Nonprofit Information

Tips To Having a Successful Nonprofit.

Pain Points for Nonprofits and How to Handle Them

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Nonprofit ResourcesMany small businesses and organizations face various types of challenges. Some of these challenges are broadly encountered, and some are industry specific. In this article, I will address challenges specifically related to nonprofits. These challenges are:

  • Retaining and engaging donors
  • Implementing IT infrastructure
  • Marketing
  • Attracting volunteers
  • Creating brand awareness
  • Fundraising
  • Recruiting board members
  • Budgeting

I will briefly discuss each of these challenges and their solutions.

Retaining and Engaging Donors

We all know that donors are the backbone of nonprofits. Without donors, a nonprofit will not survive. You should strive to make donors feel welcome, keep them engaged and make them feel that they are an important part of the organization. All these efforts will lead to future donations and support.

There are numerous ways to retain donors. They should be allowed to contribute through fun and unique ways. For example, you could arrange a charity sports tournament. This way, donors and players will be engaged in an activity while raising money for the nonprofit. It is a win-win situation for everybody involved. Here are some more examples:

  • 5K Run/Walk
  • 50/50 Raffle
  • Auctions
  • Bake Sale
  • Bingo Game
  • Charity Calendar
  • Charity fashion show
  • Gala events

Keep the donors engaged by communicating with them via an e-mail newsletter. Notify them about completed and upcoming projects and programs. Show them gratitude by thanking them for their donations. Offer a monthly donation option to improve the chances for retaining donors for a longer time.

Implementing IT Infrastructure

Today, a digital presence for nonprofits is not an option. It is a must! But implementing and maintaining an IT infrastructure comes with a high price tag. You need staff and money to implement these things. Under ideal circumstances, a professional IT services company should be hired for this task. They will assess your IT needs, create a road map for implementing the strategies and maintain the newly created IT dept.

But we do not live in an ideal world. Nonprofits are usually short on funds. Due to this, they put their IT needs on the backburner. But there are some resources available to nonprofits which will provide you with free or discounted hardware and services. These resources are:

Marketing

The purpose of nonprofit marketing is to win support for their causes and to attract members and donors. This presents its own unique challenges. Here I will explain some issues related to nonprofit marketing.

Overcoming a Tight Budget

Tight budgets are a major issue for all nonprofits, but especially for small and local nonprofits. No organization can grow without marketing, but one with limited funds also cannot afford to get all the tools and manpower necessary to create this growth. To overcome this issue, you can market via e-mail to reach potential donors and to keep current donors informed about new developments at the nonprofit.

Focusing on a Target Audience

Another issue is understanding your target audience. It is very important to figure out what type of audience you are trying to attract. Keeping that in mind, make sure that your marketing campaign has a platform and language that best speaks to that audience.

Leveraging Social Media

Social media is everywhere! We cannot avoid it in the 21st century. Platforms like Facebook, Instagram and Twitter can be used to advertise your message and stay in touch with donors and attract new members. Potential donors who are interested in donating for a niche nonprofit will likely check out your nonprofit on social media. If these donors notice that the last update was many years back, they may assume that the organization is no longer in existence. Nonprofits need to stay active on social media and post relevant material in their niche. These platforms are also a wonderful resource for crowdfunding campaigns. Use some marketing templates to create ads and post them on social media. If your nonprofit is local, make sure your ads are targeting the right location.

Millennials are known for their online presence. They use social media platforms for almost every aspect of their lives. If you want to attract younger donors, a crowdfunding campaign is the way to go.

Google Ad Grants is another source of funds specifically for advertising. Nonprofits need to qualify for getting Google Ad Grants. Check out google.com/grants for further details.

Attracting Volunteers

Volunteers are crucial members of any nonprofit. Some nonprofits may have a couple of employees, but others totally depend upon volunteers. If your nonprofit is run entirely by volunteers, there may be inconsistencies due to a high turnover rate and problems related to marketing campaigns. However, if you can manage to hire even a part time employee/consultant, you should do it.

If hiring marketing help is not feasible due to a tight budget, you still have options. Schedule regular meetings with volunteers, keep them informed about the latest projects, and show them your gratitude. Additionally, SCORE is another source for volunteer help. It is a volunteer network of business experts sponsored by the Small Business Administration. They can guide your organization in creating a marketing strategy.

Creating Brand Awareness

Branding is the practice of establishing an organization’s image and reputation. Common examples of well-established brands in the nonprofit industry are the American Cancer Society, the Red Cross, Habitat for Humanity, and the Make-a-Wish Foundation of America. Most people think that the word ‘branding’ is reserved for large for-profit corporations and enterprises. However, branding is as important for nonprofit organizations as it is important for big and small businesses. This cannot be emphasized enough. The benefits of branding are making an organization stand out, increasing trust and loyalty among supporters and donors, and growing awareness for easier fundraising. All these factors lead to growth of the organization.

Before you start building your nonprofit’s brand, review your mission and vision statements and ask for feedback from the Board, volunteers, and donors. Focus on the target audience. Keeping their interests and motivations in mind should increase the conversion rate to donors and supporters. Keep brand elements consistent, such as your logo on the web, flyers, e-mails, brochures, etc. Community outreach will solidify your brand and help win the support of donors and the community. And last but not least, your branding should be able to touch the heart of your audience. If your audience can relate to your cause and mission, then it is very likely that they will become your donors and supporters.

Fundraising

No matter whether you run a well-known nonprofit or a local charity, fundraising will be one of your organization’s biggest challenges. We all know that fundraising is regulated by state laws. Make sure that your nonprofit has all the tax documents which should be made available to the public. Consult your tax accountant in case you need help with this. Fundraising can be challenging and lots of mistakes may happen in the process. There are lots of different approaches nonprofits use to increase fundraising. Here are some of those ways.

Encouraging Recurring Donations

Encourage your donors to give a recurring donation every month, regardless of the amount. With this approach, you can improve online fundraising performance, increase monthly revenue predictability, and retain donors for a longer period.

Utilizing Mobile Fundraising Methods

Mobile fundraising is a way to raise funds using mobile devices. Overall, nonprofits have been increasing their mobile fundraising efforts every year. This is generally achieved through methods including QR code promotion, text-to-give technology, and websites using a ‘Donate’ button. QR code stands for Quick Response code. It is a square, encoded image meant to be scanned by mobile devices to access a web link. It is very easy to create a QR code by using a website such as qr-code-generator.com. Text-to-give technology is also a common tool to raise funds for nonprofits. On your website you can also install a ‘Donate’ button to make it easier for the donors to give money. There are quite a few popular web apps and platforms which can be used for mobile fundraising, such as givelify.com and givelively.org.

Creating Powerful Imagery

Humans are visual beings. Most people like to look at things before they decide to buy them. To take advantage of this, create powerful and compelling images related to your brand. These images will also get attention from the donors and evoke emotions. When people connect on an emotional level with a certain cause and mission, they are more likely to donate.

Maintaining Data Security

Data security is paramount as it not only maintains the safety and privacy of your donors’ data, but also your reputation as an organization. Make sure your web site and all other online platforms for donations are secure. Consult your IT department to implement all the necessary steps to make the platform secure. Additionally, most donors do not like to fill long forms and give out private information. Create a simple donation form which requires the least amount of information from a donor.

Appreciating Donors

It is a very nice gesture on behalf of a nonprofit to give something in return to the donor. Some examples include:

  • Tote bag
  • Wall calendar
  • Binoculars
  • Camera case
  • Water bottle

Giving merchandise to donors in return for their donation can not only further encourage them to donate in the first place, but also serve as an extra opportunity to promote your branding via a logo.

