Currently viewing the tag: "NonProfits"

Issues Arise When Non-profits Expand

So, what is a ‘non-compliant’ activity with a Non-Profit?

Let’s start at the beginning…

When any non-profit applies for its tax exemption, the organization is required to specify the activities it plans to conduct and to make the case that their mission qualifies for charitable, tax-exempt status. Upon review, the IRS either grants or denies the application and issues its ‘exemption letter’.

If your planned activity falls outside of the specified mission of your non-profit, then the activity may be non-compliant. Non-compliant? With what? Your IRS-approved exemption! How do you know, for sure, if your planned activity is within your compliance parameters? Easy…just ask! Who? The IRS (your regulatory reference)!

Please ponder the following hypothetical example: a local community Food Bank is deciding whether or not to purchase a national fast-food chain restaurant adjacent to its main food bank facility.

It sounds like a great idea when presented to the board for approval:

* the fast-food restaurant brings in lots of customers who would learn that the food bank is located right next door; * the profitability of the restaurant could subsidize the operations of the food bank

Good idea? Bad idea? How would you vote if you were on the board?

This is a good example of the challenges of a non-profit board. Let’s take this scenario a step further before we try to deal with the dilemma.

This Food Bank was organized 30 years ago and received its IRS approval as a charitable, tax-exempt organization serving the public good. The founding executive director (ED) led the organization for 20 years until he retired.

Following the retirement of the founding ED, the board conducted a search and hired a replacement ED. Unfortunately, their new ED left after just one year, accepting an opportunity at a larger food bank. Since that time, the organization has suffered rapid turnover among four EDs, but the board believes the tide has turned: the current ED is an experienced manager, who was looking for a career change, and is committed to remaining in this position for quite a few years.

The idea for the purchase of a fast-food restaurant took shape during a scheduled fund-raising call between the new Executive Director and the owner of the fast-food chain. The owner, a former board member of the Food Bank, suggested the purchase as a mechanism for alleviating the ongoing financial challenges of the Food Bank and as part of his estate planning. The deal was a gracious opportunity; the owner would even provide the financing. To answer any questions, the owner offered to attend the board meeting with the ED.

Okay.

An opportunity presents itself: a former board member offers to be unbeliveably philanthropic and an excited ED presents the idea to the board at its regular meeting. You are a board member. You hear the presentation. The opportunity sounds great! What should the board do?

(We could spend quite a bit of time strategizing, but that is beyond the scope of this post.)

Question #1: Yes, you are a board member; however, are you qualified to analyze the deal and make an informed decision? Would you be willing to be that ‘lone voice in the wilderness’ that dares question the deal? Are you willing to admit your lack of knowledge?

Question #2: Did your ED research the language in your original IRS determination letter as a guide for what your scope of services can be? Did your ED consult with legal and accounting counsel?

Question #3: Are you familiar with ‘unrelated business income’ – whereby income-producing activities can result in taxable revenues (even for a non-profit)?

Question #4: Do you understand ‘noncompliant activity’? Has your ED mentioned that issue in the board presentation?

Per usual, a lot is happening at this (hypothetical) non-profit board meeting. This seemingly good idea of purchasing a fast food restaurant is almost certainly outside the description of the activities of the food bank. The IRS could approve the deal; but, failing to request a definitive ruling would be irresponsible on the part of the board and would literally jeopardize the charitable status of the Food Bank.

A lot to worry about? Nope. Not really. Just remember to ask the right questions. If you do not know the right questions, you are probably on the wrong board.

Rob Glenn founded his own consulting firm in 1993.

He has served on the boards of more than sixteen organizations. His experience in the non-profit sector led him to form The Center for Governance, Ethics, and Accountability
http://www.centerega.com/

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What Non-Profits Can Learn from a Salesperson

In the middle of the recession of 2009, I found myself unable to find a job in sales.  I ceased publication of a local lifestyle magazine that I launched in 2007 due to the cratering of advertising revenue.   With my new found spare time I stumbled across a listing for a Community Account Manager position at a local non-profit.   Being the queen of new business I thought this would be a great opportunity to expand my sales repertoire and contribute to my community.  What I found was a culture that was averse to basic sales principles.   Contrary to the prevalent non-profit attitude, the foundation of fundraising is sales.   Here are three tips that can enhance a nonprofitâ??s donor base.

In these tough economic times, non-profit fundraisers and development directors are competing for far fewer available resources to meet an unprecedented need.   Many organizations make the same classic sales mistakes such as calling on the same donors every year and not expanding their reach, hiring the same â??non-profitâ? type instead of innovative thinkers with diverse backgrounds, and failure to implement proven sales techniques when soliciting donors.  Saying that you think outside the box is one thing, but actually implementing creative ways to increase donations is another. 

1)      Have a sense of urgency
Non-profit organizations have a reputation of working â??slowerâ? than their for-profit counterparts.  The main motivator of sales is to close the deal before your competitor does.  Youâ??ve heard of the mantra, â??ABC: Always Be Closing,â? this means take advantage of every opportunity.  For example, when you get a lead, follow up immediately.  Believe me most largest donors give to more than one organization per year and due to the economy are downsizing the size of their gifts and the number of recipients.  So stay on their radar.                                                 

2) Stop thinking of sales as being â??badâ?
Most non-profits view their services as a non-tangible product and therefore donâ??t view their fundraiser efforts as sales.  However, there is nothing more tangible than feeding a hungry child, educating at-risk teens, or providing refuge for a victim of domestic violence.  You may not be selling DVD players or auto insurance, however the same basic sales principles apply to solicit a gift from a donor: relate to your customer, find the need, meet the need and finallyâ??the ask.

