Sell solutions, not problems

For those of you who believe that marketing your nonprofit mission is all about explaining a problem…

Wise up!

Donors at all levels want solutions that solve the problem, not perpetuate it. For new or smaller nonprofits, establishing that you have the resources to do that is one of your biggest hurdles.

That's not to say that you shouldn't include the high points of the problem as a explanation for your solution. After all, there has to be a reason to ask for other people's money, whether you are selling a car or a cause.

That's what the statement of need is for, but if your whole pitch is about telling people what they probably already know, you're going to lose their interest quickly.

Unless your mission is very unique or seldom addressed, donor education on the problem is sometimes regarded as just so much more PR hype. More importantly, it wastes valuable space in your proposal.

For local nonprofits, much or your funding is going to come initially from your local area; usually at  the city, county or sometimes state level. 

A case in point

To  combat a stray dog problem,  county commissioners passed an ordinance requiring all dogs be spayed or neutered to receive a license, or that the owners get a $350 annual kennel license for unaltered animals.

As often happens when governments get involved, the policy had unintended consequences. The population of unlicensed and freely breeding dogs skyrocketed.

A local but small  mid-South animal rescue had been trying to build a no-kill shelter for almost five years, with little success. They had four acres of donated land, but little else. The cheapest plans they could put together were still coming in at $2.7 million dollars for construction and all the corresponding preparation costs, including an environmental impact study.

The problem wasn't so much irresponsible pet owners as it was the cost of the surgery. Even at the so-called county discounted average price of $175.00 per animal, most owners in the economically distressed county just couldn't afford it.

The rescue wanted to switch tactics. They contacted every vet in the area and asked them if they could offer  spay and neuter services for $75.00 per head in return for guaranteed payment. 87% of them agreed.

The new mission of the rescue was to collect funds to offer prepaid vouchers to the owners to give to the veterinarians. The owner would contact the rescue, receive a voucher number, take that to the vet within 30 days of issuance, the vet would turn in monthly confirmation of the surgeries  to the rescue, and they would then pay the vets. They will call the campaign "More pets, less puppies"

At present, there are still some logistics to be worked out, such as what to do with animals that have no owners, but initial response to the concept has been outstanding. Pledges have tripled in just a few months.

Why this works

County residents already knew about the problem. They wanted it fixed, but not at the expense of maintaining another shelter forever and ever.

This idea offers a real solution to animal overpopulation. It short, people can see the time when the need for the program will dwindle down to a minimum level.

Results are germane to the county residents. No one wants to have their dog impounded and destroyed, but economics is still the driver of family budget decisions. People who are tired of packs of free roaming dogs can see an end in sight.

Veterinarians, some of whom  had been doing some surgeries for free as a public service, will realize more income, most of which goes back into the community in the form of wages and local purchases.

 

Even the county benefits, since their animal control personnel can spend more time on abuse cases instead of rounding up whole packs and litters of dogs. What little extra revenue was coming from dog licenses will be more than covered by a reduction in county personnel costs for overtime.

Focusing on impact

Rethink your approach to your mission. See if your programs can be redesigned to offer real solutions to the root cause of the problem. Give donors a glimpse of the light at the end of the tunnel, instead of just a longer tunnel.

Cancer Charities Fraud Fallout – Will it affect you?

Current news is bad news for online and small scale charitable giving programs.

When four cancer charities were charged with fraud, one of the disturbing facts published was that most of the actual money that was donated came from small donors, $20 or $30 at a time.

The total amount, as charged in the settlement was reported at more than $187 million. The published terms of repayment apportion repayments between the main defendants, but give no specific date for final payment. Consumers will likely not receive more than pennies on the dollar, since the proceeds of the scam have been spent.

Another disturbing fact was that although these charities (all tied to one family) had been under scrutiny for several years, their websites and fundraising activities were not shut down

.

Charity related fraud is one of the FTC's most often reported offenses. That puts all charities in a bad light.

There were indications that these charities weren't on the up and up, and donors who regularly decline telemarketing calls until they have vetted the charity in question through sites like Charity Navigator soon saw that something was amiss.

It's apparent from the amount of money in question that most people didn't bother to check them out at all.

   

The problem is that going forward, most people still aren't going to do that. They are simply going to say no to any and all fundraising calls.

There were red flags for those who did the research, particularly the amount of in-kind donations and fundraising costs, but most people aren't going to do that. It just isn't worth their time for a measly $20 or so.

Smaller nonprofits seeking to expand are going to bear the brunt of that public distrust. Larger organizations can withstand temporary revenue downturns but the little guys and startups can't. Given that very new charities depend mostly on individual donations, they may well be the real losers.

How can you counteract the bad press?