Maintaining Donor Engagement

Finally, create a way for donors to keep in touch. When donors give money for a certain cause, chances are they will come again some time to donate money. Suggest they opt-in to receive e-mail updates about your organization and future fundraising efforts.

Recruiting Board Members

Another factor for the success of an organization is having and retaining effective board members. Finding, vetting, and recruiting the ‘right’ board members is a challenging task, but it must be taken very seriously. Here are some tips which can be used by nonprofits for cultivating the right board members.

Choosing Board Member Qualities

You first need to figure out what type of board members are needed to advance your nonprofit’s mission. Do you need a board member with community connections or financial expertise or human resources management experience or simply prior nonprofit experience? Additionally, consider whether you want to require potential board candidates to work as volunteers for some time before taking the position. Some nonprofits take this approach so that both parties can decide whether they are a good fit for each other.

Appointing a Nominating Committee

Lots of nonprofits use a ‘nominating committee’ to recruit board members. This nominating committee should have devoted members who are focused on the organization’s mission and good governance. Its members should put some serious efforts in recruiting potential board members, working closely with the executive director in pursuit of this goal.

Setting Expectations for Future Board Members

Make sure you are up front with nominees regarding their future responsibilities, especially as they relate to fundraising. No one is happy if these types of expectations are not revealed before these board members join the organization.

Considering External Search Resources

Some nonprofits have started realizing that they need to use a search firm to recruit the right board members. Ask for recommendations for finding good search firms that focus on nonprofits. Generate a list of questions to ask the search firm about their background and experience in recruiting board members. Interview several of these firms before you select the right one. You can also use job boards for recruiting board members. BoardNetUSA.org helps nonprofits and board member prospects find each other.

Prioritizing Diversity

Board composition reflects organizational values. It should also reflect the community you are serving. Having a diversified board both brings multiple perspectives to a cause and helps attract a wider swath of donors. Board members should be required to attend training on race and diversity issues.

Budgeting

A budget is a guide containing an estimate of income and expenses for a given period in the future. It is usually the budget committee’s responsibility to propose a budget and the board members’ responsibility to review that budget and provide feedback. The approved budget should be used as a guide for all the financial activities throughout the year. But budgeting also comes with its own challenges. Here are some of those challenges and how to manage them.

Managing Unstable Funding

Nonprofits may face instability in their revenue cycle. This instability may result from donors falling through on donations or foundations withholding grants. These types of challenges can occur at any time. To avoid these issues, your organization should always be looking for new funding opportunities. The best practice is to review the budget periodically as well as compare it to the actual cash flow and expenses. Sometimes it may be necessary to amend the budget during the year.

Diagnosing a Budget Deficit

There can be several reasons that a nonprofit may have a budget deficit. It may be related to income reporting requirements by Generally Accepted Accounting Principles (GAAP). According to GAAP rules, you may need to report a grant one year but receive the money next year. Another reason for a budget deficit can be due to a shortage of funds to pay bills. This type of deficit can be managed by adjusting payment terms with creditors and increasing additional fundraising efforts. Structural deficit is another possible type of deficit and can occur due to a long-term shortage of funds and decay of facilities. This type of deficit can indicate larger financial issues and requires serious assessment of the organization’s financial health.

Planning Finances

Many nonprofits do not have staff who have proper knowledge about budgeting tasks and thus cannot put together a proper budget. This issue can be managed by implementing a budgeting tool such as planning software. Budgeting software automates the coordination of an organization’s financial resources and expenditures.

All these challenges for nonprofit organizations are not a comprehensive list. Countless complications exist in all business organizations and sometimes they can change without warning. But the main conclusion is to remain flexible and mission-focused to see your nonprofit grow.

How to Keep Your Board Members Engaged All Year

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Nonprofit Board HelpThere are volumes written on staying engaged with your professional work, how to motivate employees, and communication in the workplace. That’s great for businesses, but how do nonprofits keep volunteer board members engaged in their work? Busy professionals who are donating their time to a cause want to do well in their board service, but they may need a little help. Here are some ways to keep them excited, involved, and effective with nonprofit board work all year round, even if they are remote or only meet quarterly.

Make It Personal

Humans are hard-wired to pay more attention to human faces than any amount of text or audio presented in a meeting. If many of your board members are remote or rarely meet in person, it is crucial to maintain that human element in your communication and meetings.There are a number of ways you can do this. Provide a people directory with everyone’s photo to help new members feel familiar with the other board members. If you have remote meetings, ask everyone to use their video cameras during the meeting. You might be surprised at how much this simple measure does to personalize the experience.

Create even more rapport by developing a buddy or board mentor system. Sometimes just the accountability of knowing even one person will be working with you on specific goals or looking for your attendance at the meeting is enough to get that extra effort from a board member. Additionally, it is a great opportunity for members to learn from each other and discuss how they can advance initiatives. This works especially well at knitting a geographically far-flung board closer together.

Communicate, Communicate, Communicate

Have you ever heard the advertising adage that a person needs seven impressions of your brand before it “sticks” in their mind? Obviously, you don’t want to bother your board members seven times about every initiative, but it is hard to underestimate the value of multiple nudges. Some board members will favor email while others may prefer to keep tabs on goals with your board portal. Regardless of the medium, don’t be shy about sending a variety of updates, reminders, and nudges for key deadlines. The first reminder might catch a board member at a busy time, but the second could allow them to take action on the goal.

It isn’t enough to just communicate regularly, however. It is also helpful to make the communication as specific as possible. Many people will ignore an email to the whole board, but it is much harder to sleep on an email that starts out with their name and has information specific to something that board member is working on at that time. Be sure to keep it balanced between reminders or asks and recognition or celebration. If every time you contact your board members it is to nag them about some initiative, they will quickly learn to dread (and eventually ignore) your communication. Everyone appreciates someone noticing their hard work and small successes. Get to know your board members well enough to know if they’d appreciate a public shout-out or prefer a personal note.

Progress Should Be Visible

Similar to our propensity to react to human faces, people love visually scannable information when possible. There are two big advantages to this. First of all, with publicly visible graphs or charts, it is simple for your busy board members to glance at the dashboard and see how things are trending. You could send a three page report that no one has time to read, or you could provide three visuals that get eyes on them every time.

Second of all, visuals have a wonderful way of “gamefying” board service.Is it halfway to your big event and only a fraction of the tables are sponsored? Time to kick it into high gear. Are you just dollars away from reaching the campaign goal? Every board member wants to be the one that closes the gap. Celebrate progress and ask for help as transparently as possible with a real-time, visual representation of your goals.

Keep It About the Mission

We all know about creating “mission moments” in a meeting to keep board members in touch with the effects of their work. You can take this a step further to increase the connection. Have board members take turns every month reporting on a specific chapter or organization and some interesting results they’ve had in the recent past. Board members also feel more connected to something that they can articulate themselves. Research activities you can do with your board, such as practicing elevator pitches of why they’re invested in the organization, brainstorming sessions on the vision of the nonprofit, or interviewing each other about how they came to the organization and summarizing it in a sentence or two for the board. Not only do activities like these get board members thinking about why they volunteer their time for board service, it also offers great discussion material during meetings about the direction of the organization.

Connection Is Crucial

It can be a huge challenge to keep a group of perhaps spread out, busy, volunteer board members thinking about their board service between meetings. It’s not impossible, though. With some effort around building rapport, making information easily digestible, and motivating for progress, your board can stay a productivity machine all year long.

 

About Boardable:

Boardable is an online board management portal that centralizes communication, document storage, meeting planning, and everything else that goes into running a board of directors.

 

 

A Primer for Nonprofit Investment Committees: Active vs Passive Management

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Nonprofits should consider their objectives, time horizons, tax sensitivities, and aversion to tracking error before choosing one over the other.

