If philanthropy was art, what would it look like?

March 28, 2013 erik Fundraising

Yesterday, I saw a news story about actress Tilda Swinton, who is sleeping in a glass box at the Museum of Modern Art in New York City. While I’m not a huge modern art fan (but I’m not a hater either), I haven’t been able to get this story out of my head for some dumb reason. Whenever I have a free moment and my mind wanders (e.g. driving in the car, standing in line for coffee, cleaning dishes, etc), I can’t help but think about this modern art exhibit.

So, this morning while walking on the treadmill, it happened again. In a fit of frustration, I decided that I need to push past this because it is getting obnoxious. And then out of the blue, it hit me . . .

If philanthropy was art, what would it look like?

I think it would be fun if every DonorDreams blog reader took a moment to contemplate this question. Once you get a picture in your head, please use the comment box located below to share your thought or image.

Come on . . . this could be a fun little break from your very busy day!

Let me help get you started:

A painting of a child in a hospital bed with a nurse attending to their IV.
A theatrical production spoofing the life of a fundraising professional. The scene I’m picturing in my head has a donor being hit over the head and the fundraising professional’s hand reaching for their wallet. (Again, I emphasis this is a spoof. Please no hateful emails.)
Hmmmm . . . a modern art example? How about a live donor pulling his pants down around his bum with a fundraising professional trying to swipe a credit card down their backside.

Did I take it too far? Oooops. Sorry. But I bet that I brought a smile to your face on a stressful day and got your mind chewing on this question. So, come on . . . take 60 seconds out of your day and share a thought (either serious of silly) in the comment box below.

Do you need more inspiration? Click here or on the YouTube frame below to see Tilda Swinton sleeping at the Museum of Modern Art. Hopefully, it won’t haunt your thoughts like it is mine. 🙂

[youtube=http://www.youtube.com/watch?v=VXkmI-8wLCE&feature=youtu.be]

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

Non-profit donors, hospital visits, and stewardship opportunities

March 27, 2013 erik Fundraising

It is the morning of Wednesday, March 27, 2013 and my soon-to-be 40-year-old brother is on his way to the hospital for hip replacement surgery. He is the youngest hip replacement patient that his doctor has ever seen. With all of this going on, my mind still wanders back to non-profit organizations and how they treat their donors at times like these.

It should be no surprise to any fundraising professional that non-profit hospitals are very good at resource development. In 2011, non-profit hospitals and healthcare systems improved their fundraising efforts by 8.2 percent over the previous year’s efforts, according to the Association for Healthcare Philanthropy. That’s right. We’re talking about 2010 and 2011 when unemployment, the economy, and the housing sector were softer than they are today.

In a nutshell, I believe people are at their most vulnerable when they walk through the doors of a hospital. They are scared and their support networks (e.g. friends, family, neighbors, etc) stand by their side.

Here is the point . . . good non-profit organizations constantly message to their donors things like:

“You’re part of our non-profit family.”
“We care very much about you, and we appreciate how much you care about our mission and clients.”
“You’re a valued friend.“

If all of this is true, then shouldn’t you be by their side during their time of greatest need? And if you aren’t there, then aren’t you undercutting all of the stewardship messaging you’ve invested in throughout the years?

Non-profit hospitals have it easy in this one regard because donors (and prospective donors) are on their home turf. Of course, they still need to do a ton of hard work (e.g. quality care, bedside manner, compassion, service, etc).

My brother’s surgery this morning reminds me of a life lesson that I learned more than a decade ago when a board member, who was struggling with kidney disease, was admitted to the hospital. Not only did I not send a card/balloons/flowers, but I had left a number of emails and voicemail messages pushing him about an upcoming committee meeting.

Needless to say, the post-hospital phone call was more than a little uncomfortable for me. It was a lesson that I learned and carry with me to this very day.

