Episode 42: Getting Real: To Make Money, You Have to Invest Money
Nonprofits are businesses, with business expenses. It takes money to run a nonprofit. If you are trying to run your organization with no money (relying on donations and volunteers) your organization will never grow (and may be pulled away from its mission). Time to get real by embracing the facts: a nonprofit requires capital. Stop trying to skirt by and start doing what it takes to generate consistent revenue.
LINKS:
NONPROFIT SPOTLIGHT: The Taskforce for Global Health
Podcast Transcript
Speaker 1 (00:05):
Welcome to On Air with Amber Wynn, where nonprofit leaders learned to fuse passion and commitment with proven business strategies to create long-term funding, impact, and sustainability. And now here's your host and resident Philanthrepreneur Amber Wynn.
Speaker 2 (00:32):
Good morning fam. It’s your girl in the house, Amber Wynn Philanthrepreneur. And I am excited to be here. I'm always excited to be in the space with my community. You guys do amazing work and I am here. I'm your biggest cheerleader. I'm your biggest fan. And because of that, I am still gonna keep it real with y'all. Last week we talked about assessing your non-profit organization. And in that space, I kept it real about moving from the facade of we do this, we do that, and we have these programs when it's not real. This week we're gonna talk about just really keeping things real. And the topic is to make money, you have to spend money. A lot of my non-profit Founders come into the space with really great intentions, really, really great intentions, not knowing that a non-profit is a business. It's just a business with a philanthropic purpose. And with every business comes business expenses. A non-profit is not exempt from that. A non-profit is exempt from taxes, but does not exempt from business expenses. And so this episode we're gonna talk about, in order to make money, you gotta spend money. But you know what we're gonna do right now? We're gonna pause for a little break and when I come back, we're gonna jump into the topic.
Speaker 3 (01:59):
This is you and this is your business. From invoicing your first client to your 10th client, to your hundredth client. You'll need to get paid quickly. Pretty soon you'll be ready to hire some help and you'll need to pay them. As your business grows, Wave is there to grow with you.
Speaker 2 (02:31):
Hey, so we're back and we're getting real on this episode. And the topic is, To Make Money You Have to Spend Money. And that's just a business truth, right?. You as a nonprofit have to invest money in order to generate money. And even with simple things, for example, you have to have basic things like a website. Well, it costs to have a website and you may try to do Wix, but if you are serious, then you wanna be serious about your brand. You don't wanna have commercials all over your website because then you're not professional. You need to invest in things like a logo. You need to invest in things like a professional business email. So if your nonprofit organization is Bright Horizons, you do not wanna have John@BrightHorizons.gmail, it should be John@BrightHorizons.org. Those things are important because when you get to that part, when you wanna start applying for funds, nonprofit funding agencies judge you based off of the look.
Speaker 2 (03:51):
It's just like a resume. If your resume has typos and it has grease stains, it's gonna go into the no pile. If your grant application has indicators of unprofessionalism, like Gmail extensions and you don't have a website, so they can't see who's on your board, all of those things, they have meaning. So in order for you to generate revenue, in order for you to make money, you have to spend money, you have to spend money in your operations, you have to have systems in place. You want a nonprofit Funder to give you $250,000, but you don't have a system in place so that you can track it. What are you gonna do? Just drop it into your personal banking account. That's not gonna work. That's not running a business. So I'm saying to you, if you've come into this situation thinking, Oh, I'm just gonna start this nonprofit, I'm gonna get all this grant money in order for you to get the grant money, it's out there.
Speaker 2 (04:52):
But in order for you to get it, you've gotta look a certain way. You have got to be professional. And what that means is that you are investing money to look professional. So I think what's, what gets a lot of my Founders caught up is they come in without doing the research. And if you do the research, you'll understand that you can't run a non-profit without money. You can get donations. Sure you can. But when people donate things to you, then you're not in control. I had an organization, they're like, Oh, this company wants to donate computers. They donated to computers. The computers were so old, it would've cost them more money to try and upgrade them versus them allocating in their budget a line item for computers, making sure that they had all of their infrastructure in place so that they qualify for grants.
