Have you discovered non-profit radio yet?

October 21, 2013 erik technology

radio I don’t know about you, but radio plays an important role in my life. I used to live in my car traveling from client-to-client throughout the Midwest when I was an internal consultant. After opening my own consulting practice, I now travel much shorter distances, but I still spend a decent amount of time in my car. So, the radio is where I turn for a decent amount of news and entertainment, especially when I’m on the road. However, when I’m at home I don’t listen as much because I don’t get very good reception in the house, which is why I was so elated the other day when I discovered the Tony Martignetti Nonprofit Radio online.

On Fridays from 1:00 to 2:00 pm (eastern time), Tony broadcasts his show online and focuses on non-profit topics that will excite many non-profit professionals and board volunteers who read this blog. Here are just a few topics from the last month:

Click here if you want to check out the last 100 radio shows by Tony in the iTunes store. They are free to download.

You’re probably asking yourself, “Who is this Martignetti guy?”

In a nutshell, Tony started his work with non-profit organizations 16-years ago in 1997 as a planned giving officer. He created the planned giving programs for Iona College and St. John’s University. Along the way, he obviously spun off and created his own consulting practice. For more about Tony, you can click here to view his extensive profile.

I suspect that I will start tuning in on Fridays when I’m sitting at my desk and not on the road working with a client.

I need your help

This online radio show is one of many different sources for non-profit news, information and best practices. Here is where I get much of my information on a variety of non-profit subjects:

Blogs
LinkedIn
Google
eNewsletters from other consultants and thought-leaders
Old manuals and books
Conferences and in-person training events
Webinars

What about you? Where are you getting most of your information on non-profit best practices?

I am trying to update the DonorDreams blogroll, and I am taking suggestions from readers on what to add to this section of the blog. Please scroll down and share your thoughts and ideas. Please remember to also share the web address so I can include a link to it.

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

Larkin Center evolves for 117 years, and then it ceases to exist

October 18, 2013 erik leadership, organizational development

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 “Survival Is Not Mandatory,” John talks about how change is occurring all around us all of the time. Organizations need to make the decision to adapt to those changes or risk going out of business.

On Wednesday afternoon, I received the following email in my inbox from a local non-profit organization with whom I’ve worked with and supported over the last 13 years.

A Farewell Thank You to Larkin Center Supporters

The Larkin Center has been a valuable part of the Elgin area for over 117 years. Unfortunately, the Center has experienced financial challenges at a time when demand for its services has increased. We have been in discussions with several strategic partners over the last 18 months to secure the long-term future of the Center.

As of last Friday, the effort collapsed and we are working with appropriate state agencies to transfer contracts and transition our clients as a result, it saddens us to announce that the Center will no longer be able to sustain itself after Friday, October 18, 2013.

The Larkin Center clients and staff would like to thank the many individuals and organizations that have supported our mission throughout the years and have truly made a difference in the lives of our clients.

Larkin Center has adapted to all of the changes throughout the years. They were founded more than 100 years ago as an orphanage. Over the course of time, orphanages disappeared from our communities, and Larkin Center evolved into an agency offering residential services to children who had trouble surviving in a state-run foster care system.

larkin4 As the years passed, Larkin Center added more services including a school for children struggling with behavior disorders and counseling services for adults.

It is obvious to me that Larkin Center’s staff and board understood that “survival is not mandatory,” which is why they kept evolving and changing with the times. I think it is this realization that makes this closure so difficult to swallow.

Is it possible that there comes a time when adapting to change and evolving is not possible? Do organizations have a life span much like human beings?

The sadness of this moment makes it impossible for me to go down this road and contemplate the answers to these questions.

Instead, I want to celebrate. That’s right. You heard me correctly.

larkin1 There will be lots of news coverage about the “failure“. Many people will weigh-in with what they think went wrong and what could’ve and should’ve been done differently. There might even be a victory lap taken by a few Elgin city council members who openly fought with Larkin Center because they didn’t think “those kids” belonged in our community.

I won’t touch any of these topics with a ten foot pole. At least not today.

Instead, I urge all of you to take a moment to think about the heroes who fought to the very end to save Larkin Center.

When I think about the countless number of volunteer hours invested in strategic planning and exploring merger possibilities over the last 18 months, I want to honor those efforts.

When I think about the Larkin Center staff who persevered through furloughs and late paychecks because they believed in saving this agency’s mission, I want to honor those efforts.

larkin3 When I think about the donors who invested in efforts to save this organization in the final months and years of its life, I want to honor those efforts.