Last week, I started working pledge cards for one of my favorite charities. One of the first donors I called to set-up an appointment informed me that she was being admitted for surgery in a few days. She didn’t want to schedule a solicitation meeting and asked that I call back after her surgery.

So, what did I do?

I wished her well. I asked her when I should circle back around to check-in and set-up a meeting.
I calendarized the date she told me to call her.
I offered assistance. I told her that I’m happy to help in whatever way she thinks is appropriate. I can pick-up prescriptions, run to the store, or drive her to a doctor appointment.
I called the agency to report this news, and they immediately mailed a “get well soon” card to the donor.

Did I do this because I am working the angles to secure a contribution in the long-term?

Heck NO!

I did these things because it is what friends do for each other. It also happens to be what donor-centered fundraising professionals do.

Do you have any stories about donors, hospitalization, and stewardship activities? If so, please take a minute out of your busy day to share that story or what you consider a best practice in the comment box below. Why? Because we can all learn from each other.

Here’s to your health!

Is your non-profit board old? Paging all Millennials and GenXers?

March 26, 2013 erik Board development, organizational development, volunteers

Recently, I’ve heard at least three or four of my non-profit friends lament that their board lacks diversity in the area of age. It seems as if their boards of directors are primarily packed with Baby Boomer generation volunteers in their 50s and 60s.

At first, my response to each of my friends was:

DUH!!!

Isn’t it obvious that young people between 20- and 40-years-old are climbing life’s challenging career path trails? Not only are these individuals focused on career, but they are having children and raising families. In my opinion, these ingredients are a cocktail of NO TIME + NO MONEY.

So, I wasn’t surprised to learn the following facts in an article published in The Guardian titled “How can charities attract young trustees to their boards?“:

The mean age of a non-profit board member in the UK is 57.
Only 0.5% of board volunteers are between the ages of 18 and 24.
One-fifth of board volunteers surveyed said they lack age diversity on their non-profit board.

I am a fan of diversity and believe it is important, but I am not a fan of tokenism. You do yourself and your non-profit organization a great disservice when you recruit people to fill gaps just for the sake of filling gaps.

When your organization decides it is time to add more young people to its board of directors, your board development committee has its work cut out for itself because the prospects you identify, evaluate and cultivate must be able to hold their weight with other more experienced and better resourced board volunteers.

Young board members must be able to:

make a personal financial contribution;
be willing to attend board meetings, committee meetings and events;
have the ability and willingness to solicit their personal and professional network to support the organization.

In all honesty, I am a really big fan of getting young volunteers involved in special event planning, standing committees and task forces, and young professional groups first before asking them to join the board. However, if you’re determined to diversify your non-profit board of directors, your board development committee must have the following in place first:

comprehensive new board member orientation,
board volunteer training opportunities, and
new board member mentoring program.

Has your organization brought Millennial and GenX aged volunteers onto your non-profit board? How has it worked out for you? What lessons did you learn? What would you do differently? Please use the comment box below to share your thoughts and experiences. Why? Because we can all learn from each other.

Here’s to your health!

How does your community compare to others in fundraising?

March 25, 2013 erik Fundraising, technology

My side of town is doing better than people expect! Hip Hip Hooray!” In my opinion, this is cause for celebration because I live on the east side of Elgin, Illinois, which can come with a stigma or two according to some people (mostly those who live west of the Fox River). This morning I discovered an amazing online benchmarking tool from our friends at The Chronicle of Philanthropy that allows me to explore philanthropy in my state, city, and neighborhood.

So, all of my celebration this morning stems from the fact that I discovered my zip code (60120) is doing better than average in total charitable contributions compared all zip codes in the State of Illinois. We rank 3,976 out of 28,725. Woo Hoo! Of course, we’re still behind our west side neighbors who rank 2,347, but frankly I don’t care. I am thrilled to be doing this well!

