16 How Do I Recruit Resources?

As soon as he took his organization’s leadership reins, Alan could clearly see the organization’s problem: it lacked the facilities and personnel to carry out its mission. The organization seemed to be doing exactly the right thing in the right time and place. But the organization’s programs and operations were only a drop in the bucket of the overall needs. Alan could see that the organization could double or triple its offerings, or quadruple or quintuple them, and still not meet all the needs. Unless Alan could find new resources, the organization would simply continue to dabble in the sea of needs, without significant impact on the pressing issues that the organization was otherwise perfectly positioned to serve.

Resources

Leadership isn’t simply a matter of stepping into the driver’s seat, grabbing the steering wheel, pressing the accelerator, and heading off. Leadership also involves recruiting the resources that fuel the trip. Leaders who are good at guiding already-funded, already-made things can do well enough. Yet leaders who can raise funds, acquire talent, and amass even greater resources, whether for a new organization or an old and well-developed organization, add an extra dimension to their leadership. If you truly want to succeed at leadership, don’t just see how well you can do with what you already have at hand. Instead, examine your organization for the additional resources that it could use, and then look around to see what additional resources you can acquire and apply for your organization’s benefit. Make resource acquisition a significant part of your leadership skills and plans. Without adequate resources, your leadership efforts will be like blowing into the wind. 

Finances

Organizational finance or fundraising is one way to look at resource acquisition. Money can acquire the facilities, pay the personnel, purchase the equipment and supplies, and conduct the programs and operations necessary to an organization’s pursuit of its mission. Money isn’t the organization’s direct need. Money simply represents the personnel, facilities, supplies, or other things the organization needs for programs, functions, and operations. Finance and fundraising isn’t necessarily a leader’s favorite subject. Some leaders rue having to deal with money issues, preferring to deal with the organization’s personnel, program, operations, facilities, and even marketing and communications issues, while pursuing their vision for the organization’s success. But finance and fundraising can be the lifeblood of an organization. If the money isn’t flowing through the organization in the quantity and with the regularity that the organization requires, things break down quickly. When an organization has a need, and organizations can have many needs, money may be the first thing about which leaders think. Money isn’t the solution to every organizational issue. But money can solve a lot of issues.

Sector

The sector in which you lead, whether business, nonprofit, or government, determines the available sources for your organization’s finances. Business organizations finance their operations one way, while nonprofit organizations finance their programs another way, and government agencies finance their services yet another way. Your plan for acquiring resources thus first depends on the sector in which your organization participates. Nonprofit leaders must generally approach fundraising in a vastly different way from business leaders, although some of the internal financial-management concepts and strategies may be similar. Nonprofit leaders can certainly learn from business strategies. Resource acquisition and financial management for government agency leaders is also vastly different from resource acquisition for business or nonprofit leaders, although once again, some of the financial-management strategies may be similar. If you have a facility with finances in any sector, your facility is likely to translate well to another sector. Just recognize the stark differences in financial sources.

Business

Business organizations must have adequate financial resources to remain competitive in their field. Business organizations finance their activities primarily through owner investment, borrowing, and revenue from operations. Owners generally invest initial capital to start a business. Starting a business without owner capital is hard. Owners must generally kick in something, cash included. Successful businesses may operate at a loss for weeks, months, and even years before returning handsome profits to their investors. Owners, though, may also periodically provide additional capital when the business calls, whether to get the organization through an economic downturn or for expansion or other needs. Borrowing may be an alternative, although borrowing adds operating expense and brings risk. A line of credit may smooth the ebbs and flows of short-term cash needs, but beware significant borrowing other than for long-term capital investments such as facilities. Revenue from operations is, of course, the best source of new finances to meet business needs. Business owners hope that operations return handsome profits, not just for their pockets but also to meet business plans and needs. But that may be exactly your conundrum as a leader, that you need finances to make money. Consider all three financial sources, investment, borrowing, and profit, to meet your organization’s resource needs.

Nonprofit

Nonprofit organizations must have adequate financial resources to carry out their charitable mission. Nonprofit organizations finance their activities somewhat differently than business organizations. Nonprofits have no owners to make investments. The public is a charitable nonprofit organization’s putative owner. A charitable nonprofit’s board governs the organization for public benefit. Charitable nonprofits raise funds from public contributions, private foundation grants, and government grants. Like businesses, nonprofits can also borrow money to meet their financial needs. And like businesses, nonprofits can also earn net revenue, what a business would call profit to reinvest or return to owners but what the nonprofit must treat instead as funds to hold in public trust and reinvest. Nonprofits may, like businesses, earn revenue through sales of goods and services, although a tax-exempt charitable nonprofit must not operate in a commercial manner, competing with business concerns. Instead, charitable nonprofits sell subsidized goods and services where competitive markets do not meet disadvantaged patron needs. When seeking additional resources for the nonprofit organization you lead, look to all of the above potential sources. You need the right mix of grants, contributions, and revenue. 

Government

Government agencies must have adequate resources to fulfill their public mission. If you are leading a government agency, you know that agencies, too, have resource needs. Tax revenue, license and user fees, and revenue from sales of goods and services compose the financial mix for most government agencies. Because government agencies do not generally operate in competitive environments, market share won’t drive your resource needs. Instead, you will measure your resource needs by the extent to which your agency is able to fulfill its public mission. But you may have little influence over your financial resources, to acquire additional resources to pursue your agency’s mission. Legislative bodies generally set agency budgets, as the executive authority recommends and requests. To increase your tax revenue share, you may most need the confidence of your executive official, whether a mayor, county administrator, or governor, and the confidence of the council, commission, or other legislative body, that your agency is serving efficiently and effectively but hampered by resource inadequacies. You must build your case to properly influence the discernment, vote, or recommendation of your governing public officials. 