When I think about the tens of thousands of children and adults (if not more), whose lives were touched and changed by Larkin Center, I want to honor those efforts.

There will be plenty of time to dissect what happened and learn lessons from Larkin Center, but please join me in honoring the accomplishments and hard work of so many people.

Sigh! As always, John is right . . . “Survival is not mandatory.” But it doesn’t mean we shouldn’t celebrate 117 years of evolution and the will to survive.

You can join me in remembering Larkin Center and honoring the organization, its accomplishments and its volunteers and staff members by recalling a memory and sharing it in the comment box below.

Here’s to your health (and continued evolution)!

Does your non-profit use shiny objects?

October 17, 2013 erik Uncategorized

IMG_20131016_135643_455 As I said in an earlier post this week, I am currently in Reno, Nevada at Boys & Girls Clubs of America’s Pacific Leadership Conference. The conference is being held at Silver Legacy Resort & Casino. Of course, in order to get from the hotel to the conference sessions, you need to walk through the casino where you are bombarded by all sorts of “shiny objects”.

By shiny objects, I mean:

Slot machines
Bars
Blaring music & P.A. announcements
Gaming tables with dealers
Alarm bells announcing winners
Restaurants and delicious smelling food
Distracting blinking lights
Interesting decorations

I literally found my eyes darting all over the place. I’m not a gambler, but I was definitely tuned in and engaged with what was going on all around me.

When you consider how much money casinos make, it is hard to argue with all of these shiny object tactics.

As I sat in my exhibitor booth, I kept watching the salesperson at Markel Insurance spinning a “Wheel of Fortune” type of prop. As the minutes and hours ticked by slowly, I couldn’t help focus in on how this wheel worked its charm on conference attendees. Someone could be wandering by the Markel booth with no intention of stopping, but the moment that wheel started clicking and whirling people stopped to pay attention.

Shiny objects . . . human being like them. A LOT!

All of this got me thinking . . .

What types of shiny objects do non-profit organizations use to capture the attention of donors, clients, and volunteers?

IMG_20131016_135832_525 In an effort to make the time pass more quickly, I started making a list. Admittedly, I started thinking way outside of the box, but here is some of what I came up with:

newsletters
websites
Facebook pages
Twitter feeds
Various other social media platforms (e.g. Pinterest, LinkedIn, etc)
Texting
Newspaper stories (e.g. earned media)
Newspaper advertising (e.g. public service announcements)
Outdoor advertising (e.g. billboard)
Cable advertising
Phone calls to donors
Announced challenge gifts
Radio ads
Special event fundraisers
Press conferences
Town hall meetings
Constant Contact e-blasts
Online advertising (e.g. Google ads, Facebook ads, etc)
Sending your executive director out in public (e.g. speaking at city council, Rotary meetings, etc)
Hosting small cultivation or stewardship events in board members living rooms
Direct mail
Health and community service fares
Cause related marketing campaigns

I suspect the list could probably go on and on and on.

As I stepped back and started contemplating how many shiny objects I had identified, I suddenly realized the problem with the road I was walking down.

The casino throws their shiny objects at their customers all at once. It is like an amazing fireworks finale that never stops. Most of the non-profits I could think of that do messaging well, use an eyedropper to carefully measure out their marketing efforts.

I am hard pressed to think of many examples of cross-channel messaging by a non-profit organization. The few that come to mind might used two or three different channels to cross promote their message. For example, a year-end direct mail appeal referencing a website address along with volunteers following up with a phone call solicitation.

This is not exactly comparable to my experience at the Silver Legacy Resort & Casino this week.

Let me end this post by asking for your help:

Please help me add to my laundry list of shiny objects used by non-profit organizations.
Please highlight communications efforts that utilize more than a few channels to engage supporters.
Please weigh-in with your suggestions on how non-profits can get better at lighting up the world around them.

You can share your thoughts and experience by using the comment box below. Why? Because we can all learn from each other.

Here’s to your health! (Enjoy additional pictures I’ve included from the conference that I’ve pasted into this post below my signature block)

IMG_20131016_135942_889 IMG_20131016_135741_658

IMG_20131016_135921_679 IMG_20131016_135603_946 IMG_20131016_135814_197

More on the government shutdown and the non-profit sector

October 9, 2013 erik Fundraising, Planning

shutdown5 In yesterday’s post titled “Did fundraising cause the recent government shutdown,” we talked about whether or not fundraising strategies are one of the leading factors contributing to our current situation. Today, I want to stay with this topic and look at how the shutdown is impacting non-profits and what you should do in the long-term to mitigate some of these issues.

