Three weeks ago I drove four hours to join members of our Jewish Emerging Leaders (JewEL) leadership at a joint retreat in Irvine, CA. They were meeting with the young leadership groups from Phoenix, Orange County and San Diego. To say that I was impressed with our group is an understatement. They were often leading many of the conversations and presented on a number of the innovative programs that they, with our JewEL director Marni Unger, are developing for the Las Vegas community. Watching our young leaders in action reminded me of one of the most valuable lessons that I absorbed while earning my M.B.A.; the importance of Net Present Value.
Utilizing a Net Present Value (NPV) calculation and understanding it's implications are essential functions in business. NPV is used to analyze an investment decision and give company management a clear way to tell if the investment will add value to the company. Typically, if an investment has a positive net present value, it will add value to the company and benefit company shareholders. Basically, it is the value that an investment made today will have over time.
While Net Present Value is not often part of the nonprofit lexicon, I find it to be an essential tool in evaluating strategies and funding decisions. If an initiative or funding option has a long term gain in fulfilling the Federation's mission of ensuring the growth and stability of our community, it is worth exploring. If it doesn't, then it must be evaluated through a shorter term cost-benefit analysis.
Viewing our community through the NPV lens also allows for a more comprehensive view of the impact a member of the community can have on our work. All too often donors to a nonprofit are overlooked because their financial investment is not at the top of the spreadsheet. The unfortunate result of this myopic evaluation at is that the most dedicated supporters feel less than valuable to the organization
The JewEL leadership group reminded me of NPV, because they are a perfect example of the power of this view. If we were to view JewEL through a traditional nonprofit scope, they wouldn't register as a priority. Very few of our JewEL members are near the top of two-thirds of the donors to the Jewish Federation Annual Campaign - The Campaign for Jewish Needs. While they are growing in their careers, the majority are not in the C-suite. Their network is homogenous and does not currently have immense philanthropic capacity. So why invest in JewEL and drive four hours to join them for a one day conference in Orange County?
Again, via NPV, it's an easy decision. The JewEL leadership are some of the most dedicated and active that we have. They serve on multiple committees, participate in nearly every event, solicit their peers and make involvement in the community a top priority. They are also philanthropic. Community members in the JewEL cohort increased their contributions to our Annual Campaign by more than 20% last year. I would argue that through the lens of NPV, the JewEL cohort is incredibly valuable.
Just as we view JewEL and it's cohort, so we must view all members similarly. Every member of the community should be viewed as the sum of all of their parts, not just the level of contribution. This will provide the opportunity to maximize the potential that everyone holds for the success of our community.
If you feel that you can not be an asset to the community due to your level of contribution, I would like to hear from you at email@example.com. I guarantee that there is a place where your capital, whatever form it takes, can be applied to the needs in our community. After all, getting more people involved in our community today is most certainly a critical NPV investment.