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Why You Should NOT Run a Nonprofit Like a Business

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Do your Board members think you should run your nonprofit like a business? Do your donors think so? Maybe even your Executive Director?

Don’t believe the hype.

A nonprofit is a fundamentally different kind of organization than a for-profit enterprise.

The Looking-Glass World of Nonprofits

other side of mirrorTake it from Clara Miller, head of the Nonprofit Finance Fund. In a classic article, “The Looking-Glass World of Nonprofit Money: Managing in For-Profits’ Shadow Universe,” she gave a true-false quiz about how nonprofit finance really works. Take the quiz yourself:

  1. Rule #1:  The consumer buys the product. True or false?
  2. Rule #2: Price covers cost and eventually produces profits, or else the business folds. True or false?
  3. Rule #3: Cash is liquid. True or false?
  4. Rule #4: Price is determined by producers’ supply and consumers’ ability and willingness to pay. True or false?
  5. Rule #5: Any profits will drop to the bottom line and are then available for enlarging or improving the business. True or false?
  6. Rule #6: Investment in infrastructure during growth is necessary for efficiency and profitability. True or false?
  7. Rule #7: Overhead is a regular cost of doing business, and varies with business type and stage of development. True or false?

The answer to every single one of these questions is: in the for-profit world, true. In the nonprofit world, false. (Read the article to understand how and why.)

Because the most fundamental axioms of business don’t apply to nonprofit finance, if you try to run your nonprofit like a business, you will go broke. Or go to jail. Or both.

Nonprofits, Businesses, and #MeToo

Businesses are not a good model for nonprofits in a different way. They are notoriously bad at preventing, detecting, and responding to sexual harassment.

A case in point is what happened when a corporate PR executive took over as the head of Save the Children UK. How did he respond to complaints of sexual harassment and bullying at the nonprofit? Ruth McCambridge at Nonprofit Quarterly quotes the BBC:

Current and former employees say the charity, under the leadership of Mr. Parker, created an adrenalized culture more suited to a battle-ready business than a charity. They describe a place gripped by a desire to win, with victory defined as raising more money and then spending it on splashier projects than other charities did…

A corporate creature to his core, Mr. Parker reacted to the harassment complaints like a chief executive from a bygone era, current and former Save the Children employees say. One of his priorities seemed to be protecting the jobs and reputation of the men responsible for the harassment….

In the end, Parker left Save the Children UK with serious damage to its reputation and its finances (donations are already down) “that will shadow the charity for a long time.”

Nonprofits, please run your organization in a way that fits your own mission. Trying to be like a business is a recipe for disaster.

Nonprofits, Don’t Be a Home Invader. Be Welcome

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climb through window

If I don’t answer the door, you don’t climb through the window!

What should you do to interest a potential donor–and what shouldn’t you do? Let me tell you a story that will help you answer the question yourself.

Recently, my wife, Rona, thought about signing up for a service online. She went to the sign-up page, but she was dismayed at how much personal information the company was asking for upfront: not only name and email, but address, home phone, cell phone, location…Midway through the process, she clicked off.

The next thing you know, the company had mailed her at her home address. She knew it was them even before she opened the envelope. She’d used her “maiden name” to sign up, and that was on the mailing!

How do you think Rona felt? (How would you feel?)

Don’t be a Home Invader

Whether it’s a commercial organization or a nonprofit, there are things you just can’t do to interest a customer, or donor, in your business.

Let’s start with: you can’t ask for too much information at one time. It takes too long, and it raises suspicion that you might be using the data for nefarious purposes.

Your landing page needs to be as simple as you can make it. Name and email address might be all you need.

Then: you have to be prepared to take no for an answer. Just because you want that person’s attention–or donation–doesn’t mean they have to give it to you. Pursuing them is creepy…especially if you do it across platforms.

Imagine you knocked at my door, and I didn’t respond. You knew I was there, because the light was on and you heard me moving around. Would it be okay to climb in through the window and say hello? Of course not! Then why would it be okay to send me mail when I hadn’t even authorized you to send me email?

Be a Welcome Guest Instead. Here’s How.

Of course, you do want people who are interested in your nonprofit to hear from you. But there’s a wrong way to do that…and then, there’s a right way. If you do the right thing, you can be a welcome guest in their inbox.

The key is to offer your audiences content that’s so good and so useful to them, they keep coming back for more–and telling their friends. How do you do that? Here are five steps to take.

  1. Commit to doing better. Most nonprofits are happy just to be producing content at all. As Kivi Leroux Miller tells us, it’s time to question that approach.
  2. Know your audience. Know them so well you’d recognize them on the street. (John Haydon’s Nonprofit Marketing Personas Workbook will help you there.)
  3. Have a strategy. It can be as simple as “Who are the audiences we’re trying to reach? What do we already know about these audiences? What do we need to find out to give them what they’re looking for? What will they do differently if we succeed?”
  4. Keep it exciting. Look for ways to give your audiences useful information in a variety of forms—written, visual, online, through social media.
  5. Promote it. Use every means you have to spread the word about your great content. Word of mouth, public speaking, radio, TV. Newsletters, social media, your website. Link to it in the signature line of your emails. Find the hook so a local journalist turns it into a story. Be creative!