Those you serve

Last night, I was watching the news and an executive director of a veterans agency was being interviewed about how the government shutdown was impacting veterans. Throughout the interview, he eloquently talked about the impact on:

military support staff
vendors
contractors
VA Hospitals (except for emergency room services)
students waiting for G.I. Bill payments for school costs
disbursement of death benefits to families

While I found all of this interesting, the thing most interesting to me was how his agency was being impacted. Obviously, informational hotlines are not being staffed in government offices. So, this organization is trying to fill that void and trying to answer their questions or get them the information they require.

All of this got me thinking. How many other non-profit organizations have clients who rely on the government for something? And by “things” I mean benefits, services, etc.

I suspect there are many non-profits whose phone lines and case workers are now working overtime to fill the void normally filled by government agencies.

Funding concerns

shutdown4 From what I’ve heard and read, many non-profit organizations are concerned about how the government shutdown will impact their funding. Consider the following:

organizations fund their operations with federal contracts
states receive federal pass-through money which eventually can put state funding to non-profits in question
vendors, who do lots of business with the government, might not be able to continue providing your agency with the services you require
donors who work for the government or receive benefits from the government might not be in a position to pay their pledges or continue their support in the short-term

The longer a shutdown drags on, the more pressure will be placed on many non-profit organization’s revenue models.

Human capital

Just the other day, I was speaking with an agency who runs many of their programs with work-study students from the local college. The question they were pondering was obviously, “What impact might the government shutdown have on their situation?”

There are government programs like work-study and Americorps that fuel countless agencies’ human resources needs.

Unanticipated consequences

Our system of government is large and complicated. There are countless numbers of programs that non-profit organizations rely upon, and there are millions of individuals who are impacted. Some of these challenges are immediately obvious, but many others will only make themselves visible down the road.

When businesses — regardless of whether they are for-profit or non-profit — operate in an environment of uncertainty, crazy things start to happen. Uncertainty and the human experience mix together about as well as oil and water.

While finance professionals brace for instability in financial markets, so too should non-profit organizations prepare for the obvious impacts and attempt to anticipate unexpected challenges.

What should you do?

While you might feel helpless at a time like this, there are some things you should consider:

Pull together an ad hoc committee to assess your agency’s vulnerabilities
Revisit your strategic plan and invest some time in contingency planning
Engage fundraising volunteers in a discussion about how to shift your agency’s dependence on government funding to other more stable sources like private sector fundraising efforts and specifically individual giving

Has your agency been impacted by the government shutdown? If so, how? What are you doing about all of this right now? Please use the comment box below to share your thoughts and experiences. We can all learn from each other.

Here’s to your health!

Cause related marketing saved Tina’s life

October 7, 2013 erik Fundraising

nfl1 Over the years, I’ve urged non-profit organizations to exercise tremendous caution when contemplating a cause related marketing strategy as part of their resource development plan. There was the December 2012 post titled “Cause related marketing 101: Educate, educate, educate!” Then there was the February 2013 post titled “Bad cause related marketing is offensive” based on my personal experience with buying a new pair of glasses at the mall. Most recently, there was “Non-profits must be careful with cause related marketing,” which was based on another personal experience with an internet vendor.

Some people have called me a skeptic of cause related marketing, which is not true. I just strongly believe that media is powerful and employing this strategy wrong can do lots of damage very quickly to your brand. So, when I saw the NFL’s newest “A Crucial Catch” public service announcement during yesterday’s games, I knew I just had to blog about it today.

The commercial opens up with a woman telling us that her name is Tina; she is a New York Jets fan; and she is a breast cancer survivor. As she tells her story, you get pulled in and emotionally connected which is when they drop the bomb. Towards the end of the commercial, she credits the NFL with saving her life. It was because of the NFL’s awareness efforts and cause related marketing campaign that Tina performed her first self examinations. These initial self exams resulted in a visit to the doctor and early detection.

Haven’t seen the commercial? Click here or on the image below to check it out. Trust me . . . it is worth the click!

First, let me say that I forgive Tina for being a Jets fan. 😉

Second, let me congratulate Tina for beating breast cancer and having the courage to tell her story to millions of people.

Finally, I encourage all non-profit organizations who are looking for a benchmarking project, prior to jumping into a cause related marketing campaign, to look at this campaign. It is rock solid and everyone can learn from this textbook example.

