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On Being Generous


Embracing Madness and Complexity


Where’s the passion?


Taking on the Ratios Myth Once Again


From the President's Office, December 2009

Dear Friend:

Word of Mouth Marketing

Let's Give 'Em Something to Talk About

Word of mouth. It is the holy grail of marketing. It's effective and inexpensive. Everyone dreams of achieving it, but few organizations are truly able to make it work. Most likely it's because they are not ready for word of mouth. Before you get started on this journey, look in the mirror and ask yourself a few questions. Answer them honestly; if you don't answer Yes to these questions, you may need to address some internal challenges first.

Question #1. Is there something unique or interesting about your company?

If you do not have anything interesting to say about your products or service, why would you expect others to talk about you? Find what is interesting about you. It could be a revolutionary product or technology, your extraordinary customer service, the culture of your organization, a need in the community you are meeting, your amazing prices. There has to be something, even if it is a just a Joke of the Week at the bottom of your donor newsletter. If not, you need to figure out how you will differentiate yourself, not only for word of mouth but also to survive in this competitive environment.

Question #2. Can you easily articulate your unique value?

I tell everyone that I love my Honda Odyssey. It is the most family-friendly vehicle imaginable. Costco is my favorite place to shop. Not because of their prices, but because their return policy and customer service are second to none. It's easy for me to share why I love these products. I'm not going to tell people about something I can't put my finger on or can't explain.

Question #3. Do you treat your donors, clients, and employees with the highest level of respect?

For word of mouth to work, you have to focus on doing what is best for your donors and clients. Always. That is giving them the best products and the best service to go with them. If your clients don't love you (or at least really, really like you), don't expect them to talk about you. Unless you want the word of mouth we aren't looking for. The same level of respect and focus should be given to your employees. Odds are very good they will be one of the best sources for word of mouth. Value them and make them proud to be a part of your organization.

So you answered Yes to the above? First of all, congratulations—your nonprofit is doing a lot of things right. If not, work on getting to Yes.

Folks Are Talking Behind Your Back—And It's A Good Thing!

By now, you've given people something so interesting and easy to articulate about your organization that people want to talk. It will happen naturally, but there are things you can do to speed up the process.

Find the talkers

Certain individuals love to talk. Many are often well connected. In Malcolm Gladwell's amazing book Tipping Point, he describes them as connectors, mavens, and salesmen. Find these people and give them the white glove treatment. Send them product samples. Invite them to events. Thank them for their support. Surprise and delight them. Trust me. They will talk.

You will most likely know who these people are, but if you need help, here are some tricks. Are you part of a social network, such as Facebook or LinkedIn? Talkers are the folks that have twice as many "friends" or "contacts" as you. Their wallet is stuffed with business cards, and they are always handing out theirs. You have now found the talkers.

Make it easy for people to talk

On your Web site, place a "Refer a Friend" link and a newsletter sign-up prominently on all pages. These are two of the easiest ways to let the talkers do their work. Send out an e-newsletter to your clients and supporters (but only if they have opted in). In the newsletter, invite them to forward it to friends and colleagues who may be interested. Better yet, include a nice story or joke that will make readers want to forward the newsletter.

When you mail anything to your customers, include multiple business cards or brochures. I've even gone so far as to include two offers in a single direct marketing piece. The additional offer typically ends up in the hands of a friend or family member. Finally, include your Web address in the signature of your e-mail. Do you know how often your e-mails get forwarded and to whom? Well, now they know about your organization and how to find you!

Join in the conversation

Don't sit on the sideline and be passive in letting word of mouth to happen. Engage in it. People are probably already talking about you online. It's easy to find out. Just set up a Google Alert or check Technorati for the latest blog posts. If people are saying nice things, thank them. Thanking them reinforces for everyone the great things they heard. If someone is less than flattering, fix the problem publicly and show the world you are proactive in addressing customer issues. Don't be afraid to blog or use social networks as well. Keep conversations open and involved. But remember, you are an organization that treats clients and supporters with respect. So when engaging in online conversation, always be open about who you are and whom you represent. The Web community is very savvy. If you are spoofing people, they will find out, and the results won't be pretty.

You now have a great foundation to engage in word of mouth marketing. It's time to put together a plan, make it easy for the conversations to take place, and get them started!

Additional Resources

Scott Neilson, FundBunch
© 2009, FundBunch

Scott Neilson is the CEO/founder of FundBunch, which provides tools and services to allow individuals and organizations to be more effective in their online fundraising efforts.

