Strategic Management Processes Carried out by Non-profit Organizations
The purpose of the current paper is to examine the strategic management processes carried out by non-profit organizations and how far these organizations have been successful in developing relationships with donors and stakeholders. In this sector, most organizations implement certain cultivation strategies such as openness, shared tasks, assurances, positivity, networking, and access, but the implementation of these strategies is often insufficient. Besides, the non-profit sector cannot compete with Fortune 500 companies because the organizations in this sector are not aware of the impact of management strategies used in strategic management. This lack of knowledge about the strategic tools results in donors losing faith in the organizations. The paper suggests that if the non-profit sector implements these strategies they will win the loyalty and trust of donors, the public and other stakeholders and will be able to attract more donors.
Non-profit organizations are still not able to compete with Fortune 500 companies due to lack of technology and lack of awareness of the impact of management strategies. Despite the contribution of two contrasting and longstanding disciplines of sociology and economics to the examining of the management of NPOs, this area still lags behind in terms of the professional management approach. This nonprofit sector is a sum of voluntary and private organizations, NPOs and associations. It focuses on a set of organizational activities that stand next to the institutional complexes of the public sector or government on the one hand and the business or profit sector on the other. This sector is known as the third sector and has gained more significance in the field of social welfare, community activities, education, disasters, and calamities, leading to the improvement of international relations. The topic of management and public relations continues to fascinate scholars. The current paper draws attention on various strategic approaches to explore their contributions to the effective and efficient governance of non-profit organizations. The objective of the current paper is to assess the social welfare programs of the non-profit organization Donbas Hope and offer compelling strategies that will help the organization in raising funds and improving their relationship with donors, as well as in the accomplishment of their goals and objectives.
NGO Donbas Hope is a non-profit organization, established in the Brody district of Lviv (Ukraine), in 2014. The organization works for the resettlement and social welfare of displaced families from Eastern Ukraine. The organization is managed by an efficient board of directors. Some of the board members are affluent individuals from the business community while some of them are migrants from Eastern Ukraine who have incepted the organization for the welfare of displaced people. The organization follows the protection of human rights that are written in the United Nations Charter of the Universal Declaration of Human Rights. These human rights are reflected in the charter of activities of the organization. In 2015, the organization received an achievement award and appreciation certificate from the Ukrainian government for the service to mankind and humanity. Such awards encourage the organization to work more efficiently to uplift the disadvantaged groups in society.
The mission of Donbas Hope is to resettle displaced persons from war-torn areas of Eastern Ukraine by increasing their income and knowledge, which will enable them to become self-sufficient, provide support to their children and families and integrate them into the mainstream of Brody society.
Description of Programs and Services Provided by the Organization
Under the rehabilitation program, Donbas Hope organizes psychological sessions for internally displaced people (IDPs) who are suffering from the impacts of war such as depression, the trauma of war, homelessness, and fear of dark future due to no means of living. The organization empowers displaced women to earn their livelihood by conducting training and professional courses in tailoring, stitching, and knitting, master classes in cooking and conservation, which enables them to start earning for their families. The social welfare program for displaced children includes healthcare and educational activities such as English language courses for beginners, intermediate, and advanced levels. Besides, the organization regularly organizes excursions and short educational trips for children to enhance their mental growth and conducts dance/painting/music classes to enhance their talents and skills. The healthcare promotion program includes providing nourishing food products such as milk products, fruits, cereals, and pulses to under-nourished children and older people. The organization also takes care of older IDPs by providing them with necessary medicines and addressing health authorities for their speedy treatment (List, 2011).
Current Sources of Funding
The business community association of Brody regularly donates for the rehabilitation of IDPs. Currently, the organization is running two projects funded by UNICEF and the Direct Aid Program (DAP) run by the Australian government in Europe for the resettlement and integration of IDPs in society. Donbas Hope has received financial aid amounting to $15,000 and $12,000 from these donors respectively. Caritas, an international charitable organization, in association with local churches, provide financial assistance and summer/winter clothes to the organization for IDPs.
