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Why You Shouldn’t Be Afraid to Ask for In-Kind Donations

By | Donations, Nonprofit | No Comments

In-kind donations refer to products or services donated directly to a nonprofit organization. These are tangible gifts given to your organization. Some nonprofits dislike in-kind donations because they feel it limits their flexibility to find the exact items they need. They don’t want to turn away gifts, but when the gifts aren’t appropriate, it’s hard to get excited about an in-kind offering.

Instead of fearing in-kind gifts or shunning them, how about embracing them? With so many news stories today about operating budgets misused at both for-profit and nonprofit organizations, many people prefer to give in-kind than to give cash donations. Figure out how to leverage in-kind donations rather than avoid them, and you’ll be able to meet your organization’s goals while making people feel good about their contribution.

Be Specific About Your Needs

The first step to run an in-kind donation event is to identify what you need. Be very specific about the items, too. Don’t be afraid to create and publicize a list with brands, sizes, colors, and specifics about the gifts needed.

A local animal shelter runs two in-kind gift events each year. They provide lists of items that can be purchased inexpensively at discount stores that will be used at the shelter.

Some items, such as bleach, mops, sponges, and pails, are listed as generic items. But they also list brands of cat litter, dog and puppy food, and cat and kitten food that they prefer. Although they won’t turn away gifts of other kinds of pet food, these specific brands are used when veterinarians prescribe specials diets to animals that have been abused. By stating this in their flyer, the shelter gently educates the public, asks clearly for what they need, and receives plenty of donations. They stage in-kind events in the spring at the YMCA and, in the fall, at the local car dealership and hotel chain. Special “meet and greet” days featuring adoptable pets and volunteers give the events a personal feeling.

Best of all, because the events are for a nonprofit, the local radio station loves to cover them, giving both the nonprofit and their sponsoring organizations a lot of free publicity. It’s a great way to stage an in-kind event that helps the shelter, generates publicity, and raises awareness of the local charity.

Think Big

You don’t have to think small when it comes to in-kind gifts, either. You can list large items such as vehicles, office furniture, and computers as part of an in-kind gift strategy. Using the animal shelter example, be specific about your needs. If you do receive items that aren’t on the list, see if you can use them. If you can’t, thank the donor anyway, and find a way to dispose of them.

Establish Accounting Policies

Don’t forget to establish accounting policies around in-kind donations. You must account for in-kind contributions; they aren’t freebies. Donations above $250 must be recognized with a receipt but giving a receipt with the appropriate and necessary information for the donor’s tax records is appreciated.

An accounting policy for in-kind donations should include guidelines to ensure that all donations are:

  • Documented with a receipt, and a copy of the receipt kept on file
  • Evaluated and given an appropriate dollar value
  • Treated consistently
  • Verified in the accounting records

The IRS features a resource center called Tax Information for Contributors which includes many useful documents to guide you as you track contributions.

When your nonprofit has many needs, it can be difficult to think beyond an immediate cash influx via donations. Sometimes, however, people want to give tangible goods. An in-kind campaign helps you achieve your nonprofit goals while encouraging the public to support your organization.

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.

How to Build Your Nonprofit Technology Plan

By | Nonprofit | No Comments

How does your nonprofit choose the software it uses? Do you use what’s available at no cost or that came with your computer, and hope for the best? Or have you purchased software from an office supply store and find that it just doesn’t fit the needs of a nonprofit?

It’s not uncommon to find that off-the-shelf accounting packages, for example, don’t quite match the needs of your organization. Accounting for nonprofits must take into consideration different revenue sources and requirements. Sometimes adjusting packaged software is like fitting a round peg in a square hole. It works, but there are gaps.

The key to ensuring nonprofit efficiency and productivity lies in a nonprofit technology strategy. Planning purchases in advance ensures you’ve covered all your organization’s needs while handling its finances with care and consideration. It helps you build up your technology the right way, focusing on the primary organizational needs while preparing for future needs, too.

Five Questions to Ask to Build a Nonprofit Technology Plan

We’ve put together these five questions to help you get started building your nonprofit technology plan. Gather your team together and review this list of questions to find the right software for your needs.