Nonprofit InvestmentsThe active versus passive investment management discussion has intensified as of late due to active management’s recent inability to outpace their passive benchmarks. Some may have a knee-jerk inclination to fire an underperforming manager, but the data show that investors are better off staying the course.

A 2012 study by Towers Watson that simulated 10,000 different scenarios found that over a three-year period, institutions that fired underperforming managers ultimately underperformed institutions that stayed committed to their managers.

Managers with high active share will look especially different from their benchmarks. The more a manager varies from its benchmark, the higher the likelihood of extended periods of under- and out-performance. Performance itself should never be the sole determinant for firing a manager. Instead, investors must understand why performance is suffering and determine if it is likely to persist. This paper explores the reasons why active managers suffer bouts of underperformance and seeks to educate investors on the appropriateness of active and passive investments in their portfolios.

What is Active and Passive Management?

Passive investment strategies are rules based and typically track indexes like the S&P 500. Active managers are investment experts who build portfolios “Markets are not perfectly efficient, and they probably never will be, but that in itself isn’t a stamp of approval for active management. Managers must be able to capitalize on these inefficiencies and deliver results that consistently are above benchmark.” consisting of the most attractive investments in a universe, according to their own processes (irrespective of the benchmark).

Passive management has proven to be a viable strategy and has recently gained market share versus active management. It stresses low costs, tax efficiency, and the concept of market efficiency. Passive management gives investors cheap exposure to the market without the potential for above-market returns; after accounting for fees, it almost guarantees below-market returns. Active management, on the other hand, has the potential to generate both above-market and below-market returns.

Market Efficiency

The Efficient Market Hypothesis (EMH), in its strong form, says that markets are efficient, security prices reflect their fair value, and active management can’t generate excess returns. There is a degree of truth to the EMH, but it varies by asset class. On average, less efficient categories have the best chance of outperforming their respective benchmarks on a consistent basis. These categories tend to be non-U.S. or niche, which are less researched by U.S. investors.

The categories that have the most difficulty outperforming on a consistent basis tend to be more cyclical in nature. This is because it is more difficult for managers to forecast future earnings or prices in more cyclical markets.
When using active managers, Canterbury generally recommends using managers with excess (gross-of-fees) return expectations that are at least double their fees. This will give investors a cushion if a manager does not perform in line with expectations or is out of favor for an extended period of time.

Markets are not perfectly efficient, and they probably never will be, but that in itself isn’t a stamp of approval for active management. Managers must be able to capitalize on these inefficiencies and deliver results that consistently are above benchmark. We expect active managers in some asset classes to be able to do this; however, they aren’t going to do it over every time period. Excess returns tend to occur in cycles, and investors should expect sustained periods of underperformance and outperformance. We will take a look at a few of the market conditions that cause these cycles in relative underperformance, to help manage investor expectations:

  1. Bull Markets: Active managers are generally more conservative and take less market risk. Active manager betas, on average, are less than 1.0 (in bull, bear, and full market cycles), and their upside and downside captures are less than 100%. Less market sensitivity will mathematically equate to underperformance in up markets and outperformance in down markets, which has been the case. Conversely, if you risk adjust these returns (solve for alpha), active managers will outperform in bull markets and underperform in bear markets.
  2. Irrational Exuberance: Active managers tend to do much better when markets are rational. In rational markets, fundamentals matter and security prices move toward their fair value. In irrationally exuberant markets, we see security prices move independently of fundamentals toward bubble levels (think tech in the late ‘90s). The majority of active managers believe their processes allow them to uncover mispriced securities, but this process does not work during periods of irrational exuberance, when mispriced securities become more mispriced.
  3. Interest Rates and Central Bank Easing: Active managers are expected to struggle in ultra-low interest rate environments where access to capital is easy. It allows companies that are struggling financially to cheaply refinance their debt well out into the future, which in turn increases their solvency and stock price without regard for business fundamentals. Active managers who have a quality bias typically avoid these types of companies. Most experts feel that as interest rates rise, fundamentals should matter more, as dispersion between good and bad companies increases.

Investors should not attempt to time the market when it comes to choosing active versus passive investing. Cycles are hard to predict and can last longer or shorter than anyone anticipates. It is our recommendation that investors commit long term to whatever investment strategy they choose, whether that be active, passive, or a diversified combination of both.

Median Managers

Sometimes too much emphasis is placed on the average. Just because you average a speed of 65 MPH when driving on the freeway, doesn’t mean you would expect to drive 65 MPH on the Freeway during rush hour. Different scenarios drive (no pun intended) different expectations. As a firm, we attempt to understand our strategies in such depth that their performance relative to our expectations is more important than their performance relative to a benchmark in the short term. Furthermore, we allocate a lot of resources to our manager due-diligence process, to identify investment managers that we expect to perform above median. We understand it’s impossible for them to be in the top quartile every month, quarter, or year, but we strive to find those managers that will be there over full market cycles.

Our due-diligence process is both quantitative and qualitative. We will screen on factors that have had predictive power in choosing exceptional managers such as manager tenure, expenses, volatility, downside capture, and alpha over previous cycles. Even more important than these quantitative factors are the people, philosophies, and processes our managers employ. If an active manager does not have a value proposition — a competitive advantage or edge versus its benchmark and peers — we will not consider them as an investment for our clients.

Investment Horizon

An investor’s time horizon plays an integral role in the decision to invest passively or actively. The data suggest that active managers have a higher probability of success over longer time periods. The frequency in which the median large core manager outperforms the S&P 500 increases from 62% to 79% when extending the holding period from one year to five years. Canterbury would advise investors with a holding period of a year or less to utilize passive management a as a quick and effective way to get market exposure.

Management Fees

Passive management generally offers lower fees relative to active management. For example, Vanguard offers an S&P 500 ETF and mutual fund, each with an expense ratio of four basis points. Separately managed accounts for similar strategies can be had for less than 15 bps. This is in stark contrast to some actively managed large cap mutual funds that have expense ratios closer to one percent
Passive strategies that track the same index have similar objectives, so investors should generally invest in the one with the lowest fees (all else being equal). Fees for active management can vary widely, as can the quality of the managers. This makes it more difficult to choose the appropriate manager, but fees should play a role in that decision.

Tax Sensitivity

If taxes are a concern, passive investment strategies will generally incur less of a tax burden than active strategies, and in certain cases (a separate account optimized for tax-loss harvesting), can generate tax assets (sometimes referred to as tax alpha). Most passive strategies will replicate market-cap weighted indexes that take a mostly buy-and-hold approach, thereby generating very little in the way of capital gains. Active managers attempt to add value through buying and selling securities to lock in gains and mitigate risk, which creates turnover. The higher an active manager’s turnover, the more likely they are to generate capital gains (especially in upward-trending markets) and be less tax efficient.

Conclusion

Active and passive management strategies serve different roles in investor portfolios, and neither is better than the other. Active management, with proper due diligence, has the ability to produce above-market returns. Passive management creates a level of consistency that allows investors to invest in products that more easily meet their expectations.

About Canterbury Consulting
Canterbury Consulting is an independent investment advisory firm based in Newport Beach, CA, overseeing $22.8 billion in assets as of June 30, 2019. Canterbury provides consulting services to tax-exempt organizations, including community foundations, educational endowments, religious organizations, arts and cultural foundations and health care organizations, as well as individuals and family offices. Founded in 1988, the firm designs and manages custom investment programs aligned with each client’s goals. Canterbury acts as the investment office for its diverse clients and provides objective investment advice, asset allocation, manager selection, risk management, implementation, and performance measurement. Canterbury Consulting strives to deliver performance and service that exceeds the needs and expectations of its clients. Learn more about Canterbury at www.canterburyconsulting.com`

There’s Really Plenty To Do – How Nonprofits Can Be Productive During Social Isolation

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Nonprofit Task ListThe first week of wide-spread social distancing in the United States is wrapping up. By now, you are probably moving past crisis-mode and finding a routine. Your carefully crafted COVID-19 email and posts have been sent. Your employees and co-workers are finding a new rhythm working from home.

