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|// by Drake Forester / Jul. 24, 2014 0 comments|
Every so often a front page news story will appear citing a seemingly outrageous number as the salary of a nonprofit’s CEO. The question most people ask is how could a tax-exempt organization justly pay someone so much? In rare instances, the CEO in question has manipulated their salary in his or her favor or taken benefits not owed to them. The vast majority of the time, however, the answer rests with what the Internal Revenue Service calls “reasonable compensation.”
What is Reasonable Compensation?
A nonprofit organization is not a no-profit organization. Every successful enterprise, nonprofits included, requires profit to pay expenses (including salaries). Nonprofits, however, have no stock and none of their net profits (the money used to further the organization’s purpose) can be distributed to an individual as compensation or dividends. But nonprofits certainly can and do pay their employees competitive wages.
The term reasonable compensation is intentionally vague, but the IRS does use the following factors to determine what is “reasonable”:
One of the biggest factors you should consider when establishing reasonable compensation is what similar organizations are paying their directors and officers.And if the people at the top are making large salaries, the other employees in the company should be well compensated as well (it would be hard to justify the president taking a six-figure salary if the other employees are only making minimum wage).
How do you Determine Reasonable Compensation?
You can do several things to help protect your nonprofit from unjust compensation accusations. They are as follows:
Research what similar nonprofits in your industry and geographic region are paying their employees, executives, and directors. This should be indicative of what your salary range should look like.
The compensation committee should be comprised of independent directors. This means that anyone who will have their salary debated over by the committee should not be a part of the committee or be present while the committee is discussing pay or benefit packages.
A section in your nonprofit’s bylaws should explain policy concerning how your nonprofit determines pay. It should explain how the nonprofit links pay to performance, value, mission, and strategy.
Keep records of the data and source of your comparable data; when, where, how, and what was decided at compensation meeting; and all other meetings and policies concerning compensation.
The Bottom Line
Nonprofits employ a large sector of our economy and are allowed to pay competitive wages. The reasoning for this is simple: just because someone works for a nonprofit doesn’t mean their work isn’t valued. But, whatever you decide to pay your employees and officers should be rigorously justified, researched and documented.
To learn more about reasonable compensation and nonprofits, visit the online resources linked below:
|// by Drake Forester / Jul. 23, 2014 0 comments|
The Internet has changed everything from the way we stay connected to the way you can find a mate, and if it hasn’t changed the way you fundraise for your nonprofit, you’re missing out. While sending canvassers to knock on doors, holding carwashes and auctions will always be solid fundraising strategies, the ideas have been around long enough to become “venerable.”
Below, you’ll find several digital must haves as well as items and strategies for your nonprofit to consider.
This may seem utterly obvious, but its inclusion here acknowledges the point that a website for you nonprofit is now a necessity. If you’re just beginning the process of forming your nonprofit, one of the first items in your agenda should be launching a website. The cost of having someone build a site for your nonprofit may hurt initially, but, in retrospect, the expense to create the site should be nominal in comparison to donations you receive. In 2013, the Chronicle of Philanthropy found that the fastest growing type of giving came online.
One way you can help cut website costs is to create the content yourself. GoDaddy’s Shawn Pfunder put on two excellent Score webinars concerning content creation. You can find access those webinars here and here.
Today, a large online presence can be just as powerful as a physical one.
Facebook, Twitter, and Google+ Accounts
Is there a better, faster way to let donors and fans know what’s going on with you nonprofit? If so, I haven’t heard of it. Social media allows you to instantly spread the word about what’s happening with your nonprofit. And it’s free. Granted, you may need to spend some time becoming “socially literate,” but if you can dedicate a small chunk of the day to building and updating your fans and followers, you should see an uptick in attendance at events, which hopefully translates to a sturdier bottom line.
Recently, Beth Kanter published a post on the Score blog about nonprofit CEOs utilizing social media. She highlights the added benefits of utilizing social media. Used with some precision and direction, social media can greatly help your nonprofit interact with the public.
Smart Phone Apps
The smart phone has given us a new way to donate to our favorite nonprofits. There are a large number of free phone apps that allow donors access to giving anywhere they have cell reception. Check-in for Good allows nonprofits to add their profiles to the app for free. It’s simple, cost effective, and certainly can’t hurt. Your nonprofit should check in today, if it hasn’t already.
If you still think that people talking about Kickstarter are just dirt bike enthusiasts, you need to visit the world’s biggest crowdsourcing platform. Kickstarter is where many nonprofit projects find funding, and it’s easy to list a project. Combine a crowdfunding project with a potent social media plan and you’ll likely find you’re doing a lot less fundraising and a lot more good. Here is a list of the top 10 crowdfunding sites for nonprofits.