Potential New Sources of Funding
The new donors Center Women’s Perspective Ukraine and Fund of Crimea Kyiv, Ukraine and have agreed to sponsor the current resettlement program of IDPs. Donbas Hope realizes the need for building an efficient and effective relationship with the donors, which would help the organization in delivering benefits to IDPs. The rehabilitation project also involves seminars and conferences that will be organized in cooperation with donors because such seminars help in solving the problems of displaced individuals.
Cultivation Strategies (Fund of Crimea Kyiv, Ukraine)
Most non-profit organizations adopt six cultivation strategies to increase their efficiency and attract potential donors for funding. The cultivation strategies are the following.
Strategy of access establishes the contact between the fundraiser and donor and initiates communication between two parties. Both parties start communicating through the Internet, email, or phone, and address the interests of each other. As the level of communication increases between both the donor and the organization, this strategy of access reduces communication gaps and produces positive outcomes in the expected period.
The strategy of positivity permits donors and fundraisers to establish a pleasant relationship for a longer period. The non-profit organization gains benefits through the mutual relationship. This strategy also guarantees the simplicity of a website for users and public. A user-friendly website of the non-profit organization encourages donors to develop an interest in the activities posted on the fundraiser website rather than leaving the website with unanswered confusion. Such positive experience and the information received by the donor helps in enhancing the relations because it provides relational outcomes that create satisfaction, loyalty, and trust between the two parties (Martin, 2010).
Openness strategy establishes a two-way symmetrical communication. When both the donor and the fundraiser agree to share their thoughts and feelings, transparency can be achieved. For example, this happens when NGO explains its activities; discloses the utilization of funds; provides background of the organization’s activities; and shares achievements, developments, and difficulties as well as news both positive and negative (Martin, 2010).
Cultivation Strategies (Center Women’s Perspective, Ukraine)
Assurance strategy: Assurances are regular attempts by the fundraiser to guarantee donors that their concerns and intentions are genuine and trustworthy. These assurances can be obtained through increasing interaction and exploring other channels of expediting understanding. If fundraiser is involved in the communication with other stakeholders and a donor, pays attention to their needs and wishes, and satisfies the concerned parties with a convincing reply, then the non-profit organization demonstrates its worthiness to the donor and the public. In principle, the fundraiser has ensured the establishment of a better relationship.
Networking strategy: This strategy is used to build coalitions for a long period with other stakeholders involved in the relationship. For instance, the fundraiser develops the network with environmental groups, community groups, or unions that facilitate the organization conveying their objectives to a large audience. Networks create and build groups that may be similar or dissimilar in activities but help the organization in achieving its goals and objectives.
The strategy of sharing tasks: The strategy of sharing tasks also generates effective results. Having shared tasks means that the donor and fundraiser engage in building a relationship and cooperate jointly in solving problems or creating policies, which can be beneficial for both parties. If a non-profit organization and donor work together in empowering women to increase their income, they will be sharing tasks. Both will work together for the welfare of people and shape a better society; hence, nurturing a stronger relationship (Breeze, 2010).
Education Strategies (Fund of Crimea Kyiv, Ukraine)
Donor education strategy is emphasized on the relationships and different roles that exist among fundraisers, donors, and philanthropy advisors where the development professionals perform a critical role to promote a close relationship with donors while preserving the autonomy of their organization. The strategy assumes that donors prove to be more loyal to the organization, the deeper their knowledge and understanding of the organization are. The strategy focuses on the formal learning opportunities that engage and enable donors to make wise decisions about their contribution to achieving effect and making change. The information provided by the fundraiser through events, personal meetings, and direct mailing increases the knowledge and experience of donors and shapes their interests in the field of charity. It nurtures a long-lasting relationship, which provides mutual benefit, as well as a win-win situation for both organization and donor (Kenix, 2008).
