Capitalizing-As Important to a Nonprofit as Your Program is to its Beneficiaries

Dan Charobee

Dan Charobee

When you capitalize a company, you either put in your own money or OPM (Other People’s Money); when you capitalize a nonprofit, you put in your own or other people’s money, time, or effort. I met with a director recently that came from a prominent business sector position and started a nonprofit that solves a service delivery problem for a larger national organization. After a period of time, they were running into the problem of having critical program managers leave due to lack of funds for establishing adequate payroll.

It is not surprising to hear that this founder was looking to go back to the business sector to personally make ends meet. When I asked whether the program provided enough benefits to continue to exist, “absolutely” was the response. The program had been gaining in funding, was becoming recognized by funders and donors at a growing rate, but was in jeopardy because everyone was an unpaid volunteer. And, while they were dedicated, they leave to find work that supports them and their families.

Having worked with international, national, and regional nonprofits, I found that a very large segment of the workforce is in the nonprofit sector. The sector, not only provides valuable services, but also provides employment to many people.

So, here is my personal story about capitalizing an organization, project, or program. In a leadership program, I was challenged with starting a local program for an international organization. The basic challenge was to get members – all either paid or unpaid. I chose unpaid, thinking that payment would be a hindrance and focused on quality member prospects. I went after the best and brightest, knowing that they would draw others along with them. My first reality moment came when I talked to my best prospect and said “we could really use you in this organization”. She proceeded to open her purse and brought out her checkbook. I learned a lot after saying “I don’t want money, I want you.”

She said that she loved the project, but had the money, not the time. We all feel it is easy to ask for help and think about the physical act of helping. At the same time there are so many people and organizations that want to help that have the funds, but not the time.

Author:  Dan Charobee, Executive Coaches of Orange County, www.ECofOC.org