Wednesday, December 31, 2008

Most Popular Posts in 2008

The top 5 most popular posts in 2008 were (in order of popularity):

1. In-Kind Gifts 101: Definition, Acknowledgement & the Law

2. Using SWOT Analysis for Strategic Planning

3. Nonprofit Accounting: Cash vs. Accrual

4. Independent Contractor vs. Employee Part I

5. Nonprofit Blogging Tips from ProBlogger

Tuesday, December 30, 2008

3 tips to reduce expenses

When times are tough, nonprofits often need to cut expenses to match their declined revenue. It is important to be strategic when cutting expenses, and to avoid a knee-jerk reaction to the financial climate. Here are a few tips for reducing expenses:

1. Take a close look at what you are paying right now for everything.

There are savings to be had in almost any area of spending. For example, you can change your payroll service or negotiate a lower monthly fee. I know several nonprofits that use PressGold Payroll, a small local firm and they only charge $22.50 as a base fee and $1.75 per employee. You can also bring your nonprofit's communications into the 21st century by switching your phone service to VoIP (voice over internet telephony) based services like Skype, and take advantage of this website for free conference calls. Speaking of conference calls, schedule more of them! We all have been in meetings where a meeting wasn't really necessary. In those cases suggest a conference call which can save in mileage and parking. Also, take a look at your printing and office supplies costs. Businesses like Office Max offer special discounted prices for nonprofits, and don't be afraid of negotiating with them for a better deal.

2. Take advantage of free help.

Make sure to take advantage of your volunteers, and continuously recruit new ones. Volunteers can do amazing things, and to illustrate that is Pet Haven, a nonprofit organization in Minnesota. Pet Haven is run solely by volunteers. Volunteers plan their annual event that raises $20,000+, volunteers manage their 100+ other volunteers, volunteers run their website, and more. This is a great example of how volunteers can make a huge difference in your organization- in fact they could even run it. Also, don't forget about interns. Students are always looking for opportunities to gain knowledge and skills (and a good recommendation), and will work for little or nothing. If you have had to cut staff hours or lay staff off, don't let their work do undone, give it to a volunteer or intern.

3. Outsource some of the work.

Many nonprofit organizations have to make the difficult decision to lay off staff due to lack of revenue. In those cases, a viable option is often hiring an independent contractor to do some of the work of that employee. For example, if your organization had to let go of your communications coordinator, you can often find an independent contractor that can manage your e-newsletter and design your collateral for less than half of the cost of that employee. Now, this is rarely the recommended route because having staff in these important roles will affect an organization's long-term success, but in times of financial crisis it can be a short-term solution. If your organization decides to do this, you need to be very careful. You need to make sure that the IRS wouldn't classify this person as an employee, which will only get your organization fined and responsible for back taxes.

Finally, make sure you stay on top of your budget. A budget should not be made, approved by the board, and then set aside never to be looked at again. You should review it monthly to make sure you are on track. It should be a road map for your organization’s spending.

2009 Outlook for Nonprofits

I think most of us have seen how the financial crisis has impacted nonprofit organizations this past year, we just haven't known how bad it is. Well, the Minnesota Council of Nonprofits has done some research to examine how just how bad it really is.

What they found:

  • Over half of the organizations (54.5%) have experienced a decline in total revenue. Forty-seven percent are receiving reduced individual contributions. At the same time, 49.2% have to pay increased expenses.
  • By December 2008, many organizations have made changes in operations, including reducing their budgets (44.7%), putting expansion plans on hold (27.1%) and eliminating staff positions (25.6%).
  • This decreased program service is coming at the same time that 42.4% of organizations report that more people are in need and coming to them for services – yet 49.1% of these have already reduced their staff.

With over half of nonprofits experiencing a decline in revenue, it is especially important to start 2009 on the right foot. Watch out for "3 tips to reduce expenses" later today to help in dealing with this revenue loss, and "4 things nonprofits should do to start 2009 on the right foot" on Wednesday.

Click here to read the Minnesota Council of Nonprofit's full current conditions report, and here for their 2008 nonprofit economy report.

