The Importance of Relationships in the Nonprofit Community

Takeaways from Our Workshop with Sarah Smith-Orr

Sarah Smith-Orr, the Executive Director of Claremont McKenna College’s Kravis Leadership Institute (KLI), has held a number of important positions in the nonprofit world. Furthermore, she has written numerous chapters on best practices for working, volunteering or making decisions for nonprofit organizations. In October, Sarah shared her expertise and knowledge with SOURCE’s current class of Associate Consultants. More specifically, Sarah Smith-Orr’s workshop focused on Identifying Nonprofit Issues and Developing Best Practices. Here are a few key takeaways:

Know your mission and keep it at the forefront of every operation

“One’s mission statement is the single-most important part of the organization. It’s what you’re in the business for.” Indeed, as explained by Sarah Smith-Orr, the mission statement is the “backbone of the rest in an organization.” An organization, more specifically a nonprofit organization, must not only understand the importance of what they do, but also why it matters. Why should people take the time to listen to you? Why should people care about what you do? Why is it that you do what you do? These are some of the paramount questions you must answer in your mission statement; it must convey the essence of your organization and the reason for its significance. Thus, the mission should be clearly communicated and formulated, and every action taken by an organization must reflect this mission.

Know your members and volunteers and know what they want

“Another critical part of an organization is its members and volunteers.” Sarah Smith-Orr discussed how these two components of an organization help further the mission and are living components of successful organizations. Both the members and the volunteers play the role of expanding the organization’s mission and their scope of action; but as Sarah Smith-Orr explained, the trend was to see more and more young individuals volunteering their time and energy in nonprofit organizations. You may ask how a nonprofit takes this trend in to account in order to expand its impact. Here are some key facts to keep in mind; in 2013 online donations reached record-breaking highs and more people visited nonprofit websites than had ever been previously reported. Nonprofit organizations’ social media audiences grew faster than nonprofit email or website audiences. Today’s youth are volunteering more than ever and it is not a coincidence that online donations and social media audiences are increasing. As, Sarah Smith-Orr explained, nonprofits must heed these changes and understand where the future of their organizations and missions lay.

A few contribute the most

Sarah Smith-Orr also shared some key points about fundraising that advocates and nonprofits themselves should follow: “A few contribute the most.” Around 90% of funds raised come from 10% of donors. In other words, nonprofits should take the time and effort forging important relationships with substantial donors that can yield high benefits in the long run. This process however may take more than a couple years in order to bring a fully invested donor on board, as opposed to single smaller donors that require less time and effort to be engaged. These bigger and financially more substantial donors must be a priority in nonprofits as these relationships can considerably help expand a nonprofit’s funds and scope of action.

Donations are a factor of your organization and its mission

Sarah Smith-Orr warned that an organization absolutely should not ignore small donors either. Wealth alone does not determine donations. Small and big donors alike still give because they care about the cause and are willing to help the cause achieve higher goals. Again, this relates to her first point; the mission statement matters! It matters to the big donors, the smaller donors, and the grants an organization applies to. About 98% of donors give because “they believe the organization is trustworthy” and around 96% give because “they believe the organization supports a cause they believe in.” In other words, make sure you have a well-structured organization; a strong mission and that each donation further advance the mission. Nonprofits with models such as these are able to further reach donors and enlarge their fields of operations.

The overhead myth

Finally, Sarah Smith-Orr ended her presentation by tackling a huge debate in non-profits: overhead cost. Though many donors do not feel comfortable giving to non-profits with high overhead, Sarah Smith-Orr described overhead as “everything from salaries, training, planning, internal systems, and fundraising.” A natural reaction from every donor is the wish to see the money go to the “cause.” Indeed, when we donate to a nonprofit we donate so that the money can go directly to the individuals they help. We don’t want our money to go to the person in-charge of organizing and coordinating events or fundraisers; we want our money to go to those in need. However, Sarah Smith-Orr, as well as many other professionals in the nonprofit sector, are working to help donors as well as organizations themselves understand that ‘overhead’ is essential to a well-functioning operations. The human capital as well as the infrastructures necessary to execute one’s mission is all calculated as ‘overhead.’ Companies around the world spend vast amounts of capital on these factors in order to better execute their business models; nonprofits should also be able to spend the money on human capital and infrastructures that further advance their missions. It is key that nonprofits and donors keep in mind that high ‘overhead’ does not automatically mean a poorly managed organization, but more so that an organization is putting the necessary resources in place to most effectively and efficiently support its cause.

by matthieu hafemeister