A new problem surfaces… Some of us are slammed with work trying to fulfill our obligations from home while others of us simply won’t have much to do until the country, and the world, get back to work.

Here are some ideas to help my fellow nonprofit fundraisers stay productive over the next week or longer:

Collect stories from your clients

There may never be a better time to collect long, beautiful impact stories from the people you serve. If you are like me, there never seems to be enough time for this. Work with your Development and Communication to pull a call list of clients who might have a potential story to tell. Divide up the list and get on the phone. Hearing your clients’ gratitude will be good for you right now while you are stuck at home. You’ll also generate hours of content to share with donors.

Thank you calls

Challenge your staff, your board, or yourself to call or write a personal message to every donor who gave in the last 18 months. Take time to get their feedback on your mission and programs and hear their giving story. We all prioritize our call sheet. Maybe now is the time to learn something from that infrequent or low-level donor. Collect some quotes to share on your website and social media that will inspire other donors. If your staff divides up the calls, make sure you have a good template to record the feedback and system to record the contact in your CRM. Double-check mailing addresses with donors while you are at it!

Write a long read

I’m all about the snappy tweet, the Instagram post with the clever one-liner, and keeping key email messages above the scroll. But… the whole country has time on its hands. Maybe its time to share the full story and go beyond the elevator speech. Try a serial email message for the next few weeks that shares a more complex impact story. Do some mission-oriented interviews with support staff from each department and share why they love working for the organization your donors support. Share the history of your organization in fun anecdotes and testimonials. Call it a hunch, but I bet we will see higher view/open rates for long reads.

Edit and update your website

Let’s face it: websites collect junk information like a bad thrift store. Set aside an afternoon to update and reduce your website’s content. Refresh those pictures, rewrite the copy, check all the links. Think through the navigation from a donor or client’s perspective. Review your forms for relevancy and accuracy. Visit a peer organization’s website and jot down three things you like about it.

Complete your social media calendar for the year

Let’s assume you don’t have a dedicated staff person for social media. Take time to plan your social media content for the rest of the year. Mary Martin offers simple advice on how to do this in Episode 2 of the Fullstack Educator Podcast. A well-planned social media presence should not be stressful.

Clean your data and refresh your acknowledgment templates

No database is perfect. Chances are your database is functional but not completely uniform. These next couple of weeks might be a great time to refine relationship connections, polish up salutations, unify titles, and so forth. Flesh out the blank fields in your primary prospects by adding relationships, website URLs, LinkedIn profiles, and work history. Cross-reference LinkedIn profiles and flag down some corporate match opportunities.

Refresh your acknowledgments and receipts

While you are at it, refresh your acknowledgments and receipts with new photos and new copy. Ask yourself if your receipt makes the donor feel like a hero. What in the thank you note encourages the donor to make their next gift? Does your receipt include information about planned giving? Are your hard-copy receipts in-sync with your automated email and text message receipts?

Personnel Reviews

We all avoid these, but your staff could probably use a morale boost right now. Now might be a great time to do annual reviews, especially if your feedback is encouraging. You may also be struggling to keep your staff on task. An impending performance evaluation could provide a healthy incentive to keep productivity up.

There’s really plenty to do. Be kind, but don’t let yourself or your staff slack off. Every good leader knows that employees look to them to know how to respond in difficult situations. These are emotional times. Be consistent. Be steady. Show your employees that their hard work is still needed. Show your donors that you are faithful. Show your clients that you aren’t crumbling in the face of adversity. Keep up the good works.

 

How to Get on a Nonprofit Board

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How to Get on a Nonprofit BoardSo you want to join a nonprofit board. Whoa, back up, really? That’s terrific, but can we explore the why before we get to the how? Hopefully you are driven to seek a seat at the table in order to take personal action using your experiences, skills and connections to solve a problem or address a challenge in your community or anywhere else on the planet. Think hunger, homelessness, poverty, a particular health crisis, uneven educational opportunities, unsafe relationships, aftermath of wars, as a start. Let’s begin with the assumption that you are joining others driven by the same degree of passion. If they aren’t . . . that is a topic for another day. You are going to develop an intimate knowledge of how your fellow board members analyze opportunities, how they communicate, what talents they bring to the table, and how you might learn from them, and utilize their connections to expand your own network. These are good things, and you will be bringing your own value adds to share.

Do you know what it means to be a board member for a public charity? Do you understand the fiduciary, fundraising, volunteering and advocacy responsibilities that are expected by law and by the public? Not all boards introduce and onboard with the same degree of clarity, so you need to know what kind of a board and what kind of participant you want to be. There are online resources to learn more and help you answer these questions, and in some communities you will find organizations that offer related workshops for preparing to become a nonprofit board member.

When you join a nonprofit board, you will have motivating ideas of how you can support the organization and even what you might gain by doing so. You may rightfully anticipate the connections you can make to further your ability to put your passions to work with a team of like-minded individuals. Board service can expand your business and community networks, as you learn from others with a variety of experiences that have shaped their attitudes and paths. You may see board participation as a chance to stretch your leadership style in ways that everyday life and work experiences don’t readily offer. You may be hoping for a place to leave legacy footprints, making a purposeful difference where it matters most to you. The right board match can help you achieve these goals.

On some corporate boards members can be compensated for their participation. “Compensation” looks very different and special for nonprofit board members. As a nonprofit board member you are expected to make a financial contribution, beg your friends to donate as well, spend hours (mostly evenings) in meetings, buy tickets and tables to events, and operate often without an exit strategy of when to step away from this “privilege.” If you are not deterred, then thank you! Nonprofit board service can be the most intense, important and satisfying volunteer commitment you can undertake. And quite honestly, there are many, many benefits you should enjoy as a result.

Don’t shy away from the win-win of board service. If you are going to spend that much time, energy and philanthropic dollars, you better get something in return. It can be a warm feeling in your heart, a warm lead to a new customer, or the satisfaction that you actually took action to solve a thorny problem. Go for it.

Now as for how to join a board, please keep in mind that there are a variety of nonprofits just as there are a variety of for-profit businesses. How you proceed to join a “Fortune 500” nonprofit board will be different than the path to joining one that is a startup. The bigger the budget of an organization, the broader its geographic reach, the more “prestigious” the current board, the more likely it is that you will need to be willing to write a big personal check or deliver a sizable donation from your company on a regular basis. You may already be a significant donor. You may already have a large reputation for direct involvement in the organization’s mission or in a related area.  The closer to a Fortune 500 type nonprofit, the more likely it is that you will be head-hunted for the board because nonprofits of this size and scope understand that many others are fishing in the same pond for potential additions. They have determined that it is worth the investment to professionally search for key thought leaders and those who could add cache in some way. If you want to be considered for one of these boards, you likely already know how to go about it.

The path to joining any nonprofit board, but certainly one of a small to mid-sized or startup organization, must start with passion. Ask yourself, “What do I care about; what keeps me up at night?” and then look for organizations working on solutions. If your passion is solving a problem that is halfway around the world, you are honestly less likely to find a board opportunity in your backyard, but you can certainly find ways to donate money or volunteer your time. For example, Google “solving water pollution.” You will find organizations that tell you how to donate, volunteer and advocate to this end. This may never lead to a board position, but you might find your engagement to be equally satisfying.

