After the 180-minute workshop and networking, Courtney was completely confused about one seemingly-vital element. “What is the ideal size of my board?” she wondered. Her workshop instructor firmly declared that “best practices” dictated a board of 18-25. A number of her colleagues espoused a smaller board, “no more than twelve,” since “they were the only ones who did any work anyway.” Still others declared, “the sky is the limit as far as number of board members.”

Courtney was aware of many concerns associated with board management. She knew about creating board job descriptions, heard terms like “give, get, or get off,” and knew having an orientation for new board members would be a good idea. But the simple question of optimal size of the board eluded her. So, she decided to weigh the plusses and minuses of her options.

A Small Board?
A small board, she determined, would be nimble, easier to recruit, and would take far less of her time. A small board would allow members to meet with less notice; there would be fewer busy schedules to try to coordinate, and the nastiness of bureaucracy would be easier to evade. Very appealing! However, Courtney knew a small board could lend itself to power plays and micromanagement. She knew she didn’t want that in her new position.

A Large Board?
On the other hand, the large board presented some significant benefits. Courtney knew of many organizations where their ONLY requirement of board members was their ability to give or get a certain amount of money annually. If helping bring in the cash was the only expectation of board members, then surely these same folks would be less likely to stir up trouble or question Courtney’s leadership. She really only needed volunteers to help her raise money, anyway. Indeed, the large board presented a tempting option for Courtney. However, part of the attraction of this arrangement also creates a hazard. Where is the board oversight? If the only responsibility of board members is to bring money to the table, what about the fiduciary responsibilities associated with board membership? Courtney’s attraction to a large board was no doubt the result of the influence of her colleagues who lamented the excessive involvement of board members. Perhaps her colleagues were oblivious to the benefits of accessing the networks presented by a variety of board members; or perhaps they exploited those networks in addition to their income sources? Managing a larger board would certainly take more time and energy, but the rewards may well be worth the effort.     

A Mid-Size Board?
Finally, Courtney considered the so-called optimal board size of 18-25 people. Like Goldilocks’ porridge, certainly the mid-size board would be “just right,” right? Big enough to provide diversity of backgrounds, but not so large as to become unwieldy. Intimate enough to create a sense of teamwork and common purpose, but not too small as to allow for wild agendas. Courtney saw much wisdom in the so-called “optimal” board.  

But like most stories, the truth is not always the same as the complete story…

Courtney actually chose the large board. Her priority, she decide, was financial security. By having more local leaders she would increase not only total funds to her organization, but higher visibility as well. The challenges of managing a large board were mitigated by establishing an executive committee, serving as a board within a board. Many of her colleagues suggested the modification, and she was confident it would work in her organization. Keeping in mind all of these decisions required compliance with the agency’s bylaws. Courtney got just what she needed.  

In her case, bigger was certainly better…at least for the moment. Have you had a similar experience when starting a nonprofit? What worked best for you? 

Written by guest blogger, John A. Scola, CFRE. John has been involved professionally in nonprofit work since 1983. He has been designated a Master Teacher through the Faculty Training Academy of the Association of Fund Raising Professionals. He was also the recipient of the AFP’s Greater Arizona Chapter Outstanding Executive Award in 2002. John is an Associate Consultant for The Fundraising Resource Group.

LINK TO THE ORIGINAL POST: http://blog.lodestar.asu.edu/2013/01/bigger-is-always-betterexcept-when-its.html.

A recent New York Times editorial, “Catholic Education, in Need of Salvation,” makes some very insightful and important points while highlighting some seemingly insurmountable challenges to Catholic education. Everyone involved with Catholic education knows the history of the change from the religious order-led model to a more expensive lay-led system. There is also the pressure of shifting demographics in the U.S. Catholic population that is straining the system. However, the potential undoing of the Catholic education system lies somewhat in its worthy mission. Not in the need to change the mission but in how to fulfill it. Canon Law states that “Pastors of souls have the duty of making all possible arrangements so that all the faithful may avail themselves of a Catholic education.” This sets Catholic education apart from other private institutions that, if they choose, can provide access primarily for only those who can afford it (or who excel in sports). This open invitation from Catholic schools provides quite a conundrum on how to pay for it.

The article concluded with a quote from John J. Hughes, the first archbishop of New York: “The school is more necessary than the church.” This is understood, particularly in providing at least part of the solution to break the cycle of poverty and disproportionate opportunity that exists in many urban areas and poverty-stricken communities where public education is failing. Catholic education is vital to providing educational opportunity for the underserved. The question is, how to fund it?

