“We’re 100% volunteer-run!”
That may not be the good news you think it is.
It’s not that volunteers aren’t valuable. They absolutely are! It’s just that eventually most roles outgrow the duties and reasonable time commitment of a volunteer position. That caps your growth.
But how do you get from all volunteers to paying nonprofit staff? Where do you get that kind of money, anyway?
Would you believe me if I told you that you only had to do three simple things?
It’s true. The three things you need to do to start paying nonprofit staff are simple, but they’re not always easy. They feel risky, but they actually help you navigate and mitigate risk better. They’re good business decisions, the kind of thing that folks in the corporate world wouldn’t think twice about, but we nonprofit folks often resist.
Here’s what they are:
- Figure out where you can use volunteers strategically, and where you need a paid professional.
- Create a nonprofit budget that communicates your true need, including what you need for admin and fundraising.
- Prioritize your fundraising time on the activities that raise the most money.
That’s it. Not galas, not grants, not government funds.
1. Volunteers vs. Paid Professionals
Volunteers give their time and expertise out of the goodness of their hearts and their belief in your mission. But that means that you can’t expect the same amount of commitment and priority that you could ask from a professional. Eventually, you’re going to need a professional for some roles.
Moreover, people have good volunteer experiences when they feel like an important part of the organization. But there’s a big difference from feeling valued and significant, and feeling like the entire organization would go under without you. That’s a big responsibility to put on someone who likely has another job!
Some volunteers should play very specific roles for a certain length of time. If you’re too dependent on them for too long, you’ll hit a ceiling and struggle to secure the funding you need to grow. What does that look like?
- Your “monthly” newsletter goes out seven times a year, always on a different date.
- Your bookkeeper keeps track of your finances, but doesn’t have time to translate them into reports your board and donors can understand.
- You send out thank you letters a month after donations arrive.
None of these things seems like a big deal by itself. Hey, it’s better than spending money on any of those functions, right?
In order to attract, engage, and retain the kind of donors who will fully fund your nonprofit, you need to have a strategic communication strategy that demonstrates the impact of your work and excites donors about their role in it. You have to be able to confidently explain your financials and invite investment-level conversations about them. You need to thank your donors promptly and enthusiastically. You do have to spend money to do these things properly, but you’ll raise more when you do it.
Learn more about when to transition from a volunteer to a paid professional with my checklist, here.
2. Get Real with Your Budget
Before I entered the nonprofit world, I wasn’t a person who loved data and numbers. These days, numbers are my thing. I love helping nonprofits create their budgets.
A budget is your guide – your compass – your direction every month, every quarter, and all year long. If you don’t have a robust month to month expense and income budget in place, 9 times out of 10 you aren’t growing at the rate you could be. In essence, you’re leaving money on the table.
Your budget is how you know to spend the right amount of time and the right amount of resources, so you can bring in the right amount of money.
So, if you want to hire staff, expand your programs, or get real about creating a sustainable organization, you’ve got to budget for it.
It’s that simple. Only then can you raise to that number.
It’s likely that number, that real, true, what-you-need number will feel like a stretch.
Here’s why it’s a good idea:
A donor wants to invest in a forward-moving mission – not one that hopes to just squeak by with just a slightly better impact than they had last year.
A “cautiously aggressive” budget inspires donors to give generously, gives you a goal to celebrate, and shows that you have a plan that you’re executing with passion and precision. Who gets excited by an organization that’s just drifting along? I want to get onboard a ship that’s sailing towards a destination.
“Goals are great, but where do we get the money?” you may be thinking right now. Don’t worry, there’s a practical side to this lofty goal-setting. You must commit to spending as much time planning how you will raise the money to meet the need as you do figuring out all of your expenses.
This is a big deal. Nonprofits often plan their expenses down to the last paperclip, and then spend very little time planning how they will raise the money beyond hoping that somehow it happens. Make your plan month-by-month, with up to 75% of your revenue coming in from your Top 30 sources.
The only way to move into a paid staff model is to budget for it. Then and only then can you truly create a fundraising plan to meet that paying nonprofit staff model.
3. Prioritize What Brings in the Most Money
There are a lot of possible fundraising activities you could do, but not all of them will bring in significant revenue. If you want to raise the most money to fund your mission, give your time to the activities that really deliver.
Shift your focus to finding, cultivating, and soliciting your Top 30 donors, which should account for 50-75% of your annual revenue. Give your attention to individuals, not foundations or events.
I teach my students this strategy because it works. It works every time. But for many, it feels scary.
Here’s what my students have done to successfully make this transition:
Your Top 30 donors should make up 50-75% of your revenue. Every year, they plan their expense and income budget in a way to support this metric.
Because these Top 30 donors should result in 75% of your income, that is what they prioritize the majority of their time on. They don’t get caught up in the quick-fix fundraising ideas.
They’ve learned how to confidently lead their donors to solicitations where they regularly receive their donor’s best gifts, every year.
When you’re an expert at your mission, but haven’t ever been trained on how to actually lead an individual to their best gift, you worry about coming across as salesy and confrontational. So, it’s easy to dread the simple thought of “making an ask.”
But, if you don’t have a strategy or tools in hand to ask confidently and comfortably:
- Donors will never understand what your mission really needs, and therefore won’t give larger gifts
- You’re leaving money on the table — people might happily give if you asked, but won’t come to that conclusion on their own.
- It’ll be hard to grow your unrestricted funding and reserve
By the way, the idea that donors won’t fund staff is untrue. If you’ve faced that, you’re likely not presenting the need in the correct way.
You Can Have a Staff
You can raise enough money for paying nonprofit staff, every year. My students do it all the time. The things you need to do to make it possible aren’t impossible, or even very complicated. What they require is discipline, consistency, and a growth mindset. With those things in place, you can transition your volunteer-run organization to a staffed one, and probably sooner than you think.
Are you ready to start that shift today?
As part of Bloomerang’s Content Donation Program, $100 was donated to Every Shelter.