I am also intrigued by all of the data that The Chronicle of Philanthropy is able to put at my fingertips with regards to philanthropy and demographics data. Here is some of what I learned about my side of town this morning:

Last year we contributed a total of $10.2 million.
The median level of contributions was $1,666 per household.
Median household discretionary income is $41,310.
Households in my zip code donate 4% of their income.
55.6% of households identify as Hispanic.
33.1% of people are under the age of 20 (which compares to 27% for the average zip code in the country).
32.8% of people don’t possess a high school diploma (which compares to 14.4% for the average zip code in the country).

I could go on and on with amazing little factoids about my little corner of the world, but I will stop here because I don’t want to take some of the fun out of you exploring this online tool.

Now some of you might be scratching your head and asking the age-old question “Who cares?”

Simply put, this online tool puts a powerful benchmarking tool in the hands of every non-profit organization in America. Powerful!!!

Again, some of you still might be scratching your head and asking the age-old question “Who cares?”

The following are just a few reasons why every non-profit organization regardless of their size or skill level should be looking at benchmarking exercises for their fundraising program:

Benchmarking allows you to see where you stand in comparison to others.
When your organization is faced with making a difficult choice between a number of different options, then benchmarking can help you make tough decisions.
Benchmarking allows you to clearly see what you’re doing well and where you might need to improve.

Let’s go back to my hometown of Elgin, Illinois for a moment . . .

Elgin, Illinois is made up of four zip codes (e.g. 60120, 60121, 60123, and 60124), and the total charitable giving reported on tax returns filed from these four zip codes adds up to $39,582,326. If I operated a non-profit organization with $1 million per year in private sector fundraising revenue, then I would know that I am capturing 2.53% of the reported philanthropy in the area. With this knowledge, I can do a better job of measuring success and progress.

There are countless other ways to slice and dice this benchmarking data, and there are many ways it can be used. We’ve already made the case for how this information can be used to evaluate and assess your fundraising program. It could also be used to make decisions on who and where to target your fundraising efforts.

Does your non-profit organization do any benchmarking? If so, please share your success stories in the comment box below. If not, please weigh-in on some of the obstacles you encounter. If you took a moment to click around The Chronicle of Philanthropy’s online tool, please also share your comments or thoughts. We can all learn from each other.

Here’s to your health!

Under promise and over deliver? Managing donor expectations?

March 22, 2013 erik Fundraising

Welcome to O.D. Fridays at DonorDreams blog. Every Friday for the foreseeable future we will be looking at posts from John Greco’s blog called “johnponders ~ about life at work, mostly” and applying his organizational development messages to the non-profit community.

In a post titled “Squeeze Out the Doubt,” John looks at both sides of the “Under promise . . . Over deliver“. Yes, there is a debate surrounding this concept. One side says, this approach is the key to producing win-win business outcomes. The other side says, managing expectations will lead to inflated expectations and the need to always over deliver in order to attain a win-win outcome (e.g. unsustainable vicious cycle).

As someone who saw “Under promise . . . Over deliver” as a basic truism, I find this debate interesting and something I mentally chewed on for the last few days. While masticating on this concept, my mind turned to the relationship that non-profit organizations have with their donors (aka investors).

As I thought about it more, I think this debate is at the center of every agency’s fundraising program. Here are a few questions that I’ve heard clients and colleagues ask themselves:

Should we tell our donors how close we are to closing our doors? Or will it set the fundraising bar higher next time we solicit them for funds?
Do we share our mediocre program outcomes data with our donors? Or should we cherry pick the data and make them feel good about ROI?
When writing our case for support, should we under state our goals for program outputs and outcomes?
When talking about our fundraising campaign goals, should we talk about the stretch goal as if it is what we’ve budgeted?

It would be easy for me to come out and proclaim that honesty and transparency are always the best policies; however, I think it is much more complicated than a black-and-white proclamation.