Education Strategies (Center Women’s Perspective, Ukraine)
Website education strategy: This strategy is effective in educating donor through the website. Donors always want to enhance their knowledge and experience. Thus, the fundraiser can post the latest information on his/her website informing the donor about the activities of the organization as well as the involvement with other donors and stakeholders. Besides, the donor is always interested to know how a non-profit organization is carrying out its activities, what its goals and achievements are, how the organization is implementing various programs and what the role of other donors involved with the organization is. Donor assessment of the organization’s website will enhance trust and confidence and he/she will take more interest in it resulting in mutual benefit for both parties.
Solicitation Strategies (Fund of Crimea Kyiv, Ukraine)
Face-to-face meetings: This strategy is effective in raising funds because donors get an opportunity to evaluate the credentials of the fundraiser which is largely not possible via mobile phone, internet, or other forms of solicitation. Many donors also prefer such meetings to ensure that their funds are in right hands and the money they are going to offer should meet their goals and objectives of funding the organization. During such meetings solicitor also has an opportunity to present the genuineness of his/her organization which can be done by convincing the donor with the achievements of past, present, future activities of the organization, the goals, and objectives of the organization and efforts being made in achieving the target. The video and audio presentation in these meetings also renders a lasting impression on the donor and helps in approving the reasons of seeking money.
Direct mail strategy: Direct mail donations are another solicitation strategy where donors usually grant donations in the form of checks. This category of donors is usually represented by older people who prefer a traditional giving method and have a more personal involvement with the organization. The NGOs can adopt this strategy, but it has to send a self-addressed envelope by mail because donors are sometimes hesitant to reply to a bunch of letters. In this strategy, the fundraiser has to decide to whom mails should be sent to increase the probability of response. Besides, mails should be impressive to support the cause and mission. To achieve a strong impact of direct mail strategy, the fundraiser must remember the following:
1. Send mails only to those donors who prefer to reply using traditional methods or who have responded them earlier.
2. Don’t waste money and time on soliciting donors who do not want to contribute through direct mail.
3. Add images to mails. Donors may not be able to recollect the past events if they see a text without a visual break. It is advisable to add some recent photos of the organization’s activities (Barman, 2008).
Event donation strategy: Event donations are contributions that fundraisers collect during a fundraising event such as the walkathon, gala, or charity. The donations are raised in different forms depending on the type of event organized. For example, during a charity auction, donations may arrive in the form of winning bids, while at a gala event; donors might text in donations or present checks. Irrespective of how the funds are collected, event donations are an essential component of the fundraising solicitation strategy. Moreover, events offer a great opportunity for NGOs to remain connected with donors and put faces to names. Event donations are one of the fundraising techniques, which are significant because they inspire many donors to donate at once (List & Price, 2009).
Solicitation Strategies (Center Women’s Perspective, Ukraine)
Telephone solicitation strategy: Telephone solicitation is not an effective strategy for attracting new donors and asking for repeat donations because many donors can be irritated by telephone solicitation. However, the use of telephone calls to particulars donors to thank them for their contribution is a very effective solicitation activity. Besides, telephone calls are an essential tool to remain in contact with the donors because it increases the frequency and size of their contribution. During the telephonic conversation, the donor might ask about the future needs of the organization and the fundraiser can use this opportunity in such a situation.
A walkathon strategy is a fundraising campaign where participants take part in a long-walk to raise the awareness of social welfare programs/charity in the communities. These events are helpful in uniting people for a common reason and encourage them to get involved. Donbas Hope can also use this solicitation strategy by calling donors to preside over walkathon events, which are organized for raising funds (Bortree and Waters, 2008).