Does your nonprofit utilize technology differently? If so, let us know how in the comment section below.
|// by Rieva Lesonsky / Jul. 22, 2014 0 comments|
One of the biggest success factors when opening your own business is proper planning. Here are six questions to ask yourself before opening a business.
The more narrowly you can define your target market, the better. Whether it’s urban moms with children under age 5 or senior executives of midsized consumer product manufacturing companies, focusing on a specific niche will help you market to their particular needs. Do market research to uncover the most profitable potential target markets for your startup.
The market research you perform before opening a small business should also examine the competition. Determine what their key advantages and selling points are and how you can differentiate your business, both in terms of your product/service offerings and your marketing.
Location can affect your startup costs drastically. Do you need to rent a commercial or retail location, can you get by with a small office space or will you be able to work from home? If choosing the latter, be sure to look into applicable zoning laws.
Figure out how much startup capital you’ll need for opening a small business. Be sure to include the costs of location, utilities, equipment, inventory, taxes and employees (if any). Don’t forget to include a salary for yourself. Ideally, you should have enough startup capital to finance your business for six to 18 months, or however long you project it will take to become profitable.
Getting startup loans is difficult, so they can’t find the financing from their own savings, many startup entrepreneurs convince friends and family to give them a loan. Be sure to treat this as a real loan, by drawing up loan documents and paying the loan back.
You might need to start out as a sole proprietor with a one-person business, but hiring employees can take a lot of the load off you and enable you to focus on growing your business as opposed to day-to-day operations. If you can’t afford to hire full-time employees just yet, consider options such as hiring part-time or temporary workers or outsourcing to independent contractors.
Writing a business plan is a great way to put all your plans together in one place. There are lots of examples on the SCORE site of tools, templates and samples to make it easier.
While you’re there you can get matched with a SCORE mentor. He or she can help you answer all six questions…and any others you may have about starting a business.
|// by Caryn Stein / Jul. 21, 2014 0 comments|
Many nonprofit organizations spend time crafting a mission statement to clarify their place in the world. But it’s important to remember that these elements aren’t meant to be stored away as archived material in your annual report. These core beliefs should be an everyday yardstick for all of your communications.
These four rules can help you focus your all of your fundraising and marketing efforts so they clearly communicate your nonprofit’s unique viewpoint to donors and potential supporters.
Embrace Your Identity.
Your brand is more than your logo or campaign theme. The passion that fuels your mission, your staff, and the stories of those you serve are more powerful representations of who you are and what you do. Your brand’s identity can take on a more personal meaning for your audience. When they become donors or volunteers for your cause, supporters take pride in owning the qualities of your organization and make it part of their identity, too.
Make Good on Your Promises.
What promises are you making to your community of supporters? Beyond the explicit promises you make to your donors in your fundraising appeals or in your annual report (we are good stewards of your gift, we will use 90% of funds for program activities), your nonprofit’s brand becomes a promise in itself, implying certain values each time someone encounters your organization. This is why your work to maintain trust and transparency with your donors is vital. Of course when you’re making promises, it’s important to keep them! It’s extremely difficult for an organization to rebound from broken promises in the eyes of their fans.
Your brand is really based on relationships, and you can’t build meaningful relationships without trust and transparency. Donors won’t fork over their hard-earned cash to support your cause if they aren’t sure where the money goes. Be open about how you manage your organization and how you use donated funds. Welcome questions and be upfront and honest if you make a mistake. Hiding in the shadows only makes people nervous, which is not a great relationship-building technique.
What To Do When Change Happens.
As you work to react to changes in your community, crises, and fundraising ups and downs, it can be tempting to try anything to see what may stick. Something similar happens when there’s a marketing trend or a new channel to explore, like a new social network. When you feel this urge, it’s important to think about the four rules above. Here are four related questions that can help shape your path:
Answering these four key questions will ultimately help you answer a fifth: are your actions and outreach consistent with your organization’s core identity? If not, it’s time to take a step back to ensure everyone in your organization knows and understands your brand—and how you bring it to life.
This article was adapted with permission from The Nonprofit Marketing Blog.
|// by Aliana Marino / Jul. 18, 2014 0 comments|
As with any major business decision that affects your brand, your sales or your customers, deciding how to best represent your business online requires a great deal of consideration.
While the most critical areas around new gTLDs may appear to involve the customer trust and experience, in reality, the back-end issues – especially website availability, reliability and security – are equally important.
Return on investment (ROI) is never simple to calculate, especially when comparing an established domain – such as .com or .net – with something that isn’t yet proven. The best way to reduce risk and maximize benefit is to fully understand how to evaluate each aspect of how a gTLD is likely to impact your business.
