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Why is your nonprofit struggling to bring money in the door?

The majority of nonprofits struggle to bring money in the door. And they often don’t know why. When you are on the inside of an organization that is used to doing things a certain way it can be nearly impossible to see new opportunities, to understand what you could do differently. There can be many reasons why a nonprofit doesn’t bring enough money in the door.

Here are several things to think about:

Too Many Programs Drain Money From Your Organization. It sounds like a truism — you struggle with money because your programs cost money. But the reality is that few nonprofits analyze their programs to determine each one’s individual impact on the bottom line. Often they will add a new program because it has an impact on the mission (or because a single funder wants the program), without understanding how the new program fits into the organization’s overall financial picture. The end result is an organization that is stretched to the breaking point. Nonprofits must analyze all of their programs to understand their impact not just on mission, but also on finances, then they can make decisions about where to more sustainably focus resources.

You’re Leaving Money Up to One Person. The financial engine of a nonprofit must be a team effort. Yes, it is important, if you are large enough, to have a staff member whose sole job is to think about money, but you cannot leave it all up to her. The entire organization, from the front line program staff all the way up to the chair of the board must understand the critical importance of money and what role they individually play in securing it. Although program staff won’t actively solicit donors, they can still share client stories with donors, write blog or newsletter articles, participate in program tours with donors, and even suggest new ideas for tying money to their programs. And there are countless ways for board members to bring money in the door, but you have to make sure they are aware of and doing their part.

You’re Not Effectively Telling Your Story. It is so common for nonprofit staff and board members, who believe so passionately in their cause, to think that it’s obvious to outsiders why they should get involved. But it isn’t. And in an increasingly crowded social change marketplace it is more important than ever that nonprofits be able to articulate, in a compelling way, what value they are providing a community.

You’re Doing What Everyone Else Does. If you are struggling financially and witness another nonprofit’s fundraising activity and try to replicate that perceived success, without analyzing if it makes sense, will it work for you? Just because it looks like a recent gala or a new thrift store rakes in the money doesn’t mean a) that it did actually make a profit for the nonprofit and b) that it would make a similar profit for your nonprofit. The key is to make the best use of your specific assets as an organization. Think about what value you have to offer and who might be interested in paying for that value. For example, a homeless shelter could financially partner with local businesses to move people away from storefronts and into more stable and life-changing accommodations. You have to analyze what you have to offer and who specifically would be willing to pay for that value.

You’re Not Investing In Your Money Raising Function. If you don’t have enough or the right kind of staff in place to raise money it is little wonder that you struggle. And if you’re not giving them effective tools they will be at a loss. Think about your financial engine and the various revenue streams you employ. Do you have the technology, staffing, systems, materials, space you need to raise money well in those ways? For example, if you want to raise money from individuals you need an effective database system that tracks contact information, interactions, history, interests. Whatever ways you bring money in the door, you need to ensure you have enough and the right kind of tools to do it well.

Does your nonprofit face a fundraising generation gap?

While this is data from the UK, I think it is worth considering. Has your nonprofit done any studies to understand this? In the UK, older donors give 38 per cent more than baby boomers, according to a report by the fundraising software company Blackbaud. Charities are facing a generation gap in fundraising, with older donors giving 38 per cent more than the post-war ‘baby boomer‘ generation, research suggests.

The report, The Next Generation of UK Giving by the fundraising software company Blackbaud, surveyed 1,498 UK donors of all ages about how they give and engage with charities.

According to the report, not enough is being done to address a potential long-term donations deficit in which older donors, born in 1945 or earlier, give 27 per cent more each year than those from ‘Generation X‘, people born between 1965 and 1980.

More here: Charities face fundraising generation gap, giving survey says.

Uncharitable: How businesses co-opt nonprofits and undermine their potential

Well, this critique is blistering. Since I did publish the Ted Talk from Dan Pallotta, fairness would dictate promoting those who don’t agree.

I’m not sure that this is an either/or argument. Maybe we should look at it as yes/and.

What’s more mystifying is why Dan Pallotta would be popular among nonprofits, activists, and social changemakers. It’s clear Dan has no substantive message for them.

via Uncharitable: How businesses co-opt nonprofits and undermine their potential | Rootwork | Advocacy Online.

Can point-of-sale donations make a big impact on small charities?

The Nonprofit Research Collaborative has published the findings of its most recent Nonprofit Fundraising Study. According to the data presented, 70% of nonprofits expect to see their donations climb this year.

“Overall consumer confidence in the economy rose last year and that created a more positive environment for charities to go out in and build relationships [with donors],” explains Andrew Watt, president of the Association of Fundraising Professionals.

Giving a tremendous boost to the escalation in charitable donations is the evolution of payment donation options now available to the nonprofit community.

DonateWiseNow, for example, is a new solution for charitable organizations looking to capitalized on new market opportunities. DonateWiseNow offers cardholders making a credit or debit card purchase the option to donate at the point of sale to select nonprofit organizations. Cardholders can donate $1, $3, or $5 dollars or may round-up their transaction value to the next dollar through the point-of-sale payment device.

According to DonateWiseNow President Robert DiMattina, who created the program for Cynergy Data, the goal wasn’t to simply replicate the point-of-sale fundraising strategy that requires a cashier to ask a customer to donate $1 – a situation to which some consumers are profoundly resistant. As a result, DonateWiseNow was designed to serve up a consumer-facing signature-capture device to help customers donate in a “subtler” manner.

“We wanted to create a very discreet experience for the consumer,” DiMattina says.

The Nonprofit Research Collaborative study shows that charities largely intend to establish ambitious fundraising goals this year and will make key investments of time, treasure, and faith into new technologies and related services that continue to drive donations even in times of economic difficulty.

The Nonprofit Fundraising Study is available now at np­research.org.

Can you make your donors twice as generous?

April 6, 2013 2 comments

Are you a big believer in the positive effects of peer pressure? Global Giving has proved this again – in an intriguing experiment focused on recurring giving. Last year, the organization experimented with a number of different calls to action to get donors to upgrade to recurring donations. They tested the messages on all donors who added a project to their giving cart.

More at Katya’s Non-Profit Marketing Blog.

Dan Pallotta: The way we think about charity is dead wrong

March 16, 2013 3 comments

Activist and fundraiser Dan Pallotta calls out the double standard that drives our broken relationship to charities. Too many nonprofits, he says, are rewarded for how little they spend — not for what they get done. Instead of equating frugality with morality, he asks us to start rewarding charities for their big goals and big accomplishments (even if that comes with big expenses). In this bold talk, he says: Let’s change the way we think about changing the world.

Everything the donating public has been taught about giving is dysfunctional, says AIDS Ride founder Dan Pallotta. He aims to transform the way society thinks about charity and giving and change.

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