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Archive for the ‘organization’ Category

arm wresting competition

Soggydan

When most businesses think about their competition, they often identify businesses that offer similar products and services.

For example: HP thinks about Dell. American Airlines thinks about United Airlines. In essence, their competition is defined as those other businesses that compete for the same market share.

In a recent blog post, Shaun King highlighted that while this trend is true in business, it is not true for churches and nonprofits. In his post, “The MAJOR Disadvantage (& ugliness) of Non-Profits & Churches Misunderstanding Who Their Competition Is,” Shaun highlights that other nonprofits and churches are not in competition with each other.  He argues, instead, that the real competition is the factors that cause the problems.

For example:

  • If you are trying to fight hunger, the competition is poverty and access to food.
  • If you are trying to fight slavery, the competition is slave traders
  • If you are trying to fight drug crime, the competition is drug dealers

Unlike businesses, churches or nonprofits don’t compete against each other. Instead, they offer each other a partner for mission and work.

I really appreciated Shaun’s post and I would encourage other leaders to give it a read and to share it with their leaders in their organization. After all, operating a church is about changing lives, not fighting with other people who have the same goal.

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five

svenwerk

Each year IBM makes 5 major predictions about what new 5 technological innovations will impact our lives in the next 5 years. They call it their 5 for 5 list.

Here are the top 5:

  1. Energy: People power will come to life– normal activities will soon be converted into energy to power our houses, work, and lives.
  2. Security: You will never need a password again– think biometrics and unique identification based your physical attributes
  3. Mind reading: no longer science fiction– linking of phones, computers, and the web to your personal preferences and body actions
  4. Mobile: The digital divide will cease to exist– mobile devices are making access to information and technology universal
  5. Analytics: Junk mail will become priority mail– via analytics, technology will begin to filter the information you prefer to your inbox

Obviously these shifts will impact our lives, how we communicate, and our culture…aka every aspect of our lives. As you consider how to position your nonprofit to serve others, these advances will also impact the mission work of our world.

I encourage you to read the full story on the IBM Website

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Reviewing Financial Reports

s_falkow

Recently, I was asked, “What are some basic steps we can do to improve our financial management?”

I was visiting a local congregation and the leaders were in the process of reviewing their financial history, operations, and current accounting controls. In the meeting I listed off about five items, but in reflection, I thought I would create an official list of financial basics for nonprofit management.

Financial Basics for Nonprofit Management:

  • Tracking of Data- by tracking data, you can determine benchmarks for growth or decline. Be sure to track participation, income, expenses, donations (and levels of giving), and long term goals (and to communicate these to leaders, donors, and members).
  • Accounting Controls-many small nonprofits rely upon 1 or 2 people to handle all of their bookkeeping. This leaves them vulnerable to fraud and usually limits financial communications. Be sure to have monthly review of finances, independent reviews of bookkeeping, limits on spending, and requirements for approval of spending.
  • 6 Months of Emergency Savings- every organization should have 6 months of cash savings available to cover expenses in an emergency.
  • Line of Credit- as organizations grow, they can improve their cash flow by taking out a line of credit or operating loan. LOC should be capped at around 3 months of expenses, and often operate similar to a credit card for an organization.
  • Multiple Income Streams-no organization should only have one line of income. By creating multiple revenue streams, nonprofits increase their stability.
  • Endowment & Net Assets– Gone are the days when a nonprofit organization should operate at a net zero. By creating endowments and net assets, nonprofits can cover the cost of their operations, allowing more of their donations to immediately  go into outreach.
  • Facility Management– Buildings cost a lot to maintain and operate. If you own a facility, be sure keep up with facility maintenance, use it as resource, and improve it as building code and mission needs change- otherwise it can become black-hole that sucks money away from your mission focus.
  • Board Development- Board members are ultimately responsible for organizations- be sure board members understand their roles and that they are giving proper oversight of staff and operations.
  • Insurance- Be sure that your organization has enough insurance to cover its liabilities for its staff, operations, facilities, and to protect the organization from lawsuits and emergencies.
  • Management & Gift Policies-smaller nonprofits often lack staff, organizational management (by laws), and gift policies which help organize and outline how nonprofit organizations operate and how donations should be accepted and used.
  • Financial Relationships– this may seem like an odd item for this list, but knowing your bank manager, accountant, insurance broker, and financial advisers personally can be critical in emergencies and/or when you need additional help.

There are many other items that could be added to this list (brand management, communications, mission focus, etc), but these are some highlights to help you review how your church or nonprofit organization manages its financial operations.

 

 

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Earlier this week Guidestar posted the results of a survey that asked nonprofits about their fundraising and operations for 2011.  Here are some of the highlights:

  • 41% of Charities saw an Increase in Giving for the first 9 months of 2011 over 2010 (28% had less income & 31% no change)
  • 65% of nonprofits saw an increased need for their services– over the past 9 months compared to 2010
  • Approximately 50% of charities have some financial stress – income, cash flow, # of donors, non-donor income

For more information, visit Guidestar’s website

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If you have read the book Freakonomics, or listened to Marketplace on NPR, then you probably are familiar with Stephen J. Dubner’s use of statistics to explain common behaviors in economics and society.

