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Cynder Sinclair: Nonprofit, Business Trends and Intentions — Be a 2014 Forerunner

With nonprofits generating 8.4 percent of Santa Barbara County’s GDP or $1.13 billion in revenue, focus is zeroing in on trends impacting the sector. Demand for their services skyrocket as new challenges emerge to keep everyone on alert. More than ever, success calls us to be nimble and future-focused, using critical thinking to forecast winning decisions. Let’s look at some trends in nonprofit and small business sectors that will affect all of us in 2014.

Overall economy will continue its upward recovery.

The degree of recovery will be miniscule or noteworthy depending on which crystal ball you pick up. But at least most agree the economy is moving in the right direction. Nonprofits hope to see loosened purse strings in 2014, resulting in more donors and larger donations. As the stock market improves, so will the size of foundation and individual donor gifts. Enhanced financial health will give consumers and businesses the confidence to keep spending and investing, which will further stimulate the economy.

Ken Oplinger, president of the Santa Barbara Region Chamber of Commerce, predicts, “You can expect improvements in the economy and in credit markets. Most indicators show 2014 to be a year that will continue the economic upswing from the recession. Commercial credit continues to be tight, but expect some improvements as we push into 2014. For businesses (and nonprofits), use this time to plan for the next downturn. Knowing how you will manage your business through it now will save stress and profit when it comes.”

Hiring and employee retention will be more challenging in the coming months.

Whether nonprofit or small business, recruiting good employees is usually difficult; but expect it to be more challenging as the unemployment rate dips. And as businesses and nonprofits grow stronger, payrolls will increase as will competition for top talent. Finding high-performing employees is even more daunting in our area because of the high cost of living and our ever-present transportation issues. However, using innovative ways to increase employee loyalty can improve employee retention and enhance morale among co-workers.

A workplace culture of team work, mutual trust and employee appreciation enhances performance and retention.

Nonprofits and businesses will join forces in multi-faceted marketing strategies.

We have seen plenty of business-nonprofit marketing partnerships in the past, but recently their speed and diversity of approach have increased exponentially. Businesses are realizing that this type of cause-related marketing can be an excellent strategy for doing well while doing good.

Research shows that nearly 75 percent of consumers will go out of their way to do business with vendors that support charities. Businesses are jumping on the corporate social responsibility wagon as they see their popularity and customer loyalty soar when they shine the spotlight on nonprofits they support.

And the nonprofits love it, too. Not only do the nonprofits benefit from the increased visibility, which is important because most don’t have a budget for marketing, but being linked with upstanding businesses increases their credibility among supporters. So, 2014 will see more businesses linking up with nonprofits in mutually beneficial marketing strategies.

The digital age will transform nonprofit and business tactics.

2014 will see mobile devices reshaping key aspects of nonprofit fundraising and business marketing. The old single-channel approach to nonprofit fundraising — annual appeal letters and special events — won’t be enough anymore. Neither will the staid print advertisements business often relies on. Using multichannel marketing to reach people via mobile, web, social media and email will require solid analytics to track and leverage donor engagement.

Online methods of raising charitable donations increased 10.7 percent in 2012 while giving as a whole grew by only 2 percent. Predictions are that online philanthropy will continue to grow in popularity along with mobile banking and electronic business advertising.

Social impact investing in nonprofits will heat up.

One of the biggest trends in fundraising, social impact investing, requires measurement of program outcomes. There will be a growing demand for nonprofits to articulate results they hope to achieve and track whether those results are actually happening. Nonprofits have long focused on the outputs of their work: number of people served and types of services provided. But the sector is increasingly being asked to articulate and track the outcomes they are achieving. How are people’s lives changing because of the work a nonprofit does? Increasingly, funders and other supporters are demanding proof of social change. That means nonprofits must develop their own theory of change (how they use community resources to create change to a social problem) and then measure whether that theory is becoming a reality.

Even the federal government is embracing this trend through its Paying for Success program. The dual theory of the Paying for Success (or social impact bond) program is that the risk is borne by private investors and the taxpayers ultimately save through cost-saving innovations. So 2014 will find a growing number of nonprofits and foundations moving beyond just collecting data about their programs and starting to use that information to improve performance.

Let’s get prepared for these upcoming trends.

Whether you are a fan of new year’s resolutions or prefer more flexibility, strategic modifications can dictate your success over the coming months — for business owners and nonprofit leaders alike. Here are six intentions (a softer word than resolutions) that may put your organization at the forefront in 2014. For more ideas on ensuring your organization’s leadership and sustainability please, click here to visit Nonprofit Kinect’s website.

» Solidify internal systems. First look inside your organization. Assess your board of directors. Is the composition optimum? Are they well trained and engaged in your mission and fundraising? Evaluate your organization’s policies and practices. Are they in compliance with recent regulations? Does everyone know the policies, and are they implementing them? Consider your tracking systems. Do they measure your program outcomes and results?

Appraise your employee recruitment and retention practices. Are your employees actively engaged? Do they feel appreciated and rewarded?

» Go digital. Stop putting off the inevitable. The digital age is upon us, and savvy business and nonprofit leaders will make sure they are using social media and mobile devices to their greatest advantage. Digital proficiency yields low-cost marketing, soaring visibility and enhanced fundraising.

» Stay informed. Make sure you’re up on the latest trends in your industry. Resolve to make time regularly to read your industry publications, look at related websites and peruse blogs that have their finger on the pulse of change. You can never be too busy to stay informed about the external environment — it affects your success daily.

» Get involved. 2014 will be an important year to keep your eyes on the political world. Join your local chambers of commerce, pay attention to agendas for city council meetings and attend Board of Supervisors meetings. Be a contributing member of the community so your voice is heard among those who make key decisions that affect your business or nonprofit.

If you own a business, consider joining the Corporate Philanthropy Roundtable to benefit from the wisdom and experience of fellow business leaders. Their quarterly roundtable discussions bring in a wide variety of businesses to share what works for them in philanthropy, volunteerism and employee retention.

» Cultivate relationships. You’ve heard it before — it’s all about relationships. While that has been true in the past, building strong, cross-industry relationships will be more important than ever. Go out of your way to attend community events and fundraisers. Follow up the next day with all the business cards you collect. Be sincerely interested in finding out about your colleague’s business model. You will always learn something.

» Be strategic. Set aside time to be strategic — it takes time and intention to plan strategically. Ask yourself these questions: What are my organization’s greatest internal strengths and weaknesses? What opportunities and threats do I see coming from the outside environment in the coming months? What factors are limiting my ability to respond to opportunities or ameliorate threats? What can I do immediately, in the first quarter, and in the coming year to make changes that will close the gap between where I am today and where I want to be at the end of 2014?

— Cynder Sinclair, Ph.D., is a local consultant to nonprofits and founder and CEO of Nonprofit Kinect. She can be contacted at 805.689.2137, or .(JavaScript must be enabled to view this email address). The opinions expressed are her own.

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