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Not All Capital Is Cash
Not All Capital Is Cash

In the hard-strapped world of nonprofit finances, cash is king, and the quest for grants, contracts, and individual donations is constant. By investing in staffing, technology, and communications to bring in the bounty, nonprofits reflect the truism (credited to Titus Maccius Plautus, 254 to 194 BC) that you must spend money to make money. 

“As it relates to nonprofits, I’d like to alter that quote a bit,” said Barbara Floersch, grants expert and author of You Have a Hammer: Building Grant Proposals for Social Change. “My version: to secure resources, you have to spend social capital.”  

Author and entrepreneur Keith Ferrazzi defines social capital as “the information, expertise, trust, and total value that exist in the relationships you have and the social networks to which you belong.” It comprises the relationships, goodwill, and community support an organization can draw upon to pursue its mission. For nonprofits, social capital is essential to successful resource development. 

To raise substantial cash from community members, donors must know and trust your organization. To secure grants from foundations and corporations, they must view your organization as a crucial player that delivers what it promises. To build the collaborations and partnerships often required to secure government grants and contracts, your organization must be an honest team player that brings value to joint endeavors. To secure volunteers, donations of goods and services, free use of space, and countless other benefits, your organization must be a well-known resource. 

The most successful nonprofits work at building and banking social capital. While every interaction, project, and communication is an opportunity to build it or lose it, here are a few thoughts on building social capital. 

Be trustworthy: Do what you say you will do. Report successes and challenges honestly. 

Communicate regularly: Keep community members and funders informed of your activities, successes, and challenges. 

Network: Identify diverse organizations, groups, and individuals with intersecting missions and interests. Set aside time to meet with them and share ideas. Work regularly to build and maintain authentic, mutually beneficial relationships.

Show up: Participate in community events. Attend the open houses of other organizations. Lend a hand in issue-related presentations. Develop a reputation as a go-to team player.

Social capital is like money in the bank. When you need it, you don’t have time to go out and earn it, so it’s critical to build and protect your account. “When the activities and attitudes that produce social capital become an essential element of your organization’s culture, that bounty will pay off in myriad ways ranging from cash donations and grants to in-kind benefits and collaborative opportunities,” said Floersch. “Not all capital is cash.” © Copyright 2022, Barbara Floersch