The Non-Profit Entrepreneur
The economic crap we're enduring right now is hitting a sector you don't always read about on the front page of this or other newspapers' business section: the foundation-funded non-profits. Over the past two years, non-profit organizations of all stripes have watched their funding sources either dry up or be dramatically reduced. And it doesn't appear that those dollars will come back any time soon.
Out of the ashes emerges an interesting phenomenon: the entrepreneurial non-profit. We're getting calls from them left and right. These are organizations who realize that solvency require them to do the unexpected -- operate like a for-profit business. You know, the kind that makes money. The kind that needs to convince not just a few customers -- their foundations sources -- but perhaps thousands or millions of them -- the people they serve.
I am not talking about social services, such as homeless shelters or food shelves. I'm talking about non-profits that have products, like arts organizations or advocacy groups that create valuable content. These types of non-profits are required today to evaluate their actual market value. What are individual people willing to pay for their content or products? Since their foundation income can no longer underwrite the entire or even partial value of their offerings, non-profits are being forced to think about what their product is actually worth. What will a consumer pay for, say, a non-subsidized ticket to a program or event? What will a consumer pay to subscribe to a web site that offers valuable health related content?
These are daunting and relatively new questions many non-profits are needing to ask themselves. And yet, I believe we have an excellent model in our newly elected President Obama who used digital media to establish grass roots revenue streams (this Minnesota Interactive Marketing Association presentation was brilliant). Unquestionably, Obama became a brand. While Obama the candidate certainly raised large sums of organizational money, the campaign also managed to convince millions of Americans to open their wallets and give modest amounts to his cause. Twitter, Facebook, online town hall meetings, and other digital outposts amplified his message for a very low cost (compared to traditional media), while giving those compelled the opportunity to place their money where his mouth was.
So how do non-profits emulate Obama's success as a candidate?
I'm not suggesting that these recommendations are silver bullets. But I can assure you that survival depends upon fresh thinking and new approaches. As much as your former funding sources wish they could help like they once did, they simply can't. It's time to think of yourself as a true brand that needs to earn its keep. I know it's not natural territory, but I don't see any other options.
That said, there's great help out there. Organizations like the Social Media in the Arts Working Group on Facebook is just one of many groups trying to help organizations share knowledge and best practices. (Full disclosure, I and my sister-in-law Erika Peterson Eklund, Development Director of The Playwrights' Center, started this group last month.) It's time to band together and make all ships rise.
Best wishes to you non-profits. Believe me - it's tough everywhere.
Out of the ashes emerges an interesting phenomenon: the entrepreneurial non-profit. We're getting calls from them left and right. These are organizations who realize that solvency require them to do the unexpected -- operate like a for-profit business. You know, the kind that makes money. The kind that needs to convince not just a few customers -- their foundations sources -- but perhaps thousands or millions of them -- the people they serve.
I am not talking about social services, such as homeless shelters or food shelves. I'm talking about non-profits that have products, like arts organizations or advocacy groups that create valuable content. These types of non-profits are required today to evaluate their actual market value. What are individual people willing to pay for their content or products? Since their foundation income can no longer underwrite the entire or even partial value of their offerings, non-profits are being forced to think about what their product is actually worth. What will a consumer pay for, say, a non-subsidized ticket to a program or event? What will a consumer pay to subscribe to a web site that offers valuable health related content?
These are daunting and relatively new questions many non-profits are needing to ask themselves. And yet, I believe we have an excellent model in our newly elected President Obama who used digital media to establish grass roots revenue streams (this Minnesota Interactive Marketing Association presentation was brilliant). Unquestionably, Obama became a brand. While Obama the candidate certainly raised large sums of organizational money, the campaign also managed to convince millions of Americans to open their wallets and give modest amounts to his cause. Twitter, Facebook, online town hall meetings, and other digital outposts amplified his message for a very low cost (compared to traditional media), while giving those compelled the opportunity to place their money where his mouth was.
So how do non-profits emulate Obama's success as a candidate?
- Fully Blossom Your Social Media Presence and Involvement - For now, your very best allies may be Twitter and Facebook. They're free platforms that allow you and your very best fans to amplify your story, tell it authentically, and reach your niche audiences in a very direct and personal ways.
- Monetize Your Content - Ask yourself honestly what it's worth. What do people pay in the for-profit world for similar content? Is yours worth more or less than theirs? Why or why not? If not, why are you producing it in the first place? If you believe yours is better, then what's preventing you from asking people to pay for it if they willingly already pay others for similar content?
- Assess Your Current Income Streams - Might you be undervaluing current income streams? May you need to reevaluate or realign your costs to the product's true value? Remember, those who subsidized the gap previously are no longer reliable. You might have to earn your income gap directly.
- Slay Sacred Cows - It's possible that your ways of "doing business" are outdated. Does this year's media and outreach plan look like last year's? Are you fully leveraging the wonderful tools like email marketing software that allows you to target only those people most likely to convert? Or are you spending a ton of needed cash hitting everyone on your list? Ask your gut: How much waste is in your stewardship, marketing, and development budgets? For-profits are realizing that because new media provides them with an incredible accountability, they are cutting waste out of their budgets. It's time all organizations do the same. Why? Because you can.
I'm not suggesting that these recommendations are silver bullets. But I can assure you that survival depends upon fresh thinking and new approaches. As much as your former funding sources wish they could help like they once did, they simply can't. It's time to think of yourself as a true brand that needs to earn its keep. I know it's not natural territory, but I don't see any other options.
That said, there's great help out there. Organizations like the Social Media in the Arts Working Group on Facebook is just one of many groups trying to help organizations share knowledge and best practices. (Full disclosure, I and my sister-in-law Erika Peterson Eklund, Development Director of The Playwrights' Center, started this group last month.) It's time to band together and make all ships rise.
Best wishes to you non-profits. Believe me - it's tough everywhere.
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