Monday, December 29, 2008

Nonprofit Blogging Tips from ProBlogger

Darren Rowse is known as the expert when it comes to blogging. He has several highly successful blogs, including one titled ProBlogger, that is dedicated to helping you blog better. He graciously gave me a few minutes of his time to answer two questions about nonprofit blogging:

1. What are your top 3 tips for nonprofits that blog?

I think the biggest challenge for most bloggers is developing a blog that is 'useful' to its readers (or potential readers). People tend not to subscribe to blogs unless they enhance their lives in some way or fulfil a need. So the challenge for a non profit blog is to find a need that THEY can fulfill in their potential readers. This might be a bit of a challenge (or at least take a little thinking) because many not for profit organizations are probably more used to thinking about how to appeal to people to offer help or fulfill needs that they (or their clients) have. So my first tip is to think really carefully about how your blog will provide value and be useful to people who you want to read it.

Two other quick tips:

Consistent posting - work out what you want to post about, how often you think you can manage to post, what voice you want to write in and try to stick to it. Most successful blogs develop a rhythm of posting that has a regularity about it. This means as a blogger you can get into the rhythm but it also means your readers know what to expect which can be good.

Get Interactive - one of the reasons blogging took off as a medium is that it's a highly interactive medium on a number of levels including between blogger and reader (via comments) and between bloggers (linking to one another, building upon what others are writing, commenting on each others blogs etc).

2. What do you think is the best way for nonprofits to make money while blogging?

Tough question - One thing that I'm pretty sure a nonprofit SHOULDN'T do is run advertising on their blogs. I think blogs are probably more effective to non profits for communicating what they are on about, finding people to support them etc. But if you start selling advertising you distract people from what you're on about as an organization.

The only real way that comes to mind for monetizing non profits would be to use them to direct people back to your other fundraising activities. In a sense the blog then becomes a way of building profile which indirectly helps raise money.

Sunday, December 28, 2008

Out of the country in January

I may be posting a little less frequently the first part of January as I will be heading to Amsterdam and Egypt from January 1st through January 17th. I plan on posting while I am gone, and will be using internet cafes while I am there.

Reader Question: Starting a new nonprofit...


I have a vision for a nonprofit organization and I am planning to initially just ask friends, family members, and people at my church for donations. But eventually, I want to ask small businesses. In order for the funds to be tax deductible, does my nonprofit "organization" need to be in a database somewhere? Or do I simply need to give them a receipt for their donations? Also, I know what name I want to use, how can I find out if that name is already being used by another organization? I don't want to deal with any lawsuits.


Here was my response:

For the donations to be tax-deductible you will need 501c3 status. To get that you need to apply through the IRS:

You need to be granted exemption before you can legally say that someones gift to you was tax-deductible. As for the name, I would first take a look to see if the website is available at

If it is taken, then you might want to think of another name. You can also do a google search, a search with the attorney general/secretary of state's website, and a search with the U.S. trademark office to check on the name.

Tuesday, December 16, 2008

Executive Directors: Is it ok to be all things to all people?

Nonprofit Leadership 601 asked an interesting question in her post "Are we asking too much of our Executive Directors?" and says "As a sector we should work harder to support the strengths of our Executive Directors rather than asking them to be all things to all people."

While she makes an interesting point, that Executive Directors are expected to be responsible for pretty much everything, I'm not sure that is a bad thing. Doesn't the very definition of being a CEO, President, or Executive Director include having ultimate responsibility for all aspects of an organization? That is why it is such an important job. Those that have the role of Executive Director typically have worked in multiple areas of an organization.

While no one expects that an Executive Director is perfect at everything, they must have some foundational knowledge of the different aspects of a nonprofit organization. Plus, those that seek the position typically know what they are getting themselves into. Which brings me to an important point (and what I think is the point of her article), to help reduce turnover make sure that those you hire understand all that is expected of them.

Friday, December 12, 2008

Samples Week- Collateral

Sample newsletters here, here, here, here, here, and here.

Sample annual reports here, here, here, here, and here.

Sample promotional pieces (postcards, brochures, etc.) here, here, here, here, here, here, and here.

Thursday, December 11, 2008

Samples Week- Finances

Sample financial procedures/policies here, here, and here.

Procurement policy here.

Sample fiscal sponsorship agreement here, here, and here.

Sample request for bid letter for an auditor here, here, here, and here.

Sample nonprofit audit here, here, here, here, here, and here.

Sample budget here, here, and here.

Sample profit & loss statement here, here, and here.

Nonprofit Financial Management Self-Assessment Worksheet here.

Financial ratios worksheet here.

Cash flow template here.

To see any nonprofit organization's 990, you can go to GuideStar.

If you have some spare time, this is a good read. It is a paper on Financial Statements, includes their background, talks about accounting methods, and includes samples of a cash flow worksheet and statement, balance sheet, and operating statement. It also includes several sample budgets, including a performance-based budget and a flexible budget.