I have had the privilege to work with some of the best minds and most compassionate hearts in Catholic leadership. These are spiritual giants, intellectual geniuses and men of great wisdom. They are also good businessmen. But, these leaders, along with their fellow bishops and pastors, continue to struggle with a great balancing act when it comes to how to sustain a broken financing model for parochial, middle and secondary schools.

Here is where the free advice comes in.

There must be a consolidated approach to save Catholic education and make it more attractive as a sustainable model for investment. This is not an easy task. First, on the diocesan level, there are many competing interests. “Not my school.” “Not my parish.” “Not my donors.” That “parochial” view must be overcome. What good does it do to win the turf war if the turf becomes barren?  Consolidated school consortiums must become the norm, providing opportunity, efficiency, affordability (and transportation) to more. Second, we must continue to advocate for changes in public policy such as voucher systems to allow families to choose how to spend their education dollars for the greatest outcome for their children in all communities. Third, Catholic education must develop and communicate a business model that provides donors confidence in the return-on-investment and sustainability for the future and not simply of sense they are “just feeding the meter.” Forth, the Catholic Church in the U.S. should explore and develop a vehicle for a national consolidated Catholic educational funding model: a national Catholic Education Endowment. That is not easy, but it is Christian. If we are not called to help the least among us, regardless of geography or parish and diocesan boundaries, what are we called to do? We have no problem in supporting worthy national and international Catholic causes such as Catholic Relief Services and others, why not a national Catholic primary, middle and secondary education endowment?

My friend Ray Coughlin, Director of Stewardship and Development at the Archdiocese of Chicago, was on to something when he pitched the concept of a planned giving campaign for Catholic Schools to his diocesan leadership. There will continue to be massive wealth transfer in this country. Why not to Catholic education on a greater scale equal to that of higher education and perhaps on a national level? Of course, before you can ask someone to take assets out of their portfolio, money from their bank account, or inheritance from their children to stick in your account only to use the earnings, you must have a business plan and model that is worthy of asking someone to leave a part of their life’s work to.

The chicken or egg question is finally answered. The first step is fix the model; then the hard work of gathering the eggs will be made more achievable on a grand scale. It will take courage, hard decisions and creative thinking. It will take sacrifice and sharing from all stakeholders. It will take a non-parochial and universal viewpoint. It will take engaging the best business, education and spiritual minds to create and implement the solution. But, absent this courage, continuing to ask donors for our daily bread over and over will not be enough. The statistics will overwhelm, and the mission will be diminished.

A student at St. Mary of Czestochowa School in Cicero, Ill., photo courtesy of The Catholic World Report. Catholic School Girl

For more information about The Fundraising Resource Group’s relational fundraising and marketing services, visit our website at www.thefundraisingresource.com.

illustration courtesy of Gordon Clines

As far back as I can remember, while all of the other little boys wanted to grow up to be astronauts or policemen, all I wanted to be was a professional fundraiser. Nah…I just made that up. I didn’t even know there was such a thing. In fact, when I worked for the largest fundraising organization in country, we played a game called what-is-your-degree-in-and-how-did-you-get-here? I still haven’t found that person who said they knew all along that fundraising was their calling.

Our profession has an identity crisis. Part of the reason is that it has no real beginning point in education and academics as either an undergraduate program or even a trade school. A recent article in Nonprofit Quarterly, “Fundraising Education: A Fork in the Road” discusses in-depth the argument for developing a systematic, accredited undergraduate and post-graduate education track in professional fundraising.

I understand Drs. Sargent and Shang’s concern when they say, “Not only do we lack a depth of academic provision, our sector is also awash with low-quality training programs based largely on fundraising folklore and the illusion of best practice.” I also agree that there’s a need to have a well-rounded and developed curriculum and a starting delineation in our professional training, but I believe it goes beyond that.

I will never forget in college when I asked one of my accounting professors how the topic being discussed was actually applied in practice. His response was “I don’t know. I have always been a teacher and haven’t worked in practice.” I strongly believe that there are three elements beyond any classroom or training room that must be present to ensure the education process is not merely academic or philosophical: Acceptance, Application, and Accountability.

