In the 2015 Nonprofit Finance Fund Report, 23 percent of nonprofits reported operating in deficit and 29 percent reported break-even finances (Nonprofit Finance Fund, 2015). These reports expose a need for short and long-term strategic planning in order to establish financial security (Leroux, 2005). To avoid operating in deficit, the gold standard, historically, has been to use “revenue diversification”. However, effectively diversifying revenue is more effective than playing a “numbers game”. Nonprofits can no longer use revenue diversification as fail-proof-safety; the more sources of revenue an organization maintains does not imply greater stability. 

The only solution to an uncertain funding environment is to “get ahead” of the seemingly stagnate competition curve by creating an uncontested market (Harrison & Thornton, 2014). From this, the writer predicts the growth of entrepreneurship and philanthropy in the future of nonprofits. 

The American spirit has long been rooted in entrepreneurial success (Acs et al, 2008). When one strategy, method, or product starts to plateau, there is room for a new strategy, method, or product, as a means of increasing revenue. Allowing opportunities to be optimized is an entrepreneurial act. The implementation of entrepreneurship has shown to be successful in terms of revenue and enhancing an organization’s mission. 

Philanthropy is the term given to the donation of time…

“Capacity building is whatever is needed to bring a nonprofit to the next level of operational, programmatic, financial, or organizational maturity, so it may more effectively and efficiently advance its mission into the future. Capacity building is not a one-time effort to improve short-term effectiveness, but a continuous improvement strategy toward the creation of a sustainable and effective organization” (National Council of Nonprofits, 2017). For many organizations, capacity building would fall into the “overhead” category. Unfortunately for the nonprofit sector, higher overhead costs are correlated to an organization being irresponsible with its finances, ineffective, unable to carry out its mission, and even unethical. 

Overhead is defined as a “percentage of a charity’s expenses that goes to administrative and fundraising costs” (Guidestar, 2014). The Overhead Myth is created when donors believe that nonprofits should keep these overhead expenses below a certain percentage of the nonprofit’s total expenditures – usually no more than 15 to 20 percent. In Dan Pallotta’s TED Talk, he discusses the Overhead Myth and how it can negatively affect nonprofits by hindering their ability to create long-term sustainable growth. Both internal and external stakeholders need to be better informed about why it is okay for overhead costs to be higher when the organization is trying to grow, become sustainable, and ultimately achieve its mission more…

As nonprofit professionals, we all want to impact the greatest possible number with our work. For many, this means expanding programs, or “scaling up.”

“Today, there may be no idea with greater currency in the social sector than ‘scaling what works’” (Bradach, 2010, p. ix). Just because a program works well on its current scale, however, does not mean that it will automatically be successful on a larger scale. For nonprofits seeking to expand their programs, careful analysis of self and environment are crucial. Ask the following questions:

 Why should the program scale up?

What type of impact is the program making, and is it one that can be most effectively increased by scaling up this individual program? Keep in mind that many of the most complex and intractable social issues that nonprofits face can only be effectively addressed by collective impact, via collaboration among organizations or even across sectors.

 Scalable programs should be based on a strong theory of change or logic model, clearly linking program inputs to outcomes in a way that can be tested and evaluated to determine actual effectiveness. Defining and measuring social impacts, determining whether the intervention is effective and why, and being able to prove efficacy with solid evidence are important prerequisites to a decision to scale (Harris, 2010; Riddell & Moore, 2015; Roob & Bradach, 2009; Stone Foundation,…

Complex social issues are rarely solved by the individual success of a single organization. The nonprofit sector has the ability to achieve significant social change through collaboration across sectors. Cross-sector collaboration can be defined as partnerships between nonprofit, private, and government entities working together towards mutual goals to produce change (Simo & Bies, 2007). 

When the U.S. Department of Housing and Urban Development dropped the bombshell of defunding all but one nonprofit transitional housing provider for homeless families in Maricopa County, Arizona, the local nonprofit, private and government organizations began to scramble (Polletta, 2016). The community’s homeless housing and service providers were aware how the funding cuts would drastically eliminate transitional shelter beds within the family shelter portfolio. All sectors needed to consider what steps were essential to prevent the families in the defunded housing programs from becoming homeless again. This is an informal and episodic example where partnerships involving government, philanthropy communities and public businesses, collaborate to create a onetime task force to keep the families in need of housing, off of the streets. 

Far too often the nonprofit sector is stepping up to fill in the gaps in services because of local, state, and federal administrative failures (Simo & Bies, 2007). In order to meet complex social needs, the…

Corporate social responsibility (CSR) holds the power to make a significant difference for nonprofits and corporations around the world. The partnership between a corporation and nonprofit can be extremely complex and vary in participation, outcome and more, year by year. As corporate social responsibility becomes integrated into the framework of society, best practices need to be in place to successfully unify the collaboration between the public and private sectors. Nonprofit organizations and corporations need to work together and trust one another in order to make the largest impact possible for the populations they intend to serve. 

CSR should not be created solely to follow the trend and please stakeholders. These partnerships balance on a delicate scale between two sectors, which means that these cross-sector collaborations need to balance the needs of one another while accomplishing goals for the community. There is a significant need for improved social partnership which can withstand economic turmoil (Frynas, 2005, p. 581). CSR faces not only economic challenges, but also the challenge to be a successful partner with a nonprofit for long-term improvement (Lantos, 2001, p. 32). When economic giving for corporations may not be consistent over time, nonprofits need to find other ways to encourage corporations to support these pivotal partnerships (Lantos, 2001, p. 40). Examining current corporate social responsibility structures, determining…