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So is it possible that it is time for us as nonprofit leaders to refuse to play nice?

May 25, 2013 2 comments

The reality for most nonprofit executives is that we have fewer resources and more competition for those shrinking resources than ever before. But it’s not going to change anytime soon. So it is up to nonprofit leaders to embrace and adapt to that new reality. Instead of beating our heads against the wall of change, let’s adapt to meet it.

In fact, it is time for a new kind of nonprofit leader, one who has the confidence, ability, foresight, energy, and strength of will to really lead the nonprofit sector forward. That requires skill at having the tough conversations. For example, what are you going to do about the Board leader who will only give their time, rarely gives their talent and refuses to give their treasure (money)?

So is it possible that it is time for us as nonprofit leaders to refuse to play nice? The culture of nonprofits is one of collaboration and diversity. We bend over backwards to make sure everyone has a voice. And that is a very good thing. The new leader, however, may need to overcome the nonprofit norm of politeness at all costs and gets real with funders, board members, or staff who are standing in the way of the mission and impact of the organization.

It is called tough love. It isn’t always easy but it works.

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.

Some basics of nonprofit grantwriting

Many nonprofits can’t afford a full time grant writer. Odds are that at some point in your career it may fall to you to do it. There are some basics.

Seek support for a “fundable” project: Grants are usually awarded to projects, not to unrestricted annual support. Funders will want to measure the project’s success, not that of the organization. And, just because a foundation believes in your mission doesn’t mean they are going to say yes to your request. Identify projects based on your organization’s goals and objectives that align with the funding priorities of local grantmakers.

Identify suitable funding prospects: Having a board member that sits on XYZ Foundation doesn’t ensure funding success. And, if the “fit” isn’t right, it might put that board member in an awkward situation. Capitalize on connections you have, but take care to match your project to funders who support similar needs. Most states, often in partnership with the Foundation Center, publish comprehensive funder directories. Typically available online, these are excellent sources of grantmakers and their priorities. .

Focus locally first: This increases the likelihood that you will find a connection to champion your efforts. And, there is less competition for these dollars. Finally, a smaller local funder may have a simpler submission process than that of a national profile one.

Follow the directions: Make sure you submit the right information to the right person by the right deadline. Don’t give the funder a reason to eliminate you from the consideration process before they even read the proposal. Consider how you evaluate cover letters and resumes: Misspellings or missed deadlines make it easy to trim your list. Grantmakers will do the same.

Write, re-write and proofread: If you are not a good writer, find someone on your team who is. Proposals have to be well written. This goes beyond just correct spelling and good grammar. You need to clearly articulate your project in a sincere and compelling manner. This is the quintessential sales job—and you want the reader to buy what you are selling. All of the clichés hold true: tell a story, paint a picture. At the end of the day, you want the funder to invest in your organization. They aren’t going to do that if you haven’t touched them.

Submit required reports: Every funder has reporting guidelines. Do not overlook this step! Mark your calendar, gather needed information and do not ask for an extension on the due date. Most funders will be open to ongoing relationships with organizations they have funded. Don’t close this door because you missed a deadline.

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.

As a fundraiser, are you tired of endless appeals?

The Chronicle of Philanthropy has a fascinating interview with fundraising guru Penelope Burk, author of the upcoming Donor-Centered Leadership. Turns out it’s not just donors who grow weary of too many direct mail appeals and telemarketing calls.  It’s apparently a frequent reason fundraisers quit their jobs—the relentless pressure to bombard donors.  They’d prefer to take the time to figure out which solicitations work, but they often aren’t given the time or latitude to have a more thoughtful approach.

Over-solicitation, says Burk, is the most common reasons donors give for stopping their support of a charity.  Instead donors want to know what’s been done with their money.  Then they’d be willing to give again.  But too often, they get appeals instead of thanks and reports on impact.

Here’s Burk’s advice.

1. Thank donors after they give.

2. Send them a follow up thanks with detailed information about how their money was used.

3. Only ask for money AFTER you do these two things, and when you do, be as specific as you can about why you are asking for money.  What specific cause will benefit?

How is your nonprofit doing?

April 3, 2013 1 comment

The Nonprofit Finance Fund (NFF) has released its annual State of the Sector survey, and it shows nonprofits are struggling with a tough funding environment and increasing need for the services you provide.  This is requiring tough choices – and changing the way you do business, according to the survey.

Here’s a summary of the report from the NFF.  Does it capture your situation?  Are you better or worse off than your peers?

According to NFF:

Nonprofits need new funding sources and models:
• 42% of survey respondents report that they do not have the right mix of financial resources to thrive and be effective in the next 3 years.
• 1 in 4 nonprofits has 30 days or less cash-on-hand.
• Over the next twelve months, 39% plan to change the main ways they raise and spend money.
• 23% will seek funding other than grants or contracts, such as loans or investments.

Nonprofits that receive government funding face particular challenges:
• Only 14% of nonprofits receiving state and local funding are paid for the full cost of services; just 17% of federal fund recipients receive full reimbursement. Partial reimbursements require additional funding to cover the growing gap as nonprofits serve more people.
• Government is late to pay: Among those with state or local funding, just over 60% reported overdue government payments; over 50% reported late payments from the federal government.

Under these challenging conditions, many nonprofits are unable to meet growing need in their communities:
• For the first time in the five years of the survey, more than half (52%) of respondents were unable to meet demand over the last year; 54% say they won’t be able to meet demand this year.
• This represents a worrying trend; in 2009, 44% of nonprofits said they were unable to meet demand.
Jobs (59%) and housing (51%) continue to be top concerns for those in low-income communities.
• 90% of respondents say financial conditions are as hard or harder than last year for their clients; this is actually a slight improvement from prior years’ outlook.

Nonprofits are changing the way they do business to adapt to the new reality. In the past 12 months:
• 49% have added or expanded programs or services; 17 percent reduced or eliminated programs or services.
• 39% have collaborated with another organization to improve or increase services.
• 39% have upgraded technology to improve organizational efficiency.
• 36% engaged more closely with their board.

For more on the survey and detailed data, go here.

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