Getting to Know You, Getting to Know All About You

As you provide more value and win the trust of the person you’re trying to reach, maybe they will agree to sign up for your email. Again, keep the sign-up page simple.

Over time, you can ask more questions in an email series and store the answers in your database or CRM. You can start segmenting your email list, so that you send each person the kind of story they’d be interested in hearing.

You can create more and more reasons why the person hearing from you looks forward to your next message. Isn’t that better than having them call 911–block you–because you’ve invaded their online home?

 

 

 

 

Moving to Mobile Fundraising: Five Tips to Help

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Lisa C. Dunn

Guest author Lisa C. Dunn

Did you know that an estimated 51 percent of people who visit nonprofit websites visit from a mobile device?

And according to a recent Nonprofits Source report, mobile giving donations have increased approximately 205 percent in the last year.

The move to mobile giving is growing by leaps and bounds. There are several reasons why mobile is a trend that’s  going to stick around for years to come:

  • It’s easy for donors and nonprofits alike. Whether it’s mobile email donation buttons or text-to-give, making donations via a mobile device is intuitive for donors, and it’s also easy for nonprofits to manage the process.
    ● It’s a secure method to donate. With a wide range of security measures built into mobile fundraising platforms, both donors and nonprofits have peace of mind that it’s a safe way to conduct donation transactions.
    ● Mobile giving is not generation-specific. While you might think that
    making donations via smartphone or tablet is more common among the Millennial generation, the practice spans individuals of all ages.
    According to a recent report, people ages 65 and older donate online just as much as younger generations.

So, whether you already incorporate mobile giving into your fundraising strategy or you are considering implementing it soon, here are five tips to help with your mobile fundraising efforts:

  1. Check that You’re Ready for Mobile. To unveil a successful mobile fundraising campaign, you first must ensure that your donation forms are fully functional and easy to use.

Take the time to revise or adapt any existing online donation forms to make sure they are mobile-responsive. Ask staff members to test your mobile donation website on their mobile phones and tablets to see if it’s intuitive. You also can run a beta test of the technology with trusted stakeholders, board members or long-time donors to generate useful, constructive feedback.

Your goal during each testing stage is to make sure there are no technical difficulties. If there are issues, it’s important to address them sooner than later.

2. Set Realistic Goals. With mobile fundraising, if you develop a precise goal amount, it can boost your chances of attaining that goal more than if you merely circulate “standard” solicitations.

For example, if your organization is a religious group, you are probably already raising funds. However, by setting a realistic, specific mobile fundraising goal – like raising $10,000 to build a kitchen that can provide meals for the homeless – it may prompt members to pay serious attention. And when they know they are helping you reach a tangible goal, they will be more inclined to donate to your cause.

3. Confirm You Have Accurate Data. It’s essential that you have accurate information about your donors when launching a mobile fundraising program, starting with what they prefer to be called. For starters, send out an email to your existing donor base, asking people to verify whether their data is correct. If you have the bandwidth, you can also ask donors to verify their phone numbers and offer them the chance to be some of the first participants in your organization’s new mobile fundraising efforts.

The next step is to determine a way to gather accurate, new data. Perhaps you already have an effective method to capture leads, or maybe you need to establish a new system. If you do not already have a process in place to obtain and enter new donor data into your CRM, then it’s an ideal time to research ways to manage your donor and supporter relationships better. It might be time to find a new CRM that fits your nonprofit’s requirements and can handle list segmentation (find recommendations and read reviews here ). Either way, it’s
crucial to have a strategy in place to quickly update and store new data as you collect it.

4. Spread the Word. When launching a mobile campaign, the transition can be daunting, especially if it’s your first time. The key is to reassure current donors that if they do opt to receive messages from your organization via mobile, that it is indeed coming from your nonprofit.

To give them peace of mind, tell them that your mobile fundraising campaign is safe and secure. Also, let them know that if they do receive a text message from your organization, that it is indeed from you (and not a robot). Finally, in all communications about your mobile campaign, always emphasize that each text or email will be relevant and personalized specifically to them.

5. Understand It’s a Process. Similar to any other process that involves numerous stages, you must be open to making adjustments and tweaks along the way to be successful with a mobile fundraising strategy. As you venture through the various stages, track everything and determine what works well – and what does not.

The key is to take your time to improve your approach of seeking mobile
donations on a regular basis.

The Bottom Line

As you work to implement a mobile fundraising system that works well for your organization, understand that harnessing the power of advocates and influencers can enhance your campaign success.

Make a goal of focusing on your nonprofit’s “power players,” or leaders and supporters who you know will help spread the word through their own families, friends, colleagues and social media networks.

Remember, launching a mobile fundraising strategy is not a one-and-done project. It is a continual process, and, with a solid approach, it will become more intuitive and more manageable over time.

Lisa C. Dunn is a writer for TechnologyAdvice and a freelance writer, copywriter and ghostwriter who develops high-quality content for businesses and non-profit organizations. For over 20 years, she has worked with numerous PR and digital marketing agencies, and her work has been featured in well-known publications including Forbes, VentureBeat, Mashable, Huffington Post, Wired, B2C, USA Today,
among others.

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