The money side of things can be a bit of a mystery when you work at a charity. Especially for people who are focused on the cause or social issue, figuring out where money comes from, why it arrives, or how salaries are funded might not be a priority.
How your organization raises money influences who will have power
If you want to build a career at a charity, it does help to know how the money works. The more you know, the more influence you can have.
Financial independence gives us the power to decide our futures and liberate our conception of what’s possible. A similar power exists in understanding how money drives organizations—regardless of size or type. Institutional knowledge about how the corporate, public-sector, and nonprofit worlds work provides a passkey into a new dimension of influence. The more we understand, the more power we possess. Learning about the finances of a company or an organization is like learning a secret code. The ones who know how to effectively manage budgets and raise funds for projects are usually the ones calling the shots.
In the same passage from Minority Leader/ Lead from the Outside, Abrams argues that knowing how money works is especially important for people of colour and woman who are often excluded from positions of power:
Because we’re not expected to, speaking the basic language of finances can offer a creative way to attain power in a structure not built to grant access to outsiders.
Use your understanding of money to become a valuable part of the team
Your job always depends on someone doing a fundraising job well. Charities rely on people who can generate revenue so much that senior fundraising staff make more than other senior staff (an average of 5-10% more in Canada). In many cases, they make more than the average executive director.
If you aren't sure who is raising money, the size of your organization give you some clues:
Some charities are essentially branches of a government or business and receive most of their funding from that source. Look for the people who are the main conduits between the charity and the parent/ funding organization.
Larger charities have dedicated fundraising departments that raise money to be spent by program departments. You'll know them by their job titles and the organization’s departmental structure.
Smaller charities usually allocate fundraising responsibilities between the executive director, program staff, and volunteers. If you aren't sure who is working on fundraising and haven't already been roped into helping, just ask around.
Once you understand the flow of money, you can strengthen your projects, your skills, and your team. You can start creating new opportunities. That’s good for you, and good for the cause.
How money is raised matters to everyone
If you are trying to build a career, then it matters how money is raised
If you want to figure out how to rise in an organization, increase your salary, or ensure you have job security, then you need this information.
You don't always need to fundraise yourself; dedicated fundraising staff need excellent program managers, administrators, and marketers to help them earn funders’ respect. By understanding fundraisers’ needs, you can influence what projects get funded and start carving out leadership opportunities for yourself.
If you are trying to keep an organization on-mission, then it matters how money is raised
When fundraising staff have too much influence over programs, it usually means that funders’ needs are more important than your constituents' needs. You may have lost sight of your original purpose.
When the fundraising tail wags the proverbial dog, you sometimes see big scandals, like WE Charity’s “cynical, star-studded cronyism” or the “troubling” relationship between University of Toronto and its big donors. More often, it shows up in operational habits like not having a consistent theory of change or designing projects only after you know what funders want.
If you care about equity in society and the charitable sector, then it also matters how money is raised
Too often, people of colour, women, and people from lower socio-economic backgrounds are not considered for senior leadership and fundraising roles. If you aren’t sure what I mean, check out this article describing issues and obstacles faced by African Americans in the fundraising profession. You might not like what you find when you look at your organization’s fundraising practices through this lens, but it’s important to look anyway.
This article is the second in a series about how fundraising activities influence organizational culture. Don’t miss the first article, "How you raise money matters".