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Allan Pressel

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Top Strategic Mistakes Nonprofits Make, Part 3

Over the last two months, we have published 8 of the 13 key strategic mistakes nonprofits often make. Here are the final 5 mistakes, listed in no particular order.

9. Failing to view marketing $ as an investment

Any money that you put into your marketing, website, social media, search engine optimization, and other promotional and fundraising services should be viewed as an investment that will generate a positive return, ideally within about one year. Along these lines, as you are looking for grants to apply for, don't only look for grants that directly fund programs and services. Also apply for grants to cover overhead costs, including marketing and the other related services mentioned above. There are a surprising number of grants that cater specifically to these types of needs. Good places to search for grants online include Foundation Center and GrantStation.

10. Not considering partnerships

Many nonprofits were founded by well-meaning visionaries who are passionate about providing specific programs and services to pursue their missions and make the world—or at least their local communities—better places. Unfortunately, many nonprofit founders, boards, and management don't consider whether there is already a nonprofit that does the same or similar things, even in a different geographic area. For most nonprofits, there are other organizations that are:

  • Doing exactly or almost exactly the same thing
  • Doing complementary things
  • Serving the same clients (but with different services)
  • Serving a similar geographic area as other similar nonprofits

By partnering with organizations you may be able to:

  1. Avoid reinventing the wheel
  2. Learn from others' mistakes
  3. Capitalize on others' strengths

Ultimately, joining forces—through mergers, acquisitions, and strategic alliances—can enable you to attain a whole that is greater than the sum of its parts.

11. Failing to cross-sell and upsell

If a donor gives you $100, you should obviously ask him or her to give again in the future. You should not, however, ask the donor to give $25. You should ask for $100, $250, $500, or "other." Moreover, when someone supports you in one way, he or she is then more likely to support you in other ways. For example, ask your volunteers to donate, ask your event attendees to volunteer. And so on.

Also, use wealth research and prospect screening to assess the giving capacity of your supporters. For example, you could use Zillow to assess the value of a donor's home. Finding out that a donor's home is worth $200,000, or $2 million, or $20 million should have dramatic implications for your future cultivation of that donor.

This leads to the concept of relationship cultivation. The moment a new person begins a relationship with your nonprofit—as a client, donor, volunteer, event attendee, even website visitor, e-mail list or blog subscriber, or social media follower—you should already have a plan for how you are going to cultivate that relationship over the long term so that it produces maximum results—not only for you but for that person as well. For example, you may want to get new contacts' e-mail addresses so you can initiate an e-mail "drip campaign," whereby they will automatically receive specific e-mails on a regular basis to help improve the relationship, inform them about what you do, and get them to take various actions to support you. Before and during the cultivation of each relationship, it's essential to figure out what you want that person to do. Which leads us to our next point ...

12. Failing to understand what you want and ask for it

If there's something you want and you don't ask for it, you're unlikely to get it!

For example, ask yourself if you want more donations. Of course, the answer is yes. But now ask yourself if you want recurring donations, donations via eCheck, more event registrations, membership dues/renewals, product sales, in-kind donations, investment donations, or planned gifts. Chances are there are some elements on this list that you want—but you're not effectively asking for them—for example, on your website and in social media. You may also not be asking for them effectively via e-mail, print, U.S. mail, or in person. Notice that these were all financial transactions.

There are probably some non-financial things you want, too. For example, you may want people to volunteer, refer your organization to friends and family, sign up for your e-mail list, friend/follow you on social media, provide feedback, and much more. Again, if you're not asking for these things effectively, especially online, you are unlikely to get them.

13. Not running your nonprofit as a for-profit

The main difference between a nonprofit and a for-profit is that the for-profit pays taxes. Unfortunately, there are a lot of nonprofits that aren't run like for-profits, but should be.

Just like any well-run for-profit, your nonprofit should:

  1. Invest in growth. As mentioned above, consider the cost-benefit analysis behind each key decision, especially financial decisions.
  2. Streamline your decision-making process. Many nonprofits do not empower their executive directors to make strategic decisions. Instead, these decisions must be made by a board that often meets monthly for a short time that is chock full of other agenda items. As a result, decisions can take a long time to make or be made with without properly considering and discussing the best information.
  3. Plan. If you don't know what you're trying to achieve, you won't know when you've achieved it! Create a business plan, strategic plan, marketing plan, Internet or technology plan, and fundraising plan. At least start with just one of those. Each plan should not only include a frank assessment of where you are today and a realistic target as to where you want to get to but also specific strategies and tactics to get you from here to there.
  4. Free is not always best—as discussed in part 2. Yet, many nonprofits are so used to getting volunteers and other things for free that they are lured into the siren song of a well-meaning person or vendor who offers them something for free—when the right decision might be to pay to get it done better, more quickly, more effectively, and with a higher return on investment.
  5. Make everyone accountable for results. Most successful for-profits realize that their boards, management, and staffs will behave in a way most conducive to the organizations' goals if their compensation is tied to those goals.
  6. Realize that you are competing. Of course, for-profits compete for customers. Yet, nonprofits also compete with each other (and sometimes for-profits) for scarce donations, grants, event attendees, volunteers, investment donations, corporate sponsorships, planned gifts, capital gifts, and more.