Speaker 2 (05:47):
They could send out letters to companies, Microsoft or Apple, and ask them to donate computers, state of the art computers, because those companies can write that off. But you gotta look, looking the part means that you've invested in your organization so that you can give these Funders what they need to feel comfortable with writing you the check. They're not gonna just write you a check because you have a 501(c)(3). So when I say to make money, you have to invest money, you have to invest in your organization. Another thing, marketing Constant Contact, MailChimp, whatever system you use, you need to invest in the system so that you can get out to see your people. So if you have an email marketing software, you can generate money. Let's just say MailChimp. I think for under 2,000 contacts it's free, for more than that you know, pay, I don't know however it is a month.
Speaker 2 (06:52):
But the purpose of that is you put together a newsletter, you highlight a program, and then up under that program you have a donate button. But you also get to highlight the people, your volunteers, your donors. It's to get you visibility. But what I'm saying is you can't generate money from that donate button. If you don't invest in paying for that email marketing software. Are you following me? Everything is not gonna come to you for free. As a matter of fact, if you've been listening to my episodes, you know that Funders really only wanna pay for the programs. They don't wanna pay for overhead, which is salaries, which is rent, which is all of the things that it costs to run a business. They don't wanna pay for that. They wanna pay and support the actual program. So in order for you to operate, to run successfully, you've got to bring in money to cover those other expenses.
Speaker 2 (07:47):
And to do that, you have to spend, right? So that is my words of wisdom for you today. And you may say, Well Amber, if I don't have any money, how am I gonna spend money? And what I'm gonna say to you is, you have to create a strategy. And if you don't know how to do that, I've got resources to help you. I've got on my website, it's called the Nontraditional Book of Funding Resources. And basically what it does is it gives you tiers. If you have no money, then it's gonna show you, okay, you can do these three things that don't require any investment. Now they're gonna give you a low return. So for example, if you sign up for Amazon Smile, you are a public charity. If people identify you as their organization that get 5% of selected purchases, that money will come into you.
Speaker 2 (08:44):
You can sign up for Employee Giving, right? So I told you last episode, one of my clients, she got $60,000 from employee giving. That's passive. She didn't have to invest anything except for her time setting up the profile. So you can do those types of things. Get in that type of money, use that money then to build out your infrastructure. Then once you build out your infrastructure, now you can qualify for additional funds. There is a strategy. You can, don't just have a Fish Fry to bring in money and then give somebody a stipend, give somebody… No, take that money. Build up that money. Make a list of the things that you need to tighten up your infrastructure. You know you need a website that might be what, $1,500, $3,500, you know, need to pay for this email system. Stack your chips, get the things that are gonna help you build out your infrastructure so that then you can generate big money.
Speaker 2 (09:40):
That's the strategy that I recommend to all of my nonprofits. You can't run a nonprofit without any money. You cannot. So shift your mindset to looking at what can I do? What can I do? No investment, small investment, medium investment, high investment, right?. Let's just say you get $25,000 from an employee matching program. Use that money to pay for a grant writer to get you a big grant, right. So you just gotta think strategically. But in the meantime, I want you just to shift from, I gotta get this donation, I gotta get this for free. I gotta… And move into the space of, in order to make money, I have to spend money. It is what it is, right? All right, So I am going to pause. Be sure to go check out my website and that workbook, a non traditional book of funding resources. Cause it's going to help you with how you generate your revenue, low investment, high investment, low return, high return. But it's gonna help you identify ways to generate funds. Now I'm going to pause but when we get back, we have a question from the community. So when we get back, Ask Amber.
Speaker 4 (11:02):
Calling or texting, all small business owners and non-profits did 95% of text messages are read and responded to within three minutes of being received. Nothing is more direct or immediate. And that's just one reason to add SMS capability to any Constant Contact plan. Another, it's smart marketing, really smart, with all of your digital marketing tools in one place, Constant Contact makes sure you are connecting with the right people at the right time in the channels they prefer. So you can reach, engage, and keep more customers. Whether you're promoting a sale, announcing an event, or encouraging donations, adding SMS to your digital marketing strategy just makes sense and a lot of dollars too. Constant Contact.
