A Dollar Saved Is a Dollar Raised: Group Purchasing for Nonprofits July 21, 2010 By Mary Pat Donnellon

by Ellie LaCasse

It only makes sense. Vendors offer discounts for goods or services that are purchased in large quantities. However, since many nonprofits are small (and resources are limited), they can’t promise to make big purchases from office supply companies, printers, lawyers, accountants, and software companies—so they may think they’re not eligible for discounts.

Nonprofits in health services have long had access to group purchasing—because they’re often part of a large group with a long history of group purchasing of medical supplies. Most state nonprofit associations also offer group purchasing benefits to their members. You’ll want to check what’s available to you and find out whether this is the best way for you to make the type of purchases you need to make. In addition to state nonprofit associations, we had identified only two other nonprofit group purchasing organizations: Purchasing Partners of America (Colorado) and Nonprofit Purchasing Group of Delaware, and both focus mostly on local vendors.

But now there's a new player on the group-purchasing block you’ll also want to check out: the Non-Profit Purchasing Group (NPPG), a new GiftWorks partner.

After a career in the for-profit arena, Dan Engel started the nonprofit Miracle League of San Diego, a baseball program for children with special needs that currently serves 175 players in the San Diego area. Also board chair of the California Oncology Research Institute, Dan realized the need for nonprofits to find savings on routine purchases.

When Dan announced the start of the NPPG this January, he immediately received 3,000 responses. Even organizations that had previously explored group purchasing welcomed the chance to look into discounts (typically at least 15%) from NPPG’s 43 listed vendors, including GiftWorks.

"The challenge is to educate people about the
opportunity to save money easily."

Although you might be able to find special sale prices on occasion, at NPPG you can find them everyday. NPPG’s offerings include office supplies, printing, payroll fees, consumer directed health plans, telephone services, email marketing, website design, search engine optimization, surveys, social fundraising solutions, online auction fundraising, web conferencing and more.

“The challenge is to educate people about the opportunity to save money easily,” Dan said. Most nonprofit staff members don’t have a lot of time to devote to comparison shopping.

Data from a 2005 Urban Institute study shows that a typical nonprofit (excluding those in the health sector) spends about 10.8% of its budget on supplies, communications, professional fees, and equipment rental and maintenance. Dan estimates that smaller nonprofits spend a higher percentage of their budget on these expenses because they typically have fewer paid staff and more volunteers. It is precisely those smaller nonprofits, which don't have the resources to identify and solicit discounts, that benefit most from group purchasing organizations.

Because NPPG is dedicated exclusively to nonprofits, it doesn't accept commissions, rebates or administrative fees and is thus able to pass through 100% of the negotiated savings to its members. Instead, NPPG charges a membership fee scaled to the size of the participating organization. All members access the same discounts and find the offers in one easy-to-access place.

With an annual fee as low as $19, your organization can come out ahead with the purchase of a single laser printer cartridge or a subscription to the services of one of NPPG's many providers. In addition, NPPG expresses its commitment to the nonprofit sector by donating 10% of its profits annually to charity.

Check out the offers of your state nonprofit association and NPPG and see if there are savings that can help you focus more of your staff time and funds on your mission, and less on back-office purchasing and bill paying.

For more information about NPPG, visit nonprofitpurchasinggroup.org or call Dan Engel toll-free at 877.849.6774.

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Ellie LaCasse, a friend of GiftWorks, is officially retired from fundraising but is forever a community volunteer.

Effective Board Support—What Is It? June 21, 2010 By Mary Pat Donnellon

This article by Pete Nixon of Apogee Consultants (Park City, UT) first appeared in the October 2009 GiftWorks eNews.

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Does your 501c3 organization have enough money? If so, you can stop reading now. If not, it's time to evaluate how well your board is doing its job of connecting with the community. Community support comes in many forms: providing the community leaders who sit on the board, providing the cadre of volunteers who provide essential services without cost, and cash donations from the community. This last area is where many boards shirk their duty, placing the burden unfairly on the Executive Director or a Development Director.

The Evolution of a Nonprofit
A nonprofit organization might also be called a 'community-supporting and -supported organization'; it's typically started by a group of people who perceive there is a social need not being met by existing organizations, including government, business or other nonprofits.

In the beginning, the founders serve as both the board and the (unpaid) staff. They struggle to raise funds so they can develop and administer the programs to meet the need. If there is a broad enough interest by the greater community, the funding base grows and the organization is then able to hire paid staff. What happens next varies, depending on whether or not the leadership recognizes the distinction between staff and board functions.

"What happens when a nonprofit hires its first staff depends on whether or not the leadership recognizes the distinction between staff and board functions."