The American Cancer Society has raised millions of dollars primarily through two funding vehicles: 1) the sale of pink NFL merchandise and 2) an auction of sports related items by the NFL.

nfl2 If you want to know more about this campaign, Forbes magazine’s Alicia Jessop did a nice job in an October 2012 article titled “The NFL’s A Crucial Catch Campaign Raises Millions for the American Cancer Society” of summarizing the essence of the campaign.

I really love the mutually beneficial relationship between the NFL and the American Cancer Society.

The American Cancer Society gets:

Revenue
Exposure for its brand
Awareness of its issue

The NFL gets:

Positive exposure for its brand (e.g. The Halo Effect)
Awareness of its product (e.g. football) by a powerful segment of consumers — women

The thing I love most about this cause related marketing campaign is the contrast it creates, which in and of itself makes people pay attention to an important issue. What I mean by this is that football is a uniquely masculine product with lots of testosterone, and breast cancer (in most people’s minds) is a uniquely feminine issue (even though there are a small number of men diagnosed with this cancer ever year and countless men and boys are devastated when the women in their lives are diagnosed).

If you want to learn more about cause related marketing, you may want to check of some of the following resources:

about.com: “Three Cause-Marketing Trends That Matter For Nonprofits And Their Business Partners“
Hone Watson Bookmarks: “Cause Marketing The Halo Effect“
Ventureneer SlideShare presentation: “Cause Marketing Basics“

To all of you who follow the DonorDreams blog, let me be one of the first to wish you a happy Breast Cancer Awareness Month. Please practice and promote prevention.

I also want to take a moment to congratulate my sister-in-law who was diagnosed in her early 30s with breast cancer and has been cancer-free for more than 10 years. You’re a fighter and inspiration, Anne! Now please take your brother to a Dallas Cowboys game on Thanksgiving. I’m tired of hearing him whine about it.

Is your organization looking at a cause related marketing campaign? What are some of the obstacles in your way? What are you doing to overcome those obstacles? What does your planning process look like so that you can avoid the bad campaigns I’ve previously written about and referenced in the beginning of this post?

Please use the comment box below to share your thoughts and experiences. We can all learn from each other.

Here’s to your health! (And think pink) 😉

The power of writing it down

October 4, 2013 erik Planning

First let me start this O.D. Fridays post with an apology to DonorDreams blog readers.

For the last week, I’ve been in St. Louis with hundreds of Boys & Girls Clubs from the Midwest and Southwest regions. What an amazing conference with inspiring stories and talented board volunteers and staff members! Hats off to the national staff who planned and executed a flawless conference plan.

Unfortunately, I can’t say the same thing for me and this blog platform.

I didn’t post anything on Monday because my ride to St. Louis picked me up at 5:55 am, and I also missed the mark on Thursday because I needed to be in my exhibitor booth at 7:00 am.

Here are all of the things I’ve been trying to balance this week:

Writing for the DonorDreams blog community
Managing and staffing my exhibitor booth
Organizing and facilitating a training track
Networking
Working with other clients back home who are under contract and in need of attention

For those of you who know me, I usually balance competing projects fairly well. So, why did this week turn out so messy? Why did I drop the ball and not blog on Monday and Thursday?

I think some of the answers to these questions can be found on John Greco’s July 23, 2013 johnponders post titled “Ink It“. In this post, John drills down on the following Chinese proverb:

“The faintest ink lasts longer than the best memory.”

Heading into this challenging week, I didn’t write anything down. I was operating with everything in my head.

I am not just talking about the power of task lists and calendars. This has everything to do with brain science and in some instances personality types.

Now let’s take a 180 degree turn and about-face with this idea.

If you buy into what John talks about in “Ink It,” then what are you doing to encourage your:

staff to write things down?
board volunteers to write things down?
donors to write things down?

Again, we’re not necessarily talking about task lists and time management, which is how I started the post.

What if your board members were asked to write out their personal action plans for the upcoming year?

What if donors were asked to write out their personal stories about why they support your agency? What if you published those testimonials on your agency’s blog or Facebook page?

Would the result be a deeper sense of engagement?

Would board members be more likely to follow through on what they commit to doing? Would donors end up increasing their contributions?

I dunno . . . but if you buy into what John says about the act of writing something down, then these are questions every non-profit professional should be asking themselves.

Have you ever asked donors to share their story in writing? What was the result? How did you use it? What about engaging board members in writing out their commitments as part of a future focused action planning process centered around your strategic planning process?

Please use the comment box below to share your thoughts and experiences.

