Non-Profit Chas

A lot of non-profits use the lure of tax deductions to get free work from vendors, contractors, etc. But what can you really deduct on your taxes?

One of the most popular articles on my web developer blog, grundyhome.com answers this question. After hearing a few discussions of this lately, I thought it was worth sharing here as well.

The short answer, in case the suspense is killing you, is that you can’t deduct the “value” of your time.

So now that I’ve pulled the rug out from under you, just how do you get help without paying a competitive rate? That’s the topic of my next article.

Last year, Camp Fire suffered a meltdown of sorts. We lost one of our computers, including our accounting files. It took months of poring over paper statements and receipts to manually restore our files. Not only did this create a huge strain on some staff and volunteers, but it slowed down the progress of the rest of the organization.

And it could have been easily prevented.

The NonProfit Times comes through with a solid evaluation of your emergency planning for technology. As many small non-profits struggle with adopting technology, understanding the ramifications is critical. And knowing how to keep yourself safe can make the difference between total collapse and sleeping soundly.

Remember, it’s not a matter of if you lose a hard drive, it’s a matter of when.

Beth Kanter cracked me up today when she wrote, “if the bulk of your audience is from the baby boomer and older and you don’t plan to reach out to younger people—perhaps social networking sites are not the best Internet strategy for your organization.”

I’m hyperconnected. I read a lot of blogs, belong to a bunch of social networking sites, and maintain more websites than is probably healthy.

I’m not the average user, and I know it.

The key is to realize that your own usage patterns do not necessarily mirror those of your audience. And if you’re a non-profit, one of your biggest audiences is prospective donors. Knowing your audience is critical to any organization’s marketing or business efforts, so let’s take a look at prospective donors.

There are varying approaches to the average age of donors, including segments of gift sizes or retention rates. The biggest groups range from the upper 40s to mid-60s. Your biggest online donor segments are still no younger than 45 years old. In fact, the 18-24 and 25-30 ranges are ridiculously low in both gift size and retention rates. They don’t make major gifts and they aren’t as likely to keep giving.

Check out the graph for one such breakdown of online and offline donors by age ranges. Graph source:Target Analysis Group and Donordigital

If your average Facebook user is under 30 and is highly unlikely to give, let alone build a relationship with a non-profit, is it worth investing your time and money into that area? Though as many have demonstrated, a large number of small gifts is often easier to gain and maintain than one large gift.

NonProfit Times shares some tips from a conference presentation about how to raise the first $100,000.

A couple of the tips:

• Fundraising from people is asking for money and is not a quick fix, but it is dependable and renewable, is internally controlled and provides multiple sources.
• 76 percent of fundraised money in 2006 came from individuals, according to Giving USA.
• Big money comes from individuals who are asked.
• Getting money from individuals? Begin with the board, then membership dues, annual donations, major gifts and special events.

Notice something? They talk about fundraising from individuals, not corporations or foundations. That is, most gifts come from people. If you think about your donors as human beings, with varying backgrounds, interests, and motivations, you will begin to understand how giving works. Donations are not transactions, they are the culmination of a positive, two-way relationship between an organization and a person.

So you understand the point of strategic planning. You’re gearing up to actually start. This post is all about pulling it off.

Our biggest obstacle at first was an undefined goal and process. The problem with doing this blind is that it’s too easy to get distracted, waste time, and become overwhelmed. As I wrote before, the payoff is in the journey. But imagine a two day trip that takes a 800-mile detour and lasts three weeks. Even though you might get there, you’ll probably be cranky and won’t enjoy the destination.

Starting with a process means you set a goal (the plan) and draw a line to get there. Here’s the process we started with, based on the suggestions of the SCORE consultants.

April

Establish the rules, process, terminology, schedule, and so on.

• Preliminary Ground Rules and Assumptions
• Preliminary Schedule (what you’re reading now)
• Preliminary Outline
• Glossary of Terms
• Mission (what your organization exists to accomplish)
• Vision (what you hope to do and become)
• SWOTs defined

May

Build support throughout the organization and community by giving everyone an opportunity to participate, as well as reducing the magnitude of the process through delegation. Identify the main strategic issues facing your organization and focus everyone on these.

• Individual Team Deliberations
• Strategic Issues defined
• Individual Team Assignments of Planning Process Areas

June

Begin discussing how you will address the strategic issues. The organization should be fired up by this point, asking difficult questions and straining minds to find effective strategies.

