Trust…And Watch The Money Jar

Last week I came across another case of starvation-by-withholding. Organizational starvation, that is, with the board of trustees as the withholding body.

We see these occasionally, especially in groups that are going through very hard financial times. “How can I be sure this group is going to make it?” wonder board members in their heart of hearts – with the corollary question popping up: “How can I ask my friends to invest in this group when I might have to turn around and tell them it’s gone belly-up…only a few months after I assured them they were putting their money into a going concern?”

So there you have it, in a nutshell – board member hesitation leads to holding back on personal outreach…which leads to less income coming in…which leads to further robbing Peter to pay Paul (grabbing any available cash to pay essential bills, like payroll or the electric bill, even if the monies were part of a restricted donation)…which then leads to even greater board member reluctance given that now they’re wondering if the programs they’re fundraising for, will actually happen in the way they’re assuring potential donor prospects they will.

Groups can start at any point in this cycle, it’s not just triggered by a moment of board hesitation – but you can see how it becomes a vicious self-fulfilling prophecy.

And down we go, with acrimony.

Well now I guess you’re wondering how to short-circuit this spiral.

And the answer is – trust and watch the money jar – in other words, trust the intent, with very very close monitoring, side-by-side, of execution.

In practical terms, this means a small board-staff committee that looks at weekly spending-and-forecasting – what’s coming in, what’s a realistic judgment of what’s going to come in, and what’s gone out and is going to go out when. There’s been loads written in the past 3 years about managing through financial crisis, so I’m not going to go into that.

But the meta picture – the re-positioning so that the senior staff and the board feel they’re on the same side of the table – is the essential, “soft” part of the equation…without that, it just won’t work.

For fundraising to take place successfully, there must be confidence in the future. Trust in the staff, trust in the organizational competence to carry out the plan, and trust that the scenarios being developed are implementable.

Otherwise donors will vote with their feet for the nonprofit down the block, even if it’s not as astute and its strategies aren’t as impactful. And so too with board members – their silence when you ask them who they know who could donate in this time of greatest need, will be an eloquent testament to their lack of faith.

Addressing this crisis of confidence head-on, by creating a “case for the future” with financial and programmatic scenarios that are realistic and achievable, that match, and that contain the fierce vision and urgency of mission, is a key first step towards survival.

And most fundamentally, board and staff leadership together must buy into this case, must believe…