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The Inevitable Shrinking Workforce

How your professional association can beat the competition to the next generation of talent

What are the most pressing challenges facing your trade or professional association or professional society? Attracting talent is likely at or near the top of the list.

In 2000, the labor force participation rate for all workers (age 16 and over) peaked at 67.1%, according to the Bureau of Labor Statistics. By 2026, the labor force participation rate is projected to drop to 61%, due largely to the aging population.

As these statistics show, a shrinking workforce is indeed inevitable. Most sectors in the economy already face hiring challenges, and the competition for employees is likely to get even more intense. Your industry can’t reverse the trend of an aging workforce, but it can beat the competition to the most capable employees by making its case to the next generation of professionals and skilled workers.

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By donorsearch

Nonprofit Budgeting Tips to Exceed Your Financial Goals

Nonprofit finances are truly unique. While for-profit organizations provide a product or service to the community in order to make money, nonprofits ask for money to fund a mission towards the greater good of the world. =&0=& There are so many tips and tricks out there about how to build up your annual fund and earn the money your nonprofit needs to work towards your mission. However, there are fewer resources available about how to make the most of these funds and use them responsibly. That’s why we’ve put together this list of top tips that will help your nonprofit stay on budget once you’ve compiled funds for your mission. We’re here to help you save those resources as much as possible so they can be allocated towards what really matters. These top tips for nonprofit budgeting include:
  1. Maintain your tax-exempt status.
  2. Keep accurate records.
  3. Use effective budgeting templates.
  4. Determine overlapping timelines.
  5. Prioritize your goals.
  6. Ask for help.
Ready to meet and even exceed your financial goals? Let’s get started with your nonprofit’s budget!

1. Maintain Your Tax-Exempt Status

Consider your personal budget. You likely factor in some extra funds around April and May to help you pay any taxes you owe. However, your nonprofit doesn’t need to worry about these taxes. As a 501(c)(3), your nonprofit qualifies as a tax-exempt organization. Instead of paying taxes, each year your nonprofit must file a Form 990 to maintain this exempt status. =&1=& Depending on your nonprofit and varying circumstances, these repercussions could look slightly different:
  • If your nonprofit’s gross receipts are less than $100,000 and you’re late filing your 990, you’ll see a $20 penalty each day the 990 is late. If you continue to not file, this penalty will continue to grow until you’ve reached $10,000 or 5% of your income.
  • If your nonprofit’s gross receipts equal more than $100,000 and you’re late to file your 990, the daily penalty jumps to $100 per day with a maximum charge of $50,000.
  • If your nonprofit, no matter its size, fails to file your Form 990 three years in a row, your organization will lose its tax-exempt status. This means you’ll need to reapply for tax exemption and pay filing fees again.
Whether your nonprofit is filing a Form 990 postcard or a traditional Form 990, it’s important that you do so on time and accurately. Your Form 990 will be due at one of two times depending on your nonprofit’s fiscal year. If you follow the calendar tax year, it’s due May 15th. If you don’t follow the calendar fiscal year, the Form 990 is due on the 15th day of the 5th month after the conclusion of your fiscal year. =&2=& This may seem like a lot of information that you need to remember for tax season. The good news is that there is software available to remind you to file on time and helps make filing easier. If you want more information about tax filing software or to learn more about tax forms, check out this Form 990 software article by re:Charity.

2. Keep Accurate Records

Accurate budgets are built from data-informed estimates, generally built from records from previous years’ budgets and expenses. =&3=&

By Jennifer Liu-Cooper

MIND YOUR MILLENIALS

 

Millennials, (those born from 1981-1996) are the future—and current—generation of philanthropists.  As the current major gift prospect population of Baby Boomers retire, Millennials will advance into leadership roles across businesses, governments, and the social sector.

Fact:  Millennials are now the largest living generation (75 million strong)—their income and giving power is only going to grow in the coming decades.  The ability to channel their financial, social, and political power will determine which organizations thrive and fail. 

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By Ryan Ponzurick

Making Your Organization A Donor Retention Powerhouse

Image provided by Flickr. Donor retention is a topic that has been getting an increasing amount of attention by nonprofits but is still greatly misunderstood. With a heavy focus by boards and executives on revenue intake, the nuances of keeping donors engaged can sometimes get lost when reviewing a P&L Statement at the end of the year. Neon One is part of the Fundraising Effectiveness Project, which is the largest dataset of individual giving data in the world. That project looks at hundreds of data points relating to giving information, but there is a particular focus on donor retention. Donor retention is simply ensuring that you keep a donor giving to your organization year over year. The data doesn’t lie on why this is important – when Adrian Sargeant researched lapsed donor behavior, he demonstrated that increasing the level of retention by 10% would improve the net growth in giving for a “typical” charity database by 50% net growth. Yet how can we get to this point? In an environment where we are being asked to deliver results immediately, how can we not only convince our stakeholders that retention is not only important but the key to long term success? The cost to acquire $1 from a new donor averages $1.25, yet retaining a donor comes at a significantly lower cost. Let’s unpack a few strategies to help us become a retention-centered organization.

Understand your current retention rates

In order to know where to go, you need to understand where you are starting from and getting a grasp on your retention rates as they stand will be the first step. Luckily the Fundraising Effectiveness Project has developed free resources to analyze your own data and you will need three simple fields to get a full audit of your situation. When you run through the Fitness Test that they provide, understand that industry-wide retention is very poor. At best, the average retention rate for a nonprofit is 46%, yet it is important to unpack what the reality of this number even is. First-time donor retention rates are drastically lower, typically in the 25% range and a healthy amount of donor retention rates overall are being driven up by increasing amounts of donors giving online.

Establish a data-driven culture

Organizations that are driven (but not constrained) by data are the most creative and high-functioning nonprofits. Having information at your disposal that can accurately tell you about your organization’s performance is empowering. These organizations are able to use their time more effectively — not worrying about “where they are” or “how they’re doing.” They know, because they’ve used the data at their disposal to find out. Certainly, a data-driven culture has an effect on the fundraising side of the nonprofit. The ability for your organization to make decisions based on data and not “gut instinct” or because “we’ve always done things this way” will be the difference between increasing retention and growth in giving rates for your organization or scrambling to make up gaps in your end of the year giving hoping things get better next year. Review where your current retention rates are and make a realistic goal to increase them over the course of the year. Being optimistic yet realistic is the key here and this is why understanding your current standing with your donors will allow you to address retention properly.

Segment your donors

Grouping your donors into easily targeted segments will ensure you can message them properly. The most common reason a donor stops giving to a nonprofit is poor communication and the last type of communication a donor wants to receive is one where your organization makes it clear you have no clue who they are. Data suggests that regardless of the age of the donor, an omnichannel approach to donor engagement will be the most effective way to increase your retention rates. Segmenting your donors to create targeted messages in an omnichannel way will ensure that you are speaking to where the donor is, not where you personally want them to be. If you are donor-centered in your communications then your ability to upgrade a small donor into a major donor becomes much easier. Segmentation is also vital when doing prospect research on your donors, since you will be able to craft a pipeline management strategy that your major gift officers will be able to put into practice much quicker.

Utilize strategy and tactics

Once you have segmented your donors, start to scope out the strategy for engagement and the tactics you will use to achieve your objectives. Many organizations start with the tactical first and try to lead with the flashiest ways to engage donors, such as costly events. Instead, your organization should take a step back and calculate the return on investment it will take to retain the largest segment of your donors. A solid example of this is around how we speak to donors. A strategy your organization would employ is donor stewardship, or the ability to make donors feel welcome. The tactical application of this strategy could come in the form of well-written gift acknowledgement letters

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