3) Learn to CLOSE
Get over your uncomfortableness of asking for money.  Simply put you have to ask the donor for their gift. 

We all benefit when non-profits do their jobs of distributing money to agencies that help the community. By adopting some simple sales principles they can maximize their base and use relationships to grow lifelong donors.

Nia Gray is currently working as a temporary Community Account Manager for a local non-profit. She is a native Portlander with 8+ years of media sales experience selling television, online, and print advertising, and is one of the owners of Grassroot News a family owned media and video production company. Ms. Gray has launched several projects including renewBEAUTY, a beauty and wellness publication in Portland and Seattle, and in 2005 she produced Portland Style a 30-minute local style and fashion television show.

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Website For Non-Profits – Features That Yours Should Include

There are not many differences between traditional websites and a website for non profits. The biggest difference is probably in the URL. A non profit ends with .org and a traditional one ends with .com. It is important for non profit websites to include features that are going to allow visitors to make donations of goods or services. Non profit websites usually need to have a few extra features for these types of specific needs. There are a few ideas below of features you might want to consider adding to your non profit website.

When designing a website for non profits there are a few features that can be added to enhance the overall success of your site. Having a link on each page of your site where visitors could make a donation is a great feature to add to your site. Adding a donation tracker can help you account for donations when you have an event or fundraiser and because non profit sites are so dependent on donations it is great to keep track. Running a website for non profits is similar to running a traditional website.

Your non profit organization can have an awesome website that is clear and to the point about what you do and what your goal is with help from an experienced website design company. Having a list of current and upcoming projects or events that is kept updated is a great feature for your website so that you can get the volunteers or donations you might need before your event. It is important to have great communication with volunteers and staff members about events because communication is a big key in running a website for non profits.

When designing a website for non profits, these are a few of the things to consider. Your site can be headed in the direction you want with so many different features you can add to your site. Finding a company to help you design your site is a good idea and in most cases, the design company will offer a discounted rate to a non profit website because they understand that they are very dependent on donations. Don’t hesitate to seek help with your site design; plenty of companies would be willing to help your website become established in exchange for promoting their own website.

Kate Stevens works with Gachi Sites, a great company focused on helping you
design a great website. They can help you design a
website for non profits that can bring you terrific results. To learn more
information, please visit http://www.gachisites.com or call 305-749-5467.

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A New Way For Non-Profits to Raise Money

If you are involved with a non-profit organization, you know all too well the second most important thing you do is raise money. The reality is you cannot do what you do without money.

There are over 1.5 million non-profits in the United States, with new organizations being formed every day. There is a finite number of dollars that will be donated every year to the non-profit sector, each of those 1.5 million organizations is out there positioning themselves and marketing for their slice of that pie. Sounds like a tough gig, but what if there was another pie that nobody was looking at, wouldn’t it be easier to go get a slice of that pie without all the competition?

It turns out there is another donation pie out there, it was created by Fees To Funds. The Fees To Funds program http://FeesToFunds.com was developed to help non-profits raise money in a very unique way – thorough merchant account credit card processing. Most non-profits these days have a merchant account so they can accept credit card payments for donations. When a non-profit (or for profit business) accepts credit cards for payments, they pay fees for the acceptance services to Visa and Master Card, and the processing companies that manage these merchant accounts. When non-profits sign up with the Fees To Funds program, they still pay those fees, but Fees To Funds offers them a lower rate structure – so they save money on those fees – then they donate 25% of their gross revenue from those fees right back to the non-profit. Sounds great, but it gets even better…

Every non-profit out there has a supported base, quite often, many of the supporters for a given non-profit are business owners. What Fees To Funds provides is an opportunity for the non-profit to partner with them in a fundraising campaign to introduce the Fees To Funds program to their business owner supporters; they offer the business owners the same deal, Fees To Funds lowers their merchant account fees so they save money and then donates 25% of their gross revenue from all of the business owners merchant account fees back to the non-profit. The program allows the business owner to increase their charitable giving without spending a penny. It creates a brand new, monthly residual income stream for the non-profit at no load to the business owners; in fact, they actually save money in the process.

The business owner saves money on a necessary expense and increases their financial support to their favorite non-profit at the same time, and, the non-profit gets a brand new residual income stream – everybody wins.

Advantages of the Fees To Funds Program:

? Converts a portion of an existing expense into donation revenue

? No ongoing fundraising activities

? Creates a passive residual income stream for the non-profit that continues for years

? Simple and painless to implement

An extra bonus to the funds raised through the Fees To Funds program is that these funds are unrestricted – the best kind of money a non-profit can receive. Many of the grants and donations non-profits receive are restricted to very specific projects or uses, in contrast, the funds generated by Fees To Funds go into the non-profits general fund and can be used for any purpose.

This is free money out there just waiting to be collected every month, what non-profit would like that? If you are a non-profit, or a business owner passionate about supporting a non-profit, you should check out the Fees To Funds credit card processing donation program.

Steve Patzkowski
CEO
Fees To Funds
www.FeesToFunds.com

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