Gain Donor Support for Overhead and Infrastructure Dollars

By | Donations | No Comments

After stories in the media showcased lavish travel and other perks among some nonprofit leadership, the public outcry became deafening. The public believed that their cash donations should go directly towards the people they thought they were helping. Nonprofits, eager to prove that they were using funds wisely, began touting the percentage of donations that go ‘directly towards helping those they serve.’

The problem with this model, however, is that it doesn’t address the ongoing need for funds to support overhead. Yes, overhead. Many nonprofits bemoan the limited funds given to them for overhead, yet do nothing to educate the public about why donating to general funds that include overhead, marketing, and administrative costs are necessary.

Nonprofits Are Businesses

Part of the problem is that many people still believe a nonprofit organization is in effect a full charity with zero need for funds for things like office rent, utilities, computers, telephone services, and salaries.

People seem to equate the nonprofits of the 21st century with the charitable organizations of the 19th century. You know, the ones you see in movies, run by ladies with leisure time out of their sitting rooms over cups of tea.

Okay, so we exaggerate, but there’s still a public perception that nonprofits aren’t businesses but charities that should give away all of their funds.

While it is true that nonprofits do not seek a profit margin the way for-profits do, they do need margin to continue their operations, and they certainly need capital to go towards infrastructure.

Ratios Can Be Misleading

Touting the proportion or percent of funds going directly towards programs can be misleading. If 99% of the donated funds go towards programs, nothing is left to pay the bills. And if you can’t pay the bills, the nonprofit won’t be able to continue operations. It’s not an either/or scenario – either funds go towards programs or overhead. It should be both.

Every Penny Goes Towards Supporting the Mission

Instead of promoting the percent of funds that go directly to the nonprofit’s recipients, it would be better if organizations promoted how their donations go towards supporting the overall mission of the organization. After all, every penny donated to a nonprofit, whether earmarked to pay the water bill or to buy food for the homeless, goes towards the support of the organization’s mission.

A few ideas to help you showcase your mission rather than the ratio of funds going towards program recipients:

  • Use images on social media to showcase the recipients without promoting percentages
  • Explain how you track and monitor the use of funds, and reassure donors that all money goes towards fulfilling the organization’s mission
  • Disclose the needs of your nonprofit for overhead and infrastructure. Don’t skip over it in your messages to your constituents. If you need funds for a new roof or to pay the electric bill, say so.
  • Showcase how your nonprofit is more efficient or effective this year than last year — share program results and outcomes

Nonprofits, like any other organization, need money for their infrastructure. By including transparent, honest messages in your marketing to donors and potential donors, you’ll avoid the trap of focusing only on the percent or ratio of dollars spent on direct programs and help raise awareness that yes, overhead and infrastructure are essential, too.

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.

Three BIG Mistakes Organizations Make Asking for Donations – and Fixing The Mistakes with Donor Management Software

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Does your organization raise money primarily through individual donations? If so, when is the last time you reviewed how team members are asking for donations – and whether or not it’s effective?

These three mistakes can detail or slow any donor giving campaign. Take a moment now to review your organization’s donor campaigns and fix these mistakes before they negatively impact fundraising.

Mistake #1: Lack of communication about marketing activities

Susan sends out emails on Monday. John plans a direct mail campaign while Lynn is busy with social media activities. The team doesn’t find out until Friday’s staff meeting what each person has been working on and discovers that each one spent hours creating templates, adding graphics, and crafting the right copy to ask for donations.

What if the team members could have pooled their resources and shared them? Just knowing that an email, direct mail campaign, and social media blast was going on in one week, and that many resources could be shared among these tactics, would have helped all three people save considerable time. The email blast could have been shared on social media; text from the direct mail letter may have made a great template for the email.

A lack of communication and coordination among team members conducting donor campaigns is the biggest mistake on the list. It wastes time and money, duplicates efforts, and potentially annoys donors if they receive frequent or repetitive communications.

Mistake #2: Using separate software to track activities

Susan, the person in our example above who sends emails, uses a commercial email marketing platform to send her messages out. She manages the email list within that software platform.

John painstakingly adds mailing addresses to an Excel spreadsheet. He keeps the sheet in good order, and hands it off to the mailing house to affix address labels to the direct mail packages.

Lynn also uses spreadsheets, but tracks the messages she sends out in Excel. She tracks the messages sent, when, and from what channel they are sent.

What’s wrong with this picture? While this team may be using the software available to them, they aren’t using it efficiently. None of their systems communicate with each other, so they do not have the opportunity to share data and resources. And no one appears to review the results of their marketing efforts to find out what’s working and what can be improved.