For example, I am not a big fan of non-profits who run around their community screaming from every mountaintop that they are running out of money and weeks away from closing their doors. On one hand, I’ve talked to some non-profit professionals who see this as a way of low-balling expectations. If they keep the doors open, then they win. It also creates a heightened sense of urgency among donors. Right? On the other hand, donors don’t like to throw good money after bad money. So, the next time your agency asks for money, donors will set the bar higher than they might have otherwise done because they want to make sure they aren’t investing in the S.S. Titanic.

OK . . . this might not be the best example, but the point that I’ve driving at is that employing an “Under promise . . . Over deliver” strategy takes careful thought and application.

Please use the comment box and share examples of where you successfully employed this strategy with your board members, donors, volunteers, or staff. Did it result in a win-win? Or do you subscribe to another school of thought entirely (e.g. honesty is always the best policy, never promise anything and just deliver, etc)? If so, please tell us how that has worked for you.

Here’s to your health!

Congratulations on the new Pope and all of your ‘Good Works’

March 21, 2013 erik volunteers

I was Baptized in a United Church of Christ congregation in Park Ridge, Illinois where my parents both grew up. I was raised in a Lutheran Church in Mount Prospect, Illinois where I took my first communion and got confirmed. In recent years, my religion has faded and it seems as if none of my religious training stuck. (Note to self: I wonder if I can get a refund? I should check into that.) However, in recent weeks I’ve been bombarded by all things Catholic thanks in large part to our news media who is stuck in overdrive. All of this coverage compels me to write a little something about our Catholic brothers and sisters, who work by our sides in the non-profit trenches.

Pope Francis: A sight for sore eyes

This Pope’s namesake is Francis of Assisi, who is one of the better known saints. He is the patron saint of animals and the environment, and is synonymous with the concepts of poverty and humility. In taking the name “Francis,” it is widely believed the Pope is sending a message to the world. Many have speculated this message is that one of the church’s major initiatives will be its focus on social justice and its work with the poor.

As someone who has spent almost his entire life in the non-profit sector working in the social services/human services sub-sector, this is welcome news.

You don’t need to be a Catholic to appreciate this development. I am excited about the future and can’t wait to see where this all leads. I hope you are, too.

Beware of false prophets

As I confessed in the opening paragraph of this post, my Baptismal water didn’t take and the church that I now attend on Sunday morning is Meet The Press on NBC. David Gregory is my pastor (which is kinda funny since he is Jewish). Go figure!

This last Sunday one of the roundtable participants was former Oklahoma Governor Frank Keating, who is a Catholic and served on one of the church’s child abuse task forces. During my hour-long mass, I heard Keating saying something that really caught my attention:

“In the United States, 50 percent of social services are provided by the Catholic church.”

This declaration stuck with me for days until I couldn’t resist Googling around in my free time in an effort to fact check this statement. I guess I wasn’t the only person who was bothered by this statement because PolitiFact has already done the research and posted an article titled “Does the Catholic Church provide half of social services in the U.S.”

If you have a minute or two to spare in your busy schedule today, I strongly recommend that you read the PolitiFact post. It is super interesting and a quick read. It drives home the point that we all need to beware of false prophets. Damn politicians . . . you can’t believe a word of what comes out of their mouths! LOL

Here is the long and the short of what PolitiFact found out:

“So by our estimate, Catholic-affiliated charity amounts to 17 percent of the funds spent by nonprofits on social services — well short of the 50 percent Keating cited. Even doubling this share to create a generous margin of error brings it to 34 percent — still well short of half. But even this may overestimate the footprint of Catholic-supported charities, since it doesn’t include social-service expenditures by the government. In his comment, Keating didn’t specify that he was only talking about social services funded by private groups.”

Truth be told . . . I knew that Catholic-affiliated charities did a lot of work, but I never understood how much work it does. I am still impressed with 17 percent! I think you should be, too.

Celebrating ‘Good Works’

One of the core tenets of the Catholic faith is that “good works are done to glorify God and are done in honor of him.”

