6 Myths about Non-Profit Management: Why You Should Manage Your Non-Profit Like a For-Profit Business

6 Myths about Non-Profit Management: Why You Should Manage Your Non-Profit Like a For-Profit Business

For much of much of my career, I’ve worked in the non-profit setting, but I’ve also spent a great deal of time in the for-profit sector, including having the privilege to run my own business.This makes some suggest that I’m quite versatile. I am…but the real truth is, the most successful non-profit organizations and the most successful for-profit businesses are run with the same basic business principles and should be managed in exactly the same way with some obvious revenue/tax exceptions.

I raise this issue because I often run into people who have misconceptions about the inner workings of a non-profit. Somewhere along the line they’ve come to believe that the administration, the oversight, the day to day operations, is run a little less tight than its for-profit counterpart. Now they could be making mention of these things as merely something they’ve seen, but sometimes it’s the case that boards and committees have a lax view of how a non-profit organization needs to be managed.

Here’s the problem. When non-profit leadership takes on the attitude that we can cut corners, we don’t need to run a tight ship, that the quality of our work can be the bare minimum, we can be guaranteed that this non-profit will not be around for very long. Every non-profit should be managed with the mindset of a for-profit business….as if its your money to lose, not someone else’s. So, there are some myths about non-profit management that really need to be addressed:

Myth #1: Overhead should be avoided or kept at a bare minimum.
Of course there isn’t a non-profit or for-profit business anywhere that should practice the use of excessive overhead or spending. For all practical purposes….why? But where the non-profit struggles a bit differently than their for-profit counterpart is the belief that they should do without or with antiquated equipment so that all of their dollars can be poured back into their mission. The problem with this way of thinking is the belief that the mission is even achievable without working computers, usable phone lines, or adequate office space. The more effective an organization is, the easier it is to persuade donors to invest more. But effectiveness is dependent on efficiency, and having the right equipment and the right people is how things are going to happen.

Myth #2: Non-profits can’t have money in the bank at the end of the year.
I almost spit out my drink when someone told me that an experienced non-profit executive actually believes this. There is no IRS rule stating that at the end of the fiscal year, they have to start with a zero balance in their bank accounts. This isn’t the first time I’ve heard this sentiment in all honesty. It comes out in a variety of forms such as “we can’t have a savings account with a lot of money in it because we are a nonprofit.”  Please have money in the bank at the end of the year so you have something to work with. So sad that this even has to be addressed as a serious myth….but I’ll move on…

Myth #3: Non-profits cannot make a profit.
Another widely believed myth. So let’s set the record straight on this. If your organization that supports, for example, suicide prevention, and wants to sell t-shirts to create more awareness for the cause, your organization can do that.

Non-profits can earn a profit on activities not related to their stated goals, but any profits of this kind are subject to taxation. In order for a nonprofit to make tax-exempt income, it must fall within the scope of their mission and those profits must be reinvested into its expenses.This income typically comes in the form of donations and grants. Of course, this is not financial advice, please give your financial adviser a call to get more information on this matter.

Myth #4: Non-profit executives should be paid less.
After all, its charitable work, right? Think again. It takes talent to run any business, including a non-profit entity. In the same way you shouldn’t keep the computers around with the Windows 98 operating system (its a security risk!), don’t hire staff who are inadequate for the task. If you plan to be working for your cause in the next 10, 15 or 20 years, you need to invest in the leadership that can take you there. If you underpay, you won’t find the talent you need because they will find a way to go where they can get the salary they deserve. Invest early and reap the benefits later.

Myth #5: Big donors are more important than small donors.
Seems like that $5000 donor who dropped off a check last week should be more important than the guy that dropped $10 in the donation jar this morning. Common sense, right? But you know what they say about making assumptions. There is no donor more important than another donor. Of course, you can’t go to lunch with ALL of them, but don’t assume you know everything there is to know about the man who donated ten dollars. Do you know that he doesn’t have another ten thousand to contribute? The best way to think about donors is to not make value judgments about anyone who contributes less than you expect. Even if the ten dollar contributor could never give another cent again, that ten dollars was given from the heart. We don’t want to lose our small donors because they often make up more of the giving than do the large donors. According to Charity Navigator, “donations from individuals account for over two-thirds of all donations.” Big or small, every donation adds up.