  1. What are the tech needs of your organization? You may wish to take an inventory of the current software packages you are using. Include all departments or groups in your inventory and ask everyone to list the software they have on their desktops or organization-wide.
  2. Who needs what? List all the functional areas in your organization and then the types of software each needs. All groups need word processing and basic spreadsheet software, but perhaps only the accounting department needs access to accounting and financial management software, and marketing needs access to graphic design and/or specialized CRM software.
  3. Do you need to integrate new or existing software? Today’s solutions emphasize integration for good reason. It helps boost efficiency, saves time, and improves all aspects of your workplace. If you have a current package for accounting and finance that you like, for example, you may wish to find a CRM system that integrates easily with it so you can track member communications against donations and other data. Integration enables you to do much more with the data you have and to work more effectively across teams.
  4. Are you considering specialized nonprofit software? Software developers keen on the nonprofit world develop packages that fit the needs of an organization better than standard off the shelf ones. These packages take into consideration the various revenue streams at a nonprofit, variations in fiscal years and accounting, and many other areas. Software designed specifically for nonprofits may save you time and money and help you ramp up more quickly than purchasing a package meant for a for-profit and adapting it for the nonprofit world.
  5. What training do we need? Sometimes nonprofits think they need new software when they can use their existing software to meet their needs—with the right training. You may wish to explore training solutions to use your existing software more efficiently. Or, if you’re buying new software, learn about the training options available from the software vendor. The more you know about your software, the more use you will get out of it.

Write Up Your Plan

A written plan offers a robust roadmap of technology solutions that can be shared among team members, board members, and others who can advise and guide your purchases and budget needs. It doesn’t need to be an elaborate plan. List your goals, budget, software needs, and who needs them. Then, decide which teams or individuals will begin the exploration process to find the right software packages for your nonprofit.

Nonprofit software has come a long way from the days of single-use packages that need frequent updates. Today’s cloud-based solutions run over the internet, so anyone with a web browser can access them. They don’t need fancy hardware to run, and they are very user-friendly. Find out more about nonprofit software solutions or get help with your nonprofit tech strategy from the experts at Welter Consulting.

Welter Consulting

Welter Consulting bridges people and technology together for practical 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.

Marketing Segmentation Strategies for Nonprofits

By | Nonprofit | No Comments

One size does not fit all. That goes for shoes, clothes, and … nonprofit marketing. The answer? Market segmentation.

Market segmentation means separating constituents into categories based on similar characteristics. Your current database most likely contains current and past donors, people who signed up for your email list, and perhaps volunteers and those who attended an event. In other words, it’s a mishmash of people who have, at some time, expressed interest in the mission and vision of your nonprofit.

No two people in the database share the same characteristics, of course, but if you are like most organizations, you send them identical promotions. Loyal supporters and casual followers both receive the glossy four-page mailer with a response card or an email a week detailing your work. Perhaps the casual follower only wants to know of significant events while the loyal supporter loves to hear success stories. Yet you’re talking to them both identically, and it’s not working.

The answer is market segmentation. Here’s how to use even the most rudimentary database or customer relationship management (CRM) system to begin segmentation.

Segmentation Strategies Start with the Data

To start a segmentation strategy, review the data in your CRM or database. What have you collected? Most databases contain rudimentary information such as names, addresses, telephone numbers, and other demographic data.

Frequently, nonprofits don’t realize the many ways they can use their existing data to personalize their marketing. The constituents’ addresses, for example, can be used to alert them of events happening near them. Or, you can use the birthdate to send a birthday greeting. It’s a way to keep in touch and to keep your nonprofit top-of-mind.

Add Relevant Fields to Your Database

If you aren’t already collecting the following information, consider adding these fields to your database and begin the collecting information.

  1. Donor status: active or never donated
  2. Date of last donation
  3. Order history / purchase history
  4. Contact preference (mail, email)

With these fields, you can test messaging strategies to solicit donations based on donor history. New or potential donors may receive a tried and true message, for example, while frequent donors may receive more updates about how their donations are used.

Segmentation on a Tight Budget

Many market segmentation strategies can be achieved even on a tight budget. Lead scoring, a technique borrowed from the world of sales, assigns a value to each record in a database evaluated on sales or sales potential. You can mark your records similarly around donations, interest, or interaction. Most databases include simple spreadsheets and have an extra field or two that can be customized. You can group your list according to geography, past interactions with your organization, birth month or something similar, to test out segmentation strategies.