Unit

You may, alternatively, lead a unit, department, or team within a business or nonprofit organization, or government agency, for which you need additional resources. Acquiring additional financial resources for a unit, department, or team you lead differs from acquiring resources as an organization leader. A team leader generally raises additional resources not from outside the organization but instead internally. Units, departments, and teams may generate some of their own revenue. And some of the revenue they generate may remain at the disposal of the unit, department, or team. You might, in other words, have a limited opportunity to raise your own financial resources out of your own unit’s increased revenue. But generally, unit revenue goes to the organization, out of which the organization funds all programs and operations. To acquire additional resources for your unit or team thus generally requires advocating effectively within your organization’s budget process. You need to influence the decision of your organization’s executive director and the director’s finance team. Make your internal case based on your unit’s efficiency, criticality, priority, and opportunity to enhance the overall organization’s performance. Your ability to advocate effectively within your organization for your team’s additional resources may be critical to the success of your leadership. 

Efficiency

The efficiency of your organization or team is a significant factor in your resource plan and needs. While increasing your organization or team resources may be your obvious need, you may have the opportunity to use your resources more wisely and efficiently. Indeed, to acquire more resources, whether from owners, donors, lenders, or an executive director and finance team, you may have to demonstrate that you are using your current resources efficiently and effectively. Waste won’t get you more resources. Waste instead depletes the resources you currently have while showing your funders that you not only deserve no more but instead deserve even less. Make every reasonable effort to use your current resources well. Consider reallocating your current resources from one need or task to another, until you reach the optimal use of whatever you have. Look for opportunities to reduce expenses, share resources with other units, teams, or departments, or otherwise increase your efficiency. You may be able to satisfy your additional resource needs internally, simply by increasing efficiency. But even if not, efficient and effective leadership proves the value of your unit or organization and thus garners greater resources. 

Plan

No matter your sector, field, or leadership level, you should develop a plan for acquiring the additional financial resources that your team or organization needs. Your plan should include information on how you are currently maximizing use of your current resources, including any recent efforts you’ve made to improve efficiency. Your plan should also include specific information on how you would use additional resources and how your use of those additional resources would increase the performance, value, and return of your team or organization. That information should include measurable projections of the increased performance you expect, showing your willingness to be accountable for the additional resources your team or organization acquires. Your plan should also demonstrate that you have explored and exhausted alternatives to acquiring additional resources. Get the help of others with financial skills within your team or organization to develop your resource-acquisition plan. Asking for more money gets easier, the more clearly you can document the current need and anticipated return.

Talent

Organizations don’t just need financial resources. They also benefit from talent. Talent is a curious thing in that it doesn’t always cost more in terms of financial resources. An organization may pay a talented individual the same compensation as an individual who lacks the special knowledge, skill, and commitment that the talented person shows. One way for you to increase the resources of your organization or team is to recruit, retain, and empower talented individuals whose work and creativity add greater value to your organization or team. You may already have those individuals on your team but in the wrong place or insufficiently invited, challenged, and empowered to put their talents on display. Examine your programs and operations for where they could benefit from additional gifts and talents. Simultaneously examine your personnel to discern their greatest talents. And recruit for talent, too. 

Allocation

As already suggested once or twice above, devoting sufficient resources to the programs, functions, and operations of your team or organization is not just a matter of accumulating ever-greater resources but also of allocating the available resources wisely. In some cases, the allocation of organizational resources is the one thing that a leader most controls. Your best leadership approach may not be by commanding, inspiring, or motivating organization personnel, who despite your efforts may instead pretty much do as they alone determine. Your best leadership approach may instead be by allocating and reallocating resources. By trimming the budget of one department in favor of another, devoting a facility to one operation instead of another, or assigning talent to one program instead of another, you may accomplish all you need in seeing the organization move forward. Use your reallocation of resources to meet your organization’s resource needs. 

Reflection

On a scale from one to ten, how would you rate your finance skills? Do you have experience managing budgets? Do you have experience advocating for budgets? Do you have experience raising funds? Do you have experience raising capital? Do you have experience managing a credit loan or loan repayment? Does your financial experience align with the sector in which you are leading or plan to lead? Do you need to rely on others with greater financial experience and expertise? If so, are those others available to you, or do you need to seek them out? Is your team or organization using its resources efficiently? How can you best demonstrate the efficiency of your team or organization to those from whom you may seek additional resources? Do you have a way of showing how your additional resources would improve the performance of your team or organization? Would you be able to measure those improvements to prove the return from the additional investment? Can you recruit additional talent to improve your team or organization? Do you need to reallocate budgets to improve performance?

Key Points

• Organizations and teams require resources to pursue their mission.

• A leader’s responsibility includes acquiring financial resources.

• Leaders acquire financial resources differently among different sectors.

• Business leaders pursue investment, borrowing, and sales revenue.

• Nonprofit leaders pursue grants, contributions, and program revenue.

• Government agency leaders pursue tax share, fees, and revenue.

• Leaders of units within organizations advocate internally for budgets.

• Leaders seeking additional resources must show efficient resource use.

• Develop and pursue a deliberate resource-acquisition plan.

• Recruit, retain, and reassign talent as a non-financial resource. 

• Reallocate budgets and other resources to satisfy resource needs.

Read Chapter 17.