If there are any other samples related to finances that I didn't include, please leave a comment and I will add the sample.

Wednesday, December 10, 2008

Samples Week- Evaluation

Sample employee performance reviews here, here, here*, here, here, and here.
*360 degree review

Sample volunteer evaluation here.

Sample evaluation plan here and here.

Sample logic models here, here, here, here, here, here, here, and this one is a guide for developing them (and explains their purpose).

Sample SWOT Analysis here, here, and here.

Sample strategic planning stakeholder survey here.

Tuesday, December 9, 2008

Samples Week- Board of Directors

Sample board member job description here, here, here, and here.

Sample board fundraising menu/board commitment form here, here, and here.

Sample board agenda here*, here*, here, and here*.
*Agenda includes a consent agenda

Sample board minutes here, here, here, here, here, and here.

Sample articles of incorporation here, here, here, here, and here.

Sample bylaws here, here, here, and here.

Some nonprofits list their board members on their website, others go a step further to include full bios and contact information. Here are a few websites of nonprofit organizations and what information they have for their board of directors: here, here, here, and here.

For more information about Boards of Directors, BoardSource is a great resource.

Monday, December 8, 2008

Samples Week- Fundraising

Fundraising forms:

Donor appeal and thank you letters, and grant applications will be different for each organization since they focus on the specific work of that particular organization, but here are some samples:

A few samples of good nonprofit websites and their donate page:

  • The United Way has a unique aspect to their donate page- a video. The video is appealing and draws you in. They also include a how-to for giving.
  • Achieve Minneapolis has a very attractive website overall with a very noticeable and easy to find donate option. Their donate page does a great job translating what a donor's gift does. They also include a "success story" at the bottom of the page that adds something special to the page.
  • The Seattle Humane Society has a good donation page. They have pictures to draw you in, and link to several things to make it easier for the donor to research the organization, or attend upcoming events. I always like when organizations include a "why donate" page, which this organization does well.

If there are any other samples related to fundraising that I didn't include, please leave a comment and I will add the sample.

Friday, December 5, 2008

Samples Week- Most Commonly Requested Samples (next week)

I often get emails from people looking for examples of an appeal letter, board menu, board job description, SWOT analysis, etc. So, next week I will post examples each day:

Monday: Samples- Fundraising (in-kind acknowledgement, appeal, thank you)
Tuesday: Samples- Board of Directors (agenda, minutes, job descriptions)
Wednesday: Samples- Evaluation (employee evaluation, swot analysis, strategic planning stakeholder survey)
Thursday: Samples- Finances
Friday: Samples- Collateral (annual report, newsletter, etc)

I will post both my own samples and samples from around the web. If your organization has a particularly good appeal letter, employee handbook, etc and you don't mind sharing it, please email it to me:

PTO vs. Vacation/Sick Time

I recently came across a blog post on PTO that inspired a lot of discussion in the comment section. For those that don't know, PTO (Paid Time Off) is when an organization no longer gives you sick or vacation time, they give you a set number of PTO days and you can use them however you want (vacation, sick days, etc).

Having experienced both forms, I am a fan of PTO. While working at organizations that still use the old fashioned model of a set number of sick days and a set number vacation days, I was often frustrated with how it worked. If I never got sick, then those days just sat there, never being used. Once I got a job that gave me 20 days of PTO and some floating holidays, I loved it. I would never use them all because you might actually get sick. But for people like me, who never get sick, PTO is great. Plus, having PTO made the difference for me when I was considering two job offers. With nonprofit organizations typically paying their employees less than their for-profit counterparts, PTO is an inexpensive way to help retain employees.

For more information about PTO vs. Vacation/Sick Time you can click here and here.

Tuesday, December 2, 2008

Two Fundraising Tips for Tough Times

Here are a couple tips for fundraising in tough times:

  • When a donor declines to give, don't let that be the end of the conversation. Consider it to be the beginning, keep in contact with them to find out why they won't give. Perhaps they only give at a certain time of the year, or they aren't sure how you are going to use their donation. If you address a donors concerns and reason(s) why they won't give, you can turn them into a donor.

  • Build your relationship with your donors. In tough times donors often look to scale back and give to only the organizations they are most committed to. This is the time to make sure your database includes everything you could want to know about your donors. Keep meticulous notes when talk to them. If they mention they can't give because they just bought a house, make a note of that and call back in a few months and ask how the move went. It is important to keep track of every minute detail like this to help build your connection with donors.