It goes without saying, or should, that you need to establish as much publicly available legitimacy information as you can.

•          Have a well done and informative website in addition to social media accounts.
•          Make your contact information easy to access, including a phone number.
•          Have an IRS determination letter and corporate documents.
•          Have good board and executive staff bios online
•          Have unrelated board members with online profiles on the board of directors.
•          Have audited financials on hand to back up your 990 filings.
•          File long form 990's even if you qualify to use the e-postcard
•          Keep detailed and accurate records of your donors.
•          Limit your large-scale fundraising costs. Frankly, if you are only getting 15 cents on the dollar, they aren't worth your time anyway. That's only viable when you are talking about millions of dollars in donations.
•          If you are truly new, have a business and strategic plan, complete with financial projections.
•          Track your results and impact and be prepared to provide that documentation when asked. 
•         Where possible, provide names of people or agencies that you partner with or who have received assistance from your charity.
•         Register your charity with one of the ratings sites, like Charity Navigator or GuideStar. (Although they may not actually rate you, since rating criteria are often based on minimum revenue amounts, often over $1 million, just the fact that you proactively offered up your information helps interested donors make decisions.)

Eventually, the bad PR will fade, but it's going to remain important to avoid even the appearance of impropriety or mismanagement. You can do that by being as business-like and professional as possible. 

Promoting your nonprofit

Unlike a famous movie line, just because you build it doesn't mean they will come. "They" being the donors you need to attract to actually make your nonprofit dream a reality.

Just like any other small business, you need to convince people you may not even know to spend money to support you, or rather, your mission. So, how do you do that? Especially when as a new charity, you can't qualify for most grants?

You must have a webpage, but you still need people to visit it. How do you drive traffic to your site and hopefully to your "Donate Now" button?

Well, you could advertise, but advertising costs money, sometimes a lot of money. Even a business card size ad in your local paper or a 30-second spot on your local TV station can cost you a few thousand dollars a year. However, many media outlets have public service requirements to fill, so traditional advertising is still possible.

Of course there is always social media. Lots of nonprofits have Facebook pages, but they don't typically generate many dollars, and they don't attract many new faces. Facebookers are generally talking to people who already know them. On the other hand, those people also know people that they can bring to your cause.

Twitter can be a way to attract new blood, provided you understand that the response will be to "hashtag-their interests." If they don't know you, then a key phrase that targets their interest will be far more effective than "hashtag-your charity's name."

Then there is the oft-dreaded personal interaction. Speaking at meetings, attending stuffy events, or even volunteering creates personal connections. While it isn't quite the same as door-to-door sales, sometimes it feels that way.

The point of all advertising to reach people. People are the conduit to the funding that supports  your nonprofit.

To that end, try all of these strategies. Some will work better than others, and then you can refine your campaign. But you can't succeed without reaching out, no matter how awesome your mission statement sounds.

One emerging form of fundraising is crowdfunding. As it becomes more well-known, a lot of nonprofits are posting on sites like Kickstarter, Indiegogo or StartSomeGood.com and a lot of them are not meeting their goals.

The one thing that all of these sites require is that you have a network or nucleus of supporters. People aren't logging on to their computers every morning and typing "find an awesome nonprofit I can donate to". You have to have people that will not only start the ball rolling by donating, but reach out to their friends and direct them to your campaign.

Start developing your PR strategy now, build your network, and the funding end of things will become a lot simpler. Need more information?  Email me at rightwords@ida.net and we'll talk!

Avoiding self-made financial disasters

A three-year old human services nonprofit was dealing with serious discord between board members and the executive director. The board felt that overhead costs at 20% of revenue were too high and that the perceived imbalance was taking too much money away from programs. The ED countered that the reduced effectiveness was due to not having enough qualified staff. The board issued an ultimatum. Reduce staff costs by 20%, or the ED would be replaced.

The ED responded by cutting hours, wages and benefits, whereupon 4 of 14 staff members quit. Citing failure to deliver client services, the board fired the ED anyway. The ED then filed a wrongful termination lawsuit, since the board mandate to reduce costs by 20% was achieved due to having fewer employees, and having fewer employees impacted client services. The ED eventually won the case.

On the face of it, this seems like a classic case of a power struggle between the board and the executive director, with the staff and clients caught in the middle.

Upon further examination, the actual cause of the imbalance between overhead and program budgets proves to be more complicated.

The board had previously voted to expand a program by 50%, as outlined in the five-year plan. They mandated that the counseling center be open two more hours daily, and four hours on Saturday. This increased payroll and other overhead costs such as utilities and office supplies by about 12%. In addition, a change in state regulations required that there had to be an upper-level professional physically on duty whenever the client services center was open. Heretofore, the master's level staff only had to be available on call during evening and weekend hours. Shortly after the expanded program started, state and county funding for the program was abruptly scaled back by 15% due to decreased tax revenue.