Speaker 2 (12:02):
You are back with Amber, you're On Air with Amber Wynn, Philanntrepreneur, 30 year nonprofit veteran. Woo woo, I'm so excited to be here with you today. We are talking about getting real, in particular that you have to Spend Money In Order to Make Money. And now it is time for Ask Amber, this is when you as a community get to ask me your most pressing questions because I wanna be here to give you the resources that you need. This question was in my DM. Very interesting, Okay. This is an anonymous call from a concerned board member. I recently found out that our Founder is taking money from the organization. She justifies it by saying she built the organization and spent thousands of her own money. And now that the organization is generating revenue, it needs to pay her back. While I don't believe this to be untrue, I'm concerned about the way it's being done.
Speaker 2 (13:07):
Any advice on how to handle this? Whoa. So yes I'll start off by saying that the Board of Directors is responsible for the ethical running of the organization. So your discomfort is warranted. It is your responsibility to make sure that things happen above board. And the fact that the Founder is just going in and taking money, is not ethical. Because regardless to the fact that she invested her own money, she did not set up the process for being reimbursed properly. What should have happened was when she decided to loan the organization money, she should have documented that, she should have said, We need $1,500 to do X, Y, and Z. And she should have documented saying, I am loaning the organization $1,500 until such a time when it can reimburse me. After that, she would get the Board to sign off on that, right? But she needs to show proof that number one, she spent the amount on whatever she's spending. She could just be saying that, right? We don't know that for sure. In an audit that is what a professional would say. Well, how do we know? How do we know that she spent that. What she's doing right now is technically considered embezzlement. She's taking money without justifying it. So what I say is that the Board needs to
Speaker 2 (14:37):
Have a conversation with her, share with her that yes, this may have in fact happened, but we need to create an ethical process so that if we're ever audited, the organization won't be placed at risk. What does that mean? That means that you then say, Okay, can you show us a withdrawal from the bank or a check or whatever? Then you document that and say, Founder so and so covered these expenses and as a result, we are agreeing to reimburse her and how you're gonna reimburse her. She can't just take the money out of the account. You need to actually cut her a check and it needs to be signed off by the Board. She shouldn't be, if she's writing herself a check, she shouldn't be signing her own checks, right? It's just unethical. So I am going to recommend that you put a process in place, that the Board drives that process, that things are documented.
Speaker 2 (15:33):
If you decide to reimburse her, make sure that it's documented or you have the right as the Board to say, Well, we don't know that to be true. Moving forward we're happy to do that, but we don't have justification. If you can show us proof, then fine. If not, basically it's a loss, it's a wash. You don't have to. This is not her personal business. This is a public charity. It's one of the things that some of our non-profit Founders don't realize. When they start a non-profit, it is not their business. You can go into your business and take money out. There's a line item for that. But for our non-profit charity, it does not belong to you. It cannot personally benefit you. And right now, how she's taking the money, it is personally benefiting her. She's using it as her own banking account and that could lead to a lot of issues.
Speaker 2 (16:23):
So thank you so much for your question. It was a very important question and I think our community would be very grateful for that question. And if you have any questions for me, you can hit me up on any of my social media. I'm on Facebook, I'm on Instagram, I'm everywhere. You can also email me at amber@amberwynn.net. I love to hear your questions cuz I love to support you. All right, so now we're gonna move to my most favorite time of the episode. When I get to highlight you, the hardest working people in the world, my non-profit organizations. This week I am focusing on The Task Force for Global Health. The Task Force for Global Health takes on the world's worst and most intractable diseases to eliminate them or to bring them firmly under public health control while strengthening the health systems so that countries can protect the health of their populations. Now we have an opportunity to listen to one of the individuals who works with the task force for global health to see why they really enjoy working for the organization. Let's take a look.