There is a lot of confusion around this concept and what it means to Catholics. I found a really good blog post that explains it really well. Click here if you want to learn more.

As a non-profit professional, I really appreciate the fact that there is a network of 1.2 billion people who dedicate their lives to doing good things for other people.

With the media in overdrive about all things Catholic, I encourage all non-profit professionals to take a moment out of their busy day to appreciate the good works of the church and its members. When you’re in the car commuting, simply ask yourself the following questions:

I wonder how many of our board members and volunteers are Catholic?
I wonder how many of our donors are Catholic?
I wonder how many of our clients have been impacted by other Catholic-affiliated charities?

After scratching your head and contemplating these questions, simply end your thought with a simple “Thank goodness for good works!”

Did the “Festival of All Things Catholic” by our news media inspire other non-profit related thoughts for you? If so, please share those thoughts in the comment box below.

Here’s to your health!

Do we need a death penalty for non-profit organizations?

March 20, 2013 erik Uncategorized

Have you ever watched something on television that made you so angry that you stewed about it for hours on end? For me, this happened last night while channel surfing, and I caught a news story on The Rachel Maddow Show on MSMBC titled “A Special Place In Hell“. This 17 minute story talked about people who use non-profit organizations as a front to scam donors out of their money

If you didn’t catch Rachel’s report and you have a few minutes to burn today, then click here to watch her report or click the graphic below.

Every non-profit professional should be fuming this morning because all of our brands get damaged when atrocities like this are perpetrated against donors. This story should also prompt a lot of questions. For example, I find myself scratching my head and asking:

Is there a watchdog keeping and eye out for things like this?
If you think the IRS, Guidestar and Charity Navigator are those watchdogs, then are your expectations of those organizations unrealistic?
Should there be a watchdog?
Does the IRS need to get more involved in compliance and monitoring issues? If so, who pays for THAT?
Should the non-profit sector get more serious about policing itself? If so, what does that look like?
Should Congress enact legislation that focuses on improving transparency and accountability for non-profit corporations (a la Sarbanes Oxley post-Enron)?
Should Congress pass a Donor’s Bill of Rights? (After all, there is similar legislation protecting people who fly on airplanes)
Should there be a death penalty for non-profit organizations that violate certain laws and perpetrate fraud against donors?

I could go on and on and on with the questions buzzing through my head this morning, but I think I will stop and invite you to share some of the questions you might have. Please use the comment box below to share your question. Or please feel free to use the comment box to share an opinion on one of the questions I’ve posed.

Here’s to your health!

Charlie Brown would’ve been a great non-profit executive director

March 19, 2013 erik Fundraising, Uncategorized

As many of you know, I spent last week in California visiting friends and a whole lot of wineries in Sonoma County. During my adventures, we stopped at the Charles M. Schultz museum in Santa Rose, CA. It was one of the highlights of my trip. Not only did I get to walk down memory lane (because Snoopy and his friends were a big part of my childhood), but I was reminded of why I loved this cartoon/comic strip so much.

As I passed through one of the many exhibits on Charles Schultz’ amazing career, I was reminded of this very famous quotation by William Hickson:

“If at first you don’t succeed, try, try again.”

How many times as a child did you see Lucy pull that football away from Charlie Brown as he flew through the air and crash to the ground?

It is an image burned in my head as I am sure it is for countless numbers of people around the world.

Charles Schultz drew this image over and over and over again because he wanted kids to understand:

Failure is part of life.
It is OK to fail.
When you fail, you simply pick yourself off the ground.
You never stop trying.

What an incredibly important lesson to learn!

On my first day back from vacation, I had the privilege of having lunch with a friend who is the executive director of a non-profit organization. While breaking bread and catching up on things, my friend reflected on his career path as a non-profit professional and he said something that made me think of Charlie Brown. He said people who strive to be an executive director need to understand that they will fail, and they will do a lot of it.

