Understanding & Leveraging Your Nonprofit's Lifecycle Stage

I attended the Organizational Health and Nonprofit Lifecycle seminar, held by Don Crocker and John Brother at the Support Center for Nonprofit Management.
Understanding the life cycle is essential to any nonprofit’s continued success, no matter what stage it’s in (Idea/Startup, Growth/Maturity, Turnaround/Terminal Phases).
They first discussed criteria for board development and gave specific advice on steps that a nonprofit in the Idea/Startup phase could take to build a board, including forming a steering committee as a first step, producing an initial event to attract people, and leveraging members’ social networking.
One of the most compelling challenges for all nonprofits, is in marketing and branding. Here’s a short list of key challenges:
• Differentiating your organization from others.
• Investing in fundraising and marketing infrastructure.
• Using the Internet to build your nonprofit’s brand, create visibility, attract a donor base, and develop a community.
They suggest that it is possible to work with other organizations as resources towards addressing these challenges.
Then the audience learned more details on the profile of each stage in a nonprofit’s life cycle, in the areas of Operations, Governance, Leadership, Obstacles, and Opportunities and my realization is that I tend to work with nonprofits in the Growth/Maturity phase.
Here are some specific characteristics of the Growth/Maturity phase:
• Operations: 7- 20 years in operation
• Governance: board turnover policy and strategy is in place, and power is shared between Executive Director and board
• Leadership: since there are many managers on staff, Executive Director must possess good management and communication skills
• Obstacles: remaining client-centered rather than policy-bound, keeping staff motivated around mission, building strong financial footing from endowment or reserve, maintaining a programmatic edge, based on a continued relevancy
• Opportunity: new staff and board introduce new ideas, organization is known in community, adequate resources enable some risk-taking

Do you know what stage of growth your nonprofit is in? At the Non-For-Profit Leadership Summit VII, Don Crocker and John Brother of the Support Center for Nonprofit Management explained the stages:

Idea Phase: Imagine Inspire
Start Up Phase: The Labor of Love
Growth Phase: Ground & Grow
Maturity Phase: Produce & Sustain
Decline & Turnaround: Review & Renew
Terminal: Merge or Close Gracefully

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Volunteering Gets a Boost on CNN

Nonprofits and volunteering are in the news again. CNN online featured a story about a man who was laid off from his Wall Street job and decided to volunteer to work with baboons in Africa. Volunteering was positioned as a good way to spend time between jobs: contributing to society, moving outside of your comfort zone, gaining new skills and perspectives, and potentially reducing your living expenses.

WAKE UP CALL: How is your nonprofit taking advantage of the recession to attract highly-qualified volunteers to help bring about needed change.

Working Together for a Vital City for All

As a cyclist who has been enjoying the recent additions of bike lanes in New York City, an article on the cover recent article in Chelsea Now, a neighborhood newspaper, caught my attention. It reported on local businesses who claimed to be losing sales due to a bike lane being installed on Eighth Avenue supplanting parking spaces. The argument seemed to parallel the same one that came bars and restaurants claiming that the smoking ban would harm their business, when in fact, the opposite has happened.

While the article was decidedly one-sided (no cyclists, pedestrians or shoppers were interviewed), it does raise the issue of the balance between businesses and overall city life. In the past year or so, the Bloomberg administration has made quality of life a priority, with the renovation of parks, installation of 300 miles of bike paths, and plan to plant 1 million trees. Not withstanding the few parking spaces lost, ultimately, this will get more people out and about on the streets, and that will be good for business.

WAKE UP CALL: We are all part of one city. Businesses, the government and nonprofits need to work together in the best interests of everyone. Renewing the quality of life for all, will ultimately create a vital city that will bring in tax revenue, keep businesses afloat and provide funding for nonprofits.

Fair Representation of Nonprofits Needed

A recent article in The New York Times, Charities Give to State Campaigns, Despite Law, described how some nonprofits had purchased tickets to fundraising dinners for elected officials, or had otherwise contributed to their campaigns, in violation of the law. Neither party seemed to care or take responsibility, pushing off oversight to the IRS. The article acknowledged that minor amounts entailed, and yet found it fit to disparage nonprofits on the front page.