Price-wise, not all TLDs are created equal. At this stage, the costs of many new gTLDs appear to be inflated and, depending on the specific domain, could cost significantly more than established TLDs. For example, you can find a .com or .net domain name for about $13 and $10 per year, respectively. In comparison, new gTLDs have been priced from approximately $14.99 to $69.99 during pre-registration. For most businesses, combining the cost with uncertainty around the overall viability and long-term competitive success of new gTLDs could make it challenging to justify the investment. But even with these high prices, there’s no guarantee businesses will be able to register their domain name of choice. If two or more entities claim the same domain name during the sunrise period, the name goes up for auction – potentially driving the cost even higher.
In addition, your business and reputation could suffer a detrimental blow if your new gTLD registry operator experiences an outage and your customers can’t reach you online.
If you rely on your website to generate revenue, that loss can be enormous not to mention the damage to your business’s reputation. This is why it is critical for businesses to understand the track record of the companies behind their TLD and have confidence that they are conducting their daily business operations on secure and stable infrastructure at all times.
New gTLDs may present an opportunity for businesses and individuals, but as with any new technology, there will be growing pains.
Because you might never get a second chance, you need to be cautious when making an investment for a primary online presence, and base your decision on all of the most critical criteria: Security, cost, ROI and ultimately the ability to serve customers 24x7.
To learn more about new gTLDs and how to invest wisely, check out SCORE and Verisign’s new guide: "New gTLDs: What They Mean, What Your Options Are and How to Invest Wisely."
|// by SBA / Jul. 17, 2014 0 comments|
You finally achieved your dream of starting a small business based on your passion. Part of that dream is making enough money for you and your family to be financially secure.
One of the most important ways to ensure your business earns a strong profit is accurately pricing your products and services.
The first step to getting your pricing right is market research.
Take a look at local, regional and national market data to determine who your customers are and overall trends in the industry. The Census Bureau provides free economic data that will help give you a sense of industry trends and patterns; analyze demographics of your customer base; and determine market size. Also, survey your existing and potential customers to understand what their spending habits are and how they prefer to shop (i.e. online, storefront or both). SCORE’s Marketing Cookbook has a good recipe for market research success.
Next, run a competitive analysis of similar businesses in your area to establish baseline pricing.
Conduct online searches or visit the store of each competitor to determine how much they are charging for similar goods, what they are communicating to customers about these products, and how they stand apart. Also check out product reviews to find out what customers are saying about your competitors and identify opportunities to fill market gaps with your products and services.
Another important part of getting your pricing right is factoring in costs.
Not understanding the true costs of producing your goods or services could result in a misinformed pricing structure that kills profits and limits the ability of your business to grow. Try to understand and analyze all costs such as materials, labor and overhead – which includes taxes, rent, insurance, transportation, marketing, and support services – for a fuller picture of how much money you are spending on each product. Make sure to account for all of these costs in your pricing.
Once your initial pricing is set, revisit and adjust regularly for inflation and increased overhead costs.
Communicate to your customers on what sets your products apart from others in the marketplace and why they should buy what you are selling. Keep an eye on sales and tweak pricing based on demand. If sales are slumping for a particular product or service, consider promotions or discounted pricing to draw in customers. Fuel additional sales through advertising, marketing, reward programs and top-notch customer service.
|// by Aliana Marino / Jul. 16, 2014 0 comments|
In the recent SCORE Webinar, “Eight Trends Every Business Owner Should Be Watching Now,” journalist Rod Kurtz gives tips on how small business owners can garner success by taking advantage of the current business trends. While it’s important to remember all trends may not work for every business, Rod says it may be beneficial to at least try them. “If they work use them, but there’s only one way to find out.”
Below are 4 trends Rod suggests business owners should be watching.
Content, Content, Content
“Every company is in the content business,” says Rod. If you are starting a business or new to creating content, Rod says it is perfectly okay to start small because “not every company needs a newsroom.” Creating content is a great way to: keep current customers, engage with new customers/clients and add value to an organization online. When thinking of ways to create content, think about your own media consumption. How do your favorite brands engage you and what kind of content do you find relevant? Answering those questions will help you shape content to provide to your audience.
Relationships are More Important than Ever
Companies merging together to grow their company and product is on the rise. It’s important to remember a few factors if you choose to merge your organization:
Daily Deals are Here to Stay
Daily deals are very popular, so much so that companies are now creating their own deals online for their customers. Rod believes it’s important for companies to “get clever and see what works for them.” Using social media to engage with your customers will help you determine what deals will work best for you. Trial and error is the best method to see what kind of deals work and don’t work for your business.
Make Sure You’re Ready When the World Comes Calling
“Traditional media still has a lot of value and carries a lot of weight with customers,” says Rod. While there is a lot of focus on online media, it’s important to still take advantage of traditional media. Make yourself and your business “media-friendly.” Many businesses are not prepared to handle media coverage, something that can hinder their business success.