Wise words from a very wise man.

The following is just a short list of failures that I’ve seen in my years from executive directors and fundraising professionals:

Recruiting the wrong volunteer to do the wrong job.
Pairing the wrong fundraising volunteer to solicit the wrong donor.
Pursuing the wrong strategies at the wrong time.
Not adhering to best practices when they are so desperately called for.
Cutting corners and thinking the ends justify the means.

We’ve all been there. We’ve all failed. And we’ve all picked ourselves off the ground and pushed forward.

Do you have the soul of Charlie Brown? Do you look for this quality in the people you hire? What about in the people you recruit as volunteers? Please scroll down and share a story in the comment box about a time you missed the football and how it made you a better non-profit professional.

Here’s to your health!

Fundraising is like a fine wine

March 18, 2013 erik Fundraising

As you know, last week I re-ran five of the most viewed DonorDreams blog posts because I needed to take a break. What I didn’t tell readers is that the break was really a week-long vacation to see old friends and visit California’s Sonoma County wine country for the second time in my life. If you haven’t had the opportunity to visit California wine country, then you have to add it to your “bucket list”. It was spectacular!

So, here I am . . . sitting at my desk . . . first day back . . . struggling with the idea of getting back in the saddle again.

As I reflect back on the last week, I can honestly say that visiting wineries invoked lots of thought about fundraising such as:

Cultivation
Stewardship
Patience
Aging

So, I’ve decided that on my first day back at my desk, I will share a few vacation pictures with you as well as a few links from a Google search focused on the terms “wine” and “fundraising”. Cheers!

Jus a few results from Google search

“Like a Fine Wine, Fundraising Should be Savored” by Lisa Krueger at Step By Step Fundraising
“Wine Fundraising Ideas” at Giving Vines
“Wine Tasting Fundraising Ideas” at Fundable.org
“2 Types of Wine Fundraising” at Articlesbase
“Ehlers Estate Winery” (aka non-profit winery) atNapa Valley Wine Blog
Wine to Water

Mmmmm . . . all this talk about wine and fundraising is making me thirsty and it is only 8:00 am. Come to think of it, I also need to start making a few phone calls to set-up meetings with area donors to talk about this year’s annual campaign. Hmmmmm? I wonder if I can combine these two lovely tasks? 🙂

As they say in wine country . . . CHEERS! I’ll see you tomorrow where we’ll talk about the Charles M. Schultz Museum and how it inspired a few thoughts by which fundraising professionals should live their professional lives.

Here’s to your health!

Non-profit fees for service and the smell test

March 15, 2013 erik Fundraising

It has been an exhausting whirlwind of work the last few months. While I would never dare complain about work so as not to upset the consulting gods, I need to take a short break. So, this week I will re-run some of the most viewed DonorDreams blog posts on fundraising and leadership. I hope you enjoy today’s post on fees for service. Enjoy the flashback! ~Erik

Non-profit fees for service and the smell test

Originally published on February 17, 2012

In a previous post, I blogged about the idea of non-profit organizations looking in some non-traditional places to generate revenue such as “selling things” through unrelated business income efforts. Of course, I see non-profits also looking at “related” business income opportunities. Today, I’m turning my attention from external opportunities to “sell stuff” (e.g. thrift stores, eBay, amazon.com, etc) in an effort to create revenue streams and looking inward at internal opportunities to sell your services by charging fees.

It would be too easy for me to take the position that instituting fees to sell your non-profit services to your clients amounts to nothing more than selling your soul. However, as we discovered in Tuesday’s post titled “Should the new non-profit mantra be: Sell! Sell! Sell!” many non-profits are generating a lot of revenue from fees for service — 45 percent of the approximate $1.5 trillion in non-profit revenue comes from fees and services.

