Archive for March, 2013

Beyond the obvious: what a “funding problem” may reveal about a nonprofit

Ask any nonprofit board member or executive director what poses the greatest challenge to his/her organization and you are likely to hear this: “We need more funding.” While s/he may not be able to offer a complex analysis of the organization’s financial circumstances, the conclusion is…well, obvious: Not enough money is coming in the door to meet the cost of delivering our programs.

At the root of the problem?

It is my belief that for many nonprofits, funding shortfalls are not the core problem. Rather, fiscal stress is a symptom of other, more deeply-rooted problems that lie beneath the surface of monthly profits and losses. If your organization falls into the category of the financially-challenged, what might this reveal about other aspects of the organization? Below are four questions a board should ask to properly diagnose the root cause of the seemingly obvious.

1. Do we have a coherent resource strategy?

Writing more grants isn’t always the solution to a budget deficit, though it seems to be a popular response among nonprofits. The same is true for traditional fundraising: The answer isn’t always to go out and raise more money. The fact is grant writing and fundraising are pieces of an overall resource strategy that may include government contracts, fee-for-service,earnings from investments, in-kind gifts, volunteers and bartering arrangements. Some nonprofits have generated revenue through alternative ventures, such as the mental health agency in my hometown that opened a sandwich franchise that produces revenue while providing employment to its clients. A full exploration of all funding options will help the organization identify the possibilities and the limitations before it, which in turn provides the proper context for the development of a fundraising strategy.

2. Do we have a targeted fundraising strategy?

Deciding that your organization needs to raise money from individuals and corporations as part of its resource strategy is a good start. But the real work of strategy development is in knowing where you are likely to be successful: Who is likely to support you? What do they need to know about your organization? How can you best solicit the actual gifts? And while nonprofits like to claim to be the best-kept secret in town, the ability tocraft and deliver a compelling story is what separates the successful organizations from the frustrated ones. Absent these deliberations and subsequent choices, nonprofits will continue to “fish with a net,” hoping to nab the big fish that just happens to be in the right place at the right time.

3. Do we have the infrastructure to support the fundraising strategy?

Having the board members instruct the executive director to go raise money and let them know if s/he needs their help does little more than increase the pressure on him or her to do even more with already-constrained resources. Indeed, some nonprofits view fundraising as the addition of another glass of water into the large bucket of organizational activity. But fundraising is an orientation, more akin to adding a drop of food coloring into that bucket of water. It changes everything. So before rewriting the executive director job description or hiring a development director, nonprofit boards need to engage in a realistic inventory of the human, financial and technological resources available to support the fundraising strategy. Especially in the age of social media, the ability to connect the right message to the target audience becomes key. Without adequate infrastructure, fundraising may actually deplete more resources than it produces.

4. Are we still relevant?

In the for-profit environment, the market will determine the relevance of a particular business. Are there too many gas stations? Not if they can all make a profit. Is the family-owned hardware store relevant in the age of the big box store? Again, the market will answer that question. Having no similar market mechanism in place, nonprofits may continue to function long after their market position has begun to evaporate. Loss of funding or the inability to attract additional funding may indicate an external perception that the social good produced by your organization no longer matters relative to other priorities. Complicating the analysis of relevance is the ability of struggling nonprofits, through desperation appeals, to attract just enough funding to live to see another month or year. But nonprofit boards need to recognize that maintaining an organizational pulse is not the same as meeting a social mission.

Conclusion

Even in good times, the unpredictability of external funding requires vigilance in monitoring the financial standing of nonprofits. And there is no reason to expect that funding challenges will subside any time soon. Only through proper and thorough diagnosis will nonprofits be able to respond effectively to the root causes ofthe financial challenges they face.

See also:

The Zone ofInsolvency: How Nonprofits Avoid Hidden Liabilities and Build Financial Strength

The Cash FlowSolution: A Nonprofit Board Member’s Guide to Financial Success

Nonprofit Sustainability: Making Strategic Decisions for Financial Viability

Image credit: 123rf.com

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PODCAST: Great fundraising boards start with your nominating committee

I had the pleasure of interviewing William Mott this week via webcast for our CausePlanet readers. Mott’s new book The Board Game uses fictional characters to tell the relatable story of a new school president and his working relationships with the board of directors. Though the president’s perspective, Mott helps you recognize the red flags in working with a board and presents proven tools to overcome them.

So, if you’re not a business book reader, you’ll find Mott’s fictional approach an enjoyable read and a painless way to get smarter about optimizing your board relationships.

