When There’s No Money Left In The Bank

No Money LeftI arrived at GLAAD in June 1997 understanding that the organization was not wildly stable. On my first day, I learned we had $360 in the bank, a staff of 18 ready for payroll, and nearly $300,000 in accounts payable well beyond 60 days past due. Basically, there was no money left.

And as I have mentioned before, I had never done a lick of fundraising.

With nowhere to run and hide, I needed a plan. Much of it was instinctual but as I look back, there were ten core elements to digging out.

THE CORE ELEMENTS TO SAVING YOUR NONPROFIT

1) Clarity (aka “Stare it Down”). Go to the numbers. Right away. Vendors due money and how much, donors who owe money and how much, list of people you could ask to donate ASAP. Get control of your numbers.

2) Honesty. You do your organization absolutely no good by trying to solve this all by yourself and/or telling everyone that everything will be fine. Your staff will surely think less of you and you will get no support from your board. And it makes you look guilty.

3) Communications. Remove the word “shame” from your vocabulary. Meet with your staff and board regularly (every other day if necessary). I used to describe the organization as if it were a patient in the hospital. “Big day,” I said to the staff. “We’ve just come off the respirator!” If you tell them the truth, they will respect you. If you don’t communicate, they will create their own truth.

4) Bite-Sized Pieces. If I looked at the $300K in outstanding A/P, I felt faint. I decided to whittle it down (bite size pieces). I created payment plans with each vendor. We made sure they were conservative so that we could deliver.

5) External Validation. Find a pro bono CPA to validate your strategy, to help you tweak as necessary. And to report on your behalf to the Finance Committee. Two important outcomes: 1) The message comes from an “expert” and 2) You are smart for bringing one in.

6) Don’t Personalize. If the staff or board smell insecurity on your part, scapegoating is the logical next step.

7) Make it everyone’s problem to solve. I knew that I alone could not solve our cash flow problem.We needed an expense plan, we needed to collect donor pledges and I needed a few key prospects to save the day. By the way, according to knowledgefirstfinancialcompanyhistory.ca/ , some donors love to come in on a white horse to help get the organization they care about back on their feet. I could not do these things alone. It was a team effort.

8) Sell the vision and not the problem. I never asked for money or talked about our financial woes during that first eight weeks. I talked about where I wanted the organization to go and what it would take. I would mention short-term financial concerns but I sold the vision. A donation was about the vision and not the jam.

9) Ask Big. What have you got to lose when you have no money left? When you don’t want to lay off 18 people, you can (and should) become a very bold fundraiser.

10) Find other members of the club. Over my years as an E.D. with my financial crisis not very far in my rear view mirror, I helped many others keep their cool. In the nonprofit world, financial woes are more the rule than the exception. Look for colleagues and share your story. They will no doubt have one to share with you.

YOU CAN GET BACK ON YOUR FEET

When I left GLAAD 8 years later, we had a $1.5 million cash reserve and a robust $8 million revenue budget. After the crisis, I never presented a budget without a line item of some amount of money to put into a reserve, however small. It added up.

You can do it. You can dig out. But create a team, engage an expert and be a bold fundraiser. When you are outside the office, keep your eye on the vision and when you are inside, keep your nose on the cash flow analysis.

Did I make it sound too easy? Not my intention. I know how hard it is. One day, early in my tenure, I wasted a piece of our precious remaining letterhead and burst into tears.

It’s really hard. But you can get through it. The communities you serve need you to give it your very best shot.

MORE WAYS TO FUNDRAISE

I’ve got a lot of fundraising advice elsewhere on the site. It’s a major concern for most nonprofits and I will certainly continue to add more.

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