Maximizing your Social Impact: Keys to Success for Nonprofit Leaders: Part 3

This is the final part of my Maximizing your Social Impact series. I hope you find the 14 Keys to Success useful.

11. Get professional help with operations.

Community-based nonprofits are usually established to meet pressing community needs, and their staff work tirelessly to pursue their purpose. However, your typical nonprofit will not have internal professional support like a human resources or accounting department. Therefore, retaining external support in these key roles is essential for success.

I highly recommend not trying to do it all alone when you’re a new or small nonprofit. Getting the support you need with operations while focusing on your essential services and mission will maximize your impact. Here are some outsourcing options to consider:

  • Payroll – Payroll Taxes (941 Filings);
  • Property Tax/Business Tax Filings;
  • Bookkeeping;
  • Controller/CFO Services;
  • QuickBooks Support;
  • Human Resources Support; and
  • Grant Accounting/Reporting.

I vividly remember the feeling of relief that I experienced after retaining a Preferred Employer Organization (PEO) to handle our nonprofit’s payroll, human resource management, risk management support, and benefits administration. We were ramping up for a new program and needed to add over 20 team members. I felt overwhelmed. Working with a PEO helped to dissipate my stress. They helped build our capacity and streamline our operations for a modest fee.

12. Watch your finances with eagle eyes.

The eagle eye is among the sharpest in the animal kingdom, with an eyesight estimated at 4 to 8 times stronger than the average human. This is the level of intensity you should focus on your finances. Establish a robust financial management system to reduce the likelihood of fraudulent activities. Fraud can result in financial and credibility losses to an organization. 

Internal controls are critical. These controls are the mechanisms, rules, and procedures implemented by an organization to ensure financial and accounting information integrity, promote accountability, and prevent fraud.

Kelly Shafer, a Certified Public Accountant with Suttle and Stalnaker, shared the following ways an organization can strengthen internal controls:

  • Segregate duties – don’t have the same person open the mail, prepare deposits, take the deposit to the bank, and record the transaction
  • Only allow employees access to areas they need to perform their job
  • An employee who can sign checks should not also have exclusive access to the check stock
  • Require dual signatures on checks
  • Have monetary authorization limits
  • Avoid signature stamps
  • Monthly bank statements should be mailed directly to a board member for review or provide access to online banking
  • Review credit card charges and reconcile the monthly statement
  • If using electronic approvals, keep a paper trail (emails)
  • Cross-train employees
  • Require annual vacations
  • Conduct background checks
  • Have annual audit/review
  • Establish a fraud tip line

Remember, internal controls protect an organization as well as its employees.

13. Build a reserve fund.

Some community-based nonprofits experience funding fluctuations from time to time, disrupting their operations. Building a reserve fund that can be accessed during these uncertain times is vital to sustainability. A reserve of at least six months of the organization’s annual operating budget is ideal. 

Building this reserve will not be easy for many, but it is definitely worth the effort to tuck away as much as you can to sustain your organization. You can establish your fund at a local community foundation or other financial institution that offers a generous rate of return.

14. Persist when stumbling blocks appear.

Success is not the absence of failure, but it’s persistence through failure – Aisha Tyler.

Nonprofit work is hard work; nevertheless, I have found that working in the nonprofit sector to uplift humankind is fulfilling and sets my soul on fire. Be sure that you feel a special calling to this work before considering it a career, as the journey will not be easy. As you strive to do the best job possible, inevitably some funding proposals will be rejected, some staff will disappoint you, and some clients will become upset. 

Through it all, you will have to persist, insist, and stay the course to positively impact your community. It takes a certain tenacity to thrive in the nonprofit sector. Successful organizations are led by leaders who use stumbling blocks as stepping stones to better serve and advocate for those in need.

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