People in fundraising often joke about raising money "to keep the lights on," but for one of our workshop students, that was reality.

This student had just taken over as CEO of a struggling nonprofit. When he went to the nonprofit’s office, he was surprised at how dark it was. Money was so tight, the staff had stopped changing light bulbs. Imagine working in an organization that quite literally was growing dimmer and dimmer.

One of the first things he did was buy new light bulbs. He replaced the lightbulbs and told his staff the organization was headed in a new direction. The lights were back on.

While this is an extreme example, it’s a perfect picture of the poverty mindset.

The poverty mindset is being so focused on surviving by pinching pennies, you're not thinking strategically about the future. This mindset can manifest in many different ways...

1. Paying your employees the bare minimum, but it's leading to costly turnover, and you miss the opportunity to have better and more experienced talent on your team.

2. Providing your employees with old computers and equipment, but it's slowing their productivity.

3. Saving $100 on a red-eye flight to a donor meeting, but showing up exhausted and disheveled and not performing your best.

4. Not purchasing wi-fi on your flight, but getting less work done as a result.

5. Skimping on cheap marketing materials, website design, and branding, but you're not signaling quality or professionalism, and you're sacrificing your first impression on donors.

6. Not investing in donor research platforms, and, instead, spending hours on Google trying to find information on potential donors. 

Once you learn what the poverty mindset is, you see it everywhere.

The reason you see it everywhere is that it's so easy to get entirely wrapped up in cutting costs. If you've ever gone through a period of tight finances, it's normal to try to preserve every dollar moving forward. What you can’t forget is that money well-spent is an investment in your organization's future. While working so hard to be self-sufficient and run on a shoestring budget, you sacrifice focusing on transformative strategies.

One of the main components of the poverty mindset is people don't view their time as valuable. Have you ever spent all day trying to fix something yourself when you could have hired a professional to fix it in an hour for $100? I know I have. For example, I once convinced my wife I could totally install a ceiling fan at our house. Long story short, I ended up spending all day on it and still having to call an electrician to fix it. 

I could have created more value doing pretty much anything else while letting a professional handle it. In the moment, I thought I was being smart for saving money, but I forgot the opportunity cost of my time. That's how the poverty mindset creeps in to sabotage your productivity and success.

Ultimately, the poverty mindset minimizes your mission and impact. This is enormously harmful when you're trying to raise money. You need to show your donors your nonprofit is growing and you're thinking strategically about the future.

The poverty mindset also chips away at your confidence. This shows up especially when you're face to face with a wealthy, high-status donor. As a result, you may come across as desperate and just-barely surviving. But you don't want donors to pity you. You want them to have total confidence in you and your big vision to change the world. 

To expand your nonprofit's impact and perform your best, crush the poverty mindset. It all comes down to where you spend your money and time today, and how those decisions impact what you’re trying to accomplish long-term.

When you think about the poverty mindset, ask yourself:

• What are the lightbulbs you’re not replacing in your organization?

• Where are you trying to install ceiling fans instead of hiring experts to do it?

In other words…

• Where I am focused on saving short term at a long-term cost?

• Am I losing talent or not recruiting talented people because of a poverty mindset about salaries?

Take some time to examine where you and your organization might be unintentionally self-sabotaging by having a poverty mindset. Consider having a conversation with your staff about the poverty mindset. Chances are if you've adopted the mindset, it's trickled down to your team.

Remember, you're a leader in your nonprofit because you want to accomplish enormous, world-changing things. Don't let the poverty mindset steal that from you.