The closer your interests are to local problem solving, the better the chances of eventual board service.  You want to get to know an organization from the inside as early as possible to confirm that this is a place where you want to invest your time and resources more deeply. Maybe you already have your eye on a local nonprofit. Explore their website and see who is on the board and who is in leadership on staff. You may already have connections so that you can learn more about how the board operates and what the expectations of a member. In the meantime, note any volunteer opportunities posted on the website or reach out to see if there are ways that your skills (marketing, HR, accounting, legal, etc.) could be utilized on a committee or special project. See if there is an event where you could participate in its planning or execution. Ask if there is a need for advocates to speak out or write on behalf of the organization. All these activities will give you a chance to get to know the organization and, equally important, give the board and staff a chance to know you and what you can bring to the table.

If you have the interest but don’t have connections or don’t know where to begin, don’t despair. Read local media with an eye to organizational leadership commenting on issues you care about. Use LinkedIn, Facebook, Instagram and Twitter to see which organizations and people are engaged. See if there is a volunteer connector organization or local affiliate of Points of Light in your area and explore volunteer opportunities. Ask local thought leaders in government, civic organizations, business networking groups, and faith-based institutions for names of nonprofits doing good work and introductions to learn more.

After spending thoughtful time, if you are still interested in joining the organization’s board, let it be known. Usually a conversation with the Executive Director, Board Chair, Governance Committee Chair or a key program officer will get the ball rolling, but it doesn’t guarantee an instant or eventual place at the table. The best boards aren’t just looking for warm bodies with deep pockets, to be crass. The best ones are looking for new additions who are passionate about the mission; can fill particular skills and knowledge gaps around the table; bring diversity of opinions, backgrounds and experiences; understand what their role will be; recognize they will be expected to make financial contributions and introductions to others; anticipate that there will be personal and professional fulfillment; and are ready to roll up their sleeves and make a difference.

Not every date leads to a permanent lasting relationship, but good things will always come from getting to know key nonprofits and the boards that lead them. Enjoy the search for a great board to join. It’s out there, and the benefits are going to be as personally rewarding for you as they will be to the nonprofit.

Employee Retention in Small Nonprofits

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Nonprofit Employee RetentionNonprofits are natural inlets for individuals passionate to serve and make a difference. That is not to say that for-profit organizations do not possess individuals who are passionate about making a difference in the world, but nonprofits at their core are a social construct meant to change policy, culture, or positively impact some entity in order to leave things better then how they were. Unfortunately, many small nonprofits struggle to retain employees. There are some natural barriers toward employee retention for nonprofits. Obviously pay can be discouraging and there is not a lot that can be done to change that for many small nonprofits. So, what can be done? What options do small nonprofits have? There are arguably three things that every small nonprofit can implement to improve employee retention.

1.) Human Resource Strategy:

The smaller the organization the more human resource strategy seems like a given. It’s an easy temptation to think that human resource strategy is simply a part of the whole business strategy. This is because many nonprofits offer services and human resources are central to the overall strategy of the organization. However, forming a human resource strategy will guide nonprofits in how they utilize the employees they have and thereby further the overall mission while curtailing employee turnover. Having a human resource strategy means having a set plan for how each human element in an organization will be used to further the vision. Such a strategy will allow an organization to comprehensively develop policies to utilize the primary areas of human resources such as compensation, training, and recruiting to avoid being lazy with resources. Some helpful components that could be part of any small nonprofit human resource strategy are:

  • Make a strong effort to boost financial compensation to give fair wage for the work being done by cutting out nonessential budget items or redistributing compensation among employees.
  • Having a fair maternity leave policy that doesn’t burn through an employee’s paid time off or vacation.
  • Add tuition reimbursement to benefits package with restrictions geared towards employee retention such as access to reimbursement after at least one year of employment.
  • Raise tuition reimbursement but require employees to stay on for a contracted amount of time in order to get the amount.
  • Explore or implement the option for employees to cash out paid time off, especially in organizations where there are caps or other restrictions on paid time off. This is a simple way that employees can be compensated if they don’t need all their time off or they could use extra pay instead.
  • Adopt a training policy that is beneficial to the organization and employee by giving the option to have the training budget be used for tuition reimbursement for continuing education.
  • Allow employees who are students in college programs relevant to the organization’s needs to count class hours towards required training hours.
  • Refine job requirements for all positions and strictly stick to them in the recruiting process. If employee turnover is high; it can be tempting to hire anyone willing to work. However, taking the time to find the right match to the exact job description will have more long-term benefits than hiring out of desperation.
  • Make the interview process match the position. If the job requires the person to work with a team; then have them be involved in a group interview with that team. If the position is very unique or more hands on; then have a shadowing session where the interviewee can see what exactly they are potentially getting into. This will help refine the search for trustworthy staff.

Every nonprofit is unique in its own way and the ways to strategize go far beyond the few components that were just mentioned. The main point is that nonprofits find personnel in their organization from their management, board, or other staff and create a human resource strategy to stop losing employees due to poor planning.

2.) Employee Culture:

Working to change employee culture is a difficult task just as shaping any culture is a difficult task. In this context, culture is broadly defined as the culmination of norms and values among a particular social group. Cultures are going to vary drastically given the different types of services provided, different histories, different beliefs, being faith-based or being secular, and any number of other variables when it comes to the culture among nonprofit employees. One of the biggest problems that face nonprofit employee culture and why employee turnover can be so high is organizations not recognizing what their culture is. Whether this is done intentionally or the organization doesn’t know it is happening, the lack of understanding of the culture in the workplace leads to a type of identity crisis. One where the organization will try to head in a different direction than that of its employees. This can cause disagreements over the way things should be done and will deplete morale. Some ways for nonprofits to promote a positive culture and work against issues surrounding misconceptions over workplace culture are:

  • Define the culture that exists among the employees. This can be done using surveys or having a focus group in order to determine what norms and values are most common among the current staff and how that impacts their productivity.
  • Apply the defined culture to aspects of the human resource strategy. This could mean restructuring compensation to match the values of employees, developing training to work with the personalities/learning styles of employees, or developing recruiting practices that bring in candidates who match the culture or enhance the culture.
  • Give employees room to grow into their positions. This means appointing main tasks to staff, but not dictating every detail of how it is done. Employees can then develop their own set of best practices for the tasks assigned and be allowed to show their passions and express values.
  • Reward employees based off the values and norms that exist within the workplace culture. This is perhaps throwing office parties to celebrate a successful quarter, granting special days off, or doing whatever it takes to make sure employees feel like their organization sees their good work. This can build trust and confidence within small organizations.
  • Discipline employees based off the values and norms that exist within the workplace culture. Just as every culture will respond better to certain rewards, they will also respond better to certain disciplinary actions when they make mistakes or step out of line. This could be a three strikes policy for before getting an official write up, this could be mandatory training to prevent repeated mistakes, or it could a disciplinary policy allowing for staff to negotiate what discipline they will receive. The purpose behind this is that when employees are disciplined, they don’t feel betrayed by the organization and feel inclined to leave.
  • Facilitating culture, not micromanaging it. Organizations can facilitate culture by providing employees opportunities to be together in a variety of ways. This can be scheduled staff meeting designed to let employees work together and hear from everyone, this can be having a budget for staff to host lunch meetings to focus on certain aspects of the job, or this can be any attempt at getting staff to be together and express values and norms together.

Employee culture is a tricky component of any business or organization. However, it can quickly become an issue within a small nonprofit. If a nonprofit can’t define its culture; then it will disrupt the well-being of its employees. If employees become disgruntled because they feel like their values aren’t being recognized; then they have a reason to not want to stay. Organizations can improve retention if they focus on the employee culture they currently have and how to best respond to it.