I think my blogger friend, Joanne Fritz of about.com, got it right in her post titled “Can a Nonprofit Charge Fees for Its Services?” when she suggested there is a “smell test” that needs to be passed before a non-profit should ask its clients to pay fees for the services it offers. Let’s have some fun with this smell test idea:

<<sniff>> I don’t think domestic violence victims should be asked to pay for a place to spend the night safe from their abuser.
<<sniff>> It seems reasonable to ask students at publicly subsidized universities to pay some tuition.
<<sniff>> It don’t think hungry people should be asked to pay for the food they’re given at a food bank.
<<sniff>> It seems reasonable to ask patients at a non-profit hospital to pay for care and medical attention

Well, that was easy wasn’t it? Hmmmmmm . . . not so fast! The reality is that this issue can put your agency on the proverbial “slippery slope”. Let’s take a closer look:

Why should YMCA’s be able to charge fees to access their fitness programs? Doesn’t their non-profit tax-exempt status give them an unfair competitive advantage over for-profit companies doing the exact same thing? If you ask Bally’s Total Fitness and the fitness center industry, they’d likely say YES . . . the trail of lawsuits throughout the years would seem to support this assertion.
Why should public universities continue to charge more and more for a college education when they can also fundraise and access other funding streams that for-profit institutions of higher education can’t touch? Doesn’t their non-profit tax-exempt status give them an unfair competitive advantage?

In this “New Normal” economic environment, I do think non-profit professionals are eyeing opportunities to “sell stuff” to enhance their revenue streams. However, discretion is the better part of valor when it comes to giving in to this emerging trend because it is one thing to look at the for-profit marketplace to sell stuff, but it can be a completely different issue when you start selling your services (and your soul).

Take the Boys & Girls Club movement as a great example. It is the mission of Boys & Girls Clubs to help “those kids who need us most,” which in most cases translates into providing services to kids from “economically disadvantaged circumstances”. There are a number of Clubs doing the math on charging fees for their services.

While it is true that Clubs have charged membership fees for more than a century, it has always been nominal . . . $1.00, $5.00, $25.00 . . . for a one year membership to the Club. This was done to create a “sense of ownership” because the value associated with something given away for free is NOTHING.

However, what happens to this organization’s soul when fees go from being a program tool to a revenue stream . . . $50.00, $100.00, $250.00, $500.00 per year? At what point are you soulless? At what point do your clients walk away? At what point does your mission collapse under the weight of fee for service”? At what point does the IRS enter the picture and revoke your non-profit status?

I’m not suggesting that fee for service isn’t an acceptable model for some non-profit organizations. What I am suggesting is that passing the smell test is more difficult than you may think, and it requires serious board room consideration.

So, here are a few questions I recommend board members ask themselves:

Are there for-profit corporations in your community providing similar services? If so, then why should you have a competitive tax advantage over them?
If your fees for comparable services are similar to other for-profit competitors, what differentiates you and makes you special enough to have a tax advantage?
What is stopping you (and I mean really stopping you) from doing a better job with more traditional revenue streams that are unique remedies to non-profit corporations (e.g. fundraising, foundation grant writing, and various other philanthropic opportunities)?
What will your donors think? And at what point will fees damage your philanthropic business model? (e.g. donors balking at giving you a charitable gift because they think you can just hike fees or go sell some more stuff)

So, before you leap I suggest you look. You might not have a revenue problem that needs to be fixed with a fee for service solution. You may have a human resources and staffing issue. You may have board development or volunteer issue. Of course, you may have a revenue model issue that needs to be tweaked with the addition of some fees for service.

Here is some unsolicited advice . . . If you want to “sell stuff” to generate revenue, it is far safer to open a store and weave your mission throughout its operation (e.g. Wednesday’s blog post about thrift stores or Thursday’s post about eBay and Amazon.com) than it is to look internally at selling your services and raising revenue on the backs of those you serve.

What is the going price for a soul today? I think is it PRICELESS.

Here’s to your health!