Creating synergy between the board, chair and CEO is one of the most challenging aspects of our jobs as nonprofit leaders, according to Mott. What’s more, cultivating great leadership at the board level has bottom-line implications. A U.S. Trust study found among high net-worth donors, one of the top determinants of where they contribute money is respect for the organization’s leadership.

During the interview, one of our attendees asked, “I would love suggestions on how to motivate a small nonprofit board to apply their leadership and creativity—especially to fundraising.  How can I encourage this behavior with my board?” Here’s what Bill Mott had to say (podcast).

Join us for our next author interview on April 25 with fundraising expert and author, Cheryl Clarke, who will discuss her latest edition of Storytelling for Grantseekers.

See also:

A Fundraising Guide for Nonprofit Board Members

The Ultimate Board Member’s Book

The Nonprofit Leadership Team: Building the Board-Executive Director Partnership

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Finding common ground with your board chair

We’ve all been there. You’ve done the due diligence and checked all the boxes. You’re ready to take the plunge in a new direction and the board chair or a board member is standing in the way of progress.

Unfortunately, board chairs and members don’t present their obstruction to progress in a consistent way—their unwanted behavior comes in all shapes and sizes. If you’re like me, some of these situations keep you up at night as you try to solve the problems in your head. Right about now you could use the input of someone who’s already been through your particular situation.

Author William Mott has assembled numerous real board leadership scenarios in the form of one compelling and relatable story to engage the nonprofit leader in each one of us. There are many books and articles about governance. Mott’s purpose with The Board Game is to take the road less traveled by telling the story of David Andrews and how he coped with and eventually came to terms with his unfortunately common circumstances. You will identify with Andrews and discover red flags and their solutions right along with him.

In my interview with Bill, I asked him about problems stemming from the board chair as well as the most persistent problems that should be tackled first.

CausePlanet: Many of David Andrews’ problems stemmed from the board chair. Is there any recourse for CEOs who find the chair is standing in the way of progress?

Mott: One of the central themes is this issue of conflict between the CEO (in this case, the president of a school) and the board chair. All too often this is the case. Because of the structure of nonprofit organizations, it is very difficult to work around the chair.

The key is to try to communicate, collaborate and find common ground on which to move forward. What is it that you have in common or agree upon? Begin there and build on that. Depending on the agenda and the attitude of the chair, this may or may not be possible. One of the ways in which recourse can occur is to have some influence before the next chair steps in. The transition from one chair to the next is often overlooked by organizations. They don’t understand the consequences when there is a weak board chair attempting to lead the board.

CausePlanet: CEOs sometimes face a myriad of challenges with their boards. Are there certain types of problems that trump others and should be dealt with first?

Mott: The biggest problems are usually ones involving a lack of communication. Then that leads to a confusion of roles and responsibilities. The board’s role is to focus on mission, strategy, policy and planning. However, boards will slip into an operational mindset in which they believe it is their role to micromanage those given that responsibility, the CEO and senior leadership. This can mean the difference between living out your mission or going out of existence!

If you are seeking the strongest possible partnership, then you must have collaboration, respect, trust, shared vision, support and a great attitude. If these elements are given priority then most anything is possible. If they are absent, then struggles will ensue. It begins with communication and trust!

CausePlanet members: Register for our live author interview with Bill Mott on Wed, March 27 at 11 a.m. CST.

Not a member yet? Find out more.

See also:

A Fundraising Guide for Nonprofit Board Members

The Ultimate Board Member’s Book

The Nonprofit Leadership Team: Building the Board-Executive Director Partnership

 

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Agreement in the trenches: Less is more with foundation proposals

I consider myself to be an optimist, but I am also a skeptic. So when I read Martin Teitel’s article on foundation proposals and his assertion that mediocre proposals are not funded, I wanted to check this against both my personal experience as a funder and the experience of a group of development professionals.

Does Martin Teitel’s point align with development professionals’ opinions?

Teitel asserts there is no bell curve for funding proposals; anything less than perfect-fit, outstanding proposals do not get funding. In his experience, the proposals that are sent in as part of a mass submission from an organization fall short. This is a waste of resources on both sides, contributes to the inefficiencies in the sector and does more harm than good for organizations.

The perspective of foundations and the perspective of development professionals often differ. These sides disagree on outcomes, the size of grant awards and the length of proposals and more. However, in this case, the development perspective matched the foundation one.

Does activity=results?