Speaker 5 (17:42):
What do I find most fulfilling and passionate about my job? I would say the people that I work with, for sure, especially people that we are partnering with in other countries working on solutions to these complex health issues. I think a lot of times we think inside the box of where we grew up and our own perspectives about how things should work. But when you are exposed to other perspectives and other experiences, you know you're thinking outside the box because these problems are not the same. These contexts are very different. And so you can't just supply the same lens and the same solutions to every problem in different countries. You have to really get to know the place and the people that you're working with. You have to know how things are working there and what do they think about these problems and various solutions. So I love really asking those questions and getting to know the people who are working on these problems in their own countries. And sometimes I wish that more of them would come here so we could have some innovative thinking on the US side of things. But, in terms of what keeps me going, it's definitely their passion for improving things where they are, despite so many barriers and so many complex, difficult issues, they really work hard and are committed. And I think that is definitely what keeps me going.
Speaker 2 (19:21):
That is the taskforce for global health. If you wanna learn more about this organization, you can visit them at www.taskforce.org. And now we're gonna move to Mindset Minute. In this Mindset Minute, I wanna say it's important that we understand, to make money, you have to invest money. I wanna talk about money. There's this verse that said, Money is the root of all evil. Money's not evil. That's the people who use the money that's evil, right? Money is the resource that you need to do good. If you have money, you have choices, you have freedom, you have opportunities. You can create things, right? If you have money, you can. If one of your clients is in distress, you can help them get out of distress. If you are in a community where you can't get from A to Z, if you have money, you can purchase a van and you can get from A to Z.
Speaker 2 (20:24):
So money is not evil. And I think a lot of times when people think of non-profit, they think nonprofit meaning no money. Nonprofit does not mean no profit. You have to make a profit. And remember, a profit is what is left over after you deduct your expenses. So that means there's the expectation of expenses, and if you have expenses, that means you are expending money to cover it. So money is a necessity. You need money to pay good people. People will work for nothing, for only so long. Other priorities will come up and they will bounce. So you need money to pay quality people for their intellectual knowledge and to put in extra hours, which is what a nonprofit requires often. So money is not the root of all evil. The root of all evil is corruption and greed. Money is an opportunity to make a difference.
Speaker 2 (21:26):
Money gives you choices. Money in a nonprofit allows you to be agile and responsive to your community. So keeping in the spirit of today's topic, we're keeping it real. We're getting real. In order to make money, you have to invest money. Go into your nonprofit knowing that you're not gonna get everything for free, that grants are not gonna cover everything. And even before you even get there, you've gotta invest money in your operations, in your business, in order for you to even generate any money. Ideally, if you're just getting started, people say, Well, how much money should I have? Ideally, you should have $50,000. That's what they tell you when you start a for-profit at the minimum, $25,000 because there's so many things that you have to invest into your business just to get it started. Your website, your logo, your social media, your letterhead, there's just so much that you have to pay for.
Speaker 2 (22:30):
So if you're broke, I've said this on many episodes, if you're broke, don't start a nonprofit. If you don't have any money to invest into your nonprofit organization, don't start it. Use your skills somewhere else with an established nonprofit and help it to further its mission. If you don't have money to invest in your non-profit, do not start one. It's just gonna keep you swimming in debt and you'll never get to the impact part that you want. All right? So don't forget to visit my website and check out the non-traditional book of funding resources. It's gonna give you some non-traditional ideas on how to generate revenue. Different tiers. If you have $200 you can invest, it'll give you ideas. What you can do to then multiply that return. If you've got 5,000, what can you invest to then multiply your return on that. And there are also some in there that you don't have to invest any money in.
Speaker 2 (23:34):
Now, it's gonna take you a little bit longer to build up that nest egg, but you gotta start somewhere. All right, so that is it for this week's episode. Thank you for joining me. As always, thank you for giving me grace. Y'all know I just gotta keep it real. This is who I am and what I do. I hope you know that I'm coming from a place of love and I want you to succeed because the world needs you. We don't have time to be messing around. So I'm gonna keep it real so that you can get to where you need to be because our communities need you. I need you, you are my people, my tribe, my community. All right. So that's it for this week. I'm gonna sign out and I'm gonna tell you what I always tell you because you guys are always giving. Take care of yourself, like you take care of your community. I'll see you next time.
Speaker 1 (24:26):
Thanks for listening. If you enjoyed this episode, subscribe and leave a review on iTunes. Head over to www.amberwynn.net/podcast for the links and resources mentioned in today's podcast. See you next time.