Myth #6: Donor Acquisition is more important than donor retention.
Whether you’re a for-profit or a non-profit entity, you need to always be thinking about how to draw in more customers while retaining your existing customers. Implementation of different marketing strategies will allow you to focus on both types differently. Loyalty programs will help you with retention, including in the non-profit setting, and special deals will make an impact on both existing and potential customers. You need to resist comparing the two and give energy to both.

There are many more crazy myths out there about non-profits and how they should be managed differently from a for-profit business. The bottom line is in order for either to run efficiently and effectively, they both need to be governed by basic business principles that allow for future growth. So don’t buy into the myths and be smart about running your non-profit…like the business that it is.

5 Strategies for Growing Your Nonprofit Organization in 2020

5 Strategies for Growing Your Nonprofit Organization in 2020

Nonprofit organizations are businesses, not unlike where you buy your groceries, get your hair done, or buy your kids school supplies. But what makes your nonprofit corporation different from those is that you prioritize revenue in terms of fulfilling your mission whereas the for-profit business prioritizes revenue for the sake of the revenue itself.

How your nonprofit is EXACTLY like a business is that you need to utilize many of the same tools for successful start up and growth. You need a business plan, a marketing plan, a budget, and staff or volunteers….all for the purpose of executing and accomplishing your mission and goals. Because nonprofits are often providing for a cause or a service and not a tangible, out-the-door consumable, generating revenue can be a challenge. So I want to share a few ways to overcome challenges to growth at any stage in the life of the non-profit.

Donor Development. Because donors are the lifeblood of your organization, you need to be meeting with them as often as possible, thanking them for past support and updating them on your organization’s status. While you can’t have lunch with everyone who has written a check, you can be sure to connect with those who are top level donors. Share with them the stories about the people you serve who are at the heart of your organization’s mission and get them excited about their involvement in those successes. Let them know their dollars were well spent, thank them for their commitment and partnership and continually inform them about the great things that are happening. But no matter what, make sure you are thanking every single donor who supports your organization in some way, shape or form.

Marketing Strategy. Make sure your marketing materials are current and that you have a robust communications strategy that: 1) keeps your donors informed 2) provides opportunity for new donor acquisition 3) interfaces with the media and 4) continually communicates your mission and shares your stories. Email marketing still plays a significant role for nonprofit organizations as it provides a means to stay in front of your supporters without anything more than their consent to receive emails. Email marketing tools like Mailchimp, Constant Contact and AWeber are examples of affordable options for every size organization and provide templates for the less experienced email designer as well as professional services for getting the custom design you want.

Your website needs to be designed in a responsive format. This means that when its viewed on smaller devices like phones and tablets, it adjusts to its environment instead of becoming impossibly microscopic. The reason this is important is because so many more internet users are looking at websites on their mobile devices and not always their desktops. Don’t make the mistake of losing supporters and followers because your website is difficult to view on these smaller devices. Yes, this will mean a website redesign is in order, but it will be an investment worth making. Don’t cut corners on your internet presence, that’s often how the people in your community first come to know you.

Valued Volunteer Resources. Create a culture where your staff and volunteers can’t help but to share your mission with the people in their world. They love what your organization stands for, that’s why they are involved. Create incentives like volunteer appreciation events and monthly recognitions so that they get more than lip-service for their time – they need to actually feel appreciated and valued. When its clear that an organization values all of its resources and prioritizes its “human” resources, this can inspire others to get involved as well.