A single donor management and contact management system would make their efforts much easier and more effective.  Such systems integrate with nonprofit accounting systems and share contact information across multiple platforms. John, Lynn, and Susan could easily track not just their efforts but the results, and measure it to find out what worked so they can repeat successes and avoid failures.

Mistake #3: Using personal email addresses to send donor requests

Staff and volunteers may not realize how unprofessional it looks to send donor requests from a personal email address. Not only does it look unprofessional, but it may also compromise your personal email address if the recipient’s contact book is hacked.

Instead of using personal email addresses to send out donor communications, at the very least, professional addresses from the organization should be used. Many donor contact management systems send mass emails from an @ email address so that your private email address is hidden.

Fix It Fast with a Donor Management System

If you recognize any of these mistakes occurring in your organization, it’s time to fix it, and fix it fast, before one mistake lowers your chance of achieving your fundraising goal. Discover the many donor management systems available to you. Contact Welter Consulting  for more information on how your organization can benefit from donor management systems.

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, rather than 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. 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.

Giving Tuesday Is Coming! Here’s How to Prepare for a Successful Giving Tuesday

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Giving Tuesday, often referred to by its hashtag #givingtuesday, occurs the first Tuesday after the American Thanksgiving holiday (and for those in other countries, American Thanksgiving is always the third Thursday in November).

Started in 2012 by the United Nations Foundation and the New York City 92nd Street Y, Giving Tuesday began as a grassroots effort or “hashtag movement” to counteract the gross commercialism that often occurs on Black Friday. It’s not uncommon in the United States for eager Christmas shoppers to push, shove, and generally behave  rudely in their quest for cheap goods on the first official shopping day of Christmas. Sad, but true.

These charities began the Giving Tuesday movement in an effort to focus people on the more positive message of giving back to their communities. Instead of crass commercialism, the emphasis is on charitable giving. And that’s good news for your organization if you can leverage the momentum of Giving Tuesday.

In 2017, the last year for which figures are available, approximately $274 million was raised in total, with $45 million raised through Facebook donations.

Your nonprofit can ride the surge of donations generated through the hashtag campaign by ensuring an easy way for people to donate. A little preparation now may result in a surprise on #givingtuesday.

Revamp Your Donation Page

Don’t wait until the night before Giving Tuesday to update your donation page. Take the time now to make sure it’s as enticing as possible.

  1. Update your branding. If you’re using PayPal or a similar payment service, customize your checkout pages and thank you pages. Add your nonprofit’s logo, slogan, URL and any other information to remind donors that their donation is making a difference.
  2. Remind donors of your impact. Another great use of the donation page is to remind donors of the impact that your organization makes on the constituents you serve. An animal nonprofit may wish to include a link or stories, photos and other media showcasing their work with animals their charity helps. The best time to remind donors of the impact that their generosity makes is at the time they’re giving. It reinforce their feelings of good will and strengthens the bond between your organization and the donor.
  3. Add monthly giving options. Sure, a one-time donation is great, but what about monthly giving options? You may be able to add monthly giving options so that donors can choose to give in regular increments rather than in one lump sum.
  4. Make it friendly: Make sure that your page can be easily read by multiple devices including desktops, laptops, tablets and mobile phones. Responsinator is a free tool that allows you to see how your webpages look on mobile devices.

Don’t Be a Stranger

One of the best ways to leverage your participation in #givingtuesday is by letting your constituents know ahead of time. Start several weeks before the promotion to let your donors know that your nonprofit is participating in the event. As the date draws near, send more frequently emails. A good sequence is a thank you message on Thanksgiving; email reminders on Sunday and Monday; and a big announcement email on Giving Tuesday.

Incorporate Social Media

Giving Tuesday is a social media-driven campaign; be sure you’re actively participating on social media in the time period leading up to the actual day. Update your social media banners and set up automated messages using tools like Buffer or Hootsuite to make it even easier to keep a steady stream of messages flowing to your constituents.

Remember to use the hashtag #givingtuesday on all posts related to the big donation day. People searching under that hashtag can see your posts; it will show up in the results for the hashtag search. That’s another great way to reach potential donors!

Giving Tuesday, One Great Day Among 365 Other Donation Opportunities

Giving Tuesday is a great event – but so are the remaining 364 days in the year. Every day is an opportunity to connect with donors and raise awareness for your nonprofit. In fact, many of these tips can (and should) be implemented year-round as part of your fundraising and marketing activities.  With a little planning and follow-through, you can expand upon the idea of “giving Tuesday.”

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.