3 responses to “5 Strategies for Non-profits to Use to Get Rid of a Deficit”

  1. This piece suggests that increased fundraising from donors is one method
    of covering a deficit, and the way it reads suggests that donors be told
    that is how the funding will be used.

    Where I agree that fundraising efforts should be expanded, it’s always a
    poor practice to raise money to pay debts, repay loans or cover a deficit.

    For the first two, there’s little or no motivation for people to want to help.
    Paying bills or repaying loans does not suggest that people are being
    helped or a mission is being advanced.

    For the third, having a deficit suggests poor management and/or poor
    planning. It suggests that an organization may be in trouble, and rarely
    are people motivated to support a “failing” nonprofit.

    People give to create a result that satisfies their needs, and paying the
    “overdue bills” of an organiztion doesn’t fall into that category.

    In essence, raising money to help others is what keeps people giving.
    When people are having issues about paying their own bills, they’re
    not going to be interested in paying someone else’s.

    If, on the other hand, an NPO raises money to fund a deficit, and
    suggests that the funds are to advance mission/program, that ethical
    lapse will inevitably come back to bite….

    Hank

    =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
    Henry D. Lewis, MA, CFRM
    President,
    Development Consultant Associates
    4701 Willard Avenue, Suite 1213
    Chevy Chase, MD 20815
    301-986-4747
    “Helping Non-Profit Organizations Ensure Their Futures
    … With Effective Fundraising Programs”™
    http://managementhelp.org/blogs/fundraising-for-nonprofits/
    =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
    Development Consultant Associates is a fundraising consulting
    firm providing counsel (primarily) in the creation, expansion and
    maintenance of Major Gift Programs and in the preparation for
    and implementation of Capital Campaigns … including Planning
    Studies to preface both types of programs, and Bequest Programs
    to supplement both.
    =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=

  2. Hi Hank,

    For us to think that non-profits never run deficits would be being unrealistic. Also, for us to believe that there are not times that the best of plans go arye, would not be reality. In my article, I am not suggesting non-profits run a deficit, nor am I suggesting they lie to their donors or funders. Every non-profit must be transparent and honest with those who entrust money to them. But I also think that donors would not have a problem with money being spent to sustain a program, that otherwise might not continue. Now that’s my personal opinion, but I know many other people who would feel the same way.

    If a non-profit did not use one of the suggestions I offer, then how would you suggest they clear up a deficit? If you feel all the options I am offering are not doable, what other options can you offer? I am always open to new ideas and solutions.

    Thanks for your contribution!

    Ingrid :)

  3. Ingrid,

    Sorry I wasn’t clear in expressing the thought.

    The sentence: “Where I agree that fundraising efforts should be expanded, it’s always a poor practice to raise money to pay debts, repay loans or cover a deficit.” should have been worded differently.

    Of course nonprofits run deficits, and of course fundraising often needs to cover the shortage. My point, badly made, was that a fundraising effort should not be limited to and/or publicized as being a deficit-reducer. That would send the wrong message and would garner little support.

    The wording for a comprehensive fundraising effort to pay all the bills — programs, salaries, overhead, deficits, etc. — accentuates the positive (the people being helped), and does not dwell on the “negatives.”

    You opined that, “…donors would not have a problem with money being spent to sustain a program, that otherwise might not continue.” And I agree. But it’s all in the “marketing.” An effective fundraising effort is one that suggested to donors that they’d be helping others, not one that indicated that the program might be in financial trouble.

    Major donors understand that nonprofits occasionally run deficits, and they are often ready to help NPOs bridge the fiscal gap, but it’s not the gap-spanning-gifts that make the donors feel good about their support — as making those gifts rarely satisfy the needs of the donors.

    “People give to create a result that satisfies their needs, and paying the “overdue bills” of an organization doesn’t fall into that category. In essence, raising money to help others is what keeps people giving.”

    I guess that the key word/concept that encompasses the point I was trying to make is, “marketing.”

    Hank

    =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
    Henry D. Lewis, MA, CFRM
    President,
    Development Consultant Associates
    4701 Willard Avenue, Suite 1213
    Chevy Chase, MD 20815
    301-986-4747
    “Helping Non-Profit Organizations Ensure Their Futures
    … With Effective Fundraising Programs”™
    http://managementhelp.org/blogs/fundraising-for-nonprofits/
    =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
    Development Consultant Associates is a fundraising consulting
    firm providing counsel (primarily) in the creation, expansion and
    maintenance of Major Gift Programs and in the preparation for
    and implementation of Capital Campaigns … including Planning
    Studies to preface both types of programs, and Bequest Programs
    to supplement both.
    =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=

Translate »