04.24.13

Not-For-Profit Group Newsletter – Spring 2013
Laurence Sophian

Are you ready? Three Significant Developments in Outreach Technology

By Larry A. Sophian

One of the top priorities for not-for-profits is engaging with their supporters and building relationships. It is no surprise, then, that interest is surging in technology that can help not-for-profits do just that. How can your organization maximize the potential of current technology tools and avoid wasting time with passing fads? Let’s look at what’s working.

Going Mobile

According to the Pew Internet and American Life Project, 45% of American adults had a smartphone as of September 2012, and 25% had a tablet computer (a dramatic jump from only 4% in September 2010). As of April 2012, Pew reports, 55% of adult cell phone owners used the Internet on their phones — almost twice as many as three years earlier. And 31% of the cell Internet users said that they mostly use their phones to go online, as opposed to using a desktop or laptop computer.

With mobile Internet access poised to surpass that of conventional computers in the coming years, some not-for-profits are wisely taking steps now to develop mobile websites and apps. Why do you need a mobile-specific website? Imagine a supporter who receives an e-mail call to action on his phone and immediately clicks through to your regular site, only to find that it’s difficult to read and use on his phone’s small screen. That’s a lost opportunity — one that will only multiply as users increasingly rely on phones for their online communications.

Mobile websites and apps provide your supporters with information at their fingertips and allow them to act, including donating, on the go. As with any type of online transaction, of course, it’s important to establish strong internal controls to protect users’ data and privacy and prevent the fraudulent misappropriation of funds.

Leveraging Social Networks

Mobile websites and apps also can help not-for-profits leverage their supporters’ social networks. The past few years have taught many organizations the critical role that social networks can play in spreading their missions to wider audiences than ever and attracting new supporters and donors.

Some may have initially scoffed at the idea that Facebook or Twitter could provide real value. But few can argue with the power of social media at this point, particularly for not-for-profits. It’s an indisputable fact that people are much more likely to engage with organizations endorsed by friends, families and trusted sources.

That’s one reason why peer-to-peer fundraising has taken off in recent years. Thanks to social media, it’s much easier for participants in your 5K race, cycling event or dance-a-thon to drum up financial support for their efforts. By providing social media tools as part of your registration materials, you empower your participants to personalize their pitches and meet or surpass their — and your — fundraising goals. Again, though, you’ll need to have proper internal controls in place, such as firewalls, encryption and other protections for credit card data.

Social media also allows not-for-profits to easily and cost-effectively participate in back-and-forth, multiparty conversations, rather than just one-way communications. A single posting might elicit numerous enthusiastic responses that can snowball as the posting is passed along by readers with a click of a button.

Expanding Web Presence

Engaging in social media doesn’t mean you can afford to neglect your existing website. Instead, savvy not-for-profits are expanding their Web presence.

Your website visitors should find a simple, secure way to donate, as well as a range of compelling content that will bring them back again and again. Online videos, for example, offer effective, inexpensive opportunities to tell your organization’s story and mobilize viewers.  Partnering with an experienced Web-design firm to improve your online presence can be an investment with results measuring far greater than the cost.

Sink or Swim 

The tools listed above are by no means the only technological advances that can pay off for your organization or enhance your outreach efforts. Not-for-profits are also turning to cloud computing, social analytics and software that produce solid financial metrics. Such advances are no longer a luxury — they are a matter of survival. If your organization has lagged behind, now is the time to jump into the water.

SIDEBAR
Are you Making the Most of Your Technology Investments?

Technology is no different from any other investment — you need to make sure you are getting an adequate return. Yet some not-for-profits fail to take the time to determine whether their technology is paying off and supporting their overall goals. If they consider the question at all, they focus their attention on budget expense, rather than financial metrics that would reflect the organization’s gains from its use of technology.

Your financial advisor can help you identify appropriate metrics — such as economic value added (EVA), total cost of ownership (TCO), internal rate of return (IRR) and total economic impact (TEI) — to evaluate your technology investments, and help develop strategies for collecting the necessary data to calculate the metrics. Armed with this information, you can make better, more informed technology decisions going forward, as well as set financial milestones to gauge progress on future technology projects.


Not-For-Profit Mergers: When Joining Forces is the Answer

One in 12 respondents to a recent GuideStar Economic Survey said they believed their not-for-profit was in danger of closing for financial reasons. If your organization is dealing with a lack of either financial or human resources, you need to start looking for solutions — fast. Joining forces with another not-for-profit is one strategy to consider. When researched and executed carefully, a merger can make both organizations stronger.

Have the Right Reason

The decision to merge is not an easy one to make. But if your organization has experienced steady declines in grants and donations, it’s worth considering. Duplication and overlap of services may be another valid reason to merge. Bringing organizations together can be a powerful way to build unity, achieve objectives faster and use funding more efficiently.

You also might consider joining with another not-for-profit to gain access to a larger skill set. Perhaps another organization has an outstanding and dedicated staff, while you have excellent fundraising skills. Combining forces may enable you and the other not-for-profit to provide better services and maximize capabilities.

Pinpoint your Goals, Question the Timing

If you’re mulling the idea of a merger, think about what you really want to achieve. Develop realistic objectives stated in measurable terms, such as striving for a 25% increase in donations or an expansion of services into an adjacent community.

You also need to assess your readiness to be a partner. Assemble a committee of key managers, board members and advisors to discuss the financial, legal, public relations and other implications of a potential merger. Invite critical outside stakeholders, such as major funders and service recipients, to provide input. If you’re going to lose funding because a merged entity would deviate from a major funder’s goals, it’s better to know before you make your decision.

In general, not-for-profits are better merger candidates when they have stable management — including a strong relationship between the executive director and the board — and a good handle on their strategic challenges. Not-for-profits that are growth-oriented, with a history of successful risk-taking, also may be better candidates.

Identify the Hurdles

Naturally, not-for-profit mergers involve considerable risk of stakeholder resistance as well as internal hurdles. For example, it may be difficult for two organizations to combine their cultures. Out of habit and expectation, staff may oppose efforts to act as a united organization when it comes to everything from the flexibility of work hours to program procedures. Combining information technology systems can be challenging as well.

Funders, program partners and community leaders also may object. Good communication can help alleviate much — but not all — resistance. Legal obstacles are another possibility. Many states have specific procedures that must be followed, particularly if either of the entities owns real estate, and forms that must be filed when not-for-profits merge. Further, you may need to get consent from donors to legally transfer gifts or grants.

Finally, consider just how much time and other resources are needed to merge two entities successfully. Depending on the size and complexity of the organizations, a merger can take as long as two years to complete. The process also will involve additional costs, such as for the services of financial consultants and attorneys.

Plan Carefully

Two organizations becoming one clearly face obstacles. But, if going it alone no longer seems doable, combining resources with another not-for-profit may be the answer. Just make sure that your organization’s plan to merge is as strong as its desire to succeed.

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