Shopping for New CRM Software

As you get more comfortable with market segmentation and segmentation strategies, you may find that your current database limits how much you can do. A full customer relationship management (CRM) system offers all the features you need to build a robust market segmentation strategy, track and measure the results, and improve your data collection over time.

There are many versions of CRM software on the market today. How do you know which one is right for your organization? You don’t need to do exhaustive research to find a solid starter system. Instead, ask these questions to get started:

  1. What features do I need in the CRM system?
  2. Will it need to integrate with any other systems we have, such as an email or contact management system, or can it stand alone?
  3. Do I buy a site license or seat-based licenses? Is there a usage or data cap in my license?
  4. Is this software complex? Will I need to have someone dedicated to learning how to use it?
  5. Will we need training to use this software?

Depending on how you answer these questions, you may choose a stand-alone CRM, a cloud (internet) based system, or a system that complements your existing operational software.

There’s no right or wrong answer. Just as one-size-fits-all doesn’t apply to a marketing strategy, one-size-fits-all rarely applies to a software solution, either.

Welter Consulting

Welter Consulting bridges people and technology together for practical 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.

Understanding and Avoiding Conflict of Interest in a Nonprofit

By | Nonprofit | No Comments

We’ve all heard the term conflict of interest, but what is it exactly? If I’m on a nonprofit board and I also run a marketing agency, can I charge the board when I make up flyers for an event? If I serve on two boards and there’s an opportunity that would be great for both, how do I choose which one to share it with?

The Law Dictionary defines a conflict of interest as “a situation in which a person has a duty to more than one person or organization, but cannot do justice to the actual or potentially adverse interest of both parties.”

We usually think of a conflict of interest as something personal, such as when there is a conflict of interest between a person’s best self-interest and that of the organization or company they serve. But there can be conflicts of interest at a nonprofit, too. To avoid them, you’ve got to recognize them first.

Types of Conflict of Interest

In general, there are two types of conflict of interest.

  1. Financial conflict of interest, in which a nonprofit board member receives financial benefits from their involvement with the nonprofit or their connections.
  2. Organizational conflict of interest, or when a board member has an affiliation with a person, group or organization, and the relationship may induce the board member to act against the best interests of the nonprofit.

In Washington state, the law is clear: a board member must perform his duties with loyalty to the organization. He or she must be faithful to the organization. When acting on behalf of a nonprofit, board members must set aside personal interests and relationships to make decisions that best serve the nonprofit.

Examples of Conflict of Interest

Sometimes it helps to look at examples to see how conflict of interest happens in real life. Below are a few fictional examples of conflict of interest.

  1. Sam runs a construction company and serves on the board of directors for a local school for special needs children. The school plans to add a wing to their original building and publishes an RFP for construction companies to bid on it. Sam knows he can’t bid on the project, but he gives insider tips to Warren, his old friend who also runs a construction company. In return, Warren gives Sam two lucrative projects as a “thank you.” In this case, Sam has engaged in a financial conflict of interest. He has profited financially, albeit indirectly, from his involvement with the nonprofit board and its connections benefited him personally.
  2. Fran serves on the boards of two health-related nonprofits and hears about a grant available for healthcare nonprofits. Fran chooses to share it with Nonprofit A instead of both nonprofits. In this case, Fran exhibits organizational conflict of interest. Fran’s actions act against the best interests of Nonprofit B, which may also benefit from the information about the grant.

To avoid a conflict of interest, Sam should have remained quiet and not given Warren tips for winning the RFP, or he should have declined any contracts or gifts from Warren. Fran could have given the grant application information to both organizations and allowed them to choose if they wished to apply for the grant or not. In both cases, the choices and subsequent actions of Sam and Fran made their situations into conflicts of interest.

Although federal laws governing 501(c) (3) organizations do not require a conflict of interest policy, it is often a good idea for nonprofits to have one in place. Simple guidelines may be all it takes to get people to think twice before acting in a way that could harm your nonprofit’s best interests.

Welter Consulting

Welter Consulting bridges nonprofits and solutions to help them find technology that works for them. We invite you to contact us for any assistance you need with nonprofit technology and business solutions. Call 206-605-3113 or contact us.