A side note of appreciation

Throughout the week at the Boys & Girls Club conference in St. Louis, I’ve been approached by countless numbers of people asking me about this blog.

Just last night, I was dragging myself off of the elevator on my way to another late night bedtime when a fellow passenger (who I’ve never met and don’t know), said “You’re that blogger! I missed your post this morning.”

I just want to take a moment to sincerely thank all of you who subscribe and read this blog. I very much appreciate your time, loyalty and complements.

It is easy for me to get into that “Fred the Baker” from Dunkin’ Donuts mindset of “It’s time to make the donuts.” However, this week reminds me that this blog and your daily work is all about mission-focus, your clients, and making this world a better place.

Thank you to those of you who re-inspired me.

I’m also glad that I’ve written all of this down in ink so that this inspiration won’t fade too quickly. 😉

Here’s to your health!

Non-profit governance: The work of the board, part 5

October 2, 2013 erik Board governance, Planning

Dani Robbins is the Founder & Principal Strategist at Non Profit Evolution located in Columbus, Ohio. I’ve invited my good friend and fellow non-profit consultant to the first Wednesday of each month about board development related topics. Dani also recently co-authored a book titled “Innovative Leadership Workbook for Nonprofit Executives” that you can find on Amazon.com.

Governance: The Work of the Board, part 5

Setting the Mission, Vision and Strategic Plan

By Dani Robbins

strategic planning Welcome to the final post in our five-part series on Governance. We have already discussed the Board’s role in Hiring, Supporting and Evaluating the Executive, Acting as the Fiduciary Responsible Agent, Setting Policy, and Raising Money. Today, let’s discuss the Board’s role in setting the mission, vision and strategic plan.

As previously mentioned, Boards are made up of appointed community leaders, who are collectively responsible for governing an organization. As outlined in my favorite Board book Governance as Leadership and summarized in The Role of the Board, the Fiduciary Mode is where governance begins for all boards and ends for too many. I encourage you to also explore the Strategic and Generative Modes of Governance, which will greatly improve your board’s engagement, and also their enjoyment.

At a minimum, governance includes:

Setting the Mission, Vision and Strategic Plan,
Hiring, Supporting and Evaluating the Executive Director,
Acting as the Fiduciary Responsible Agent,
Raising Money, and
Setting Policy.

One of my goals for this blog is to rectify the common practice in the field of people telling non-profit executives and boards how things should be done without any instruction as to what that actually means or how to accomplish it.

What “Board members being responsible for setting the mission, vision and strategic plan” means is:

The Board sets –meaning discusses and votes to adopt or revise — the mission statement, which answers why your organizations exist.

The Board also sets the vision of the organization. A vision statement is a description of what the organization will look like at a specified time, usually 3-5 years, in the future. There are two minds in the field as to if a vision statements should be a Utopian view such as “an end to hunger” or a more concrete view such as “to be the premier youth development organization.” I lean toward the latter; I find it challenging to set goals to get to Utopia.

The Board votes upon the strategic plan, after participating in a strategic planning process “in which the board, staff, and select constituents decide the future direction of an organization and allocate resources, including people, to ensure that target goals are reached. Having a board-approved, staff-involved strategic plan that includes effective measurements and the allocation of resources aligns the organization, provides direction to all levels of staff and board, and defines the path for the future of the organization. It also allows leadership, both board and staff, to reject divergent paths that will not lead to the organization’s intended destination.” (Innovative Leadership Workbook for Nonprofit Executives)

The process — and the document — can be very long or very short. In fact, I have a new theory that the longer strategic plan is, the less likely it is to be used. For my clients, I recommend a 4-5 meeting process: We start with setting or revising values, vision and mission and end with assignments, measurements and due dates.

Please do not accept a plan that does not include assignments, measurements and due dates. If you cannot answer the question “How will we know when we get there?” you will not get there. A plan without measurements, assignments and due dates is just a list of goals that are unlikely to be accomplished.

For information on what should be included in the process, please click here.

A strategic plan should be a living document that guides the organization and provides a point for ongoing programmatic and organizational evaluation. It should not sit on a shelf.

All organizations should have a strategic plan.

Strategic plans get everyone on same page as to where you are as an organization and where you are going. They allow the group to decide the goals moving forward; create measurements to determine if you met your goals and assign responsibility and due dates for specific goals.

Strategic planning is a process that results in not only a document but also a shared understanding among key stakeholders.

