Applying Business Wisdom to Help Nonprofits
Financial gifts are not the only – or even the best – way to be generous. Because many donors begin their philanthropic journey after a long and successful career in business, nonprofits can greatly benefit from their expertise. Here are some examples of how, as a donor, you can increase the effectiveness of a charity:
1. Assist the nonprofit in developing a business plan: Many nonprofits start out with a mission but have not fully mapped out the practical goals and strategies to get there. Donors who have achieved success in the business world understand what it takes to build a thriving business, and these same lessons can often be translated to the nonprofit landscape: setting the overall vision, creating milestones, managing resources, identifying required talent, and developing strategies to achieve the plan.
2. Help with nonprofit financials: Often, nonprofit founders are unfamiliar with budgeting and accounting principles and what is required to establish a firm financial footing for their nonprofit. For those just starting out, donors can help by walking through the basics of budgeting, understanding cash flow needs, planning for a “rainy day,” allocating limited resources, building efficiencies, reporting to enhance transparency, and maintaining records that will be important for tax and auditing purposes. For those more established, donors can still advise on more sophisticated financial management, such as investing operating reserves or creating an earned revenue stream.
3. Offer professional services: Donors with particular expertise in the law or accounting are in high demand. As a donor, consider donating your time or connecting the nonprofit to colleagues in your field who can be a resource. Getting quick, inexpensive, and helpful legal guidance on topics from hiring to reimbursements to construction to board member elections is particularly meaningful for a nonprofit operating with limited resources. Specific questions about whether such “in-kind” donations are tax-deductible should be directed to tax and legal professionals.
4. Join the board: Donors should carefully consider whether the fiduciary and governance duties associated with board service matches their available time and expertise. For example, start-up nonprofits often require significant board engagement (working board), whereas more established nonprofits typically have monthly or quarterly obligations (governing board). In situations when both the donor and the nonprofit agree that board service would be mutually beneficial, these roles can offer excellent opportunities to use high-level strategic thinking gained in the business world to benefit the nonprofit.
5. Corporate sponsorship: Donors could consider supporting nonprofits both personally (through their preferred giving vehicle, such as through a private foundation or donor-advised fund) and through their company’s corporate giving program. Sponsoring events or other activities with in-kind donations or outright gifts or organizing company volunteers to help a nonprofit with its programming can lead to meaningful community outreach.
The recommendations above are just a starting point for a myriad of ways that donors can give generously of their time and talent, assisting nonprofits beyond a contribution of funds. Hoplin Jackson has many examples of ways in which donors have supported nonprofits over time, as well as a deep understanding of the nonprofit landscape and organizations that could benefit from assistance. Contact us today to learn more!