Nonprofit leadership tends to lead with the heart and often overlooks the fact that nonprofits are businesses. They can be so focused on serving a community need in the short term that they miss important steps successful businesses must take to ensure they are protected in the long term.
It’s not an intentional oversight. Many organizations begin as volunteer-only with everyone consumed by getting the mission up and running and establishing day-to-day operations. Then, it’s all about growth and filling an important need. Down the road, when the organization has more staff, upscaled operations and is well-known in the community, a lack of rules, guidelines and structure can leave it open to a whole host of complications.
Preparing your nonprofit for sustainability is not just a financial exercise. Well-drafted nonprofit policies and procedures provide a blueprint for how your organization is run. In an industry with a lot of turnover, the right documentation also ensures everyone understands what is expected of them prior to coming on board. When problems arise, leadership doesn’t have to scramble for solutions, because those solutions will be written down.
Before I was in the nonprofit sector, I worked at a major financial corporation in a role that, at one point, focused almost entirely on paperwork, compliance and documentation. It was total overkill, but, 10 years later, I have found myself on a crusade to promote — of all things — the importance of paperwork, compliance and documentation.
I have seen many nonprofits face potential legal, reputational, structural and other serious risks that could have been avoided by having proper policies and procedures in place before a crisis hits.
Policies That Protect Your Revenue
If your mission depends on contributed revenue, then development is one of the business functions you can’t afford to run on unwritten rules. As an example, let’s take a look at how clear development policies can protect your fundraising and strengthen your bottom line.
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