3.) Hype Up Unique Compensation:

When pay is not abundant (the case for most nonprofits) there has to be an enthusiasm generated among other forms of compensation. These other forms of compensation are usually called indirect financial compensation and other non-financial compensation. Indirect financial compensation comes in the form of health insurance, dental coverage, and tuition assistance or reimbursement. Many nonprofits have the benefit of being able to provide decent insurance packages. Nonprofits may also have the ability to provide some form of childcare or special memberships to gyms and clubs. Non-financial compensation are perks of the job that may not have a monetary value. This can be the ability to work from home, flexible hours, or other forms of service that can’t easily be measured for their value. This also includes work space and atmosphere. It can be a benefit to have a nice office or work car to get to use. Perhaps an organization offers a four-day work week, that is an amazing perk that needs to be advertised and packaged as a unique benefit of the organization. Beyond typical work benefits every nonprofit has its areas of benefits specific to its sector. Whatever it is, small nonprofits need to make sure that those benefits are incorporated and verbalized in their human resources strategy and that the culture of the workplace is encouraged by such benefits. Many nonprofits are concerned with very difficult subject matters. When there are employees involved in social work, counseling centers, shelters, and other difficult types of work; then nonprofits need to make sure that every manner of compensation is highlighted. Hyping up other forms of compensation is a way of giving employees a reason to stay on top of the heartfelt reasons they got into the nonprofit sector.

Employees are going to come and go. At the end of the day, employees are going to realize what they like and dislike about an organization and that’s okay. However, the task of giving employees more reason to stay has to be undertaken in order to have mission success within small nonprofits. People who work within the nonprofit world have a passion for what it is they do within that sector. If it is passion that brought a worker to an organization; then passion will cause them to leave if they can’t find fulfillment.

Improve Your Nonprofit’s Leadership: 4 Top Tips

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Nonprofit Leadership TipsLeadership plays a crucial role in the success of any nonprofit. While your board and executive director might not typically be on the very front lines of fundraising, these bodies are the ones that create the strategic plan for that initiative and greenlight any funding put toward it. Both are essential tasks.

However, from tension within nonprofit boards to leadership that is disengaged from their organization’s work, sometimes sub-par nonprofit leadership is an organization’s biggest complication.

Just consider the Survey on Leadership and Management in the Nonprofit Sector conducted by Stanford University’s graduate school of business. When given a list of 11 options, 38% of respondents noted weak or ineffective management as a top challenge in the nonprofit sector as a whole.

If that sounds like your organization, it’s time to make a concentrated effort to improve your nonprofit’s leadership. We’re going to explore the following strategies to help you do so:

  • Outline roles and expectations for each leader clearly.
  • Cultivate a culture of philanthropy.
  • Bring in professional help.
  • Recruit quality leadership from the start.

Strong leadership will have a domino effect on your organization, motivating every team member of your nonprofit to perform at their best. Continue reading to learn how to improve your nonprofit’s leadership today!

Outline roles and expectations for each leader clearly.

Consider how your organization would fare without a nonprofit strategic plan in place. While you might be able to easily navigate short-term fundraising efforts, any longer-term efforts (such as building fundraising capacity or even projecting your annual fund needs) would be significantly more difficult without a 3-5 year plan in place.

It’s a very similar scenario for your leadership! Without clearly outlined operating rules, your leadership’s “strategic plan,” successfully completing their job is significantly more difficult.

This doesn’t just mean copying standard nonprofit bylaws from a digital template and calling it a day. Rather, in addition to bylaws tailored to your organization, you should outline clear roles and expectations for each leader on paper.

What are the expectations of a board member? What are the expectations of executive directors? Answer those questions clearly and concisely and make sure every leader is aware of it.

Just like your bylaws, revisit these documents regularly to make sure they’re still relevant for your organization and leadership.

Cultivate a culture of philanthropy.

When discussing nonprofit leadership, there are generally two facets considered: executive leadership and board members.

While the former (directors and other salaried leaders)  play hands-on roles in your organization by mere definition of their role, the latter (board members) can often be found in distant roles in many organizations.

Think of it like this: your executive directors coordinate the planning of fundraising activities, while board members simply sign off on the funds needed to hold the initiative. Of course, the exact level of board involvement will vary greatly from one organization to another. The main point is that board members typically have their own very separate lives and careers that occupy most of their time.

Whether filling a less-present role or not, it’s crucial that all members of your leadership feel connected to your organization and cause. They need to feel the philanthropic spirit that fuels your cause because that’s what will motivate them to fulfill their role to the highest degree.

There are a few different ways to cultivate this culture of philanthropy in your leadership:

  • Encourage leaders to participate in fundraising efforts. This could be as simple as writing giver thank-yous as a capacity-building task after a major campaign.
  • Set an expectation of board member fundraising. During each fundraiser, your board members should be making gifts and reaching out to their networks to do the same.
  • Hold leadership retreats. Bring your leaders together for a weekend of training on fundraising best practices. Bonus points for adding a volunteer aspect to the retreat and incorporating nonprofit-branded t-shirts into the mix!

Regardless of how you get there, it’s important that each leader in your midst pitches in to your cause.

Bring in professional help.

Sometimes, improving your nonprofit’s leadership is simply too large a task to handle within your team. It makes sense— evaluating where your leadership is failing and instructing your peers on how to improve is a sensitive task.

If that sounds like your organization, consider bringing on a nonprofit consultant to help navigate the improvements. Consulting firms offer a variety of leadership-strengthening services, including conducting leadership learning events and embedding expert staffers in your team to provide in-person, daily training.

An outside perspective will notice issues in your leadership that you might not notice yourself. After all, it’s hard to see all of the details of a picture when you’re standing too close to it! Plus, consultants can help guide critical but necessary conversations with your organization’s leaders.

Learn more about hiring a fundraising consultant, and the associated fees, through this guide by Averill Fundraising Solutions.

Recruit quality leadership from the start.

Improving your nonprofit’s leadership doesn’t always refer to improving those already serving in your nonprofit’s highest ranks. It could also mean hiring new leaders to enhance (or replace) those already in position. Or, it could mean building your leadership from the ground up if you haven’t had much of a formal body before!

Regardless of why you’re hiring new leaders, it’s crucial that you recruit quality team members from the start. Evaluate each board member and director you hire against specific criteria most important to your organization.

For board members, consider the following criteria:

  • Is the candidate considered a thought leader, or a “go-to” expert in their industry or your greater community?
  • Does the candidate have an impressive social following, specifically on social networks?
  • Do they have experience relevant to your nonprofit’s cause, or nonprofits in general?
  • Do their interests align with your organization’s values?

For executive directors, consider:

  • Does the candidate have stellar communication skills?
  • Do they have extensive knowledge of fundraising and the nonprofit sector overall?
  • Do they have technical skills specific to your organization’s fundraising efforts?
  • Are they able to keep a level head under pressure?
  • Do they have a long-term vision for your nonprofit that aligns with yours?

This is another task where it might be helpful to bring in a nonprofit consultant. Some consulting firms offer executive search services, through which they recruit impressive executive leaders that fit your organization’s existing culture. Further, these consultants can help create a strategy for successfully onboarding new leaders! Check out this guide to learn more about nonprofit fundraising consultants and strategy development experts.

Conclusion 

Having strong leaders at the helm of your nonprofit is crucial for future success. Luckily, improving your leadership doesn’t have to be a difficult task!

Consider incorporating any of the above strategies and watch your leadership become more engaged, more philanthropic, and more helpful participants in your organization.

Conflict on the Board of Directors? Four Tips to Defuse Tension

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Nonprofit Board Conflict ResolutionMembers of a nonprofit board of directors are wonderful people. They are often accomplished professionals, visionary leaders, and passionate supporters of the cause. Interestingly, these characteristics of excellent directors can also set the stage for tension in the boardroom. Let’s look at four tips for defusing any conflicts.

Clearly define roles and rules of conduct.