I find this quite disturbing for a number of reasons.

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IDEAS: Reaching Beyond Your Base

This reader comment on a New York Times article about electric cars caught my attention:

“Just get NASCAR to change its rules to only allow electric powered cars to race and see how quickly the technology becomes not only affordable, but mainstream as well…”

WAKE-UP CALL: The thought highlights the need for nonprofits to think beyond their traditional base, and to forge partnerships with groups that are on the opposite side of the spectrum in order to create large-scale change.

SOURCE: Electric-Car Battery Makers Seek Federal Funds

FUNDRAISING: Lessons from a Charity

Amidst all the recent financial gloom and doom, I thought it’s worthwhile to report a blip of good news on the fundraising front and relate the lessons that can be learned from it. The New York Times reported today that its Neediest Cases Fund has increased its contributions significantly over last year. The number of donors has jumped 53% from 2,955 to 4,518, and the fund is $500,000 ahead of where it was this time last year (a total of $3.7 million was raised so far). Apparently the heightened awareness of the needs of those living in poverty has touched the middle class, despite their own financial concerns.

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FUNDRAISING: Lift the Limits on Low Overhead Ratios

This entry is in response to an op ed piece by Nicholas D. Kristof in the New York Times on December 24, 2008: The Sin in Doing Good Deeds.

Easing our insistence on low overhead ratios for charities, will help them to co-opt the profit motive. One reason that nonprofits are not as effective with their own in fundraising is not specifically the profit motive, but the fact that the public insists on nonprofits maintaining low overhead ratios (such as 85%). On the face of it, it makes sense that donors don’t want to see their money spent on administration or fundraising costs – they want it to go directly into programs.

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EARNED INCOME: Encourage Triple Bottom Line for Nonprofits

This entry is in response to an op ed piece by Nicholas D. Kristof in The New York Times on December 24, 2008: The Sin in Doing Good Deeds

A new concept in business is the Triple Bottom Line: Profit, People, and the Planet. By paying attention to all of these elements, we create more responsible corporations, and in turn, a more responsible society. Just as businesses are expanding their outlook from merely profit to include social and environmental responsibility, it is time that we allowed nonprofits to expand their focus as well to incorporate a bit of the profit motive.

Earned income ventures is the name that nonprofits are giving to their business pursuits, allowing them to derive revenue from sources other than purely altruistic donations. This trend is on the rise and is here to stay, so let’s embrace it and allow nonprofits to take advantage of the market forces that have rewarded those in the private sector.

WAKE UP CALL: To what extent does your nonprofit take advantage of market forces to achieve its mission?

Acknowledging Sponsors Names in Programs

How do nonprofit organizations address long sponsor names in their programs?

As more nonprofits turn toward individual and corporate donors, they face the issue of how to acknowledge these contributors often in contexts that do not easily accommodate long naming formats.

Red Rooster Group recently worked with a nonprofit organization that had multiple tiers of sponsorship naming — the entire building as well as specific wings of the building, its departments and individual programs, as well as a book series — all named after people.

Their series of brochures, are typically named for their respective programs. Given that these sponsors names, some of which were quite long, had to appear in the nameplates of the various publications, a plan was needed in order to handle them appropriately.

We identified the following three considerations for addressing sponsorship names:

1.  Political – how the name is treated based on the donor’s request balanced with the needs of the organization. The size of the donation, the clout and influence of the donor, and the need and fortitude of the organization will come into play.

2.  Relative – the size, nature and payout of the donation relative to other contributions for that organization. It is easiest to set up this hierarchy before soliciting contributions in order to set the standards for the appropriate recognition and treatment of sponsors’ names.

3. Logistical – the practical considerations that will determine how a sponsor’s name is treated. Each media will tend to have its own limitations. Building names, for example, may require a significant capital investment and have a fairly long lifespan, while links from an online recognition can provide quick means additional information.