Final Post of John Davidson

Dear friends,

It has been wonderful to serve as the founder and author of the ‘Operation Church’ blog.  In just 2 years we have collected over 1,000 readers and served as a resource for hundreds of churches and church leaders.

Yet all things change, and as of 12/31/11 I left Church Extension to accept a position at the Univ of Colorado Foundation in Denver. With this change, I will be passing the mantel of blog manager and author to Katie Marlowe, Church Extension’s VP for Marketing.

In the short term, Church Extension plans to leave the blog open to serve as a resource, however its extended future is unknown.

It has been a wonderful experience for me and I thank you again for being a reader.

Blessings,

Rev. John Davidson

Whose Your Real Competition: Hint, it is not the Church Next Door

Soggydan

When most businesses think about their competition, they often identify businesses that offer similar products and services.

For example: HP thinks about Dell. American Airlines thinks about United Airlines. In essence, their competition is defined as those other businesses that compete for the same market share.

In a recent blog post, Shaun King highlighted that while this trend is true in business, it is not true for churches and nonprofits. In his post, “The MAJOR Disadvantage (& ugliness) of Non-Profits & Churches Misunderstanding Who Their Competition Is,” Shaun highlights that other nonprofits and churches are not in competition with each other.  He argues, instead, that the real competition is the factors that cause the problems.

For example:

• If you are trying to fight hunger, the competition is poverty and access to food.
• If you are trying to fight slavery, the competition is slave traders
• If you are trying to fight drug crime, the competition is drug dealers

Unlike businesses, churches or nonprofits don’t compete against each other. Instead, they offer each other a partner for mission and work.

I really appreciated Shaun’s post and I would encourage other leaders to give it a read and to share it with their leaders in their organization. After all, operating a church is about changing lives, not fighting with other people who have the same goal.

The USA is the most Charitable Nation in the World

In its second edition of the World Giving Index, the Charities Aid Foundation has determined that the United States is the most charitable country in the world.

The study found that out of the 153 countries evaluated, the people in the United States were the most generous with their donation and volunteering for charities and other nonprofit organizations.

The study also showed that giving globally has increased by 2% and that volunteering has increased by 1%.

The report also has a great picture showing how giving has been distributed (originally found at http://taxprof.typepad.com/taxprof_blog/2011/12/world-giving-index-2011.html ) shown below:

Charities Aid Foundation

 

For more information read the report at https://www.cafonline.org/publications/2011-publications/world-giving-index-2011.aspx

5 New Innovations for the Next 5 Years

svenwerk

Each year IBM makes 5 major predictions about what new 5 technological innovations will impact our lives in the next 5 years. They call it their 5 for 5 list.

Here are the top 5:

1. Energy: People power will come to life– normal activities will soon be converted into energy to power our houses, work, and lives.
2. Security: You will never need a password again– think biometrics and unique identification based your physical attributes
3. Mind reading: no longer science fiction– linking of phones, computers, and the web to your personal preferences and body actions
4. Mobile: The digital divide will cease to exist– mobile devices are making access to information and technology universal
5. Analytics: Junk mail will become priority mail– via analytics, technology will begin to filter the information you prefer to your inbox

Obviously these shifts will impact our lives, how we communicate, and our culture…aka every aspect of our lives. As you consider how to position your nonprofit to serve others, these advances will also impact the mission work of our world.

I encourage you to read the full story on the IBM Website

2011 in review

The WordPress.com stats helper monkeys prepared a 2011 annual report for this blog.

Here’s an excerpt:

The concert hall at the Syndey Opera House holds 2,700 people. This blog was viewed about 20,000 times in 2011. If it were a concert at Sydney Opera House, it would take about 7 sold-out performances for that many people to see it.

Click here to see the complete report.

Learning Fundraising from the Big Boys & Girls

Akron Kiwanis

During the ‘Season of Giving,’ most of us are aware that churches and nonprofit organization rely upon the generosity of others for their operations.

Lest we forget, we often receive several letters, emails, phone calls, and of course we will see the Salvation Army bell ringers. However, while most of us are on the receiving end of soliciation… very few of us are aware of the great amount of detail and effort that larger nonprofit organizations use to research and track our giving habits.

Just like retailers and credit companies, many larger nonprofit organizations rely upon market research and public information to learn about our philanthropic passions and wealth. In a recenet NYT article, “Taking Fundraising to the Next Level,“ author Rob Lieber highlights just how a larger nonprofit organization like a hospital, college, or major foundation will likely track your information.

For most small nonprofit leaders, and most donors, this article will likely be the first time that you see how professional fundraising is done, and like the author, I would say that I support their efforts- even if it seems a little unsettling.

As I read this article, I thought it would also be a great way to help leaders of smaller nonprofit organizations see the bigger picture and learn how some of the biggest and best fundraisers in America support their causes and philanthropy organizations.

Enjoy the reading and have a Merry Christmas.

Financial Basics for Nonprofit Managment

s_falkow

Recently, I was asked, “What are some basic steps we can do to improve our financial management?”

I was visiting a local congregation and the leaders were in the process of reviewing their financial history, operations, and current accounting controls. In the meeting I listed off about five items, but in reflection, I thought I would create an official list of financial basics for nonprofit management.

