[Part 1] Micro-Econonprofit 101

[Continued: Issues OR Opportunities?]

Merry Christmas! I hope everyone has had a great time with love ones and safe journey. Once again, lots of great things were done over Christmas this year.

Previous post I touched on three major focuses I've found when I was volunteering, working, and studying about nonprofit organizations in BC, particularly Lower Mainland BC. In this post, I would like to expand on the first focus, "Lack of Financial Supports".

There are several ways a nonprofit organization can obtain financial income: donations, sponsors, grants, product or service fees, etc. Many organizations I am aware of, spend lots of time on seeking donations, sponsors, and grant writings; but not many seek to improve its services or products and focus on sustainable income from its own operation. It is true that many organizations are serving to the target with limited income; thus, charging the clients for sustainability would not be feasible, but that does not mean the organization cannot have additional services to generate funds, or even a social enterprise.

The question is probably how to create such thing as social enterprise or provide services that high income population can enjoy because of the perception toward nonprofit organizations' services (eg. private fitness facility versus YMCA).

As many nonprofit organizations will hate me for this, but it is true that we need to operate as if we are a business. This does not mean that we need to pursue maximization of shareholder's wealth. It means, we need to have a organizational (business) plan for both short and long term (click here if you are not sure what is business plan looks like).

Do we really need a organizational plan for a not-for-profit organization? I say yes, because business plan organizes all aspects within an organization and the detailed organizational plan would create a clear single path for staff to follow. Which will likely lead the organizations to the successful result.

Lastly, having products and services that allow organizational sustainability will generate constant cash flow rather than relying on single-time donation. Several organizations is now pursuing sustainability plan by using monthly sign-up which in my opinion, is not sustainable (even though the results proved otherwise).

Next I will discuss about the second topic, "Lack of skilled labors". Generally, it is one of the important reasons preventing nonprofit organizations to grow. Find out in my next post.

"Shaping the Future of Business"

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Issues OR Opportunities? [The Introduction]

It sounds bad as it is but we need to face the truth that nonprofit sector is becoming competitive. I had conversations with a few of local nonprofit organizations, all of them were seeing other nonprofit organizations that are offering the same services/products, locating in the same area, targeting the same people, having the same value(s), as partners. My question was "How is the idea treating your organization?"

The results I found in those nonprofit organizations can be categorized into three main focuses, (i) lack of financial supports, (ii) lack of skilled labors, and (iii) lack of public awareness. I will briefly describe each of the issue in this posting.

As an MBA student and marketing apprentice, seeing the competitors as partners will not only limit the organization to differentiate itself from competitors due to lack of competitiveness, but also discourage the clients and donors to support the organization because they cannot distinguish the organization with the rest; hence, they tend to support those organizations they are familiar with or had been using the services or products.

Second issue is most likely to limit only to some nonprofit organizations, lack of skilled labors. My experience volunteering and working for nonprofit organizations, this seems to be one of the most important issue because without skilled labors, the organizations grow slowly, if lucky. In fact, not many nonprofit organizations see the importance of or cannot afford a professional marketing personnel or agency. Some perceive marketing activities as unnecessary expenses. Again, how is that idea treating your nonprofit organization?

Most nonprofit organizations I've been with did not have any issue regarding number of clients because they serve to the local communities where they are located and to a small portion of the communities. But that does not imply that the organizations have solid public awareness because the amount of donations received in the community is relatively small considering size and income of the people living in the area.

I will leave it here for this post as I am planning to write several chapters on these concerns. Although I mentioned these as issues or problems, I do not mean that they cannot be seen as opportunities. I will expand on those in the following postings.

Credit: Striatic

"Shaping The Future of Business"

Follow up with this topic on next Saturday 27th November, 2014

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Selling The Impact of Your Nonprofit Organization

The End of Fundraising By Jason Saul

Today I would like to introduce a book I read long time ago written by Jason Saul. In his latest book "The End of Fundraising: Raise More Money By Selling Your Impact", Saul emphasizes on how the social capital market impacts nonprofit sector.

The book is divided into three parts: Capturing Your Impact, Marketing Your Impact, and Selling Your Impact.

Here are what I leant:

Capturing Your Impact

Sale is one of the most important skills to have in everything we do. It is even more challenging for nonprofit organizations, because what they sell is intangible. Nonprofits must convince the stakeholders with "value" that is hard to measure. However, it can be done and I found that in this section.

Marketing Your Impact

People do not care what you do, if you cannot give any benefit to them. The obvious benefit ones can see is the economic benefit. Impact buyers - "those who are willing to pay for the outcome you produce" - are the most likely target to purchase your impact. This book taught me how to find them and add values to the organizations for Impact Buyers to see.

Selling Your Impact

Similar to business, nonprofits need to sell and consumers (donors) need to buy. Take contemporary salespeople for example, they do not sell the products to the customers, they sell "solutions". Thus, nonprofits are the "solutions" to many problems, but how are you going to relate the problems to each one of the customers.

Overall, I love the ideas written in the book. I do believe that nonprofits have to be inside the business world if they want to be success in the contemporary world. I recommend this book to everyone who are interested in nonprofit sector.

"Shaping The Future of Business"

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