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Posts Tagged ‘ministry’

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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In its second edition of the World Giving Index, the Charities Aid Foundation has determined that the United States is the most charitable country in the world.

The study found that out of the 153 countries evaluated, the people in the United States were the most generous with their donation and volunteering for charities and other nonprofit organizations.

The study also showed that giving globally has increased by 2% and that volunteering has increased by 1%.

The report also has a great picture showing how giving has been distributed (originally found at http://taxprof.typepad.com/taxprof_blog/2011/12/world-giving-index-2011.html ) shown below:

Map of Giving

Charities Aid Foundation

 

For more information read the report at https://www.cafonline.org/publications/2011-publications/world-giving-index-2011.aspx

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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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Bell Ringers

Akron Kiwanis

During the ‘Season of Giving,’ most of us are aware that churches and nonprofit organization rely upon the generosity of others for their operations.

Lest we forget, we often receive several letters, emails, phone calls, and of course we will see the Salvation Army bell ringers. However, while most of us are on the receiving end of soliciation… very few of us are aware of the great amount of detail and effort that larger nonprofit organizations use to research and track our giving habits.

Just like retailers and credit companies, many larger nonprofit organizations rely upon market research and public information to learn about our philanthropic passions and wealth. In a recenet NYT article, “Taking Fundraising to the Next Level, author Rob Lieber highlights just how a larger nonprofit organization like a hospital, college, or major foundation will likely track your information.

For most small nonprofit leaders, and most donors, this article will likely be the first time that you see how professional fundraising is done, and like the author, I would say that I support their efforts- even if it seems a little unsettling.

As I read this article, I thought it would also be a great way to help leaders of smaller nonprofit organizations see the bigger picture and learn how some of the biggest and best fundraisers in America support their causes and philanthropy organizations.

Enjoy the reading and have a Merry Christmas.

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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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Programmable Wifi Thermostats

The Nest

When most of us think about a HV/AC system, we usually picture an older furnace- rarely would we picture a sleek thermostat that connects to a wifI system. However, this seems to be the future of energy controls for commercial and residential buildings.

Since 2008, manufacturers have offered thermostats that can connect to a wifi system, thus allowing control and access to the system via the internet. This has been a great upgrade, but until now many of the programmable thermostats have been confusing to use. In fact, the US Dept of Energy realized that most people who purchased programmable thermostats, actually used more energy than before, because they were too complicated to use.

So in an effort to make programmable thermostats more user friendly, several companies have begun to create systems that can be controlled by a computer using a program like Microsoft Outlook set set room temperatures.  Other companies, have also begun to make intuitive thermostats that create a pattern of use based on how you adjust the temperature over a period of a few weeks.

With heating and cooling systems accounting for 16% of the electricity in the USA, and more than half of the energy consumed in a house, HV/AC systems will continue to be a focus for utility companies as they try to reduce the amount of energy consumed in the United States. This trend will likely also become a focus of more and more churches, facility managers, and home owners as the cost of energy continues to rise.

After all, the less money that people and organizations are forced to pay for utilities, operations, and energy, the more money they have to support the mission and programs that they value. For more information about changing HV/AC systems, please read the following articles:

Blog notes: Several of the stats given in this blog were pulled from these  two articles. The picture above comes from several sources and is provided by the company and can be found on their website- http://www.nest.com

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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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Picture of Twitter Bird

some_communication

Last week I was interviewed by MSNBC for an article about how churches are using social media (read it here). As I prepped for the article, I created a list of reasons why churches should consider using Social Media (SM).

5 Reasons to Consider Using Social Media for Your Church:

  1. Local Context– Unlike most communication mediums, SM is grassroots based- meaning it provides a powerful way to reach out to people in your specific community.
  2. Be Present in the Conversation about You– People discuss all kinds of issues on SM- including their church. In order to be part of conversation, you need to be present. This is especially key when communicating about brand, major events, or in times of a crisis.
  3. Reach Gen X and Millenials– Younger generations are skeptical about institutional church- SM offers a way to engage with them, whereas they would be hesitant walk into a church building.
  4. Connect with People not Present– SM offers tools to connect with people who are unable to be physically present- traveling, hospital, shut-ins, etc. With SM they can participate live or by watching/engaging with an event later.
  5. Facilitate Conversation– more than just telling people about your church and its ministry, SM provides a place for a larger conversation where everyone has a voice- providing more transparency and accountability for organizations.

If you want to consider how Social Media can improve the operations and ministry of your church, I would also encourage you to follow Rev. Courtney Richards on facebook or twitter (@c_rev) – links are for her pages.

Courtney is a minister at Geist Christian Church in Indianapolis (facebook link), and when I asked her about SM, she said, “I use SM all the time to keep us with members and with what is going on in the community. It has been great way to reach out to people and to offer either a word of support or to give someone a shout out for their hard work.”

If you are considering using Social Media, feel free to read a number of blogs that I have posted here, and to also find someone in your local community who can assist you. You can begin by just listening and observing first, and then jump in as you feel ready.

Blog Notes: Special thanks to Courtney Richards for the quote and letting me share her online twitter profile.

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White Chapel

photo: edgeplot

Unlike most commercial businesses, which have a common standard by which to rate their financial operations and health, churches struggle to identify healthy financial norms.

Part of the reason for this struggle has to do with the following reasons:

  • Churches are faith based organizations
  • Church are contextual
  • Churches are organized by mixed polity (denomination or independent)
  • Churches are exempt from many IRS and government reporting requirements
  • Churches vary in size, financial support, and ministry
  • Churches don’t usually follow GAAP (General Accepted Accounting Principles)
  • Churches are run by volunteers

However, while all of these factors cause incongruity, there are a number of common ratios and principles that many churches share related to income, expense, debt, membership and worship attendance. I have highlighted a few of these in some of my earlier posts (please see: Financial Rules: Ministry Distribution), but another resource is a new financial database that was created by Capin and Crouse, CPA. (more…)

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