In the absence of that shared understanding and agreement, there are still moving parts, but they’re not aligned. The absence of a plan sets the stage for people to do what they feel is best, sometimes without enough information, which may or may not be right for the organization. It opens the door for one person’s vision to get implemented and others to feel unheard or unengaged. The absence of a plan allows for major decisions to be made on the fly and for potentially mission driven decisions to be compromised. As we all know, movement goes in other directions than forward.

What do you think? As always, I welcome your insight and experience.

My day with Jay Love from Bloomerang

October 1, 2013 erik Fundraising

Do you know Jay Love? Of course, you know this gentleman, but you just may not know that you know him. Many non-profit professionals know Jay as the man who innovated the online donor database system known as eTapestry. More recently, you may have heard whispers about a new online CRM product called Bloomerang, which focuses on donor loyalty instead of more transactional metrics found in traditional donor databases. Well, that is Jay’s newest gift to the non-profit sector.

A few weeks ago, I extended an invitation to Jay and asked him to speak to the Fox West Philanthropic Network (FWPN) about donor loyalty rates and the data associated with this phenomenon.

Over the course of an hour or so, FWPN members were exposed to data and lessons learned from the 2012 Fundraising Effectiveness Project. I thought I should share some of those points with you today.

Focus on 10 percent

Jay started his presentation by asking the group a multiple choice question.

“What does a 10 percent increase in donor retention rates mean in terms of lifetime dollars raised?”

a) 50% increase
b) 100% increase
c) 150% to 200% increase

Of course, the answer is the most dramatic answer . . . c) Increasing donor retention rates by 10 percent can improve lifetime dollars raised somewhere between 150% and 200%.

Jay does a nice job of illustrating this point mathematically.

If your organization started with 2,000 donors at an average size gift of $200 and a retention rate of 41%, you would raise $820,859 over 10 years in lifetime giving. With everything else staying the same except moving your retention rate from 41% to 51%, your organization would raise more than $1.2 million in lifetime giving.

These initial slides are designed to get your attention. I know that Jay had my attention at this point.

Do you love your donors?

It shouldn’t be surprising that Jay Love is obsessed by “donor-love”.

One of the statistics I scribbled down on my notepad was why customers of for-profit companies stop doing business with those companies.

According to survey research, 77% of consumers stop frequenting a company because they don’t believe the company is interested in their business.

Jay does a nice job of tell a story about his dry cleaners who after many years of business still don’t use his first or last name when he picks up his clothing. Where is the love? He even conducted an experiment where he started using their first names in an effort to personalize the relationship, but it resulted in no change.

The moral to the story is that when a new dry cleaners shop opens up closer to Jay’s home, he is very likely to switch.

Of course, this is similar with regards to non-profit organizations.

Most donors don’t make a second contribution. Why? Well, simply stated . . . they didn’t feel a connection, which isn’t any different from the for-profit explanation of “they aren’t interested in me“.

How many of your donors are currently shopping for a new place to invest their charitable giving?

The answer is . . . you don’t want to find out! Take an interest and get to know your donors.

Take the time to be personal

Jay talks about the power of a handwritten note. Not only does he keep his handwritten gift acknowledgement letters, but they don’t even fill up one shelf in his office.

The power of handwritten notes really resonated with me because I do the same thing as Jay. I tape them to the door, and generally have a hard time throwing them away.

Are you already sending handwritten notes to donors? Want another idea about how to personalize philanthropy? I really liked Jay’s idea of sending individuals, who make a first time gift to your organization, a “new donor welcome packet“.

Always remember . . . the more personal the gift acknowledgement, the more likely you are to get contribution number two!

Please note that personalized acknowledgements are only one-third of the battle. You need to communicate to the donor that their donation is being used in the manner in which you promised. You also need to demonstrate ROI. However, if personalizing your acknowledgement strategies get you one-third of the way to a renewal, then what are you waiting for?

The final two notes that I took from Jay’s presentation were:

Your targeted and direct mail should use the word “YOU” twice as much as the word “WE“.
Your letters should be written at a sixth to eighth grade reading level.

My advice to you?

Jay was super kind and uploaded his FWPN presentation to SlideShare. If you have the time, it is worth it to click here and view his slides.

I’m sure that you won’t find it surprising that Jay built many of these principles as well as the teachings of Adrian Sargeant and Tom Ahern into his new online donor CRM product. You may want to check out Bloomerang when you have a chance.

Do you use Bloomerang? If so, what has been your experience? Are you tracking your agency’s donor retention rates? What has been your ROI experience. Please use the comment box below to share your thoughts and experiences.

