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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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Top-Strategic-Mistakes-Nonprofits-Make-Part-3_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