The immediate problem was that the board failed to re-assess the challenges to the program and when the problems became obvious, they responded by trying to cover funding shortfalls by cost reduction alone. In the long term, their desire to hold administrative and other overhead costs at 10% of revenues was simply unrealistic, given their need for highly qualified professional staff.

The problem seems very simple. In their zeal to help more people, the fundraising part of the equation had been overlooked. Instead of diversifying and expanding sources of non-governmental funding, the nonprofit was relying solely on  government fee-for-service revenue to pay for the expansion.

The real problem was a failure by the board to adequately develop contingency planning and funding. As many organizations often do, they neglected the unpleasant parts of strategic planning. They developed the strengths and opportunities section well, but failed to acknowledge the threats and weaknesses portions, taking the rose-colored glasses approach.

You cannot plan adequately without considering worst-case scenarios. This organization was relying solely on one source of funding and that source had historically been very sensitive to outside influences, in this case a substantial drop in state tax revenues coupled with increased regulatory costs. In addition the board was highly resistant to developing an emergency fund. All revenue had to be spent on the mission annually, and even the idea of having excess funds (called profit outside of the nonprofit sector) at the end of the year was abhorrent to the board.

The board had made half-hearted attempts at fundraising, but felt that it was unnecessary due to their fee-for-service model. Donor development or grant research wasn't even mentioned in their financial plan.

The obvious answer was to postpone the planned expansion and start developing a more diversified funding stream. The NPO's mission was still being fulfilled in regard to their existing client base, and a 15% fee-based income reduction was realistic to try to cover with income from fundraisers and grants.

Instead, this nonprofit came very close to shutting down. Client services had to be curtailed by a full 75%. The staff eventually settled at just four paid professionals. In press releases, the nonprofit blamed the recession and the resulting loss in government funding. In reality, the reason was poor planning.

Bad things do happen to good people and organizations. Some things truly are beyond one's immediate control. Recognizing and planning for that can make the difference between success and failure.

Grantmaker Research

Sometimes I get lists from clients that were obviously compiled from some website like the Foundation Center. Not too long ago I actually got a list printed directly from that website of over 100 "youth-oriented" foundations from a prospective client.

  

I have a subscription to that resource and several more just like it.  If grantor research was that easy, no one would need professional funding consultants and/or grant writers. The reality is, that list is simply a baby step in finding prospective funding.

There are many steps that go into approaching and qualifying a viable funding partner. Does the grantmaker ever support NPOs in your geographical area? What do they mean when they say they make grants nationally?  What makes them choose one nonprofit over another? Does their controlling philosophy match yours? Are you looking for a one-shot funding source, or is a continuing relationship important? What other nonprofit or ideological themes do their individual board members support away from that particular foundation?

There are dozens of things that can influence acceptance of a grant application. Not too long ago, I researched a large family foundation in the eastern U.S. for an Idaho client. I felt that the client's program might fit in with the foundation's underlying interests, but according to their public face, it looked like a stretch.

I literally built a profile for the board members and the history of their involvement in Idaho.  And I mean every consequential board member, all 22 of them. In the end, I was able to help the client craft a customized proposal that stayed true to the client's mission, but still appealed personally to the foundation's board members. This is the first three sentences of the acceptance letter from that foundation:

"Thank you for making our board aware of your program. We have been interested in this type of highly targeted program for many years. Normally, the program would not fit our giving parameters, but we are making an exception due to our personal interest in (the program). We are pleased to inform you that we are funding (the specific area of the program) in the amount of $10,000 for each of the next three years."

This was a highly targeted, well documented and very personal appeal to the specific interests of three of the board members as evidenced by their personal participation in similar projects. I spent almost a month, off and on doing that.

Very large nonprofits may have the resources to do that type of in-depth relationship building, but often they rely on actual personal contacts.  They know the board members they are trying to court. They go to dinner with them, attend the same functions, and often the actual application is simply a formality.

If you don't rub elbows on a personal basis with your target funding source, consider hiring out the research, and acting on it with something more than stale boilerplate copy. It could be profitable.   

Successful Nonprofit Fundraising

On a Personal Note

To all the people that requested Climbing the Ladder to Nonprofit Success-Thanks! To the "marketing guru" that emailed me to tell me I was missing "an awesome monetizing opportunity" - I'm not interested.

I'm not exactly stupid when it comes to marketing, internet or otherwise. I know about landing pages, and "free" offers that require me to enter my email just to look at something to see if it I want it. I couldn't even begin to count all the content pieces I've written for that type of campaign. Those marketing/sales techniques do have a place in many industries. If just getting subscribers to view your blog is how you make money, or you have a product that many people use, but lots of competition in the same product line, I get being able to mass email your contact list constantly. I really do understand top-of-mind branding.