Interested in hearing Rod’s other tips? Listen to the full webinar here.
|// by Rieva Lesonsky / Jul. 15, 2014 0 comments|
Do you love being in charge of your own life as a business owner? You’re in good company. A whopping 96 percent of small business owners (SBOs) in the U.S. feel that control and flexibility is the best part of owning their own businesses, according to the TD Bank Small Business Month Survey.
OK, so what do small business owners hate? Not surprisingly (to me, anyway), bookkeeping tops the list. Although 15 percent listed bookkeeping as their favorite small business task, they were far outweighed by the 46 percent who say it’s their most-hated chore. Marketing and banking/finances tied for second-most-hated tasks (22 percent each).
How can you do more of what you love and less of what you hate on a daily basis? Try these three tips:
1. Choose a business you enjoy.
If you’re still working on your business idea, it’s important to pick something you’re passionate about. This is the number-one advice I hear from small business owners. Burning the midnight oil getting your company off the ground is a lot easier if you love what you’re doing!
2. Get help.
If at all possible, outsource, hire employees or find a business partner who loves doing what you hate to do. If you hate selling, you’re going to be in trouble, since sales is key to any business’s success. If you can’t afford to hire inside salespeople, options include hiring an independent sales rep who is willing to work on commission or finding a partner who’s good at sales so you can focus on what you do best. On a really tight budget? Enlist family and friends to help out until you can afford to outsource.'
3. Learn to love it.
When you don’t know how to do something well, you’re probably not going to enjoy doing it. Fortunately, there are many ways to learn the ropes of everything from social media to management to bookkeeping and accounting. Adult education or community college courses, online webinars and courses, or industry association seminars are just a few.
One of the best ways to get educated about all aspects of running your business is to work with a mentor at SCORE. SCORE mentors can teach you everything you need to know—and if you still don’t like accounting, they can help you find someone in your community to handle it for you. Visit www.score.org to get matched with a mentor today.
|// by Jeanne Rossomme / Jul. 14, 2014 0 comments|
Last week we had an amazing turnout of hundreds of business owners with over 300 marketing related questions. While I regretfully could not get to everyone’s questions, I did try and whittle down responses to the most important considerations and tips to get entrepreneurs off and running.
For those of you who missed it, you can hear a recording of the presentation here.
We also listed several resources, some by industry and others just great resources. I share them here along with the questions that prompted them:
Jim: Any secrets in getting business from large companies?
Shirley: Are marketing strategies for non-profits different than that of for profit businesses?
Sara: Best marketing for online coaching business?
Michele: How does a small business/1 man band keep up and not spend hundreds every month to market the business?
Stephen: What’s the most effective means for identifying your target market?
Katrina: How do you come up with a marketing plan? What is included in a marketing plan?
Katharine: Do you have tips for interviewing and hiring a marketing firm? And is 10% of revenue a good benchmark to spend on marketing efforts?
And here are more Webinars/Workshops to get your marketing to the next level: score.org/onlineworkshops
•How to Create an Actionable RoadMap for your Company's Growth
And don’t forget to get a SCORE mentor – he/she can really help answer your most burning small biz questions!
|// by Aliana Marino / Jul. 11, 2014 0 comments|
In today’s ever-changing world of search engine optimization (SEO) and search engine algorithm updates, it can be hard for any company – especially small- and medium-sized businesses – to maintain its organic website traffic and search engine rankings.
According to Forrester Research, 54 percent of consumers typically turn to search engines such as Google or Bing to find websites – far more than they turn to social media, website links, email or other options.
Today, SEO considerations pervade virtually every facet of your online presence – from website design and development to content – and yes, your domain name. The influx of new gTLDs in the market leaves online businesses and consumers uncertain of how search engines will handle these new domains and how Internet search may evolve. The search results and traffic you enjoy from having developed your name and website over time may not automatically or easily transfer to a new domain.
So if you have a successful domain name, be sure to protect your investment and all your hard work of creating content, generating backlinks and optimizing your website as a part of your SEO strategy.
You don’t want to lose that momentum. Thus, your online marketing strategy needs to focus on minimizing the impact and potential pitfalls of rebuilding your website on a new domain name, particularly since the SEO equity you’ve built may not necessarily transfer automatically or easily.
If you decide that new gTLDs are a fit for your domain strategy, consider keeping your website at its current Web address, and redirect your new domains to your website to protect your original website’s history and SEO value.
To learn more about new gTLDs and how to invest wisely, check out SCORE and Verisign’s new guide: “New gTLDs: What They Mean, What Your Options Are and How to Invest Wisely.”