Financial Basics for Nonprofit Management:

• Tracking of Data- by tracking data, you can determine benchmarks for growth or decline. Be sure to track participation, income, expenses, donations (and levels of giving), and long term goals (and to communicate these to leaders, donors, and members).
• Accounting Controls-many small nonprofits rely upon 1 or 2 people to handle all of their bookkeeping. This leaves them vulnerable to fraud and usually limits financial communications. Be sure to have monthly review of finances, independent reviews of bookkeeping, limits on spending, and requirements for approval of spending.
• 6 Months of Emergency Savings- every organization should have 6 months of cash savings available to cover expenses in an emergency.
• Line of Credit- as organizations grow, they can improve their cash flow by taking out a line of credit or operating loan. LOC should be capped at around 3 months of expenses, and often operate similar to a credit card for an organization.
• Multiple Income Streams-no organization should only have one line of income. By creating multiple revenue streams, nonprofits increase their stability.
• Endowment & Net Assets– Gone are the days when a nonprofit organization should operate at a net zero. By creating endowments and net assets, nonprofits can cover the cost of their operations, allowing more of their donations to immediately  go into outreach.
• Facility Management– Buildings cost a lot to maintain and operate. If you own a facility, be sure keep up with facility maintenance, use it as resource, and improve it as building code and mission needs change- otherwise it can become black-hole that sucks money away from your mission focus.
• Board Development- Board members are ultimately responsible for organizations- be sure board members understand their roles and that they are giving proper oversight of staff and operations.
• Insurance- Be sure that your organization has enough insurance to cover its liabilities for its staff, operations, facilities, and to protect the organization from lawsuits and emergencies.
• Management & Gift Policies-smaller nonprofits often lack staff, organizational management (by laws), and gift policies which help organize and outline how nonprofit organizations operate and how donations should be accepted and used.
• Financial Relationships– this may seem like an odd item for this list, but knowing your bank manager, accountant, insurance broker, and financial advisers personally can be critical in emergencies and/or when you need additional help.

There are many other items that could be added to this list (brand management, communications, mission focus, etc), but these are some highlights to help you review how your church or nonprofit organization manages its financial operations.

 

 

New Survey Shows Giving is up at 41% of Nonprofits

Earlier this week Guidestar posted the results of a survey that asked nonprofits about their fundraising and operations for 2011.  Here are some of the highlights:

• 41% of Charities saw an Increase in Giving for the first 9 months of 2011 over 2010 (28% had less income & 31% no change)
• 65% of nonprofits saw an increased need for their services– over the past 9 months compared to 2010
• Approximately 50% of charities have some financial stress – income, cash flow, # of donors, non-donor income

For more information, visit Guidestar’s website

Improve Your Church’s HVAC w/ Wifi

The Nest

When most of us think about a HV/AC system, we usually picture an older furnace- rarely would we picture a sleek thermostat that connects to a wifI system. However, this seems to be the future of energy controls for commercial and residential buildings.

Since 2008, manufacturers have offered thermostats that can connect to a wifi system, thus allowing control and access to the system via the internet. This has been a great upgrade, but until now many of the programmable thermostats have been confusing to use. In fact, the US Dept of Energy realized that most people who purchased programmable thermostats, actually used more energy than before, because they were too complicated to use.

So in an effort to make programmable thermostats more user friendly, several companies have begun to create systems that can be controlled by a computer using a program like Microsoft Outlook set set room temperatures.  Other companies, have also begun to make intuitive thermostats that create a pattern of use based on how you adjust the temperature over a period of a few weeks.

With heating and cooling systems accounting for 16% of the electricity in the USA, and more than half of the energy consumed in a house, HV/AC systems will continue to be a focus for utility companies as they try to reduce the amount of energy consumed in the United States. This trend will likely also become a focus of more and more churches, facility managers, and home owners as the cost of energy continues to rise.

After all, the less money that people and organizations are forced to pay for utilities, operations, and energy, the more money they have to support the mission and programs that they value. For more information about changing HV/AC systems, please read the following articles:

• NY Times: A Thermostat that is Clever, Not Clunky
• Green Tech Grid: Get Ready for the WiFi Thermostat

Blog notes: Several of the stats given in this blog were pulled from these  two articles. The picture above comes from several sources and is provided by the company and can be found on their website- http://www.nest.com

Building the Base- Fundraising by Volume

laubarnes

If you follow trends in fundraising (most people don’t), then you may remember that America saw a shift in how organizations approach small donors during the 2008 election campaign.

Prior to 2008, most organizations had mainly focused on reaching major donors- and many still do. However, in 2008, there was a major shift in how organizations began to reach out to donors who made many small and medium sized gifts.  The two reasons being:

1. Most potential major donors have already been targeted
2. Technology has allowed better access and communication via email, internet, and mobile communciation

Together these two shifts have allowed more and more organizations to expand their base, and thus, improve the stability and size of their fundraising work. But when we look at this trend, however, we see that it has largely been adopted by larger nonprofit organizations, and not small nonprofits or churches.

So beyond the shift, what is the big deal as it relates to fundraising for churches?

Well the main reason is that churches have often been the envy of other nonprofit organizations, for the following reasons:

• Churches usually have a loyal base that donates weekly, monthly, etc
• Churches make a regular ask each week, most nonprofits only get 3-5 a year
• Religious people tend donate 3 times more than non-religious people
• Religion accounts for the largest segment of fundraising each year
• People who attend church are usually versed in donating habits and believe in serving other

So with the shift of other nonprofits into expanding their base of small and middle donors… churches, and other small nonprofits, will now be competing more and more for the same donors and money. This competition will not really matter for donors who are over the age of 60 and who physically give in the offering plate each week. But it will matter for donors under the age of 60, who now want more and more access to online giving and better transparency of how their gifts are used.

Thus, if you are a church leader, I would strongly encourage you to work with your financial leadership team to start reviewing how members and participates are currently donating to your church, and how you can make donating more accessible via electronic transfers and online giving. By being aware of people’s financial habits, churches can better offer ways for members to support the mission, ministry, and operations of the church.

For more information about this trend, check out a recent article in the WSJ entitled, “Strength in Numbers”