I asked a handful of friends to share their experience in submitting proposals that were either rushed and not of top quality, an indirect fit with guidelines, or part of a mass mailing for their success rate. To a person, they said these proposals were rejected. And yet, all of them had submitted sub-par proposals in their careers. There is significant pressure to produce as a development professional and at times activity can be confused with results.

Misguided beliefs

There are some misguided beliefs that fuel this sort of proposal submission fallacy. We like to believe our cause is the most important, most relevant and most urgent one that exists, and that if we just share the information, others will be converted to that belief. The other is that foundation money is “easy” to get. From an objective view, neither of these beliefs is true. There are a multitude of important and worthy causes competing for limited resources and foundation dollars that are rarely simple to obtain or maintain. Foundations funding is not easy or consistent. Teitel suggests rejection rates for proposals are as high as 95 percent. In my experience, this is high, but rejection rates at 75 percent are not uncommon.

Cold prospects and multiple rejections

Aside from the inefficiencies Teitel cites, a number of rejected proposals can actually work against an organization. Foundation staff can be a good resource. In the discussion about your organization and funding priorities, if the program officer says, “In the 65 years of the foundation, no similar organization has ever received funds,” then do not apply. Don’t just send in an application because you thinks/he is wrong. S/he is not. You will not be funded. Harsh, but true. Save your time for the hot prospects, not even the warm ones. Being under resourced should make us more frugal and protective of our time, not the opposite. If you think some headway can be made in the future, don’t just send in a proposal, but continue conversations, gather data, follow the foundation’s communications and perhaps eventually submit an exemplary proposal. In my experience, organizations have a better chance with their first proposal, not their seventh or eighth. Foundations do fund new programs and organizations, but after discussion and education, not after 10 rejected proposals. One piece of data requested by trustees is often organizational history of requests-–proposals submitted, rejected and funded. If there are 10 rejections, the eleventh is an easy decision.

Return on investment

As development work increases in sophistication, I am encouraged to see more and more organizations calculating the return on investment for development efforts. Structuring foundation proposals in the way Teitel suggests takes time but provides larger returns. It can take just as much time to build a relationship and do research as it does to craft a proposal for a foundation where there is no fit. The return on this work is very different and can be more rewarding when the return increases–-both in resources for your organization and in personal satisfaction.

Educate boards and executive staff against the more is better thinking around proposal submission. Track time and results to make a strong case. And you can always ask your friendly program officer to share this message with those who disagree. Instead of wishing you all good luck, I wish for you a very few, exemplary proposals.

See also:

The Ultimate Insider’s Guide to Winning Foundation Grants

Image credit: maestasmatters.com

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Six ways to get more website traffic from your Facebook page

One benefit of having a Facebook Page is that once you build up a healthy community, you can start directing it to your website to join an email list, sign a petition, donate or take some other action.

But have you optimized your Facebook Page for this purpose?

Here are six ways to increase the amount of website traffic you’re getting specifically from your Facebook Page:

1. Optimize your Info Tab–-Your info tab should be optimized for search and viewers (overlapping goals). You optimize the info tab for search by filling in the appropriate fields with keyword-rich content. You can research the best keywords by using Google’s Keyword Tool and Google Analytics. You optimize your info tab for viewers by writing compelling copy for your info tab.

Within your info tab, make sure your put your website URL in the URL field. Also, enter specific URLs to pages related to each section. For example, in the “mission,” add a link to the page on your site that talks about your mission.

2. Create a Custom Tab–-Not only will this convert more Facebook users into fans, it will be another way to drive more traffic to your website.

3. Add your URL in your About Section--Within your info tab, you can include your website’s URL in the “About” field. This creates a clickable link just below all the tabs on your Page (as shown below).

4. Post Links in Updates–-It’s great to put links to your site in your website, but the reality is that most Facebook users see your content in their news feed. This is why you also want to publish Facebook Page stories that include compelling headlines, excerpts and of course, links to your website.

If you have a blog, you can use Networked Blogs or Post Planner to automatically post blog posts on your Facebook Page with an RSS feed. And don’t use URL shorteners!

5. Post a Short Video–-A creative and unique way to drive traffic to your site is to post a video talking about specific content on your page. For example, you could post a video talking about a petition or a fundraising campaign. And you don’t have to spend a lot of money to create these videos. (Hint: Flip camera or iPhone). Bonus points if you use YouTube.

6. Use Google Analytics–-You can use Google Analytics to measure visits, page views, exit pages, time on your site and more by using UTM tags. Simply put, UTM tags allow you to easily append existing URLs on your site so you can track them easier.