Acceptance
There must be a change in the mindset throughout nonprofit organizations on the need to invest in development. That includes hiring the best, quality training, and ongoing support. In the for-profit world, the parallel to development is sales. When I worked in the investment banking industry, there was a huge focus on, and investment in, sales training programs. Credentials walking in the door did not matter, everyone in securities sales went through the rigorous training. Nonprofit leadership has the tendency to recycle development personnel from one organization to the next, many times recycling stale habits and ideas. There must be organizational “buy-in” that development is the lifeblood of the mission, and quality matters. Archbishop Beuchline and the Archdiocese of Indianapolis is a good example of this understanding of the importance of development. A few years ago, when budgets were tight and programs had to be cut, the Archdiocese invested in additional development resources. The result? Scaled-back programs were more quickly reinstated and a $100 million capital campaign for archdiocesan ministries was successfully implemented. Non-profit organizations (i.e. the executive, board, volunteers and, yes, development staff) must have a mindset that says we will all invest our time and resources to build the most successful fundraising organization possible. This mindset takes not only buy-in, but an actual commitment and patience on the part of the organization to allow the initiative to mature. It may even take an investment in outside expertise to evaluate your current fundraising plan, develop a comprehensive plan specific to your needs, develop and deliver training specific to the plan, and to assist with application.

Application
In Soren Kierkegaard’s parable of the ducks, every Sunday the ducks in the village would waddle to their church. The duck pastor would give an inspirational challenge each week with soaring rhetoric. “Ducks, God has given you wings! With these wings you can fly! With these wings you can rise up and soar like eagles! No walls can confine you, no fences can hold you. You have wings and you can fly like birds!” Every week, the ducks in the pews would receive the message with frenzied “amens.” Then, every week, the ducks would waddle back home – no soaring – no flight. This is what happens all too often with training and education in our industry. There is no mechanism or plan to actually apply what was learned. It is one thing to engage in academic exercise, but unless it is put into practice, it does no good. The problem is not with lack of desire or information; most often it is the lack of experience to truly know how to apply the information at hand and evaluate the success. That is where outside, third-party fundraising professionals can make a difference. Any training or educational program that is going to be worth the investment should have an ongoing component to support the organization in applying what is taught, with a specific, actionable and unique plan for each individual organization, and a good measure of accountability.

Accountability
Fundraising professionals working within their organizations often voice frustration over being a “prophet in their own land.” It is kind of like when you tell your teenager something very wise, and they do that eye-rolling thing. But, if some other sage (say a pop star or professional athlete) says the same exact thing, the swooning begins and, possibly, even action can occur. It can be a challenge for development and fundraising executives to hold their organizations to task, even when there is organizational acceptance for a plan. There must be a true mechanism associated with any teaching and training that holds not only the student accountable, but everyone involved into account, or the knowledge gained will simply be another good suggestion unheeded. There must first be a clear understanding of responsibilities (who, what and when), then there must be measures to assess outcomes, as well as accountable reporting. Again, many times this is where third-party expertise can be that outside voice that is heard. As a fundraising consultant, there are times I would consider giving diagnostic services or training at no charge. But what I have learned is that without some skin in the game, it is too easy for organizations to take the service less seriously. It is easier to hold an organization accountable when there is an investment in the outcome.

To recap my position, I look forward to the day when there is a solid educational track in higher education for more people to choose our profession from the beginning of their careers. However, other critical factors beyond academics include acceptance of the importance in investing in quality development programs, ongoing support for practical application, and steps for holding all accountable for the outcome. One-hour, one-day or even one-week seminars that do not take seriously how to actually put information into practice and guide the organization to fundraising success are – to borrow a line from the late Rich Mullins’ song – “about as useless as a screen door on a submarine.”

For more information about The Fundraising Resource Group’s relational fundraising and marketing services, visit our website at www.thefundraisingresource.com.

What I do know is that it will continue to take a lot of ambidextrous thinking to meet the challenges of private education funding that face schools today. In a recent op-ed piece in The New York Times, R. Scott Asen, a successful businessman and 10-year veteran of the Development Committee for Groton School in Massachusetts, puts forth some interesting and challenging thoughts for funding “the gap.”

Mr. Asen’s thesis is that for some private schools, tuition is too low and the development model simply cannot keep up and “is beginning to fray.” He rightly points out that tuition revenue for the average day school covers only 70 to 80 percent of the cost of education and the gap is as much as 50 percent for many boarding schools. He advocates that cost is not the issue, but that it is a revenue problem.

