- December 12, 2021
- Posted by: Robert Brown
- Category: Investing
I held a candid conversation with a soon-to-retire sports personality (name withheld for ethical reasons but let’s call her Jane) about her future after years of active professional sporting. She was concerned about how to sustain her charitable activities without blowing her savings.
Influential individuals, including celebrities and athletes, are very active in charitable activities. The strong influence that communities have in supporting ‘one of their own’ or backing their home team help fuel these relationships. Some of the successful athletes are also beneficiaries of community driven non-profit programs. Therefore, athletes are more likely inclined to returning the favor through engaging in community empowerment activities. But at what cost?
From my conversation with Jane, she told me that despite having registered a non-profit under her name, her donations to other charities were made using her personal account (nothing wrong). However, as someone who wants to engage more in charity work, the problem then becomes how does she solicit for funds using your personal account? And how does she manage her personal finances separate from the charity work?
Like Jane, there are other individuals passionate about charity work but lack strategies to raise funds from their networks and hence end up blowing their savings just to keep up with the spirit of giving back to the community.
Without following a solid plan, it is easy to veer off your goals. And without a strategy, lack of financial prudence creeps in and this becomes a liability to your personal and non-profit accounts.
Once concerns about financial management and accountability set in, the risk of harm to your brand and person escalates. The impact is devastating to both your non-profit activities and to your personal life, including financially. The negative publicity damages your reputation and credibility. It might also attract punitive action from government and professional enforcement agencies.
Some of the disciplinary actions from professional regulators and government (federal) include; deregistration, freezing of personal and the organization’s assets, or imposition of fines to serve as a warning.
Luckily for Jane, her case was quite straight forward as so my input was technical. We set up the technical structures for her non-profit and developed a strategic, operational plan. The strategic operation plan will act as the policy guideline for the non-profit in the midterm.
I am also glad to have met Jane and worked with her to develop a prudent plan on how to solicit and manage funds from donors in her network. Most importantly, I am glad to have worked with Jane in separating her personal financial activities from those to do with her organization.
There might be other people with similar concerns like the ones that Jane experienced. Others might have unclear strategic fundraising plans. I advise you seek professional assistance to straighten up these concerns. They not only stifle your organization’s growth potential, but also exposes you to self-inflicted reputation or financial harm.