The Mistake Bank

Sometime after Newsweek and The Daily Beast joined forces, the last page of each issue of Newsweek is now “My Favorite Mistake.”  Each issue some bigwig—from business, entertainment, even politics,  talks about his/her favorite mistake that s/he has made along the way.

Sometimes, they have been game-changers in that person’s life, such as Paula Deen reluctantly leaving her home town of Albany, Georgia; other times, it was just a hugely embarrassing moment, such as Jeremy Irons, fixated on finding out when it would be appropriate to smoke at a luncheon at which he was sitting next to Princess Diana, lit up after getting both her permission and a chastising for doing something harmful to his health, only to realize the next day that it has been National No Smoking Day.

As the first month of the new year ends, I thought I would share some of the common mistakes that we see nonprofits make over and over, in hopes that, going forward in 2012, fewer will repeat the mistakes of others.

1. Do not use “being corporate-like” as a universal slur in the nonprofit sector.  Having a succession plan or marketing protocols or forecasting out five years is not a negative, but best practices of all sustainable organizations, for-profit or nonprofit.  There are good businesses practices that we should take from the corporate world, unapologetically, while leaving others behind.
2. Do not bury your head in the sand, or at worst, encourage, or at best, allow, your board to do the same.  The longer you ignore a problem, the more difficult it will be to resolve.  That goes for a staff or board member who needs to be removed for underperforming or that grant report that isn’t going to be as strong and positive as you had hoped, to taking a hard, honest look at the financial future for your organization.
3. Do not ignore the concept of ROI—return on investment.  In business and in personal investing, the axiom “it takes money to make money” is widely accepted as valid.  You can’t increase your money in the stock market without risking some money with which to invest.  Yes, it is a risk, yet millions of people do it every day.  Why? Because it is a calculated risk based on sound analysis.  Thus, hiring a dedicated staff person to increase raised income is a calculated risk that, if done correctly, more often than not pays off.  Engaging a development consultant to a feasibility study for a major donor campaign is more likely to lead to a successful outcome than is setting the purpose and goal for the campaign on wants, hopes and wishful thinking.
4. Do not act as a mobile phone company in building your board.  Leave connecting friends and families to the phone companies and build your board strategically, based on the expertise, connections, demographics, and personality traits that the board, and organization, need in order to be successful.  Look in places beyond your smart phone for these new board members.
5. Do not run a program, nonprofit or board as if it were Twitter and Facebook.  There you “like” people and programs for the mere sake of liking.  In running a program or organization and managing a board, performance comes first; liking comes second.  Just because you let someone go because s/he is underperforming does not mean you cannot like that person.  But liking someone is not necessary and sufficient for allowing him/her to stay in a position, paid or volunteer, if what that person needs to get done isn’t getting done in the expected and sought manner.
6. Do not assume that you are great, special and wonderful simply because you are a nonprofit and, therefore, everyone should be more than happy to help you for free!  You run a business and so do the vendors from whom you are looking for help.  Consultants, accountants, lawyers all need to run profitable businesses so that they can be there next month, next year, when you need their help again.  Profitable, however, does not always mean obscene hourly rates, but more often than not rates that cover costs and allow for a little profit for wiggle room.  Remember, you are one of almost one and a half million nonprofits in this country alone, all thinking they are special, wonderful and deserving of all of the free help they need.   There is only so much that any one individual or organization can give away for free and still survive.
7. Do not chase dollars and forsake your mission simply because we are going through tough economic times.  Nonprofits exist to serve their missions and the economy in which we operate does not change that proposition.  Rather, develop a strong business model that supports the programs that serve that mission.
8. Do not forget the people who, day in and day out, are in the trenches making sure your mission is carried out.  A tough economy is no excuse for trampling on the good will, psyche and morale of employees.  Expressions of gratitude are free and go a long way to boosting employee morale; random shortened workdays—coming in late, going in early—cost little and garner great return.

This list could go on and on, but this will do for starters.  This is not meant as criticism, but rather as a favor, hoping to allow you to see yourselves in others, learn from their mistakes and do better going forward.