The bottom line proposal from Mr. Asen is a “means-based” model that includes tuition and an agreed upon annual donation to fill the gap based on the ability of a family to pay the full cost of education for a child. He concludes that many who are simply paying the stated tuition amount may have the capacity to pay more toward the full cost. He suggests it is not only an issue of value, but a moral imperative. I have to agree he has some valid points.

First, I think there is an issue of education. I am not talking about the students but rather about the education of parents. I was visiting with a current parent at a school where I was working recently who said, “I get it. Tuition has to be set at a reasonable rate, but not necessarily the full cost. The school allows me to make a part of the cost of educating my child tax deductible by asking for a donation to the annual fund, and I happily give.” Bingo! The only other options are to pay full price or have others help to underwrite the gap.

There is no question that a quality private education should be an option for many who can’t afford even the base tuition. It also cannot be expected that current parents should be responsible for filling the complete gap. It does take a robust development effort to engage past beneficiaries and community partners to help make that education accessible. It is a benefit to all. But it will also take other creative models for generating revenue.

The Cristo Rey Network of Catholic schools, begun by the Jesuits in Chicago in 1996, is one example of right brain creativity and left brain ingenuity. I encourage you to read the book More Than a Dream: The Cristo Rey Story: How One School’s Vision Is Changing the World to learn more about this model for funding inner-city education. But the challenge extends beyond just the inner city to all areas of private education. Endowment dollars are not sufficient. Tuition cannot continue to rise. Costs cannot be cut further. More must be done in messaging, marketing, fundraising and creative revenue models.

I disagree with Mr. Asen that the development model cannot help solve the problem. My experience is that many times it is what we are doing in development that is the issue. I continue to evangelize on the need to shift from an event-heavy approach and embrace a major gift mindset. This mindset has to be adopted and embraced throughout the organization and not simply laid at the feet of development and fundraising staff in a “Here you go. Fund the gap. It’s your problem,” kind of way. Major gift fundraising is an intentional, professional and relational approach that must permeate every aspect of the organization with ownership and involvement from every stakeholder. Still, this alone may not do the trick.

I agree with Mr. Asen on a hybrid, needs-based approach with the proper information, education and cultivation of those who can pay the full cost of educating their child. I just don’t think that alone will be enough. It will take enhanced development efforts that generate the highest return on fundraising investment, increased marketing on why the gap exists and the benefits to all of giving to fill that gap, perhaps workable voucher programs to allow students trapped in education limbo a choice, and even more creative funding approaches.

We have to put the best left brain, right brain and ambidextrous minds to work to develop funding models that will support and reward educational institutions that are making the grade and providing opportunity. Schools should be willing to invest in enhancing their development and marketing efforts by evaluating their current activities and implementing a sophisticated, professional approach to fundraising. Training for administrators, staff, boards and volunteers should be seen as a true investment rather simply a cost. We must explore every possibility.

After all, a mind is a terrible thing to waste. What do you think?

For more information about The Fundraising Resource Group’s relational fundraising and marketing services, visit our website at www.thefundraisingresource.com.

I was with an organization recently that is considering hiring outside capital campaign consulting services. The Fundraising Resource Group, my company, is one of the firms being considered. The question of the benefits of hiring a national firm, such as ours, versus a local firm came up. This is common and each organization must determine what it needs and expects from an outside fundraising consultant and make the best hire for their circumstances.

Here is the part that concerned me. According to one of the individuals with the organization, one of the firms being considered made a statement that it “could open doors to new donors in the community” if hired. Before going into my concerns I want to make a couple of things clear. First, I wanted to write this before the organization makes its final selection. My firm is still being considered and I believe has a good chance of being selected. But in case we are not chosen to conduct the feasibility study and capital campaign, I do not want this to sound like sour grapes. Second, my firm is a for-profit company that seeks to make a reasonable profit just like the other firms. I understand the sales process so I do not want to come off as completely altruistic or “holier-than-thou” as I share these concerns. I also do not want to sound as if I am accusing the other firm of not caring for the mission of the organization. I do not know the other firm or individuals and am not passing judgment. I speak more from a general sense when any non-profit organization is considering the question “what do I expect from fundraising counsel?”

There were two questions that popped into my mind when I heard what could sound like a reasonable proposal to an organization:

1. Whose relationships are they, and whose will they be at the end?
2. Why not introduce them to the organization now, even if not hired?

This organization has an incredible mission and successful track-record for serving vulnerable children and their families. The needs are great and the organization wants to do more. My question for anyone is, if you personally know of others that would want to support this mission, why make it a bargaining chip for business?