My point is: nonprofits are usually started, governed, and managed by people in a community who are focused on the mission, not on raising money. Fundraising in the community is seen as a necessary evil. As soon as the organization can afford to hire an Executive Director, one of the first tasks they unload is that of fundraising. At that point, the personal connection to the community becomes strained--if not severed. You need a Board to bridge that gap.

A Better Board Model
The Board's role in connecting the nonprofit with the community includes:

1. Representing the organization in the community
2. Representing the community's interests in ensuring the organization is meeting the community's needs

If the Board takes this role seriously, the community is always aware of the importance of the nonprofit to the community and of the need to support it with volunteers and funds. This is not something a staff person can or should do, unless it is in support of board initiatives.

Board members should be chosen not only for their interest in the mission, but for their ability to engage the community in supporting the organization with their money, time and talents. All too often, organizations that are in trouble financially are 'led' by a board composed of well-meaning, concerned citizens who do not understand or accept their responsibility to ensure the financial well-being of the organization.

An effective board is one composed of people who are willing to use their stature and influence in the community to raise funds from the community. Ideally, these are people who are successful in their own right - 'pillars of the community'-- who are not the least bit reluctant to ask for money for a good cause. In fact, they enjoy the challenge of doing so.

The Nonprofit's Funding Conundrum
By its nature, a 501c3 nonprofit derives little or no funding from those it serves and must instead obtain funds from sources that only indirectly benefit from the services provided. Think about that for a minute because it is at the heart of the funding conundrum faced by just about every nonprofit.

"By its nature, a nonprofit derives little or no funding from those it serves; it must instead obtain funds from sources that only indirectly benefit from the services provided."

A community health clinic or homeless shelter provides critical life-saving services to those who cannot pay; it must somehow convince the community to provide the funding. Animal shelters, soup kitchens, adult literacy programs, inner-city and at-risk children's programs--the list is virtually endless and the dilemma the same; those served cannot pay for the services so the community must be convinced to do so.

Many of these programs qualify for government funding, but it is rarely enough to meet an organization's financial needs. This is particularly true in tough economic climates as we have seen recently, where demand for services soars while these funding sources dry up. Even those nonprofits previously successful in obtaining foundation grants are now seeing that source constricting.

So, unlike for-profit businesses, nonprofits must not only serve their 'customers' (the users of their services) well - they must also convince someone else to pay for services they are not themselves using. Now that is a marketing challenge!

The Fundraising Duties of Staff
The staff's role in all of this is to administer the programs at the center of the organization's mission which serve constituents. All too often, though, I see Executive Director job descriptions that make the ED responsible not only for running successful programs but also fundraising in the community. This is an abdication of duty by the Board and a formula for constant financial distress for the organization.

What is the staff's role in fundraising? I believe it is limited to:

1. Identifying and applying for relevant foundation and agency grants
2. Developing an effective marketing strategy to get the right message out to the community
3. Providing administrative and marketing support for fundraising and awareness events that the Board has initiated and promoted within their circle(s) of influence
4. Developing and grooming a database of financial supporters to which occasional appeals can be targeted

In Summary
The key to active, ongoing community support is a Board with the right attitude toward its responsibilities as the 'community connection'.

If your organization does not have a board that understands and accepts its responsibility as the 'community connection', you will likely always struggle with funding. On the other hand, if your board becomes actively engaged in a two-way conversation with the community, you will likely find a much more receptive audience for your marketing message and have an easier time obtaining community support.

Organizations that have mastered the art of soliciting community support can actually experience an increase in community support during economic downturns. Make sure your community knows why you exist and why they should support you - and the best way to do so is with a board that understands this as their 'job one'.

Pete Nixon, of Apogee Consultants (Park City, UT), helps corporate and nonprofit clients recognize and overcome patterns of behavior and thinking that don't serve them well, and to develop strategies for future success. Pete has been an active leader and volunteer with numerous civic and charitable groups in the Salt Lake City area.

Are You Making the Most of Your Volunteer Talent? October 6, 2009 By Mary Pat Donnellon

We’re declaring October to be Volunteer Appreciation Month.  Why?  Because volunteers can be an organization’s greatest resource – if managed, leveraged, and appreciated properly.

Intellectually, we all know how important volunteers are to our nonprofit work.  But day in and day out, we often fail to tap in to this rich vein of talent and support.  Recent studies show that nonprofits have a very difficult time retaining volunteer talent. 

What's to be done?  First, there needs to be an organizational commitment to leveraging volunteers to their fullest.  In order to rally your staff around this, it's quite helpful to fully understand the impact volunteers have on your organization which requires good measurement. Second, decide to learn to manage volunteers just as you would manage any other critical function in your organization.

Of course, you need tools to properly manage, measure and scale your volunteer program.  GiftWorks Volunteers can help - from capturing volunteer skills and your organization's volunteer needs, capturing volunteer and project hours, to providing the means to recognize and communicate with your volunteer team.  GiftWorks Volunteers is an add-in to, and completely integrated with GiftWorks Standard and Premium editions.

