Nonprofit organizations have the same challenges as for-profit businesses – they must address everything from sales to human resources as they deliver on their mission. Unfortunately, good intentions and a solid mission aren’t enough to build a sustainable organization, no matter how worthy the cause.
George Kenefic, Director of Enterprise Empowerment at The Loan Fund, offers these five critical elements, along with a few tips, for managing a nonprofit organization like a for-profit company.
Get the Right People. As with for-profit businesses, people are the single most important factor that determines an organization’s success. People implement plans, and the right people must be in the right roles. A trailblazer probably isn’t going to be happy with day-to-day operations, and a stellar fundraiser may be terrible at managing staff.
Tip: Write job descriptions and performance measurements before beginning any recruitment. If board members are expected to raise money, state that right up front. Many organizations assign multiple roles to employees; for example, a development director may need to do some marketing. Determine if a potential staff member has the pertinent skills needed for each role to which they will be assigned.
Create a Workable Plan. The plan doesn’t have to be long to be effective, but it does have to be written so it can be implemented. Both board and staff should be involved in planning – strategic or otherwise – to avoid confusion and duplicated effort. Many entrepreneurs never write a plan, and a large number of them ultimately fail.
Tip: Keep it Simple! For example, seven major objectives are too many. Try for three, maybe even one. The simpler it is, the more likely the organization can remain focused on its mission and achieve results.
Craft The Right Message. Before initiating any marketing, ensure the message is right for the intended audience. Kenefic said he often hears, “If they just understood, they’d make that donation!” It’s not the job of the donor to understand what you do, he said, but the message should tell them why the mission is important and why they should care.
Tip: Passion points, the elements that get people’s attention and compel them to act, can vary tremendously even within a single demographic. For example, some companies advertise to women by painting their products pink or talking about “helping” women overcome their fear of finances (or investing, or technology, etc.) In fact, many women hate the color pink and don’t believe they need help.
Qualify Opportunities. One of the keys to success in the for-profit world is determining if a prospective buyer is qualified to buy. Making that determination promptly shortens the sales cycle and ensures quality customers. The same is true in the non-profit world. Don’t chase every dollar. Determine who will be most interested in the organization’s message and the best way to approach them. This applies to grant-writing as well.
Tip: Write target profiles for each stakeholder group. Then, craft a sales strategy specific to each. Ask what the most effective method is for reaching them? Advertising may not be the answer.
Measure Results. If results can’t be measured, the effort has not been worth doing. Measured results indicate if the method has been a success or a failure, enabling tactics to be refined or changed.
Tip: Build measurements into processes from the beginning. It’s much easier to do ahead of time, rather than retrospectively, and it avoids a mad scramble for data when funders request information.
Evaluate Continuously. Don’t be afraid to drop a plan that’s not working.
The Loan Fund, a nonprofit CDFI, provides financing and consulting to non-profits and for-profit businesses in New Mexico and the Navajo Nation. Find more information on its website.