As a stats junkie myself, I love their work, and on Tuesday’s Marketplace radio program- Dubner reported on some truths and myths about fundraising (to listen to the program, click the NPR link above). Dubner’s report included an interview with John List, who is a professor at the Univ of Chicago. Professor List studies the economics of charities

So here is a taste from the interview:

  • Seed Money helps– The more seed money that you have induces more people to give, and those people tend to give more money.
  • Matching Gifts– only work up to a 1-1 match.  People will not usually give more than the original match amount (this is contrary to most expert advice)
  • Raffles are a Big Deal– Research shows that by offering someone a prize will increase their gift by almost 100%
  • One & Done- This is new, but it gives control to the donor. Donors who are offered the “give us one gift and you can tell use never to contact you again” option, tend to give more money and more often. Few actually choose to not be contacted again.
  • Guilt Pleas Don’t Work– You may get a 1 time gift from guilt or shame tactics, but in the long run you are only burning bridges.

As you think about how to raise money for your organization and its operations, I would encourage you to consider this information. Take a moment to think about how you raise money for your annual fundraising, and take a second to listen to the full interview.

Blog Notes- the above bullets are paraphrases from the interview found in the Freakonomics & Marketplace Report for Nov. 29, 2011.

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On Monday I was interviewed by Alex Johnson, a reporter for MSNBC.com about how churches are using social media.

In the interview I really tried to stress that churches really have a great opportunity to connect with their local communities (via social media), and that the conversation was taking place, with or without their official presence.  Here is the link to the full article: “For Some Churches, The Internet Clicks; for Others It Doesn’t”

social media

some_communication

Much of article focuses on how different denominations and local churches have adapted to using social media.  But, the article also helps to spell out that congregations need to think through how they plan to use it.  It is not enough just to create a facebook page or to have a static website.  Instead, churches really need to think about their ‘brand’ and what messages they hope to convey to their potential audience.

As you read the article, here are some helpful questions to ask about your church’s use of Social Media:

  1. Who are we trying to target?
  2. What is our overall goal for using Social Media
  3. What messages should we try to communicate?
  4. How can we participate in the conversation, rather than just push out information? (more…)

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Pew Research Quiz Logo

Pew Research Quiz Logo

There is a lot of conversation in the business world about how to connect with Generation Y, aka the ‘Millennial Generation,’ as they grow and transition from youth into adulthood.

If you are not familiar with the Highlights of this group, here are a few:

  1. Currently largest generation in the USA (yes bigger than Boomers)
  2. More ethnically and racial diverse than most of USA population
  3. Less religious than most of USA population
  4. More educated than most of USA population
  5. Highly technology integrated and multi-taskers (more…)

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People meeting together

nateOne

The top ten list below came from the Boardsource’s website, which is a great resource for any and all nonprofit organizations.

Ten Basic Responsibilities of Nonprofit Boards

  1. Determine mission and purpose. It is the board’s responsibility to create and review a statement of mission and purpose that articulates the organization’s goals, means, and primary constituents served.
  2. Select the chief executive. Boards must reach consensus on the chief executive’s responsibilities and undertake a careful search to find the most qualified individual for the position.
  3. Support and evaluate the chief executive. The board should ensure that the chief executive has the moral and professional support he or she needs to further the goals of the organization.
  4. Ensure effective planning. Boards must actively participate in an overall planning process and assist in implementing and monitoring the plan’s goals. (more…)

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On Monday, I talked about how technology can bridge the accountability gap that separates donors from beneficiaries, and in the post I shared that I would write 3 blogs showing how such examples can be used. This is the second of three posts.

You might have heard of Mark Horvath if you listen to NPR, watch CNN, or if you are a SXSW junkie-  He is the guy who started the the nonprofit organization, InvisiblePeople.tv, in 2008 to help tell the true story of homelessness in America.

Mark started the project when he found himself homeless, and when asked why he launched the site Mark said (excerpts taken from an interview by Kevin D. Hendricks):

Two things,

1) When I started InvisiblePeople.tv, I was close to 19 months unemployed, moving fast forward into foreclosure. I don’t think I could have filled out one more job application, and I filled out a lot. I couldn’t find work and I had to do something to keep from going crazy.

2) I knew from my own experience that the homeless story wasn’t being told correctly. We needed to empower (more…)

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Pie Chart

GuideStar

According to GuideStar, giving to nonprofits has remained fairly consistent with giving patterns in 2010.  There seems to be a slight increase, but many donors are still concerned about their personal income and the economy.

The pie chart to the right shows that 44% of nonprofits surveyed have shown an increase in giving, over the first 6 months, compared to 2010. While 25% have see no change, and 30% have seen a decrease.

In its report, GuideStar also noted that the larger the nonprofit organization, the more likely they were to see growth in income (the 44% listed above).  For example, 57% of organizations that spent more than $3 Million showed an increase in giving for 2011 over 2010. While only 34% of organizations that spent less than $250,000, showed an increase.

This information can be helpful to plot where your organization is in its fundraising, operating, and donation cycle, and I would encourage you to read the full report at www.guidestar.org

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