The most effective boards and meetings have one thing in common: clear expectations. Board conflict prevention starts with everyone knowing who is in charge and what is expected. I encourage boards to actually make a board member commitment “contract” that spells out the roles and responsibilities of being a director. There should be a similar description for each of the board officers, too. That way, no one is confused about who should be reporting on which areas and who is responsible for certain decisions. Make sure there are also procedures spelled out for meeting discussions and votes. If everyone is aware of the rules ahead of time, it is much easier to address conflict later.

Be hard on ideas, not people.

This is a great mantra I learned from our board governance coach, Kim Donahue. It’s all about cultivating a culture that can pick apart ideas as needed without making it personal. This is a fairly intuitive way to behave, but reminding board members about it in a fun informational session can go a long way towards boardroom decorum. Additionally, make sure that your board is building in enough social time to grow real trust and respect between members. It is much easier to express an opposing view if you believe that your fellow board directors all have the organization’s best interest in mind.

Enlist the troublemakers.

I use the word “troublemakers” loosely here to mean the people who might be more inclined to dominate a discussion or always be the first to offer their opinion. Sometimes this happens organically as other directors look to a few strong leaders to see how they feel about an issue before weighing in. If you find your meetings always revolving around the opinions of one person, elist this person to lower tension in the boardroom. Try pulling them aside and saying something like, “Brenda, everyone values your point of view so much. I wonder if we could try an experiment in this meeting. I really want some feedback from the others on this agenda item, so it would be interesting to see what would happen if you withheld your ideas for a minute to see what they come up with.” Win the more opinionated board members over to your side and you might find that the people who were previously a challenge become the peacekeepers.

While some dissent is healthy, everyone needs to come together after a vote.

 Disagreement is a part of discussion, but everyone should understand that the vote on the motion should be the end of that discussion. The board will vote yes or no, and all board members should know that is the time to accept the decision of the board. This can sometimes be difficult for board members who disagree. Consensus means that even though I may disagree, I can support this decision because the majority of board members believe it is the right thing to do. It is not a bad idea to remind board members that the decision of the board should be supported by everyone in the room. Being considerate of dissenting opinions will go a long way toward resolving any differences.

Conflict in the boardroom can take time to resolve.

Don’t be discouraged if it seems like certain disagreements keep flaring up over and over. There will be times that people simply don’t like each other that much, and that’s okay. As long as you have started implementing the four steps above, you will be on the way to reining in any disputes. Don’t be afraid to periodically take a step back and ask board members what is working and what isn’t. With some careful thought, board feedback, and proactive practices, your board will be on the right track.

 

About Boardable:

Boardable is an online board management portal that centralizes communication, document storage, meeting planning, and everything else that goes into running a board of directors. Founded in 2016 by nonprofit leaders and founders, Boardable has a mission to improve board engagement for nonprofits. Boardable is based in Indianapolis, Indiana.

What Every Nonprofit Needs to Know About Technology

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Nonprofit TechnologyReturn address labels. I so rarely mail anything that receiving return address labels with a donation request from a charity I wholeheartedly support was simply a tipping point. In addition to my annual donation, I vowed to volunteer and share what I know about using technology to solve business challenges.

More and more nonprofits are facing challenges that mirror those of for-profit businesses. They need to cut operating costs, reach more stakeholders, move to data-driven decision making, and keep information secure. While businesses invest in technology and transform their operations from end-to-end, too often nonprofits give technology a pass. Tight budgets, lack of knowledge, fear of change—they are all part of the resistance.

Making technology improvements doesn’t necessarily mean a massive undertaking that requires many resources. I recommend starting with an assessment and a plan that helps you focus your goals, understand the technology you have, and learn about standards for technology in other nonprofits of a similar type and size. Then prioritize the improvements that offer the strongest return on investment—big gains for a small amount of dollars and effort—or those that will help you meet your top goals.

To help you get started, I’ve gathered some perspectives on technology that all nonprofits can use.

The right technology can help you save money on operations.

First, focus on efficiencies in your operations to reduce or eliminate redundancies, waste and errors, and in the process save money. Technology can play an important role in creating efficient processes, helping you reduce or eliminate duplications and delays, as well as helping you speed up by automating specific tasks. Technology allows for faster processing of data and easier sharing and retrieval of information. Automation can reduce the time a repetitive task takes and eliminate human error, like sending a welcome email when new members register, or filling out financial forms.

Technology also keeps information up to date. Instead of searching through spreadsheets to gather data on members, anyone in your organization can open a shared database and have the most up-to-date information at their fingertips. Also, integrating systems, like finance or project management systems, can help keep track of how much time staff members spend on various efforts. This will help you determine if it’s a worthwhile task, one that needs to be outsourced, or one that needs more resources.

Invest in data analytics to take advantage of your data.

Examining your data can lead to a deeper understanding of the relationship between your activities and results.

I remember a nonprofit client who found that the same material covered in their 5-day, in-person certification classes could be taught in about 3 days online. Armed with the data, they worked to offer an online class. The move reduced instructor and travel expenses, and delighted participants, all without impacting the integrity of the program.

Another nonprofit examined data from a decade of fundraising efforts and discovered that the two biggest campaigns each year demanded considerable up-front costs and time; however they failed to reach top donors. That insight helped them consider new options and reprioritize efforts for the following year.

Data can also help organizations demonstrate their powerful impact solidifying their case for grant and donor money. Using data to target fundraising appeals by interest and donor capacity has proven to be more effective than hitting the whole list repeatedly.

Security is everyone’s responsibility. Make it a priority.

Nothing can derail a nonprofit’s growth, reach and reputation like data breach exploiting personal and financial information or beneficiary lists. Because you share a passion and a cause with your audiences, every exchange of information or money is a trusted transaction.

It can be powerfully motivating to look at your current vulnerabilities and worse-case scenarios when prioritizing security. It’s also important to think through educating staff on security issues, and closing up endpoint security issues, such as unprotected laptops or websites that connect to your network.

Want governance and transparency made easy? Invest in technology.

Every nonprofit operates by certain standards and reporting structures. Good governance, according to the National Council of Nonprofits’ Good Governance Practices requires a good mix of board members, leadership and accountability, and a blend of candid discussions, transparent practices, and governance policies. Additionally, your industry may have formalized principles and practices and standards for excellence for nonprofits.

Technology tools make light work of keeping up with these standards. There’s a host of proven technologies for reporting, taxes, audits, policies and more that save headaches, hassles and time.

I notice that nonprofits tend to discount competition in their sector, but every nonprofit is constantly competing for funding, volunteers, and even talented staff. Charity Navigator, GiveWell and annual ranking lists all use standardized data and information categories to evaluate nonprofit organizations, influencing these external audiences. One of the ways to distinguish your nonprofit ranking or score is through transparency and accountability metrics, which often boil down to how technology is used to manage governance.

Connect the community to your future mission in new ways.

Digital communication is a game changer. Your reach, impact, and ability to personalize the connection are now all a reflection of your technology choices. Information-rich websites, tailored appeals, online education, open-source tools, social media updates, and technology have transformed nonprofit tactics, leading to greater awareness and a streamlined donor experience.

Top trends include text messaging for quick updates and news alerts; customer relationship management systems that collect data and engage donors; and social media that helps nonprofits make incredible connections. We now live in a time when someone, inspired by a story they see on social media, can donate by simply telling their home voice assistant, “Give $10.” The long-term impact of today’s communication technologies will shift how all nonprofits tell their stories as well as achieve their missions. The question is, when will yours embrace it?

Technology is the competitive advantage for nonprofits.

Models of commercial organizations, as well as nonprofits, show us that those who choose not to invest in technology will see an ever-widening performance gap between their outcomes and those of organizations that adopt technology effectively. The models emphasize the value of an innovative culture, which is at odds with traditionally risk-adverse and show-to-change nonprofits.

