7 things many people don’t realize about running an $8 million nonprofit

7 things many people don’t realize about running an $8 million nonprofit
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Rob Butcher is the CEO and President of Swim Across America, a 501c3 nonprofit that hosts benefit swims across the country to raise money for cancer research and clinical trials.

The organization’s national headquarters is in Ballantyne. To date, Swim Across America has raised more than $80M for its beneficiaries, a list including organizations like the Levine Cancer Institute, Memorial Sloan Kettering Cancer Center and Johns Hopkins Medicine.

Their next Charlotte open-water swim is happening on Sept. 21, and their Makin’ Waves at Hoppin’ fundraising event is July 18.

Now, Swim Across America’s CEO sheds some light on common misconceptions about running a nonprofit, plus tips for those looking to get into the nonprofit field.

Below are Rob’s thoughts on what people should know about running a nonprofit.

(1) While there’s obviously a higher purpose involved, at its core, a nonprofit is still a business.

Rob: Most people look at the designation of nonprofit and there’s the perception of “Oh, that’s just a charity. That’s just a goodwill donation.” But you still have to run a sustainable and successful business model and provide value to people through donating or the services you’re offering in order for you to stay in business each year and ultimately meet your mission.

The only difference between a nonprofit and a for-profit is the tax status.

Nonprofits still have P&Ls.

You still have stakeholders, which are typically your donors or the people you’re making your grants to. All of our tax returns are public. You still need a level of business skills, people skills and problem-solving skills in order to lead a nonprofit.

(2) No, nonprofits don’t donate 100 percent of the money they take in. But there’s a good reason why.

Rob: There are various types of nonprofits. Swim Across America is a grant-making foundation, so we try to achieve a threshold of grant-making, which means revenue minus expenses, the balance becomes the grant that we award out.

We’re trying to achieve a minimum of 70 percent that we award on a grant basis each year. If you looked at our tax returns and saw that we took in a little over $8M, you would say 70 percent of that would be $5.6. Are we meeting that? And the answer is yes, we are.

But we still have to pay for things when we do our charity events, whether it’s permits, insurance, legal fees, food and hospitality, T-shirts, Port-a-Johns, tables and chairs.

We’ve got people who want to support our cause and they might cut us a discount, but they’re not necessarily giving away things for free.

(3) If you want to see how a nonprofit you’re looking to get involved with uses their donations, there are resources readily available.

Rob: There’s a good resource called Guide Star and another called Charity Navigator, they’re the watchdogs for nonprofits.

You can read about any nonprofit and see the level of transparency, their tax returns and write-ups on the nonprofit. My experience is most people don’t do that before they donate.

(4) Starting a nonprofit isn’t as easy as just having a passion for a cause.

Rob: Until your nonprofit generates about a million dollars in revenue, you’re probably going to be a volunteer.

Once you get over a million dollars and it’s sustainable, you probably have enough to afford to hire one person, like an executive director.

(5) For those running nonprofits, there’s a lot more marketing involved than you might think.

Rob: One of the goofiest things I do is I wear a wetsuit everywhere I go.

So you go to a conference. You go to a hospital. You look like everyone else in a shirt and tie, right? I was looking for a way that my words could translate as well as an image I could create, too.

It’s been a conversation starter and has had more meaning and impact. It’s also encouraged some of our oncologists to wear wet suits during the week of a swim. It becomes an icebreaker. “Why are you wearing a wetsuit?”

(6) If you want to get hired by a nonprofit, get used to creative thinking.

Rob: We have a full-time staff of seven. We operate out of a 650-square-foot office in Ballantyne. Yet we raised right at $9M this year.

So if you want to work for a nonprofit, you have to be prepared to be a problem solver.

We’re not looking for more problem reporters. We’re not looking for more problem causers. We’re looking for more problem solvers.

It helps if you have your convictions, but also play well in the people sandbox.

(7) Just like any other business, making it work on a tight budget is one of the biggest challenges for many nonprofits.

Rob: Raising money and sustainability are two major challenges for nonprofits, and sometimes there’s the image or perception challenge — you need to create a value proposition and think of yourself as a real business.

In our world, before we do one event next year, we’re in for a million dollars in expenses from legal to accounting and insurance.

That number can become really, really daunting if you’re not able to go, “What’s my business model so I can cover these expenses?”

But I think the other challenge that nonprofits face is understanding what your mission is and being able to communicate your impact in a way where it emotionally connects with your participants and supporters.

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