The AFP Code of Principles and Standards makes it clear that “Members shall not exploit any relationship with a donor, prospect, volunteer, client or employee for the benefit of the members or the members’ organizations.” It is not as clear on how, if and when a member introduces its personal relationships to an organization.

I believe the value that a fundraising consultant contributes when working with an organization is in providing:
• A proven methodology, tailored to the specific needs of the organization
• Experience and expertise that the organization lacks today
• Coaching, guidance, training and mentoring for success now and for ongoing benefit

The reality is that a capital campaign for any non-profit organization is successful by raising the level of awareness for an urgent need, putting a plan in place to maximize potential, and bringing primarily existing donors of the organization to an informed and thoughtful quality decision to support the campaign; in short, to bring about capacity giving with existing relationships.

That is not to say new donors will not be brought to the organization as a result of the campaign. But the facts and tried-and-true experience are that the capital campaign will be won with relatively few donors where a relationship is in place by fashioning individualized plans of approach to those donors. There is a “truism” in fundraising that says “first gifts are rarely the largest gifts.” In other words, the likelihood of “capacity giving” on the part of new individual donors is not the norm. A donor typically grows into their giving over time as the relationship grows.

I think it is fair for an organization to ask any fundraising firm that says they will introduce new relationships a few questions:

1. Did any of these relationships come as a result of your work with other local organizations?
2. Will you use your best efforts to establish a direct, personal and ongoing relationship between these donors and our organization?
3. Whose relationship will it be at the end of the campaign?
4. Once the campaign is complete, will you introduce these or any of our other current relationships to other organizations you work with in the future?
5. Will you continue to introduce potential donors to our organization once this campaign is complete?

I have witnessed some nasty outcomes when fundraising counsel believed relationships introduced to the organization were “theirs” rather than establishing a strong connection to the organization. Certainly donors make up their own minds as to what causes they support and to what level. The organization, once an introduction is made, has the responsibility to understand the passions and interests of that donor, convey the urgency of the needs and impact of the gift, and steward the relationship appropriately. An introduction is simply the starting point like any relationship, and must be nurtured.

I go back to my question and concern; if a fundraising consulting firm or any individual truly believes in the mission and work of an organization and has personal relationships who would want to learn about the opportunity, why wouldn’t that firm or individual introduce the two for the good of the cause, regardless of the business opportunity? So tell me, am I naïve or just not a very good business person?

Non-profit organizations are not immune to this challenge when seeking to effectively communicate to their donors. Many times we compound the inherent pitfalls by not starting with a clear strategy, effective message, specific objective and well-defined audience. We go one step further down the wrong path many times by making the common mistakes of “do-it-yourself” communicators rather than employing the appropriate expertise to do the job.

How do you stop this communication “illusion” and actually “achieve” effective communication? Well, if I had all of the answers I would be making a fortune writing a book to teach men how to better communicate with their significant others or parents with their children. However, what I do know is that there are some very specific actions to developing a communications strategy, creating the messaging and materials, and appropriately delivering the right communication to the right audience to enhance your fundraising efforts.

If you want to find out these secrets, join Lee Neel, Vice President of Marketing for The Fundraising Resource Group and Daniel Neel, President, for a FREE webinar on June 26, 2012 entitled, Design and Messaging for Winning Campaign Materials: Avoiding Common Mistakes of “DYI” Communicators. This session is designed to teach participants to:

• Develop a strategy statement for their organization’s campaign communications
• Understand the elements that create strong branding and communications
• Strategically implement effective communications in fundraising activities

Lee brings over 25 years of marketing communications experience, working for high-profile advertising agencies in Manhattan and Dallas and with notable corporate brands. A gifted strategist and analyst, Lee has a broad set of capabilities that include strategic planning, brand positioning and messaging, campaign materials development, traditional media and online marketing, public relations and project management. Lee also has extensive non-profit experience working with many organizations across the country and holds a Masters Degree in Advertising from Northwestern University’s Medill School of Journalism. Daniel has more than 28 years of professional fundraising and financial services experience, developing comprehensive fundraising programs for organizations across the country.

You can sign up for this webinar and find out more about The Fundraising Resource Group at www.thefundraisingresource.com.

Please join us for this webinar on June 26, 2012 at 2 PM EDT and help get grandma off the roof.

