Category: Raising Capital

A NonProfit CEO Manifesto (blame it on Seth Godin)

~ Sasha ~ 51 Comments

Inspired by Seth Godin, and his new book Tribes, I collected my thoughts after nearly two years in my current role at Acumen Fund.

I wrote a manifesto.  You can read it here.

This one isn’t for everyone, but you probably know someone who’d like to read it. Do me (and them) a favor and send it to them.

And tell me what you think.  I think this one is important, and since the economy is blowing up and won’t improve any time soon, now is a good time for nonprofits to rethink how they think about raising money.

Sequoia Capital sounds the alarm bell

~ Sasha ~ 1 Comment

Sequoia Capital, one of the most well-respected venture capital firms in Silicon Valley, recently organized a meeting for the CEOs of its portfolio companies. The tagline?  “R.I.P.: Good Times”.   You can check out this write-up on  the GigaOM blog.  Here’s an excerpt:

They want the companies to cut costs, to figure out way to survive and emerge at the other end of this downturn, which could last years. The speakers went through each functional area of the business and told the companies how to cut costs. By holding this special meeting, Sequoia is telling its companies to put survival strategies in place and figure out ways to outlast the broader market troubles.

Ron Conway, a well-known angel investor who has backed the likes of Google, is pushing companies to “lower your “burn rate” to raise at least 3-6 months or more of funding via cost reductions, even if it means staff reductions and reduced marketing and G&A expenses.  This is the equivalent to “raising an internal round” through cost reductions to buy you more time until you need to raise money again; hopefully when fund raising is more feasible.”

While no one wishes this kind of impact in any sector, one can imagine that non-profits are going to feel the same fundraising crunch and will also have to make some tough decisions.

Bankers heading to UK non-profit sector?

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This just in from Reuters: a positive fallout from the financial crisis?

LONDON (Reuters) – A wave of job cuts in the wake of the financial markets meltdown is causing hundreds of City bankers to turn to UK charities in search of work.

Charities are keen to hire the former star bankers to help them raise funds and are able to pay better salaries than in the past, said forum3, a recruitment agency…

It will be interesting to see how the skills translate.  And what, if anything, this does to the balance of power, and the flow of human and financial capital, between the non-profit and financial sectors.

A Revenues Strategy?

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Before coming over to the non-profit sector I worked at IBM and GE, two of the biggest businesses around.  In Big Business, the people who hold the reins – the center of energy and talent – are people who bring in money: the sales guys, the CEO, the big account managers.  That’s where everyone’s bread is buttered, so it’s where the action is.

Surprising, then, how in the nonprofit sector everyone wants to be on the money-spending side of the equation (the “Program” side), and raising capital (a.k.a. fundraising) is mostly seen as a necessary evil.  Need proof?  Check out the Chronicle of Philanthropy’s job page today: 354 “fund raising” [sic] jobs; 102 “Administrative” and 80 “Program.”

The sector is doing itself a major disservice.  Raising money is a barometer of how effective you are at convincing the the most powerful, influential people in your orbit (whether you raise big gifts or have a retail strategy) to care about your mission and support it.  It’s taken as a given that the Obama Campaign’s ability to inspire people and raise money from them is a testament to the power of their message.  When was the last time you heard similar talk about a nonprofit that’s good at raising money?  We rarely if ever think about things like “Revenues” in a really strategic way.

As the meltdown continues in the banking sector, the nonprofit sector in New York (let alone city and state government) runs the risk of a major downturn in funds raised. Hopefully we can all roll up our sleeves and start to think differently about Revenues when the music starts again.