Wayne Elsey, Author, “3 Key Elements to Take Your Nonprofit from Surviving to Thriving.”
Let’s dive right in. You’ve written several books and now this one with DonorPerfect. Why?
DonorPerfect has been a leader in fundraising growth for decades. Your team reached out, and we realized that there were many things we shared in common, mainly, that the way organizations have done business has shifted. For instance, with the growth of social enterprises and even for-profit companies become much more aligned with the social sector in their business planning, it’s fostered an environment where donors don’t only have to support their local nonprofit. Different models can be supported, such as TOMS shoes.
Additionally, there’s Millennials, Generation Z and the digital world have helped create an environment of greater transparency. And, there has been a higher degree of mistrust or perhaps fatigue with nonprofits that are not making a clear and demonstrable impact.
You unpack what helped you build many businesses, brands and even a nonprofit you founded and developed from a zero-dollar budget to over $70 million in fewer than five years. That’s a rare achievement in the nonprofit sector. You write about leadership, and you’re a student of leadership. How does leadership in the nonprofit space differ from that in the private sector because you’ve been successful in both arenas?
There’s no difference. It doesn’t matter the area life you’re talking about: military, sports, for-profit businesses, nonprofits, the elements of leadership are the same. However, what I have seen in the nonprofit sector, is that a lot of people allow things to happen that they would never let in a for-profit business.
I’ll give you an example. Business leaders, owners of companies, serve on nonprofit boards. I’ve heard or seen circumstances where they provide a nonprofit executive director a pass regarding performance for a much more extended period than they would within a business. As an example, how many times have fundraisers had to work with CEOs or executive directors that have no interest in fundraising? You get a revolving door of fundraisers over a period of years because boards allow the executive director take a pass and, essentially, pass the buck for the money performance of the nonprofit business to the fundraiser. That would never happen in the for-profit world. The top person is responsible for making sure the company has what it needs for success––customers and money. But, in the nonprofit world, often CEOs are not helping to that same performance standard for a nonprofit business.
That may be changing in the sector because donors and supporters are becoming more demanding. Next question: what can a nonprofit leader do to improve their comfort in talking about money? What can board members do, a nonprofit CEO and senior leaders?
I think everyone that works and is associated with a leading role within a nonprofit organization has to remember that the 501(c)(3) status of a nonprofit is not a business model. It’s merely a tax designation. A nonprofit is, in fact, a business. Its objective is to help society, and the most significant way it can achieve success in providing its programs and making an impact is by raising money.
I think all board members have to be informed and dialogue about the finances of a nonprofit and not simply leave it to the finance committee or the “financial people.” At the staff level, I think CEOs and executive directors have to do the same thing in their own meetings. Senior meetings have to include a discussion of the revenue and expenses of the organization at every meeting. The more people talk about money, the more natural the topic becomes. And, I think that nonprofit board members and senior management all have to get involved in making asks for financial support from donors, which I know is music the ears of the fundraisers, but it’s the proper strategy. Major donors, for instance, don’t want to speak only to a fundraiser, the hired gun. They want to talk to the CEO and board members.
You’ve run small organizations and have developed them into larger ones. How does the work of a nonprofit leader vary between a startup and a larger, more established nonprofit?
I think that some leaders are made for start-ups, and others are better positioned temperamentally to develop established nonprofits or businesses and grow them. I’ll give you an example. I personally love starting companies and brands and developing them and then move on to the next build. I think it’s often a matter of temperament. What both leaders have to have in common is the vision. You have to be able to excite, motivate, inspire and get people to want to follow you to that new place. It doesn’t matter if it’s a start-up or an old nonprofit that’s been around for years. A leader has to set the course.
One final question, Wayne. Big data and leveraging technology are hard for many organizations to wrap their arms around. Any advice on how to get started?
We live in the digital era. There are no excuses for not being somewhat informed or doing your homework. Look, I’m not a “techie” and much more prefer to pick up the telephone or have a face-to-face meeting, but I do my homework on SEO and the trends in digital marketing, for instance. A nonprofit leader has to get the expertise. It doesn’t mean he or she has to know all of the back-end technology, but the leader must understand how big data and technology work at a strategic level and how it impacts every area of their operation: marketing, fundraising, programs, etc. That means calling on leaders, such as DonorPerfect and others to give them the information to engage with all of their constituents using the tools disposable in today’s world. Leaders have to read, get informed and hire the expertise.