How do you determine the value of your organization?
- Is it by the size of your annual budget
- Is it the number of members you have
- Are you the only game in town, or are you a part of a larger overall collection of other organizations?
Benjamin Franklin once observed: “I believe that the great part of the miseries of mankind are brought upon them by false estimates they have made of the value of things.”
The challenge of defining and measuring true value is not confined to companies, for profit or nonprofit, even nations struggle with this very concept. Is any organization measured only by its financial transactions?
In the case of nonprofits, this question is even more salient. To really clearly show the value of any business, indicators other than a balance sheet or profit and loss statement need to be included. Its health, well-being and future depend as much on nonfinancial qualities, particularly for nonprofits; their missions and goals are decidedly not focused solely on finance, but rather the urgency for change in a particular arena.
But Money IS the Most Important, Right?
Finance is key, no question, no doubt, no argument. But the concept of capital has to be increased to include human capital and all that it provides: intellectual, creative, social, and natural.
Capital is defined as one of the factors of production (the others include land, labor and organization, entrepreneurship, or management). But money and finance alone can’t produce. Someone needs to care, to want to act, to invest other types of capital. For most nonprofits, the capital that got the ball rolling, and the plan off the ground, has NOT been money, it has been passion; the passion to make change, to make something better for someone, somewhere and somehow.
That passion has incredible value, and that needs acknowledgement.
The Future Depends on Inclusive Capital- That Means You
As the competitive landscape for donations and support becomes more acute, the value of a nonprofit, its value as the choice of a donor, sponsor or partner has to become more broadly defined.
It is these other vital capitals that lie at the heart of long-term value creation of any organization. Together they establish the machine that drives long-term mission delivery, and financial stability. Their stewardship and enhancement is what is critical to achieve, at the very least, parity with finance capital in determining what you are worth.
Would you like to define all the capital you possess? Let us help you see what you really do have to offer. If you’d like a valuation, get in touch by email here or by voice on 310 828 6979.
Cindy Lauren is the Principal of Lauren Associates – non profit consulting
As well as advising Executives and Boards on all aspects of nonprofit management, the firm specializes in developing fundraising solutions for all sizes of organizations.
Image Credit: It’s not about the money by TheeErin on Flickr.
Posted while listening to:Goodbye Ray – Instrumental Study Music – music2work2