Year-End IRA Gifts Are Still Possible

On December 31, 2009, an easy-to-get gift expires, so you've got two to three weeks to encourage your donors who are 71 and over to donate to you through their Individual Retirement Accounts, or IRAs.

It works like this. Those who are the right age (technically, 70½ and over) inform their traditional IRA administrators that they wish to make a "qualified charitable distribution" to your nonprofit. Your donor may have to fill out and fax back a simple form, and he or she will need your federal tax ID number and legal name. The administrator cuts the check and sends it directly to your office.

The advantage for you can be up to $100,000 from each donor. That's the maximum donation allowed per traditional IRA owner, per year.

The advantage for your donor is that he or she doesn't pay income tax on the amount of the gift. Typically, distributions from traditional IRAs are taxed as income. Because this is a distribution to charity, it is not taxed. In this case, your donor doesn't earn a charitable income tax deduction, but the tax-free distribution is just as good as a deduction. There's no difference between paying income tax and declaring a deduction, on one hand, and not paying income tax and not getting a deduction, on the other. (State income taxes and other factors could make this less advantageous for the donor, however. It's smart to urge donors to consult their tax advisors; see my recommended message below.)

This giving opportunity has been with us since 2006. Congress might extend it, as it did once before, but no one can say for sure.

Here's the fine print:

  • The check from the financial institution must be postmarked by December 31, 2009.
  • Only IRA holders of the right age can take advantage of this opportunity.
  • Traditional IRAs work best for this program. Don't promote the charitable distribution to donors holding Roth IRAs, because Roths are taxed differently, and a charitable distribution from a Roth IRA probably offers far less benefit to the donor.
  • Charitable distributions cannot be made from 401(k), 403(b), SEP IRA, or SIMPLE IRA accounts—they don't qualify for this program.
  • Supporting organizations and donor-advised funds aren't eligible to receive charitable distributions from IRAs.

How do you promote IRA gifts in the short time left? Use your last-minute communications:

  • Mail appeals
  • E-mail blasts
  • Phone appeals

Develop a mail insert, e-mail, or phone script based on my suggestion below. For mail, you can print the message three or four times on a page, cut them up, and drop one in every letter going out. The light weight probably won't increase your postage.

Here's my suggested wording:

If you are 71 or over, you can make a tax-free gift to us from your traditional IRA. You won't pay income tax on the amount of your gift. Tell your traditional IRA administrator that you want to make a "qualified charitable distribution" to us and give him or her our federal tax ID, XX-XXXXXXX, and our legal name, YYYYYYYYYY. The administrator will send your tax-free gift directly to us. It must be postmarked by December 31, 2009! Thank you very much!

Note: We do not advise on personal income tax issues. Please consult your tax advisor for full information. Only your advisor can give you definitive advice based on your personal financial circumstances.

You have my good wishes for your end-of-year fundraising.

Tony Martignetti, Esq., Martignetti Planned Giving Advisors, LLC
© 2009, Martignetti Planned Giving Advisors, LLC

Tony Martignetti, Esq. is managing director of Martignetti Planned Giving Advisors, LLC. He has been supporting the fundraising needs of nonprofits since 1997. He is the author of Charity Registration: State-by-State Guidelines for Compliance. You'll find Tony on LinkedIn, Twitter, and Facebook.

Down but Not Defeated: Results of GuideStar's Eighth Annual Nonprofit Economic Survey


A survey of public charity and private foundation employees was conducted online from October 1, 2009, until October 15, 2009, the eighth annual nonprofit economic survey conducted by GuideStar, and the third of three such surveys conducted by GuideStar in 2009. The purposes of the survey were to compare how charitable organizations fared during the first nine months of 2009 to previous years and to try to gauge the effect of the downturn in the economy on the American nonprofit sector. There were 2,565 usable responses, 2,381 (93 percent) from public charities and 184 (7 percent) from private foundations.

The IRS View of Nonprofit Governance

With recent substantial changes to Form 990, the Internal Revenue Service has taken the position that good governance is of paramount importance to nonprofit organizations. Its Tax Exempt and Government Entities Division (TE/GE) has identified what constitutes good governance—an engaged, informed, and independent board; defined policies and practices; and transparency—and is focusing agency resources on enforcement of compliance with these standards.

How Cross Promotions Can Help Your Organization

Adapted from the white paper by M+R Strategic Services