Below is short version of an excellent article written by retired volunteer organizer Ellie LaCasse discussing how technology can help you improve your volunteer program.  Read on and please share any thoughts you have on fully leveraging volunteer talent!

 

Using Technology to Gain and Retain Volunteers by Ellie LaCasse

Volunteers may be your organization's greatest resource. In fact, volunteers bring something invaluable to your organization, more than just their dollars, but their time, their interest, their loyalty and their ability to evangelize your mission to others in your community. Committed volunteers, helping with your work and representing you in the community, are priceless. Indeed, volunteers are likely to become your most consistent and, in time, major donors. But if you're not using technology to reach them and coordinate your volunteer efforts, you may be missing a large and growing segment of potential volunteers.

Today's volunteers are no longer content to sit and stuff envelopes on Thursday afternoons. They put a high-value on their time and abilities and want volunteer assignments that tap into those talents and reward them with the satisfaction of having provided meaningful work. To succeed, you must develop ways to find, fulfill, and satisfy your volunteers.

You may not be a sophisticated computer or web user, but you can be sure that the majority of your volunteer audience, both in your community and beyond, is using technology for their personal and business lives. Here are a few ways that you can use technology to improve volunteer efforts for your organization.

1. Collect specific data about your volunteers. It is critical to a not-for-profit's success to have systems in place for managing volunteer skills and abilities, as well as volunteer jobs and opportunities. At a minimum, you should invest in some type of a database for these areas. There is no other effective way to manage this important function.

2. Match volunteer talents with organizational needs and activities. Just as important as recruiting volunteers is retaining them. With your volunteer database, you'll need the ability to manage projects and volunteer jobs and match volunteers to jobs and projects. You'll also need to be able to record what jobs people have performed in the past, what skills they possess that you have and haven't used, and check that you've found a job for every volunteer you can. If you keep your database up to date, you'll even be able to brush up on John Jones' volunteer history before you meet him for lunch.

3. Schedule and track projects. Use your software to manage jobs and opportunities as well. You don't want to schedule five volunteers to help with an activity and then only have enough work for two of them. All five will feel that you and your organization are unorganized and perhaps their skills could be better used elsewhere, and be reluctant to sign up again.

4. Keep in touch with your volunteers. Likewise, you should use your software system to contact volunteers. While this is most easily done via e-mail, you might also consider a personalized, handwritten note to those people connected to an event, or even a regular volunteer newsletter. You can alert committee members of an approaching meeting, updates on an upcoming event, or let them know how many pledges have registered for your upcoming walk-a-thon, transmitting not only information, but motivation and a sense of community. You can even put out a call when there's a sudden unforeseen need for emergency food preparation or data entry or help with a move. Make sure to acknowledge the importance of volunteers to your organization and community with fresh success stories.

5. Recruit volunteers continually. Recruiting new volunteers can start on your own website. Provide on-line job descriptions, sign-up/registration, volunteer outcomes on your site, and keep them up-to-date. Create a special volunteer section where you highlight and thank your volunteers. Publish a monthly report of volunteer hours.

6. Personalize your volunteer requirements. Both on your site and on the Internet, you have the opportunity to put a real face and voice to your appeal. You can use photos, maps, even voices or music to bring your story to life. Unlike the limitations of a paper brochure, you can vary and change your image(s) daily in order to provide more depth and breadth to your message.

7. Link to social networking sites. Many not-for-profits are expanding their reach even more boldly with the use of interactive web tools like MySpace and Facebook, blogs, and discussion groups. Maybe you even have a volunteer who might like to tackle this kind of outreach. This is a great opportunity to build an online community, to engage more people in your cause, resulting not only in volunteers but donations and increased awareness.

Pennsylvania Budget Impasse is Hurting Nonprofits September 16, 2009 By Mary Pat Donnellon

Here in Pennsylvania, we still don't have a state budget.  Without going into the politics of the situation, the result is that many PA nonprofit organizations are unable to receive earned reimbursements for services provided and other state funding.  While at some unknown point in the future, some funding and most payments will come, but until then, there is a cash flow crisis.  How many organizations have the reserves or lines of credit established to cover 3-4 months or 5-6 months of unexpected shortages? 

In Pennsylvania, the PA Association of Nonprofit Organizations (PANO), has been leading the advocacy effort in Harrisburg.  The importance of having a cohesive voice for the nonprofit sector is never more important than in times like these.  More on that topic later, but please visit their site if you want to learn more about the budget impasse and how you can help.  

Here is a letter to the editor written by Maureen Powers and Tina Nixon, co-chairs of the YWCA Mid-Atlantic Region, describing very well the issue at hand. 

