First published in the November issue of Nonprofit Business Advisor, available electronically to current subscribers in October.


Nonprofit organizations hoping to advance their missions and grow their spheres of influence would do well to engage their audiences—especially their funders—when seeking solutions to their plans or issues, said Bob Kovacevich, principal at Avatar Company.

When “best practices” became a nonprofit sector buzz phrase, Avatar Company began to consider how best to define the term, the consultant said, especially because no one could describe it uniformly. “Everyone had their own definition” Kovacevich said, “but we concluded that the nonprofit’s most vital audiences knew the definition—funders, members, subscribers, volunteers, grantors; all those that contribute time, energy, and money to the nonprofit.”

Avatar’s philosophy has always been that when a nonprofit is planning to grow or change, whether financially, strategically or programmatically, it should reach out to its most valuable resources—its audiences, the long-time speaker, consultant and facilitator said. Kovacevich said his company has been “chanting that mantra” since its inception, and those clients that subscribe to that behavior profit with greater public engagement. This compatibility between the nonprofit and audience results in increased loyalty.

“I think that someone who is volunteering their time, energy, and money to a nonprofit is a likely candidate to address and provide free counsel relative to nonprofit advancement, if given the chance to participate,” said Kovacevich, “much like what the for-profit sector has been doing so successfully before going to market with a new product or service. It develops a prototype and gives it to a select audience of users to objectively evaluate the service or product. Once done, it then uses the data to perfect the initial product or service, thereby eliminating the risks associated with ivory tower decision-making—nonprofits should be doing the same.”

A decade ago, Avatar began to contact annually nearly 600 nonprofit sector audiences such as funders—regular and major donors, program sponsors, and volunteers—and asked them a series of questions concerning what they considered a best practice, the consultant said.

After gathering the data for several years, Avatar compiled a list of 36 best practices, or a “Recipe for Funder Catnip,” according to the principal. Some of their significant findings, which can assist nonprofits in becoming more attractive to current and new contributors of time, energy, and funding include:

• Systematically monitoring and reporting organizational performance beyond financial outcomes. “People like to give money to nonprofits where they keep track of outcomes, and many organizations overlook this,” said Kovacevich. “Donors don’t want to give money or time to a black hole. Being able to monitor and report performance on mission attainment—not just the financials but nearly every aspect of the organization too—and say, ‘We put the money to good use, and it has improved certain aspects of our mission’ is important to vital audiences. Organizations need to publicly present how they are doing relative to their programs in a quantifiable, statistical way,” he said.
• Producing a strategic plan that includes a comprehensive fundraising plan for each goal. Kovacevich said Avatar discovered that most nonprofits go through a reasonably good process of defining their strategic goals, but they drop the ball and don’t quantify how much each of those goals will cost and then develop a fundraising plan to make each of those goals a reality. “More often,” he said, “an arbitrary price tag is affixed to a goal, and the development department’s goal is increased.” It then falls on the shoulders of the development department to raise more money using the same annual fundraising techniques they’ve always used, the consultants said, and goal realization usually falls short, causing the development department to lose credibility, the executive director to take heat from the board, and a stalled effort. “Funders like to see organizations that have a strategic plan and goal-specific fundraising mechanism,” Kovacevich said. “This practice is just good nonprofit management. Absent this procedure, this essential document ends up in a drawer to never see the light of day.”
• Developing a succession plan for key leadership. “This is a big deal, especially among foundation funders,” said Kovacevich, “because they have funded nonprofits where the key leadership became absent during the funding cycle, and their awarded funds were underused, abused or misused.” Philanthropists and foundations that provide major funding want to know what will happen—what plan is in place—to replace the executive director, chair, or other member of the board and are likely to deny funding unless the applicant can demonstrate that it has a succession plan in place, he said.
• Developing a contingency reserve or “rainy day fund” in case an emergency occurs. Funders are concerned about the ability of an organization to bounce back after a natural disaster or a challenging economic climate. “What happens if services are interrupted?” Kovacevich asked. “Is there a reserve to be able to sustain the nonprofit for a number of months so that it can get back on its feet after an emergency?” Funders refrain from awarding funds to a nonprofit that is hand-to-mouth, especially one that can’t demonstrate that there is a safety net in place, he said.

Collect stakeholder input

Many times when an organization determines that it needs to gather crucial input from its constituents, it then fails to select the most appropriate data collection method, Kovacevich said. One way, and the most efficient, is to use online surveys—board members, staff persons, consumers of services, donors, volunteers, funders, and other stakeholders—anonymously, he said. “Sometimes they don’t want to let you know who they are, so they can be candid with their evaluation,” Kovacevich said, “and that’s what you’re looking for. There is some risk involved in this process, but far less risk than implementing an untested and costly initiative.”

He recommended using any online survey service, which can be sent with no to relatively little start-up cost and provides anonymity if required by the participant.

“This is the ultimate acid test concerning whether people are behind you or not.” Kovacevich said. “You become a consummate best practices strategic planner because you have audience data to influence the nonprofit’s decision-making process.”

For more information

Bob Kovacevich is principal at the Avatar Company. To learn more, go to http://2n4e.zapd.co
/?device=browser. To contact Mr. Kovacevich, email avatarcompany@aol.com.