For example, on the Inbound Zombie Facebook Page, I know exactly how many people click on the links and the banners on this tab with UTM tags.

Special thanks to John Haydon for this post, which was originally published on March 9, 2012 at The Nonprofit Facebook Guy powered by Inbound Zombie

See also:

Facebook Marketing for Dummies

Social Change Any Time Everywhere

Content Marketing for Nonprofits

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Three ways to a better culture & bottom line (Audio)

Unengaged employees cost time and money. So why do we have molasses-like reflexes when it comes to cultivating a positive culture in the organizations we lead?

Billions of dollars are lost every year by corporations through turnover as well as legitimate and non-legitimate sick days. Tens of thousands are lost in productivity and outcomes within a single position if it turns over or if the employee is unengaged in your nonprofit.

Michael Stallard, author of Fired Up or Burned Out, says there are many easy ways you can cultivate what he calls a “connection culture” in your workplace. CausePlanet hosted a live interview with Stallard last week and one of the questions from the attendees generated a response that centered on three steps toward a great culture (podcast).

CausePlanet members: You can play back the full interview with Stallard if you missed the live session last week. Don’t forget to register for our next interview with William Mott, author of The Board Game: A Story of Hope and Inspiration for CEOs and Governing Boards.

Not a member yet? Find out more about how you can download this book summary and other titles as well as attend or play back regular live author interviews.

by Denise McMahan

See also:

Links provided by Stallard during the interview:

Stallard mentioned in the interview: www.epluribuspartners.com, www.michaelleestallard.com, Indiana University Center of Philanthropy studies that assert donors stop giving due to a lack of connections: “Indiana Gives 2008” and “The Local Connection” in “Coming to the Table,” “Great Leaders Connect” (article about Admiral Clark), and the National Geographic video on stress entitled “Stress: Portrait of a Killer.”

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Key points from “A Fundraising Guide for Nonprofit Board Members”

In my work as a nonprofit consultant, one of the most frequent challenges I encounter is finding ways to get board members more engaged in an organization’s work, especially in fund development. A Fundraising Guide for Nonprofit Board Members by Julia Ingraham Walker is a great resource for executive directors, fund development directors and board members themselves who are seeking a better way to confront this challenge.

One of Walker’s most important points is that the fundraising culture of a nonprofit board cannot change overnight but can change over time, often resulting in significant gains in fund development success and board engagement. Some of Walker’s key tips include:

Fund development is a significant challenge for nonprofits of all sizes and mission focus areas. Because of the inherent challenges associated with fund development, a nonprofit organization needs all hands on deck and full participation from board members to maintain momentum and achieve success overtime.

Make fund development expectations very clear during the recruitment process for new board members and then provide the tools that board members need to be engaged as successful fundraisers for an organization. Seeking small successes and then building on those successes can help build board member confidence with fund development and help change a board’s culture overtime.

Board leadership in fund development is critical. Many successful fund development programs are based upon the division of responsibility that primarily relies on staff for planning, structure, and coordination, with the board providing leadership in making contacts, cultivating prospects, asking for money, and thanking donors.

This partnership between the board and the staff is essential for creating a sustainable and thriving fund development program, rather than the strapped, over-capacity and burned-out culture that often exists when staff members are solely or mostly responsible for fund development.

Board members should serve as role models for other donors by making leadership-level gifts without constant prodding from the board president or executive director. “The board is there to lead, and it is their leadership that will inspire others to give.” Provide a variety of ways for board members to be involved in fund development.

Not all board members will be comfortable directly asking for money but can be involved in the equally important roles of identifying prospects, cultivating donors and thanking donors over time. Providing options will help get board members in the activities that are most comfortable for them, thus increasing an organization’s prospects for success.

Combining these strategies, along with the many others Walker discusses in her book, can help nonprofit organizations move from frustration around fund development to a higher level of success and sustainability, thus creating more resources for achieving an organization’s mission over time.

See also:

A Fundraising Guide for Nonprofit Board Members.

The Ultimate Board Member’s Book

The Board Game

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Get in the game and out of committee work

If you’re like me, you love a good story. And if you’re not a business book reader, you may have found your match in our new feature: William Mott’s The Board Game: A Story of Hope and Inspiration for CEOs and Governing Boards uses fictional characters to teach us about board leadership through great storytelling. The Board Game applies real life experiences to help you recognize red flags and employ useful tools when engaging the board, chair and CEO.