"Since the passage of the Governor’s Stopgap budget, State budget negotiations have stood at an impasse.  State workers are now receiving paychecks, but organizations and agencies with contracts with the state are still not being paid for their services.  During this recessionary time, this adds to the severe economic distress nonprofits are already under.

As Co-Chairs of the YWCA Mid-Atlantic Region, we are witnessing the impact the lack of a state budget is having on the 24 YWCAs in PA.  YWCAs provide childcare for thousands of low-income families daily that is subsidized through the state.  We also operate domestic violence shelters and rape crisis centers that are almost wholly dependent on government grants, and we certainly cannot refuse these crisis services to victims of crime because of inability to pay.  However, because we currently are not receiving payment from the state for services provided and may become unable to pay our staff, these services and others are at risk of shutting down.

As one example, at the YWCA of Lancaster, we continue to provide child care for 300 children daily, counseling and accompaniment for sexual assault victims, parenting education for low functioning parents, and youth services that are costing us $100,000 per month for which we are not receiving our expected and earned reimbursement.  School is starting, and there is no state money to subsidize childcare for babies of teen parents who want to finish high school.

Some YWCAs have exhausted their reserves and their lines of credit.  If the state does not pass a budget promptly, they will have no recourse but to lay off staff and suspend programs.  This will only add to the number of unemployed people in PA, and deprive communities of essential services.

And in forcing us to use our own reserves or lines of credit, the state is essentially using nonprofits as a bank.  We are virtually “lending” the state money at no cost to the state, but at a loss to us, as we will not be reimbursed for interest payments and fees incurred.

We urge our representatives and senators to abandon their intransigent positions and focus on resolving an intolerable and unworkable situation.  Posturing for a certain constituency may enhance an individual candidate’s political image, but it damages the underlying fiber of the community and exacerbates an already difficult situation for our most vulnerable populations.  

The issues involved in the budget are the same today as they were in May and June, and could have been resolved then as well as now.  In the name of democracy, we call on the state legislature to put an end to this injustice charading as political debate."

Sincerely,

Maureen Powers     Tina Nixon   

Co-Chairs  

YWCA Mid-Atlantic Region

Employee Turnover June 18, 2007 By

Several of the nonprofits in which I'm involved have been going through some tough times, and one of the natural outcomes is employee turnover. At one, a longtime employee, who represents the heart and soul of one of the programs, decided it was time to leave after a series of management miscues that made her job not very fun. So she left and started her own business doing the same thing but under her own domain. So perhaps we can say this  nonprofit inspires entrepreneurism, but we know better.

At another, smaller nonprofit, one of the employees is leaving because of disagreements and negative interactions with management (I'm deliberately keeping it vague). This is after less than a year of part-time work, and she was a valued contributor.

Employee turnover is costly. Sometimes it's appropriate; an employee or Director is the wrong person for the job, and it only makes sense to recognize that and help them find a more suitable career. In fact, I believe in those cases all pretense should be dropped and the move made as soon as it's clear it's not working--make it surgical, as my Dad used to say (a doc, of course). The drag on an organization by a poor performer or inappropriate hire is likely greater than the hole left by their absence.

But when good people leave the organization, it is substantially more painful all around, and can often be an indictment of management, policies, behaviors, etc.  This is when everyone questions leadership, and rightfully so. What's not working? How can we do better? What does the former employee think? What does she think we could do better and correct? What advice can she give us?

Replacing good employees is expensive and tough. The process can take many months, and in the meantime, you have holes to fill. So my advice? Hold on to great employees. Listen. If they must leave, ask them to recruit their replacement. But the question remains: what are the underlying problems that led to the departure, and can you address them?

Good news, Bad News: Nonprofits and Politicians May 18, 2007 By

When nonprofits and politicians mix, great things can happen. The pols can shake down the state or fed for grants, attract press and publicity, and inspire large donations toward projects of their liking. The downside is when Pols are on the take from nonprofits they start themselves.

In Philadelphia, Vince Fumo had his "own" nonprofit, through which he funneled millions of "donations" from "generous" donors like Verizon, which frequently had legislation to push through the PA State Senate. One of its infamous bills was the Telecommunications Act of 2004, which (get this) bans municipalities from providing wireless internet access to citizens. That's right, you have to ask Verizon for permission.

Fumo had his nonprofit buy things for him, like a tractor for his farm, and renovations to his office. And just Wednesday we learned of the Detroit Mayor's own nonprofit profiteering, where he has apparently had high-priced vacations paid for by a nonprofit run by his sister-in-law.

You work too hard on missions too important to let this sort of stuff go on. Between exorbitant executive salaries at large nonprofits and outright fraud, the nonprofit world continues to get smeared. I'm thinking a lot about this lately. I think we need to establish greater accountability, transparency, and oversight.

Any thoughts on this?