Historically, we know that ignoring technology launches a cycle of ignoring change such as not innovating and benefiting from the value that comes with technology, not to mention a flexible, adaptable organizational culture. Nonprofits who hope to continue the mission for years to come simply cannot ignore the call to technology. And they don’t have to take massive risks to do it.

Basic operational technologies, the baby steps to digital transformation, have been adopted on a large enough scale and for a long enough time to be proven effective. Investing in them makes sense and shows ROI. What’s needed is a deeper understanding of how technology solutions support nonprofit missions and strategies.

While data analytics get nonprofit boards excited and motivated, the real value of technology daydreaming is that it helps organizations understand why they want tech tools, what they hope to accomplish, and why it might be worth using consultants or hiring staff to ensure the transition is timely, effective, and a good experience for stakeholders.

To effectively adopt technology, nonprofits need technical expertise coming from the top management levels and woven through the organization—not secluded in information technology departments. Done right, technology adoption isn’t about new apps or devices, it’s about strategically selecting digital tools that empower staff and members to deliver on the mission. It’s a cultural mindset that embraces innovation.

Start-Up Essentials for Launching a Nonprofit Organization

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Start Up NonprofitsStarting a nonprofit organization can be both personally fulfilling and professionally challenging.  While many nonprofit founders are motivated to do good in the world, forming and operating a successful nonprofit also requires business acumen and attention to complex state and federal laws.  To ensure that your nonprofit starts with the proper legal foundation, it is important to take the right steps at the outset.  Below are some essential legal issues to consider when forming a nonprofit.

Corporate Formation

A nonprofit can function as either an incorporated or an unincorporated organization.  Incorporating may require additional filings, but both can qualify for tax-exempt status.  To form an incorporated nonprofit, it is necessary to file incorporation paperwork with your state’s Secretary of State and pay a fee.  There are legal protections to operating the nonprofit as a corporation, so most nonprofits choose to operate as a corporation.  It is important to consult an attorney to prepare your incorporation documents, especially if you intend to qualify for 501(c)(3) status, as there are certain provisions the IRS requires to be included in the incorporation documents.

By-laws

A nonprofit must create By-laws, which will govern how the organization operates.  State requirements vary, but most By-laws provide for how the nonprofit can elect directors and officers, how many directors it should have, the length of a director’s term, quorum requirements, and how to hold meetings.  Changing By-laws later will usually require approval by two-thirds of the directors.

Board of Directors

In a nonprofit, the board of directors is comprised of uncompensated volunteers who guide the mission, develop a strategy, set policies, oversee finances, and even fundraise.  To the extent that the nonprofit wants to qualify as a 501(c)(3) public charity, having a majority of disinterested directors will be important to establishing tax exempt status.

Establishing a strong board of directors is critical to the success of every nonprofit organization.  The best directors combine a passion for the mission with an ability to think strategically and provide proper oversight.  Board composition will influence and direct the dynamics of the organization, so a team that brings a diversity of skills, perspectives and experiences is highly beneficial.  With the right board members, a nonprofit can be successful in both good times and bad.

Effective Leadership

An executive director’s role is to oversee the nonprofit’s functions, including fundraising, program development, HR management and finances, and provide strategic guidance to board members on setting annual fundraising goals and standards for community outreach, grant-making, and more.  However, a truly impactful executive director is dynamic, engaging and creative.  He or she must embody the enthusiasm, passion, diversity and experience that is the model for all board members to follow.  Particularly in a newly formed nonprofit, it will be up to the executive director to serve as the face and voice of the organization, and motivate board members to work as a team to advance the nonprofit’s mission.  Part manager, part cheerleader, and part visionary, the executive director must be a strong leader who doesn’t mind getting his/her hands dirty in the day-to-day work.

Application for 501(c)(3) Tax Exempt Status

Most nonprofits that solicit funds will seek to qualify as 501(c)(3) tax exempt organizations with the IRS.  To qualify, the nonprofit must fall into one of several IRS categories, including religious, charitable, scientific, educational or literary purposes.  You should be sure to consult with an experienced attorney or accountant to assist in preparing the IRS forms.  This is your opportunity to tell your story of why you should be granted tax exempt status with the IRS, and it is important to do it right to avoid delays or rejection with the IRS.  An attorney can also help you best apposition the nonprofit to qualify for 501(c)(3) status.

Compliance with State Regulations

Most states require nonprofit charities that are organized in the state and/or solicit funds in their state to register with the charities division of the Attorney General’s office.  Charities division registration is important, as many states require registration before you can solicit funds in that state.  Depending on the nature of your fundraising and other activities, charities may have to register with the charities division in multiple states.

Operations – Special Rules for Charities

A nonprofit charitable organization must not only operate as a regular business (dealing with issues related to contracts, employees, leasing of space and the like), but must also deal with a series of special rules for charities.  Generally, these can be broken into two categories – no self-dealing and following the donor’s intentions.  These are the two most common areas where charities can get into trouble.

  • No Self-Dealing. Generally this means that the charity must handle all business dealings with its officers, directors, donors and founders on an “arms-length” or for fair value, and any transactions with such parties must be disclosed to and approved by a majority of the disinterested directors (those not involved in this transaction).  For example, if a charity leases space from a founder or director, the rent must be at no more than a fair market value rate.  The IRS imposes penalties (known as “intermediate sanctions”) on the charity and its directors for above-market related party transactions, so it’s important to follow these rules closely.
  • Following the Donor’s Intentions. This may sound obvious, but this is often where issues arise.  For example, if you hold a fundraiser and your marketing materials provide that “all proceeds from the event will go to cancer research”, this means that the charity cannot later decide that some of the funds raised can be used for hiring a fundraiser, or for other programs not related to cancer research.

In addition, charities need to comply with all IRS laws regarding notices to donors for tax purposes.

Intellectual Property

The nonprofit leaders should not overlook their intellectual property (IP), which can be a valuable asset.  If the organization generates ideas, images, marks, products, and reputations, it is important to protect these valuable assets.  Trademarks, copyrights and patents can enhance the brand, generate support and drive growth.  In addition to safeguarding the nonprofit’s own IP, nonprofit leaders should take care not to infringe upon another organization’s rights, as this can have costly consequences.  The virtual world has added new twists on IP concerns and questions, so it is important to consult a lawyer to ensure proper procedures.

Employment Law

Nonprofits are not exempt from state and federal employment laws, so it is vitally important that the nonprofit leadership stays abreast of the employment laws that apply to employees in states where the nonprofit operates to ensure it is compliant.  At a minimum, nonprofits need to:

  • Formalize employment terms through formal employment contract, especially for senior management
  • Understand the employee vs. independent contractor issues
  • Develop an employee handbook
  • Have written policies covering sexual harassment, social media and computer/internet use

Because employment laws are complex and ever-changing, it is advisable to have a professional resource available to consult when questions arise about employment issues.  Relying on employment laws and HR management experts is much more prudent than trying to go it alone in this highly regulated area.

Legal Agreements

Like any business, a nonprofit needs to use a range of legal agreements to reduce its liability and avoid legal disputes.  Some common agreements include:

  • Confidentiality agreements to be used for suppliers, contract manufacturers, distributors, joint venture partners, prospective customers and other parties to whom confidential information may be disclosed
  • General business contracts, such as office and equipment leases and contracts with major suppliers, distributor, contract manufacturers, brokers, joint venture partners, equipment vendors]

If you plan to form a nonprofit organization, being mindful of the above essentials will help put you on the path to success.  Since the start-up process and ongoing compliance requirements can be complicated, you should be sure to consult an experienced nonprofit attorney and accountant.

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