Other Articles in This Series

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Allan Pressel, PowerSite123
© 2014, PowerSite123

Allan Pressel is CEO of PowerSite123, which helps nonprofits create world-class websites, social media, SEO, and marketing. Allan is a world-renowned ePhilanthropy speaker. Allan is co-author of Internet Management for Nonprofits. He was given the Volunteer Service Award by President George W. Bush. Allan was co-founder of i-Cube, which had a highly successful IPO. Feel free to contact Allan with any questions at (310) 363-0095 or allan@powersite123.com.


Top Strategic Mistakes Nonprofits Make, Part 2

Last month we published numbers 1-4 of the 13 key strategic mistakes nonprofits often make. Here are mistakes 5-8. Again, they are listed in no particular order.

5. Failing to understand what makes donors give

If you examine what makes donors give, here are two factors that consistently bubble to the top:

The first is feeling like they're making a difference. The closer you can tie donor action to results—past, present, and future results—the more likely you are to get more people to give more. Consider these two scenarios. In scenario one, you simply ask someone to donate $100, perhaps online. In scenario two, you first demonstrate that $100 can house a woman and her children in your domestic violence shelter for one week—and THEN you ask donors for their $100. Or better yet, you permit them to choose one of the women in your shelter (names redacted for privacy, of course) and sponsor her and her kids for one week for $100. In that case donors might even get periodic updates on how their sponsees are doing, or a thank-you note directly from them. Now, in which of these scenarios do you think the donor is more likely to give?!

There are effective ways of using your website and social media to help convey to existing and prospective donors what you are doing with their money. For example, when Living Homes wanted to create the "greenest" home in America, they posted a one-minute video showing the complete construction of the home, starting with the foundation. For donors who already gave, the video was tangible evidence of the impact of their donations. For prospective donors, the video showed that the organization could truly deliver impressive results.

Another great donor motivator is gratitude. Again, consider two scenarios. In the first scenario, a $1,000 first-time donor is either never thanked, or thanked weeks later in an impersonal manner. In the second scenario, that donor is thanked in an immediate, personal, and meaningful manner, perhaps even thanked in more than one way. Again, the Internet can be a powerful way to accentuate your gratitude. Of course, you could send donors an immediate, perhaps automatic e-mail (for online donations). But beyond that, you could send them a personalized thank-you video. You can send such videos for free from MailVu. Better yet, the next time you have a fundraising or educational event, each attendee could, that day, receive a personalized thank-you video from your executive director, founder, or board chair. These personalized thank-you videos are surprisingly inexpensive—as low as a couple dollars per recipient.

As a recent headline in the Chronicle of Philanthropy aptly stated: "Donors Say They Would Give More If They Saw More Results."

6. Failing to deliver some services online

Traditionally most nonprofits limit themselves to serving people in their local community, and even then, their programs and services are typically delivered face to face. Why not reach out to people who need your help but cannot access it in person—whether they are 1 or 1,000 miles away?

For example, a nonprofit that helps special needs kids could offer online counselling to the children's parents, online discussion forums, resource referral, application for various funding, educational training, and much more—all online.

You can deliver a surprisingly wide variety of services to desktop or mobile devices through:

  1. E-mail
  2. Social media
  3. Chat
  4. Texting/SMS
  5. Instant messaging
  6. Skype, FaceTime
  7. Webinar
  8. Podcast
  9. Interactive website/training

In this way, you may be able to deliver more services at lower cost more quickly to more people. Equally important, you can deliver online services to people far from your office. Some nonprofits object to this concept with the rationale that "we were created to only serve our local community." If so, why, and why can't this change? If you truly have value to add to those in your community and can easily expand that value to those far beyond your community, why not do so? The key here is easily. If doubling the geographic area you serve would double the personnel and money you need to offer those expanded services, then you may not want to consider doing it. If, however, the additional cost is minimal, or perhaps close to zero, why not do it? In fact, by offering some of your services online—without discriminating against potential recipients of your help based on where they live—you could even LOWER your costs while serving more people.

Moreover, expanding the geographic reach of those you serve may result in a similar geographic expansion of those who support you. Serving people in, say, Vermont makes it much more likely you'll get donations from Vermont.