According to CharityWatch, spending $35 to raise $100 is acceptable, which means it will get you a “C” in fundraising. Charity Navigator recognizes that there are differences based on the type of organization and incorporates those differences in their rating system. The chart below shows that, generally speaking, if you want to be above average, you need to be spending less than 20 cents of each dollar you raise:

So how do you get there? Well it is not by doing another event or one more mailing. The fastest and most efficient way to increase your fundraising ROI is to adopt a major gift mindset. A recent study shows that “the cost spectrum for fundraising methodologies ranged from a low of $0.12 per dollar raised to a high of $1.50 per dollar raised. Major gifts, partnerships, capital campaigns, planned giving and sponsorships were in the lower cost range, while acquisition mailings, special events, and telemarketing were in the higher cost range, with direct mail to existing donors and earned revenue in the medium cost range” (Spears and Morrison, Philanthropic Trends, 2005). You are lucky if you get to keep half of every dollar you raise from an event (before allocating staff time), and the return on mailings will never get you to that 4:1 revenue to cost ratio you should achieve.

It is not easy to adopt and effectively execute a major gift mindset throughout the organization. It takes leadership buy-in, patience and expertise.

The Fundraising Resource Group recognizes these challenges as we work with organizations across the country to help them adopt this mindset and effectively implement or enhance a major gift strategy. To help get you started, or at least thinking about it, we offer a FREE WEBINAR called Significantly Increase Your Fundraising ROI: A Major Gift Mindset. While there is no way to get all that you need in a one hour webinar, we will give you some practical tips and tools to:

• Identify a major donor for your organization
• Create and manage major gift portfolios
• Develop individual major donor plans
• Solicit major gifts
• Measure and track major gift fundraising success

Fundraising executives, CEOs and board members should all attend this webinar to understand the importance of major gift fundraising and what it will take to adopt that mindset. After all, a mindset is a terrible thing to waste, and so are precious financial resources given by generous donors.  A recording of the webinar is also available to nonprofits upon request.

For more information about The Fundraising Resource Group’s relational fundraising and marketing services, visit our website at www.thefundraisingresource.com.

(Here is where I brag a little before I get to my concerns.)

You see, she competes in canine frisbee competitions and is, in fact, going to the Skyhoundz World Championships for the third time in Chattanooga, TN in September. When I say “world competition,” I mean dogs from around the world. The year Jessie came in sixth in the micro-dog division she got her clock cleaned by a Poodle from Japan. Anyway, Jessie is very motivated at the sight and though of a frisbee. We, of course, have to log a lot of time practicing. Here is where we get to the problem. She doesn’t like to share.

Jessie is a very social dog and loves to play with others. She will give her time willingly to make others happy, unless it includes sharing her most precious treasure. Poor Chance, the Pit Bull, just wants to run a little with Jessie and perhaps get a drink out of the frisbee (I put water in a frisbee for Jessie to drink out of). Jessie immediately grabs and hoards her possessions leaving poor Chance to continue to thirst. When the twin Shelties come out to run and play, all is well until one tries to actually pick up one of the disks, then Jessie is ready to take her toys and go home.

How do I teach her generosity? This is concerning me. I make my living working with others to help maximize generosity. To help organizations better serve others. To teach that it is more blessed to give than to receive. Yet, my own dog I can’t teach.

How do you teach generosity? Perhaps it is inherent or comes to one as an epiphany. Perhaps it is learned gradually as one experiences that it really does feel good to share and help others in need or who are less fortunate. I once read somewhere that generosity can’t be taught – it’s “caught” when someone sets an example, and then imitated and nurtured.  We don’t become generous because we hear a message on generosity. We become generous over time when we begin to practice actions of generosity.  What we do know is that once it exists, we can then maximize generosity in people by understanding their motivations, passions and interests and showing how the needs of others can satisfy their needs to give.

Jessie catches a lot of frisbees, but she has yet to catch the spirit of generosity. Please give me your ideas on how to teach Jessie (or others) that a generous spirit is a good thing and that there are plenty of frisbees to go around.

For more information about The Fundraising Resource Group’s relational fundraising and marketing services, visit our website at www.thefundraisingresource.com.

Or if you want to learn more about canine frisbee, go to www.skyhoundz.com.

At conclusion, participants will be able to:

1. develop a strategy statement for their organization’s campaign communications,
2. understand the elements that create strong branding and communications, and
3. effectively implement campaign communications.