Leadership. The face of your organization, whether an Executive Director, board president, operations manager, or marketing/PR director, needs to be someone who reflects the values of the organization, is able to provide clear and concise information about its mission, goals and needs, and is capable of inspiring others to participate, support or just simply share about the organization to other people in other spheres of influence. This person is the ambassador for your cause, so if they struggle to lead the organization internally or externally, they may not be the right person for the position. Don’t underestimate the need for someone who can speak to a crowd of 20 or 200 who also has the disposition to connect with volunteers.

Co-Branding & Collaboration. Find ways to collaborate with other groups and organizations in your community. Doing so doesn’t mean sacrificing current or potential donor dollars to other nonprofits. You want to be seen as a member of an interactive community, not like you’re living on a nonprofit island and no other mission matters. An aspect of reputation management for any business or organization is a willingness to be altruistically involved in a community. If you are involved in an art museum, you could plan to collaborate with local children’s organizations to do workshops. If you represent a cat rescue you might find ways to work with local medical facilities to fulfill animal-assisted therapy needs. In the world of marketing, this is called “co-branding,” a strategic marketing partnership between two separate organizations who collaborate to generate interest from their respective customers. The success of one brand provides for the success of the partner brand.

Growing your nonprofit organization requires a great deal of attention to donor development, volunteer management & support, community engagement, strong leadership, and marketing. Every nonprofit who wants to fulfill their mission and achieve their goals needs to work hard in these 5 areas. I hope the ideas I’ve shared help you to continue to grow and move your organization forward to the next level.

5 Tips for Improving Your Nonprofit E-Newsletter

5 Tips for Improving Your Nonprofit E-Newsletter

There’s nothing more important to the success of a nonprofit organization than the quality of its communications. From your brochures, website, and public speaking events, your message has one shot at being received. Once you lose someone’s attention, whether because of poor presentation or inaccurate information, its difficult to get it back. The same is true for your digital email campaigns. Don’t underestimate the impact of a quality e-newsletter. Though your organization is considered a charity, people are often not that charitable if content is sloppy, poorly formatted…..or worse, out of date. The following 5 tips will help to improve your organization’s email campaigns and make it easier to reach your intended audience.

1. Design Emails to be Mobile Friendly (Responsive)

By the end of 2014, 66% of emails were opened on a mobile device like a smartphone or tablet and that number is only growing. Designing your emails to be mobile responsive helps them make the most impact when opened by your supporters. Emails that lack the responsive design are impossible to read, creating a lost opportunity. Don’t encourage your readers to hit the delete button, give them something they are able to read. Platforms like Mailchimp and Constant Contact offer free or affordable options for setting up your email the right way.

2. Quality Content

Email is an opportunity. Once an email is opened, you have a real chance to make an impact on a supporter. Be sure all information sent is up to date including upcoming events, schedules, donation figures, etc. Share stories about your volunteers, or if possible, features about the people your organization serves. Donors want to know that their money is going to work for the stated cause of an organization and email is one way—and an easy way—to deliver those details.

3. Send Email Campaigns with Regularity and Respect

Have an email campaign schedule that your supporters remember. Its recommended not to send on Mondays and Fridays, and when you send do it early enough in the day that they will be opened and read. If sent too late in the day, your readers may not get a chance to look as their day comes to a close. You should also avoid sending too frequently. As soon as someone believes their email box is being inundated with email blasts, they will unsubscribe.

4. Always Include a Clear Call to Action

One of the ways you can determine the success of an email blast is by looking at which links were clicked or actions were taken. For example, if you put out a call for new volunteers and include a link or email address for those who are interested to respond to, you can begin to see the effectiveness of your emails. Give your readers something to do in each email! This will become a helpful metric in determining your overall success.

5. Make it Easy to Opt In to Your Organization’s Email List

Make it easy for your supporters to opt-in to your email list via social media and your website. Have it on the contact page, footer and even on Facebook. Once they are on the list, encourage them to forward it to friends so that they can opt in too. Your supporters are your biggest advocates and can be a huge benefit to your cause.

Email campaigns can assist an organization in expanding its reach and effectively promoting its cause. Contact us to discuss how Sarah Flashing Creative & Consulting can help you be more successful in promoting your cause.