• Strategies Development
• Preliminary Goals Identified
• Ground Rules and Assumptions finalized
• Final Mission

July

Once strategies are developed, the plan begins to take shape. The organization begins to understand the financial needs and the future of the programs.

• Final Strategic Plan Outline
• Preliminary Financial Plan (5 yr)
• Preliminary Draft of Strategic Issues, Strategies and Goals, Preliminary Objectives and Programs Defined

August

The many components begin to come together.

• Revised Financial Plan (5 yr)
• Final Draft of Strategic Issues
• Strategies, Goals, Objectives and Programs
• Check for consistent vertical integration of all inputs to Strategic Plan

September

Down to business: wrapping up the financial plans, beginning to draft the strategic plan, and clearing up the rest of the discussions.

• Final Financial Plan (5 yr)
• Draft Strategic Plan
• Resolution of Outstanding Strategic Plan Issues

October

Everyone gets an opportunity to review and provide feedback on the newly drafted plan.

• Distribute Copies of Strategic Plan

November

The destination has been reached… now the work begins.

• Board Acceptance
• Implementation of Completed Strategic Plan

After the Planning

One of the biggest complaints I’ve seen about strategic plans is that they frequently collect dust on a shelf while the organization continues about its business as it always has. This suggests to me two things: first, the organization wasn’t really buying into the plan because it’s hard to ignore such investment if you agree with it; second, there is no champion of the plan to keep attention focused on it. An executive director, CEO, or President needs to force the organization back into the plan. Meetings, evaluations, proposals, etc. should be considered in the context of the strategic issues and strategies from the plan. All staff, board members, and major donors should be fully aware of the strategic issues and strategies of the organization. And once the plan is implemented, the organization must continue to evaluate and revise it—because you’ll be doing it all over again very soon.

Here’s a story for you.

What an awful title. Kool and the Gang… eesh.

As the hideous parody title indicates, it’s all about delegation. That’s become my defense against small non-profit woes - too much to do with too few people and too little time. Getting others to do the work for you. After all, you can’t possibly do it all yourself.

Small businesses often struggle to find new work. One of the common suggestions is to ask your current customers for referrals.

This extends really well into the non-profit sector, where your current donors are probably some of the best sources of potential donors. Have your current donors provide prospect recommendations or introductions. If your donors are properly invested in the organization, you can even ask them to help make the ask.

This process does wonders for donor engagement.

I believe that strategic plans (like business plans, college educations, and road trips) have more value in the journey than in the destination. The end result of your strategic planning process might be two pages or 20 pages. It might be loaded with all kinds of optimistic goals and lofty ambitions. It may even help you win grants or land new donors.

But those three (or 20) pages represent more than the text on the paper. The plan represents your organization’s heart and soul. Built by of board members and staff, volunteers and donors, community members and experts, a strategic plan brings many perspectives together and puts them on the same team. Many people driving hard, optimistic, and committed to the future.

Hard questions and hard answers. New ideas and revelations. Many a-ha moments. And a lot of expectations.

This isn’t to say that the end result isn’t valuable; it’s just not the whole picture. You can’t ask one person (or five people) to simply sit down and create your strategic plan. Not if you want it to mean anything. Not if you want it to hold up.

Next post: planning your strategic planning.

I read a lot. I’m currently reading “Beyond Fundraising” by Kay Sprinkel Grace and “Making Library Web Sites Usable” by Tom Lehman and Terry Nikkel. I’ve nearly exhausted our small collection of non-profit resources at the Camp Fire office.

Amber just discovered an amazing resource: Indiana Youth Institute has a free library that you can use via mail.

Once you have requested materials, IYI will mail your materials to you by priority mail. In your package, we will include a postage-paid return envelope. Just place the items in the envelope, seal it and add your return address, and pop it in with your regular mail.

Check it out at IYI Library

I’m definitely going to sign up.

When we face seemingly insurmountable odds, it is easy to seek a silver bullet to magically solve your problems. We see this in desperate fundraising appeals to wealthy donors, last ditch (and very expensive!) advertising campaigns, and so on.

There is no silver bullet.

Sure, you might win the heart of some fantastically rich and generous donor who bails you out. Of course your ad campaign might catch the right person at the right time and land you tons of clients.

Or you could buy a lottery ticket to pay your bills.

In the real world (where you live when you’re not working for your non-profit of choice), we know better. We save money and make frugal decisions. We build our resumes through hard work and incrementally successful projects. We take life slow and build on the results we’ve achieved.

Momentum takes a lot of work to build. It’s hard. It’s even harder to reverse it. So don’t think you can do it overnight, with a silver bullet that never was.