That isn't what I intended to do when I wrote Climbing the Ladder to Nonprofit Success. That's why I gave you MY email address. If you are interested in starting a nonprofit the right way, or struggling with one that didn't start with a good business model, I figure you'll contact me. If not, bombarding you with a sales pitch every week isn't going to make you a client. That's when I become known in a negative way. "OMG!  Another email from that pest again!" is not how I want you to remember me.

What does all this have to do with YOUR nonprofit funding plan?

 

Don't be a robo-fundraiser

There are certain organizations that seem to live on seemingly never-ending cycles of email or direct mail appeals, especially around the holidays. We all get them. Every few days there is an email or a fundraising letter in the mail. Pretty soon, the intended recipient simply drops them in file 13 or its electronic equivalent on the way to opening the rest of the mail. Even at nonprofit presort rates, that is expensive. The marketing firm that produces the appeal materials doesn't work for free. And we wonder why their fundraising costs are 50%-plus of their budget?

   

Robo-mailing typifies the way many nonprofits approach fundraising. Nag, nag, nagging for money or shot-gunning your grant applications aren't always viable plans. It can be an ineffective, time-consuming and expensive way to turn off your donors. Purchasing one-size-fits-all mailing lists costs money.

One of my services is researching probable matches between funding sources and a specific nonprofit. Some people email me with a request to "send out up to 100 applications for grant funds". It ain't gonna happen. If I can find 12 good matches, that is a rarity. A half-dozen or so really good prospects per grant cycle is more like it.

Why less really is more

Are there 100 foundations, corporations or government grants that generally support your type of cause?  Maybe…but they aren't all a match. Some are not geographically matched, some are already locked in to supporting specific nonprofits, some require a depth of organizational development that your nonprofit simply can't provide at the time, and some actually don't support your specific mission at all. Just because they say they support youth doesn't make them candidates for a pitch for advanced dress designing classes for girls 8-13. Researching grants takes time and in-depth analysis. Why not spend your money to develop a really targeted campaign?

Spend Wisely

That's why I offer fund raising planning services. That can be a part of a larger strategic plan, or a stand-alone service, but the idea is to focus your time (and money) on developing customized strategies that actually have a chance of succeeding.

Get a focus. Develop a real plan. Know when you will need money and think ahead, not a week or a month, but a year or even five years ahead. For that you'll need a budget, a easily explainable program and verified positive outcomes. Develop these now, not when we're writing the grant, because making it up as you go along is not a strategy. And if you need help, give me a shout. Helping you to succeed is what I do. Just drop me a line at granthelp@ida.net.

How to ask for support effectively

I got a call yesterday from a local nonprofit. The nice lady on the phone spent about three minutes telling me all about the organization. She gave me a synopsis of what they support, their mission statement, even their web URL. At the very end, she said,  "Thank you for taking the time to let me tell you about (the organization name). Can we count on you to support us?"

 

Support it how?  Do you want money? Volunteers? Are you having an event? What specific thing will my support accomplish?

This is a problem with many smaller nonprofits. They don't complete the ask. Maybe it's because they are trying to avoid the hard sell, maybe they are uncomfortable with having to ask for money, who knows?

I get just as annoyed as anyone else when the first words out of the telemarketers mouth are the name of the organization and the dollar amount. You know, the ones that start out, "this is the Blank Society and we are calling to let you know we are sending out a donor envelope for $25.00. Can we mark you down for that amount?" Uh…no. That approach almost always gets you hung up on at my house.

In between those two approaches is that sweet spot that gets you what you need. If the local lady had simply told me in about one minute that they were the Blank Nonprofit trying to support X cause, given me their name, location and their URL, and told me they would appreciate a donation for $25.00 that would provide X benefit for a recipient, I probably would have been more inclined to either say yes, or counter with another amount.

I fully appreciate that many smaller organizations are using volunteer fundraising personnel that don't do cold calling for a living. Work up a script, and have them practice calling each other or role playing until they are comfortable with the spiel. Try to keep it short, but informative. Above all, specifically ask for the money (or time, if that's what you need). If the answer is no, and it often will be, thank them graciously and move on.

One well known nonprofit uses the tactic of visual images and a targeted monetary appeal. "Just $xx. a month will (feed, clothe, educate, whatever) a (deserving recipient)."  That is about as short and yet effective as it gets, and that nonprofit raises millions and millions of dollars every year, $x at a time.

Asking for money is a part of nonprofit survival, particularly for new or smaller nonprofits that may not yet be ready to apply for grants. It's a learned skill, but you can learn to do it well.