Sustaining Critical Assets

Every nonprofit should have four critical assets. The assets are advocates (rare), referral sources (few), donors (many), and staff (most). Almost all have donors and staff, some have referral sources too, very few have advocates as well.

What is your nonprofit doing to increase and nurture each of your asset classes?

It is surprising the number of nonprofits who lack an asset because they think it is unnecessary. In our experience when two nonprofits are competitors, the one with more asset classes is very often the stronger one. Having a full complement makes a bigger difference.

The best leaders surround themselves with diverse groups of people who have insights into areas the leaders lack. The members of each asset class have unique knowledge and perspectives. Their insights will help your board better understand your community and your marketplace. It is also specific, actionable, and current information that is be hard to acquire elsewhere.

There are two questions every asset should be asked at least once a year:

Why do you continue to support our nonprofit?

What might entice you to support someone else?

The simple act of asking the questions will help to retain the asset. It tells them that you think they are an asset and you care about their needs. Having a board member or two in attendance when the questions are asked adds a level of sincerity to the process. Most of the time, you will learn about things you can do that will strengthen the relationship and prevent the loss of an asset. You will also learn about emerging trends, new opportunities, and new threats. Most of the responses will provide you with another perspective on an issue that is important to your mission and clients.

The goal is to discover what must be done to retain the asset. The other information you learn underscores how valuable each asset and asset class is to your nonprofit. Therefore, anything that reduces attrition and strengthens a relationship is worth doing.

All of the assets have an acquisition cost. Compared to the acquisition costs the maintenance costs are low. Therefore, the return on the time you invest in talking with assets will be well rewarded.

Next Step:

Ensure your nonprofit has a full complement of assets

Educate your board about the value of each asset class

Identify and assess each of the key members of each asset class

Monitor the health of the relationship between your nonprofit and each asset class member annually

Your board pays careful attention to the health of the assets listed on your balance sheet. The change in those assets is probably reported to the stakeholders in the annual report. Those are hard assets. The soft assets (advocates, referral sources, donors and volunteers, and staff members) are probably more valuable. In combination they are probably a more important source of income and sustainability than the ones listed on your balance sheet.

Remind your board that it is responsible for protecting, maintaining, and increasing the value of all of your nonprofit’s assets.

Take It Further:

Look for other assets that are critical to the success of your nonprofit and mission but never appear on your P&L or balance sheet

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