Category: good management principles

Why Nonprofits Fail

Sarat PratapchandranLeave a comment

I know first-hand how two non-profits have failed. Neither can blame it on the economic recession nor on bad programs. They failed because they constantly underrated the real cost  of providing services to the community. 

According to  David Greco, Vice President of the Nonprofit Finance Fund, nonprofits should retool their thinking. Here are some tips Greco gave during a recent workshop in Phoenix:

  1. Nonprofits should ask funders for the real cost of providing services. Do not bring the cost of programs down.
  2. Have the discipline to say “No” to funders and others in the community who ask for services at steeply discounted prices. Think like a corporation as the 501-c-3 is just a tax exempt status.
  3. Educate funders that you are in for the long haul. Discounted services will affect your long-term growth.
  4. Change from being a program provider to an enterprise. Think business like.
  5. End the culture of funding programs. Instead, focus on the organization as an enterprise.
  6. Get real data and use it to highlight the good you do.
  7. Target growth in unrestricted income as this is your net worth. Have adequate cash in your reserves to grow your organization. Board designated reserves will add to your financial health.

Do you delight? If not, you are not in marketing.

Sarat PratapchandranLeave a comment

What is marketing? Text books define it in several ways, but according to Bill Pearce, faculty at the Hass School of Business at the University of California, Berkeley, marketing is the product, your store or site, the experience you give to your customers, and ultimately it is YOU and your company.

While it’s tough for us to pick the best marketer, we can find companies that create “unimaginable differentiation”  in a particular market. Pearce cited Cirque de Soleil, that has made all it’s competitors irrelevant in a short time span. The tactic? They delivered product differentiation while lowering costs by a third.

Basically, they reinvented a dead industry- circus. They went from a $100 million company to a $700 million company while their major competitor Ringling Bros “did the same thing they always did.”

Pearce  was speaking at a Phoenix marketing summit organized by the Greater Phoenix Chamber of Commerce earlier today. He said marketers shouldn’t assume nor should they care about the whiners inside your business. Instead, “use your constraints as a catalyst for change.”

Good marketers ” look at what everyone else looks at but sees what no one else saw.” They convey rational thoughts and emotions through their brands.

Ultimately, every company should ask: Do we delight? This mindset is what marketing is all about.