“Income, Profit, Equity.” December 2008
Impact of fraud on Non-Profit Organization Income
Last month, most people had never heard of Bernie Madoff. This month, the world has just gotten a glimpse inside the world of private investing and what a world-class ponzi scheme looks like. Nobody’s been convicted yet, but there are serious questions into what happened. As the media and federal agencies study the books, there is a serious secondary impact that is coming to light…
…the impact on non-profit organizations’ income.
Most people don’t realize that because of financial restrictions on endowments and proposed legislation by the Obama administration to reduce tax benefits for those who donate to charity, most NPOs (non-profit organizations) are staring straight down the barrel of a loaded gun (financially speaking). The changes in the economy have caused personal donations to drop radically, so what’s an NPO to do to stave off the consequences of dwindling support?
Good question.
Let’s look at the cornerstone of an NPO. Most times it is the passion of the person or people who started it. Life events cause people to become passionate about a subject or cause. When they do, they need to raise cash to support the work of the fund. The money has to be raised according to strict guidelines in order to protect the non-profit status (reduced tax liability) of the organization. In essence NPOs focus on their strengths. Sound familiar? It’s the same thing for-profit entrepreneurs and business owners do.
NPOs need to focus on what they do best while at the same time make sure they are competitive in this economy. For many NPOs this means they need to get their technology in the 21st century. In the consulting work we’ve done with NPOs, we’ve found most organizations are not up to speed with spam-compliant email communications, effective email marketing, and supporter retention. These are all critical because NPOs will be competing for dollars.
People will choose to support organizations for which they have passion, but also groups that make it easy to support. In other words, if you continually and effectively communicate your message, make it easy to share your message with others and think about creative ways to show your support for your contributors, you have a much higher likelihood of maintaining and even expanding your support base.
There are over 1.5 million NPOs in the United States. While Bernie Madoff may have taken advantage of them, we believe it’s important to apply effective business principles and practices to help them continue their passion!
We’ve prepared a free special report for our newsletter subscribers which you can receive by going to MyFundraisingStrategy.com. (Click Here)
Cheers,
Steve
Steve Olds
Founder and CEO
www.STRATWORX.com