7. Failing to encourage feedback

Most nonprofits do not actively solicit feedback. They should—even if that feedback seems critical.

Consider the following two cases: Several years ago, both Hewlett-Packard and Dell created Facebook and other social media outlets for their PC customers to give them feedback. Both were quickly deluged with complaints. HP's approach was almost to sweep these criticisms under the carpet and hope they would go away. (Of course, they didn't.) In contrast, Dell assigned a team dedicated to handling these complaints. They would immediately, in a personalized way, acknowledge the complaint. Then they not only did whatever it took to resolve the complaint but they also implemented systemic changes within Dell to minimize the likelihood the problem would occur for anyone else. Finally, they not only communicated the resolution back to the person who originally aired the complaint but also to the online community at large. As you can imagine, Dell saw positive results. HP did not.

Some nonprofits reject the idea of permitting anyone from the public to air their complaints about the organization online, for fear of negative publicity—especially if it emanates from a disgruntled party. Consider these four points, however. First, if you run a nonprofit, or a portion of it, wouldn't you WANT to know if people are thinking or saying negative things about you, your staff, your employees, your programs, or other aspects of your organization? Second, if someone does post something harsh about you online, often you'll see lots of other people from outside your organization jumping to your online defense by offering their positive points of view. This can be a healthy dynamic. Third, if you take an approach like Dell—where you acknowledge the complaint, fix it, make organizational changes so it never happens again, and communicate all of that to everyone transparently online, you look good! Finally, if you don't provide people with a convenient forum for airing their grievances, in a way that you have visibility into and control over, they will certainly find lots of other online venues in which to do so.

Here are some specific ways you should solicit feedback:

  1. Feedback cards(print and online)
  2. QR codes (create your own QR codes for free at www.qrstuff.com)
  3. E-mail (even video e-mail)
  4. Surveys, polls, questionnaires (www.zoomerang.com is one good place to do this)
  5. Website
  6. Discussion forums
  7. Interactive blog
  8. Social media (especially Facebook and Twitter)

8. Failing to consider internal costs—and benefits

Let's say that you want to build a new website. You are offered two choices. One website developer offers to build you a site for free. The other want to charge you $20,000. Many boards and executive directors would immediately conclude that they should go with the free option. They may, however, fail to consider such additional details as:

  1. The free website might not bring in any additional revenue, while the paid website might help raise an additional $50,000 per year. In this case, a simple cost-benefit analysis shows that the paid website is the far better investment.
  2. The free website might not lower costs at all, but the paid website might—perhaps substantially. Again, this helps create a potentially significant return on investment (ROI).
  3. The free website might require lots more time and effort from you and your staff and board to implement and maintain. Of course, your time has value, and must be factored into your decision.
  4. The free website might take longer to implement, causing you to wait in order to start benefitting from the new site.
  5. The free website might be of inferior quality relative to the paid website. If this is true it could end up costing you in increased costs and/or decreased revenue. For example, an online donor who would have donated to you if your website looked professional and portrayed your organization in a highly positive manner might not donate if the website looks shoddy or doesn't portray you in the best light. Moreover, if the free website does not incorporate effective search engine optimization techniques, it might get far less traffic than the paid website.
  6. If you have any issue with your site before or after it goes live, you might get delayed and/or poor support for the free website. After all, the person who builds the site for you is likely busy, and his or her priorities may emphasize spending time in ways that will generate money, no matter how well meaning the developer is. On the other hand, the paid website may come with 24/7, effective support.
  7. The free website might require some maintenance by people outside your organization (since they have the technical skills to do so), causing you to wait for and potentially pay for each change to your site. On the other hand, the paid site might include the ability for your staff to make any changes to your site immediately and without technical skills—or cost.
  8. The free website may never get implemented!

Often there is a reason for the adage "you get what you pay for"! So, whether your decision involves a website or any other way to spend or raise money, consider the full impact of the decision, including benefits and internal costs—not just the surface costs.

Allan Pressel, PowerSite123
© 2014, PowerSite123

Allan Pressel is CEO of PowerSite123, which helps nonprofits create world-class websites, social media, SEO, and marketing. Allan is a world-renowned ePhilanthropy speaker. Allan is co-author of Internet Management for Nonprofits. He was given the Volunteer Service Award by President George W. Bush. Allan was co-founder of i-Cube, which had a highly successful IPO. Feel free to contact Allan with any questions at (310) 363-0095 or allan@powersite123.com.


