. Effective relationship building is critical to any effective organization. Focus on things like identifying and getting to the interests and disinterests, motivations and aspirations of your constituents. Find the most appropriate and effective ways to communicate with them and cultivate the relationship. Engage diverse constituencies more fully with your cause by creating extraordinary experiences for them.
Your relationship with volunteers enables them to take meaningful action on your behalf. Volunteers expect to be adequately supported in their work with you. I call this enabling. See my previous columns on this topic, such as this one.

Make no mistake. The survival of your organization depends on developing these four relationships. Together, these relationships can produce more philanthropic dollars. Together, these relationships make a healthy organization. The most successful organizations recognize that each relationship is a contributor to and a beneficiary of the other relationships. These organizations know that the four relationships interrelate to form one interdependent system, each relationship adding value to the others.

The reward is more than survival. With the four relationships in place, an organization can do everything better, including fund development. Without these relationships, nothing will be done well enough.

Excerpted from Strategic Fund Development: Building Profitable Relationships That Last (3rd edition), by Simone P. Joyaux. John Wiley & Sons, 2011.