Here’s to your health!

Does your non-profit put its employees first?

September 20, 2013 erik organizational development

In a post titled “People-Service-Profit,” John talks about the impact that Federal Express’ corporate philosophy of People-Service-Profit has on it employees . . . which in turn has an effect on customer service and loyalty . . . which ultimately is reflected on the bottom line in profit

When reading John’s blog post this week, I immediately had two thoughts, which I will address below in two different sections.

Non-profit culture

People who work for non-profit organizations are different. In my experience, they aren’t motivated by the same things as their for-profit counterparts. Here are just a few examples of what I’ve seen people on the frontline of the non-profit sector do:

They often agree to work for less money than they otherwise might earn working in the for-profit sector.
I’ve seen non-profit employees work longer hours than they’re asked (or authorized to do). I’ve even seen hourly employees fudge their timesheet in order to avoid overtime (e.g. they get in trouble for working unauthorized time . . . overtime isn’t part of most agency’s budgets).
I’ve seen program assistants purchasing supplies for their programs using their personal money because there isn’t enough agency funding to do so.

peoplefirst2 The point I’m trying to make is that most non-profit organizations have built a culture that revolves around THE CLIENT. This focal point is so intense that ideas threatening to shift that focus are often seen as heresy.

While many people see a client-focused philosophy as altruistic, there can be a cost to this kind of corporate philosophy.

Low employee morale
Burnout
Cynicism
Poor staff cohesion

Another significant negative effect of this philosophy is “The Nonprofit Starvation Cycle”. I talked about this phenomenon in a previous “DonorDreams: O.D. Fridays” post on July 26, 2013 titled “Is your non-profit only living for today? Then you need Picasso!”

In the Picasso post, I describe how senior leadership and board volunteers are blinded by the agency philosophy of CLIENT FIRST, which results in zero funding important organizational capacity building expenditures. The end result is a non-profit that has no capacity and starves itself out of business.

Heck, in yesterday’s post about budgeting, I confessed that when I was an executive director, my finance committee once convinced me to eliminate donor newsletters from the budget in order to balance it. Ugh . . . while this was done in the name of putting the CLIENT FIRST, the result was putting the donor second (which is the person who needs to see ROI on their investment if they are going to renew their support). How did THAT make any sense?

So, let’s jump back to John’s post about company philosophy and FedEx.

If you are an executive director or someone who supervises staff, you should click -through and read the 10 bullet points located in the middle of John’s post. After reading those FedEx examples of how managers should treat their employees, I encourage you to complete the exercise described in the paragraph after the list.

It likely will be an eye-opening experience for you.

The Loyalty Effect

I suspect many non-profit people who are reading today’s post are probably still not convinced that a CLIENT FIRST philosophy can be damaging.

More than a year ago, I wrote a week long blog series focused on “The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value,“ which is a book written by Frederich Reichheld. I mostly focused on translating some of his business themes into resource development messages.

However, one of Reichheld’s bigger points is how employee loyalty drives customer loyalty, which turns into profit on the bottom line.

If you are still one of those skeptics when it comes to this post, look at it from this perspective . . .

Many of your clients have “special relationships” with your staff. In fact, if you surveyed your clients, I suspect they would say they come to your agency primarily because of that relationship and secondarily because of your services. I know for a fact this was true for the kids using the programs at my former agency.

So, investing in your employees results in their retention and loyalty. This in turn keeps your customers coming back, which in turn drives impact and program results. When you communicate this impact (e.g. ROI) to donors, it improves your donor loyalty rates and you raise more money.

Please don’t misinterpret me here.

I am NOT suggesting you shouldn’t strive to make your clients happy and provide them with the best possible programming. However, I am saying the non-profit sector needs to take a page out of FedEx’s book and figure out how to invest in its people. It will make a huge difference in so many different ways!

Putting your employees first IS putting your customers first because your employees will put the customer first especially if your organizational values drive them to do so.

If you have some time this morning, I also encourage you to jump in the “way back machine” and check out that six part blog series about donor loyalty as it relates to some of Reichheld’s loyalty principles:

Want to change? Where to start?

If this post has you thinking about creating a different company culture, you may want to check out a post by Inc.com titled “How to Create a Company Philosophy“. It is definitely worth the click! 😉

Did you click-through and read John’s 10 bullet points? If so, how well did your agency do? What are you doing to invest in your employees? Is your organization avoiding the starvation cycle? If so, how are you making the case for investments in capacity building? Have you ever correlated your employee turnover to client turnover to donor turnover? If so, what have you found? Please scroll down and share your thought and experiences in the comment box below.

