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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.

Top-Strategic-Mistakes-Nonprofits-Make-Part-2_Allan-Pressel.jpgAllan 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.

Topics: Nonprofit Leadership and Practice