Online strategy: It has been observed that donors consistently contribute larger amounts of money when they donate online through credit card as opposed to giving a check in response to the mail appeal. Setting up electronic fund transfer can increase both the donor’s frequency of contribution and the amount of donation. It is much easier for many small donors to electronically send a monthly gift of $30 (totaling $360 per year) than making a one-time gift of $360. While small donors could pledge $30 a month and send checks to fundraisers, it is more likely that the organization will collect monthly commitments via electronic transfer instead of monthly checks. EFT has an advantage in the sense that donors feel comfortable with small monthly gifts and it does not increase the extra load on their financial budget (Landry et al., 2010).
Appreciation Strategies (Fund of Crimea Kyiv, Ukraine)
Social Media Strategy: This strategy is effective in attracting funds from donors. Communication through social media such as Facebook and Twitter has increased all over the world. Through these media, it is possible to reach a large audience in a short time. Donors who regularly donate are interested to see the activities of the organization they intend to offer donation. The NGO can highlight previous contributions of the donors on such social sites and pay them thanks for their involvement and noble reason. Appreciating their dedication to humanity definitely enhances the morale of the donors and motivates them to continue donating to the organization.
House Parties Strategy: House parties are generally hosted by a fundraiser, a high-level donor, or an influential person who possesses a good list of contacts in the society. These can be fancy or simple events. The fundraiser can invite friends, colleagues, and socialites to motivate them for personal donation. The fundraiser and donor receive appreciation for a noble reason during such parties. Since all guests are familiar with the activities of the fundraiser, such parties can be a useful source of collecting funds (Nathan & Hallam, 2009).
Appreciation Strategies (Center Women’s Perspective, Ukraine)
Thank you, meet and greet events, and other stewardship activities are one of the features of appreciation strategies. Special events do not need to be expensive to be effective. However, it is important to decide whether an event is simply a thank you and stewardship event or whether it also involves funds collection. Both of the approaches are correct, but the purpose of the event should be clear to the invitees. This strategy is very effective in terms of appreciating the contribution of donors and expressing gratitude for their involvement. Moreover, this strategy can produce a lasting impact if such events are separated from ask events.
Website appreciation strategy: A website appreciation strategy can render a lasting impact on potential donors. Donors will be encouraged to see their contributions listed on the fundraiser’s website, as well as how their funds are being utilized. Expressing gratitude to donors for their contributions on the website is always helpful to fundraisers as such gestures hold a significant value in the eyes of potential donors (Waters, 2011).
Role of Board and Staff
There is a strong feeling amongst board members and staff that boards can play a more active role in the fundraising process. The tools such as cultivation, education, solicitation, and appreciation strategies both in relation to asking and managing donors assist the organization in meeting goals. Board members are generally identified as not properly involved in the fundraising activities; though the board is helpful in terms of staff management but is not good at fundraising. Where the board is engaged, members realize that it would be an effective way to build donor relationships. For larger non-profit organizations, the board members often find new donors, develop relationships and then allow volunteers to raise funds but at this initial level board members have a responsibility to develop trust and faith in and satisfaction with new donors. Hence, board members should give considerable attention to these issues so that new donors are satisfied with the organization. As for smaller non-profit organizations, the board can perform a pivotal role by actively participating in the fundraising campaigns that will relieve some pressure from the fundraising volunteers.
The board needs to be more realistic while raising funds and how it should be achieved and utilized. The board should also make efforts to develop a strong relationship with the donors. It is also important for the volunteers, donors and stakeholders to know about the involvement of the organization with other organizations and have the information about other organizations involved in fundraising programs (Nicholls, 2011).
Overall, this study is important because it offers information on how to effectively use cultivation, appreciation, solicitation, and education strategies to establish trust, loyalty, and satisfaction. These strategies are also helpful in fundraising and attracting donors for their equal involvement. In the current economic turmoil, the budgets of funding are often decreased or cut down to a minimum level. Understanding the use of relationship tools can help the fundraising organizations in building cost-effective methods of promoting their ideas and attainment of objectives. These non-profit organizations should learn how they can be more resourceful with donors and stakeholders and how they can improve their public relations functions.