“May I interest you in a susu account or would you like to hear about Sharia-compliant lending?”

Those kinds of solicitations are not something many of us in the nonprofit world hear very often—or would understand.

But if we are in the business of investing, lending, or giving in diverse
communities, we must do better at increasing our understanding of how
culture matters in the handling of money.

After all, many of the inequities that philanthropy seeks to eliminate are rooted in cultural bias—and many of the opportunities for change are rooted in cultural awareness.

For example, those who work with African or Caribbean communities should
know that susu collectors are popular in these cultures, and they made the
idea of giving small loans popular long before microfinance became trendy.
And if we work with Muslim communities, we must understand that Islamic law,…

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As elected officials focus on ways to close the deficit, they are making decisions that are likely to make the cash crunch for nonprofits even tighter than they already are.

That’s why many grant makers are looking for new ways to lend organizations money or arrange for new pools of funds that charities can borrow from.  If these efforts are successful, they will shift the landscape for nonprofit capital and create new opportunities.

Nonprofits use debt for many purposes: to purchase equipment, buildings, and other assets; to cover money owed by the government; or smooth uneven cash flow from ticket sales or fund-raising events.

Without access to debt, many nonprofits would have to stop paying staff members, eliminate programs, and even close operations. However, while nonprofits rely on debt, in the past two or three years, credit markets have tightened. Some nonprofits that…

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As my husband and I stood surveying what seemed like 100 feet of snow that fell on our roof throughout the winter and taking bets on the likelihood of its collapse, he uttered these dangerous, divorce-inducing words, “You didn’t forget to put a new roof in our budget?”

Did I budget? Of course I budgeted, for all these kinds of possibilities. But I had also nagged about the need for us to consistently save for the work in spite our list of less practical but more enjoyable expenses.  The undeniable truth is that real estate, be it a family residence, a theater, or a school, requires constant care and feeding.

Many nonprofits, like weary homeowners, defer routine building repairs or dealing with other deteriorating systems often to the point of jeopardizing the soundness of the both the facility and the program. Take, for example, a child-care center whose boiler regularly…

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Over the past few months, the Nonprofit Finance Fund has had the opportunity to work with several foundations and regional associations of grant makers across the nation on efforts to rethink how they can better use their grant dollars to achieve more and better results in their communities.

Time after time, I have been struck with the deep desire by foundation program officers and staff members to change what many understand is a flawed system. Too often, foundations bear the brunt of the blame for creating many of the problems facing nonprofits.

As Ann Goggins Gregory and Don Howard suggest in the Stanford Social Innovation Review, the problem boils down to “funders’ unrealistic expectations about how much running a nonprofit costs.”

Laying the blame and responsibility on the doorstep of grant makers and their “unrealistic expectations” might play well with many people who…

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Too often, foundations don’t get as much out of a research grant as they could.  That’s because grantees and foundations don’t distill the lessons in ways that organizations can easily find out about and apply to their day-to-day work and conversations.

But now some grant makers are collaborating with nonprofit organizations to take different approaches. The Steppenwolf Theatre Company, in Chicago, chose to make public the results of a new report on attracting and engaging theatergoers in their 20s for the benefit of other organizations facing the same challenges.

The Nonprofit Finance Fund provided assistance in this effort and asked the report’s author, Patricia Martin, to organize and publicize the findings in the report through interactive social-media channels used by creators and consumers of culture.

I asked Ms. Martin, who is author of RenGen, Renaissance…

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A growing number of nonprofits are starting businesses with the goal of solving social problems or producing revenue for charitable programs—or both.

While every entity is different, certain characteristics distinguish those that achieve their goals from those that either limp along or outright fail. Successful enterprises I’ve seen typically incorporate the following principles into their planning, while those that ignore or play down these essential ingredients do so at their peril.

Hiring experts. Well-run health clinics, schools, theaters, and other nonprofits are usually led by teams with years of relevant experience; social enterprises require the same depth of management expertise.  But many nonprofits are reluctant to spend the money that an experienced management team costs, especially because such business veterans sometimes expect salaries similar to what the private …

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As a teenager, I was a paperboy, delivering copies of the Daily Homes News in my neighborhood.

It was well known in my small town that paperboys were flush with cash every Thursday, since Thursday was the day that we collected subscription dues on our routes. And, like clockwork, my friend Tommy would approach me every Thursday to borrow “some change” to purchase pastries from the corner store.

When Tommy’s tab hit a certain level, I would approach him to try to collect his debt. And whenever I approached him, his response was, “as long as I owe you, you’ll never go broke.”

I share this story because many of our nonprofits are operating with the notion that if their balance sheets contain some level of accounts receivable, they cannot go broke.

After all, those receivables will eventually become cash—someday.

But this is a dangerous mind-set. In actuality, a …

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Even though I am nearly a quarter-century beyond my economics degree, I read the many articles in recent months on the possibility of a double-dip recession—or just a long-term shaky economy—with more than a little bit of hyperventilation.

But to avoid real panic, I have learned a few coping mechanisms, and one of the best is to stare down the thing you fear as the first step toward being able to manage it. Here are my three biggest fears–and suggestions for how all us who manage nonprofits can face down these worries:

What will happen to nonprofits? The last two years have been among the most difficult in recent memory.  Organizations made difficult choices and hard sacrifices, and some came up with creative ideas—all to keep operating and serving their communities.  I fear many have very little powder dry for another assault. Some will fail, and others will have to…

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A special type of organization, known as a community development financial institution, offers credit and financial services to organizations and neighborhoods that have trouble getting aid from traditional banks.

Traditionally, only a small universe of foundations and wealthy investors supported those institutions.

But that is changing.

For the first time, foundations and individuals are finding that in addition to a social return, these institutions are also providing a notable financial return. As a result, they are attracting new interest from unexpected places.

Historically, foundations have supported community development financial institutions through program-related investments. Such investments are typically loans or loan guarantees that foundations make to organizations that carry out programs connected to their missions — thereby preserving capital for their…

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Below is the final part of my interview with Ben Cameron, program director for the arts at Doris Duke Charitable Foundation, about a program administered by Nonprofit Finance Fund and financed by Duke to help arts groups. (Read the first, second, and third installments.)

Through the multiyear “Leading for the Future” project, Nonprofit Finance Fund is directing more than $10-million in capital from the foundation to 10 performing-arts organizations. The goal is to give them the flexibility to test new ideas, explore new business approaches, resist distraction, and even risk failure.

Below, Mr. Cameron shares his thoughts on the lessons he’s learned during the program’s first year.

With innovation and risk comes the possibility of failure. How have you seen your grantees use capital to turn major disappointments into future artistic successes?

Success for us lies not…

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