Charities are not like organizations in the private sector because they can’t just sell more widgets or raise their prices to improve the “bottom” line. The reality is that they have inflows and outflows just like any other business and do have a “bottom line", it just can’t be called the “p-word” (profit!).
Most folks have a favorite charitable organization whose purpose they are passionate about, donating their time and money to try to help those in need. One that is close to my heart is The Victory Mission in Springfield, MO where I've served on the board the past three years.
The Victory Mission feeds the hungry, houses the homeless, has a successful recovery program and helps equip people to get back into the workforce. Generally, Victory Mission helps folks get back on their feet when life has thrown too much their way.
Although "profit" is considered a bad word in charity operations, the reality is, if you have no money, you have no mission. Without the funds to run and operate an organization, non-profits are unable to provide their services and live out their mission. Three years ago Victory was facing some real challenges. Some of the issues they were trying to overcome at the end of 2016 included:
- Over $200,000 in past due payables
- Scrambling each pay period to raise the funds to meet payroll
- No financial reserves
At the end of 2016 a new executive director, Jason Hynson, joined the team and saw the need for some drastic changes. After Jason and his team attended the Great Game of Business for Social Sectors workshop, they took GGOB practices back to the Mission and began implementation.
They began Huddling every week and not only communicating financial information, but teaching the staff financial and how they affect the “bottom line". In less than twelve months, they saw these amazing results:
- The panic was removed from payroll
- Three months of operating expenses were collected in reserves
- $500,000 of annual expenses were cut
- Long-term debt was reduced
- All payables were now current
- Last, but not least, they successfully served more folks in need!
Victory Mission is just one of the many turn-around success stories The Great Game of Business for Social Sectors has had a part in. Remember, "No Money, No Mission."
When the next recession hits, don’t you want the non-profits that you care about to have staying power? What kind of organization do you think donors want to give to? When the staff and volunteers of any non-profit understand what they can do to help, not only do they win, the community wins!
Check out Victory Mission's All-Star Case Study and video to see how they empowered the entire staff to manage financials and turn their company around, and the progress Victory has made since implementation.
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