This webinar focuses on the strategic aspect of communications and would be particularly helpful for development directors who do not have a communications background, new and small nonprofits. A recorded version of this webinar is also available to nonprofit organizations upon request.

Visit The Fundraising Resource website often to find out about other upcoming FREE webinars at www.thefundraisingresource.com.

Money. This may come as a shock to some, but being “nonprofit” does not, cannot, mean NO PROFIT.  With the notable exception of GM, AIG and a few others, a business must make a profit to survive.  Your organization was probably not on Tim Geithner’s list for TARP funding, so red ink should be regarded as impending doom.  With the uncertainty of this economy, you simply must be solvent.  You and your board may have to make some tough decisions.  Some programs may have to be scaled back or eliminated.  Fundraising must become even more focused and intentional.  I won’t repeat what we’ve discussed in other recent blog posts concerning funding…suffice it to say you must keep a lid on overhead…now more than ever.

Liability. Your board members have more liability than they probably realize.  While it shouldn’t discourage potential board members from serving, it should be recognized that liability does exist.  For example, the IRS holds board members responsible for actions of the organization.  How?  Let’s say that the board approves a compensation package for the executive director that greatly exceeds reasonableness standards.  It’s the board members that can be held responsible via intermediate sanctions penalties (an upcoming blog topic).  Board members have a fiduciary responsibility for things such as payroll taxes.  The list goes on.  Again, it shouldn’t be a deterrent to serve, but rather an incentive to understand the issues.  While you’re at it, a good officers-and-directors liability policy is not a bad idea!

Documentation. Write it down.  File it.  Record it.  Back it up.  Got the picture?  Don’t put your organization in the position of needing documentation and not being able to come up with it.

Legal. Most likely, your nonprofit is organized as a corporation.  And as a corporation, it should have bylaws.  Bylaws are the rules by which your nonprofit is governed and collectively they are considered a legal document.  The IRS and the courts will hold the board accountable for following them.  It is amazing the number of organizational boards that do not regard their bylaws as important until someone sues them.  If the bylaws need changing, make sure you follow the procedures in your bylaws for making amendments.

Debt. Solomon said it best…The borrower is servant to the lender (Proverbs 22:7).  Debt is not evil, but it is a tough taskmaster.  The more debt you have, the less freedom you have.  Get in over your head, and you may not survive.

Business plan. Got a plan?  You’d be surprised how many nonprofits do not.  If you had one when you started, take a fresh look and see if you are still on target.  Maybe you are still on target, but circumstances have changed, rendering your plan inappropriate for the times.  Create, update…do something.  You’ve got to know where you’re going or you’ll go in circles.

Relationships. In this age of blogging and tweeting, it is easy to mistake social networking for real networking.  We’re not against social networking…we love it.  Just don’t fool yourself into thinking you are building real relationships with people who would go out of their way to help you.  Real relationships take effort and networking.  Whether it is your banker or leaders of other area nonprofits, you don’t get there by tweeting.  It’s about investing yourself and your time.

Volunteers. Can’t live with them, can’t live without them!  Sounds cliched, but it’s true.  Leveraging the efforts of excited, motivated volunteers can expand the reach and capability of your nonprofit beyond anything a small paid staff could ever do.  Just remember that it can be a little like herding cats.  And don’t expect perfection.  “Good enough” is sometimes the phrase of the day.

Customer service. It is way too common to hear nonprofit leaders grumble about recipients of services not being grateful.  While that may be a legitimate gripe from time to time, it usually isn’t.  If your recipients are not treated with courtesy, grace and respect, the fact that it is “free” matters little.  Don’t be condescending to those you serve.

Business reputation. Regular businesses can sometimes survive even when their reputation isn’t the best.  Maybe it’s because they are the only game in town for whatever product or service they offer.  Rarely can a nonprofit get away with something similar.  Safeguard your reputation and public image…to vendors, donors, program recipients…everyone.  You may be the occasional victim of an unfair attack, but as long as you do everything you can as often as you can, you’ll be OK.

This list is just for starters.  There is so much more to successfully operating a nonprofit organization, but hopefully these bullet points will help you in your path to effectiveness.

Written by guest blogger Greg McRay, the founder and CEO of The Foundation Group. Greg is registered with the IRS as an Enrolled Agent and specializes in 501(c)(3) and other tax exemption issues.

LINK TO THE ORIGINAL POST http://www.501c3.org/blog/10-business-essentials-for-nonprofits/