Here’s to your health!

Non-profit budget season: The old Texas Two Step

September 19, 2013 erik Board governance, Fundraising

The other day I received an email from an old friend asking me to share my thoughts about the “right way” for a non-profit organization and its board to construct a budget. Do you start with revenue projections and develop the agency’s fundraising plan first? This way everyone knows what the expense budget can’t exceed. Or do you start with the expenses and try to build a revenue budget that supports the organization’s mission, vision and programming?

My first thought when I got this message was: “OMG! It is budget season for many non-profit agencies. Ugh . . . it is almost October. Where did winter, spring and summer go?”

My second thought was actually more of a chuckle because I’ve always thought of budget season as a bizarre dance between board and staff that resembles something like the Texas Two Step as demonstrated in this YouTube video.

[youtube=http://www.youtube.com/watch?v=D_H1x2MpeEk]

For the record, I don’t think there is a right and wrong way to undertake budget construction. There are obviously very smart people who reside in both camps — revenue first vs. expenses first. When I was an executive director, I tried to do the uncomfortable thing and sit on the fence. Ouch!

budget The following is a thumbnail sketch of what my process looked like:

I put the budget process in writing with a narrative description and timeline, then built consensus around the importance of following process and adhering to deadlines.
I simultaneously started working with the finance committee and the resource development committee.
The finance committee and I worked with program staff, and everyone collaborated around constructing reasonable expense budgets with mission, vision and quality programming in mind.
The resource development committee and I worked on developing a detailed resource development plan chock full of reasonable revenue projections, range of gifts charts, goals, strategies, volunteer prospect lists, grant prospects, annual campaign prospects, special event prospects, fundraising calendar, and action plans.
Sometime in October or November the two committees met jointly. They shared and compared their work. The FUN was just beginning because there was always a gap on the bottom line.
Consensus was built and both committees went back to work. The finance committee was usually tasked with finding cuts that wouldn’t hurt the agency’s mission or damage its organizational capacity. The resource development committee went back to the drawing board to find reasonable revenue enhancements.
Both committee were tasked with reporting their progress back to the board every month throughout the process. The hard part was staging those board meetings in a manner where generative discussions would happen and result in: 1) board volunteers who didn’t sit on those committees an getting and opportunity to weigh-in and 2) both committees getting an opportunity to engage the larger board in decision-making focused on strategies and tactics (esp. those related to revenue generation).

When the committees converge in the process, the age-old Texas Two Step issue would always float to the top. Do we close the gap with budget cuts or revenue enhancements?

My philosophy was always “revenue first” because I felt like the mission of the organization called upon us to make that attempt first. However, this doesn’t entail just changing projections and modifying our best guesses. It involved adding more prospects, tweaking strategies, and adding revenue streams.

Some years I won this argument. In many other years, I lost this argument, and the finance committee would produce their hatchet. (I am embarrassed to admit that one year I lost the ability to send donors a newsletter thanks to that hatchet. I should’ve fought harder because donors need to see what their investment is doing.)

Ahhhhh . . . You gotta love the old Texas Two Step. 🙂

As I sat on my couch and texted back-n-forth with this old friend, my mind wandered (as it tends to do) and I had a third thought:

If you like sausage, you don’t want to know how it is made!

making sausage I am not suggesting that my process is the right way to put a non-profit budget together. However, I do believe strongly in the following few budget construction principles:

Budgeting is a collaborative activity between board and staff. (Avoid a situation where staff puts it together and the board either behaves like the two Muppets who sit in the balcony or simply just rubber stamps it.)
Projection of numbers (esp. revenue) isn’t a dart throwing activity. It is rooted in historic data, trends, actual prospect names, and strategies. Don’t ever use “plug numbers“.
There is a process with an explicit timeline. It is written out. It is created collaboratively and agreed to by all parties.

Enough of my waxing poetic about how your non-profit should tackling budget season. Here are a few online resources and documents that I found:

Nonprofit Accounting Basic$: “The Budget Process“
Larsen Allen LLP Effect Magazine: “Nonprofits: Improve Your Budget Process“
Clifton Gunderson LLP Count on Insight: “Best Practices for Nonprofit Budgeting and Cash Forecasting“

Is your organization in the middle of its annual budget construction process? What works for you? What doesn’t work? What do you plan on doing differently next year?

Please use the comment box below to share your thoughts and experiences.

Here’s to your health!