Lessons Learned: Money Matters

I find myself increasingly ready to openly reflect on my experience of starting a formal nonprofit organization and having to fold it after just three years. While CommonAction had a vibrant run, I still find myself a little bit stung; however, out of that sentiment comes some learning I want to share. This post is one of four with some of my lessons learned from starting a nonprofit.

LESSON ONE: MONEY MATTERS As Adrian Sargeant and Elaine Jay argue in their book Fundraising Management: Analysis, Planning and Practice, the single biggest cause of nonprofits failing is that organizations let their money matters fall apart. In the case of CommonAction the money never really came together. The best policies new nonprofit organizers can adopt are those that have clear economic goals, including funding sources and revenue replacement.

In 2007 a group called Incite! wrote a pivotal book about the nonprofit world called The Revolution Will Not be Funded: Beyond the Non-profit Industrial Complex. In it they make a sound a clarion call demanding that community organizers grow aware and averse to the demands of the negative funding cycles that are perpetuated by the American-oriented nonprofit-industrial complex. Anyone wanting to learn more about the truth behind the economic realities facing nonprofits should refer to that book for more.

The worse parts of funding a nonprofit organization are writing grants and reporting to funders. Both of these two items caused me undue anxiety, as I am a perfectionist when it comes to grant applications, and I feel morally obligated to be accountable for how I spend others’ money. In three years of constant funding-raising for CommonAction I wrote more than 50 requests for funding. I found myself constantly translating the vision and mission to funders who weren’t necessarily suited for funding radical youth engagement; however, their main foci, either in education, research, policy-making or technology, aligned with our mission indirectly. That didn’t seem to work: we only recieved 4 grants. As for reporting, the dilemma became finding time to compile the evaluations, aggregate the data, and identify measurements that effectively quantified the investments made in the organization. Where I wasn’t particularly successful in securing grant funding I made up for in fee-for-service contracts, and those contracts regularly required reports that called for this type of analysis. I rose to the task, but not easily; I challenge anyone considering starting a nonprofit to think about this component particularly.

This is my first post on this topic; I’ll put out three more. However, I might consider this the most important point. The reality that I face in this work, unfortunate or otherwise, is that I have little room for economic disparity in my own life. That leads me to work hard and diligently for my money, and demands that I take my labors seriously enough to give money the attention it deserves. Nonprofits require cash, and money matters

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