In each chapter, the story progresses candidly with its main character, David Andrews, who takes his first position as the head of a school, trying to muddle his way through relationships with the board. As readers we are privy to his all-too-realistic and sometimes painful challenges many of us will also face when attempting to align the board, chair and CEO. Mott uses the plot to provide us with teachable moments and guiding principles while attempting to prevent us from actually enduring some of the struggles ourselves.

Author Bill Mott concentrates on the single most important component of successful nonprofit organizations: the relationship between the CEO, the board chair and the governing board. He acknowledges, “To be successful, this demands a high level of trust, leadership, collaborative thinking and extensive cooperation.”

In my interview with Bill, I asked him about the common challenge we all share with boards that get mired in committee work at the expense of more visionary efforts. Here is what he had to say:

CausePlanet:

Have you observed CEOs who’ve successfully helped boards rise above committee work and delve into the organization’s vision and direction? If so, what did they do?

William Mott:

I have as a consultant observed and worked with many boards that do a wonderful job of understanding and embracing their role. The CEO has the leadership skills to guide the board toward an environment of teamwork and recognition that by working together, the opportunities to live out the organization’s mission and vision are improved. One of the components of the book I think has the potential to genuinely impact behavior is the chapter entitled “The Governance Promise.” It includes six statements that strategically reveal what is most important in building the strongest possible relationship between the CEO and governing board. Committing to these principles will make all the difference. The other contributing factor is education and training. Through retreats, orientation sessions, workshops and other professional development opportunities, boards can significantly enhance their governance skills and embrace what it means to be highly productive, contributing trustees.

Purchase the summary and full interview, subscribe to our library of summaries or read more about boards and CEOs in the related content below.

CausePlanet members: Register for our live author interview with Bill Mott on Wed, March 27 at 11 a.m. CST.

Not a member yet? Find out more about author interviews and other services.

See also:

A Fundraising Guide for Nonprofit Board Members

The Ultimate Board Member’s Book

The Nonprofit Leadership Team: Building the Board-Executive Director Partnership

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Living the brand means rethinking the business model

Co-creation of brands

A brand is much more than a logo, tagline or key message. It is an authentic expression of a nonprofit’s promise to the world. Branding experts agree our organizations alone don’t control our brands. Brands are co-created with our stakeholders–-our audiences, volunteers, board members, funders, partners and service recipients. One’s perception of The Red Cross, for example, is informed by what it communicates directly, but also what our friends, family and social network say, as well as our own experiences. Those impressions ultimately create a collective consciousness of the brand itself. Our impressions of a brand and the authentic manifestation of that brand promise in the world influence how we engage with that nonprofit as donors and ambassadors.

Brand + business model

How can we more effectively engage stakeholders in the mission of a nonprofit? While brand engagement is critical to consider, we must think beyond the marketing function alone. It is time to fully imbed our brand promise in the way we do business day in and day out, which necessitates new thinking about business model design. At the core, we are talking about operating in new and different ways.

Value creation in your business model

A well-designed business model creates and captures value. Value, like beauty, is in the eye of the beholder. Fueled by the interests of our stakeholders, we can leverage organization-driven and user-driven experiences to inform, engage and influence opinions and actions. Data-driven strategies and tools can improve marketing, fundraising and volunteer engagement. The trick is not solely beginning and ending there. It is time to intentionally design your nonprofit’s business model to add value to your key stakeholders on a regular basis, recognizing the unique and overlapping needs of each group. By keeping an eye on value creation–-from the point of view of your stakeholders–you will capture more value within your nonprofit in the form of financial support and active ambassadorship for your cause.

So, where to start?

1.       Begin with clarity of brand promise.

2.       Design your business model to activate the brand promise.

3.       Use data to refine and reevaluate along the way.

4.       Keep an eye on creating and capturing value via a scorecard that tracks key metrics.

Three-component business model

The case studies profiled in Rippling by Beverly Schwartz and Forces for Good by Leslie Crutchfield and Heather McLeod Grant evoke a three-component business model, one that is designed to maximize 1) programs and services, 2) financial resources and 3) community engagement. It’s no longer sufficient to merely consider what you offer and how you fund operations. As the growing recognition of the importance of nonprofit brand suggests, a well-designed business model creates and captures value through imbedded approaches aligned with brand.

See also:

Rippling

Forces for Good

Breakthrough Nonprofit Branding: Seven Principles to Power Extraordinary Results

 

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