Monthly Archives

December 2018

What Sets Successful Nonprofits Apart

By | Nonprofit | No Comments

Have you ever read the book, “Think and Grow Rich?” There’s a saying in the book: “Success leaves clues.” The author of this classic self-improvement book suggests studying the lives and habits of successful business people for clues of how they obtained their success.

The same may be said for all businesses, including nonprofits. What clues do successful nonprofits leave behind to guide newcomers in the world of mission-driven business? The answer may surprise you.

Success Metrics at the Five-Year Mark

Experts used to say that they judged a business successful or not by the third year; now that has increased to five years. For nonprofits hitting the 5-year mark, statistics from the NCCS/Urban Institute tell us that just 16% failed to renew their form 990 from 2000 to 2005.

Why do nonprofits fail to renew their form 990? If they fall below the $25,000 income threshold or if they go out of business, they may cease to renew form 990.

We don’t know exactly how many of those nonprofits reflected in the NCCS/Urban Institute statistics went out of business, how many dropped below the $25,000 threshold, or how many simply forgot to renew their form. We, however, know that the remaining nonprofits were alive and growing after five years – fully 84%. That’s a great testimony to survival in an age where many businesses fail quite quickly.

The Key Factor Determining Success

Looking across many of the nonprofits that make it to their 5-year anniversary, one thing stands out. This may, in fact, be the key driver of success for nonprofits.

Successful nonprofits turned passion for the mission into passion for the organization. While passion for the mission was prevalent, it was successfully transmuted into passion for the livelihood of the organization. The organization then received the care and attention as a mission-driven business entity it needed to thrive.

That’s a valuable distinction. Nonprofits are, by their very nature, mission-driven. You can’t imagine a nonprofit without its rallying cry, whether that is to end hunger and homelessness, serve a religious group’s needs, or save animals.

However, thriving organizations also focused on developing as a business. Care and attention were paid to things like technology, which can be used in the service of the nonprofit to cultivate donor relations, encourage good communications, and track grant applications.

The Business of Nonprofits

You can also see several things in common among successful nonprofits. This includes:

  • A healthy, active Board of Directors: The Board of a healthy nonprofit takes a strong interest in the organization’s work. Its members aren’t afraid to roll up their sleeves and engage in some networking or fundraising to help the organization raise money or achieve a goal. Members take responsibility for the actions and activities of the nonprofit.
  • A strategic plan: Growth is directed and managed through a five-year strategic plan that lays out the foundation and direction for the organization.
  • Smart hiring: Recruiting and hiring are taken seriously, with people chosen for their passion for the mission and their skillsets.
  • Investment in technology: From software to track and manage grants to the right CRM system, nonprofit management knows that technology, especially software, can help them be more productive.

How does your nonprofit stack up against this list? Are there gaps or areas of improvement?

Success leaves clues. It doesn’t occur in a vacuum. Those nonprofits who thrive and achieve milestone anniversaries – 5 year, 10 year and beyond – do so when passion for the mission meets a passion for the organization. Together, the two create an unbeatable combination.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

Highlights of the 2018 Nonprofit Leadership Impact Study

By | Nonprofit | No Comments

Did you know there are over 1.8 million nonprofits in the United States? How do nonprofits move from startup to leaders? What characteristics do successful nonprofit leaders exhibit and how do they manage with excellence?

The 2018 Nonprofit Leadership Impact Study authored by Nhu Te seeks to answer these questions and more. We think the study bears reading and have included a link to it so that you can read the full report. Here are the highlights.

Nonprofits Aren’t Focused Enough on Donor Loyalty

Most nonprofits spend considerable time, energy, and resources on cultivating new donors. However, it is a truism in marketing that it costs more for acquisition marketing than retention marketing. Increasing donor loyalty is one way to reduce marketing costs while increasing donations into the organization.

According to the report, 45% of the study’s respondents cited “donor acquisition” as an area of concern, while 31% cited “donor retention.” Those two areas go hand-in-hand. Improving retention offsets much of the worry over acquisition since funds continue into the organization with less effort. It’s all about communication and nurturing relationships, rather than leads, for new donors.

Events Are Popular for Fundraising – But Not Necessarily Profitable

What would a nonprofit be without the annual charity dinner, the church carnival, the library book sale? These and other nonprofit fundraising events are quite popular, but are they profitable?

The survey data doesn’t support the assertion that events are as profitable as many nonprofit leaders think. While 86% of the respondents use events as fundraising opportunities, other fundraising activities such as mobile fundraising outstripped events in their ability to raise money. The bottom line? Events may be popular, but they don’t raise quite as much money as nonprofit leaders think they do.

Nonprofits Lack In-Depth Strategic Plans

Plans? Who needs strategic fundraising plans? You do if you’re running a nonprofit. The report found that 74% of nonprofits do not have a strategic fundraising plan. Remember, “Those who fail to plan, plan to fail!” Time to work on your strategic fundraising plan.

Nonprofits Need to Be More Selective When Choosing Their Boards

Serving on a nonprofit board of directors carries a great deal of responsibility. Among their many responsibilities, fundraising should be an integral part of the total package. Yet 72% of nonprofits struggle with making sure that their board members are actively fundraising. They also struggle with keeping board members motivated to help with fundraising activities. Another 53% struggle with finding quality board members who are passionate about the nonprofit’s cause. 52% struggle with establishing clear roles and expectations for each board member.

Nonprofits Aren’t Utilizing Technology to Its Fullest Extent

This point from the study is one that we’ve seen many nonprofits struggle with – using technology. It’s not that nonprofits are averse to using technology. It’s that they are slow to adopt it, especially in the realm of fundraising.

For example, the study found that 80% of nonprofits are not utilizing mobile fundraising in their fundraising strategy. Another 63% of nonprofits estimate that their organization’s digital fundraising falls under 20% of their overall fundraising.

Putting It All Together: Fundraising Is Changing

If you step back and look at the big picture that emerges from the study, you’ll see a few macro trends. First, fundraising is changing. It’s no longer about events, but about using technology such as mobile fundraising and other tech-enabled tools to raise money. Events may continue to be an essential part of awareness and brand-building for your nonprofit, but events aren’t as profitable as everyone seems to think they are. If you continue to run events, keep a close eye on the profit/loss ratio for the event and ensure that you aren’t hosting events just because that’s what you’ve always done.

Technology can be used in so many ways to help with fundraising. From automating grant tracking to using email to keep donors engaged in your nonprofit’s mission and story, smart technology use can go a long way towards helping your nonprofit reach its fundraising goals.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.