Top Strategic Mistakes Nonprofits Make, Part 1

Nonprofits do a lot of things well, particularly making our world a better place. Many nonprofits, however, could do an even better job of pursuing their missions and raising more funds if they avoid the 13 key strategic mistakes nonprofits often make. Mistakes 1-4 are listed below, in no particular order. Mistakes 5-13 will appear in articles published in November and December 2014.

1. Failing to help people find you online

There was a time when nonprofits used to have to search for virtually all their donors, volunteers, clients, staff, board members, event attendees, partners, and even grants. Now there's a new paradigm in which those people are increasingly trying to find you online. Even when you pursue these people the old-fashioned way—say by meeting them at a networking event—no matter how effective a job you do of convincing them of the merits of your nonprofit, sometime after that encounter they will probably try to find you online. If they can't find you online, or if they are underwhelmed by what they do find, the chances of them supporting you or engaging with you diminish.

Inbound marketing is a collection of techniques designed to help people—the right people—find you online. Inbound marketing has three overriding goals. First, maximize the number of people who find you online. Second, maximize the quality of those leads—otherwise you might get a lot of tire-kickers. Finally, maximize your conversion rate—that is, the percentage of your online visitors who become "converted" into donors, volunteers, or into doing the other things you want them to do. Since most nonprofits have an online conversion rate of 0 to 2 percent, inbound marketing can only help them improve.

Here are some of the key inbound marketing techniques:

  1. Search engine optimization (SEO): SEO includes techniques within your website to boost your search engine standing and thereby help you get more traffic to and support through your website.
  2. Search engine marketing (SEM): SEM is like SEO but includes techniques external to your website.
  3. Pay-per-click (PPC): PPC enables you to buy your way to the top of the search engine standings. Through Google Grants, most nonprofits can easily get a grant entitling them to up to $10,000 per month in free Google AdWords.
  4. Content creation: You should be consistently creating fresh, relevant content—and posting it to your website, social media, blog, e-newsletter, and articles.

2. Not measuring outcomes

Nonprofits typically need to do a better job of setting goals—and then creating/deploying strategies to achieve those goals. Furthermore, each of those strategies and techniques should be measured periodically. Those that prove effective should be continued. Those that are ineffective should either be tweaked so they become effective or discontinued and replaced with other techniques.

Here are potential areas for which you may want to establish goals:

  1. # clients served
  2. $ raised (online, offline, and total)
  3. # event attendees
  4. # website visitors
  5. # e-mail list subscribers
  6. # Twitter followers
  7. # Facebook likes

Each of your goals should be specific, measurable, and attainable.

3. Failing to attract board members beyond your inner circle, and failing to hold them accountable

Some nonprofits recruit board members from the close circle of friends or colleagues of existing board members and management. This may be an effective and convenient place to start but should not be the end of looking for good board members. For example, nonprofits should be recruiting board members online, especially via LinkedIn and other social media connections. You may want to use professional board recruiters as well.

Hold board members accountable for the results they achieve. This means setting and measuring goals, as discussed above. It also means making each board member responsible for a specific amount of fundraising. If a prospective donor finds out that some of your board members don't donate, he or she may question why he/she should donate. Take this objection off the table by requiring each board member to "give or get" a specific amount.

Each board member should sign up for (or get assigned) specific tasks with designated outcomes.

Hold some board meetings via webinar. Board members are often busy and difficult to schedule in the same place at the same time. So hold some of your board meetings via webinar—either with or without webcams, screen sharing, and slides. They'll be able to participate from wherever they happen to be, as long as they have Internet access—even through their mobile phones.

4. Not paying for performance

The way an employee performs is often highly correlated with the way he or she is compensated. Most nonprofit employees, especially development and executive directors, have little or none of their pay tied to performance-related goals. Each employee should have specific, attainable, measure goals that are directly correlated with his or her compensation. This principle should apply to management, staff, and consultants. Even though they are not paid, board members and volunteers may become more productive if their goals are made more in alignment with your nonprofit's goals.

Allan Pressel, PowerSite123
© 2014, PowerSite123

Allan Pressel is CEO of PowerSite123, which helps nonprofits create world-class websites, social media, SEO, and marketing. Allan is a world-renowned ePhilanthropy speaker. Allan is co-author of Internet Management for Nonprofits. He was given the Volunteer Service Award by President George W. Bush. Allan was co-founder of i-Cube, which had a highly successful IPO. Feel free to contact Allan with any questions at (310) 363-0095 or allan@powersite123.com.


How Your Nonprofit Can Use the Internet Strategically


Any nonprofit can have one of two broad types of Web sites. First is a "brochure-ware" site, which simply contains information about the nonprofit. A brochure-ware site can be one page of unformatted text or hundreds of pages of text, graphics, animation, audio, and video. Either way, because all of the pages provide information only, the site is considered a brochure-ware site.