Now, with that as a base for this entry I am compelled to note that I’m not “mad” at the events below. Not at all. In fact, if anything I pity the people who are in charge of increasing the fundraising outcomes of the institution involved in the story. Read on and find out what I’m talking about…

A few weeks ago I was invited to attend a special reception for a local organization where I choose to donate a few dollars each year. The reception was organized and hosted by a select fundraising team within that organization (which is separate and apart from the full fundraising team that raises money for this institution). I’m blessed to be fortunate enough where I can donate a few bucks each year to several of my favorite charitable causes so I know the deal at these receptions – you go there, the hosting organization does what it needs to do to make you feel welcome and like you’re one of the team, eventually a professional fundraiser comes around and makes either a hard or a soft ask (i.e. they ask for a donation), and then you reciprocate their kindness for hosting the event with a check or commitment for a future check.

Any professional fundraiser out there can tell you that this is the standard sequence of interactions (boiled down to a very simplistic nature) at one of these events. The donors know it going into it, the fundraising team at the organization plans for it, and everyone representing the organization should be prepared to play their part.

Well, apparently this sequence wasn’t so standard at the event that I attend a few weeks ago. One of the first things that I noticed when I arrived was that there were a great deal of people who worked for the organization at the event. At first glance, one might wonder what’s going on, but this is also part of the basics of fundraising. If you’re hosting a fundraising event on your home turf, then you bring out the entire team to meet and mingle with the donors. This organization had a big number of its staff available to talk to the donors when they arrived. Speaking of the donors (and guests of donors, which is another common tactic to grow a donor base – inviting the friends of donors), I noticed that there were probably 15 – 20 donors milling around mostly talking to one another. I didn’t think anything of it since I was just walking in the door.

After getting a table for my buddy and I to sit down at, we went and got a drink and some food to pick at while we sat down. Some five or ten minutes went by and I started talking to my buddy about the fact that it was weird no one had come up and spoken to us yet. In reality, we hadn’t been made to feel welcome since we arrived. Not only were the front doors of this particular building locked (weird), but the young hostess who was supposed to say hello to the people who were walking into the event was busy tapping away on her cell phone when we walked in. Then after we put our jackets down and all through the time we got some food and a drink, no one spoke to us. So after those ten minutes went by, I began looking around with a more critical, fundraiser’s eye.

The first thing that I noticed was the same first thing that I noticed when I walked in – there were a lot of employees for this organization milling around. However, now that some time had gone by, most of the organization’s employees had gotten themselves some food and sat down to eat – with one another. The donors were sitting by themselves (having a good time, by the way) just like my buddy and I were while the organization’s employees (who outnumbered the donors perhaps 2-to-1) were sitting by themselves (equally having a good time). On the surface, the event looked like a lot of fun! People were hanging out, having a drink, chit chatting, etc. But looking at this event through a fundraiser’s eye was scary.

Another five or so minutes went by and one of the organization’s newer employees walked over to the table where my buddy and I were sitting. Without getting too much into the conversation (since I’m obviously trying to hide the nature of the organization as well as the type of event that this was), this employee made a very good impression on my buddy and I. The employee was well-spoken and when they asked for our (non-monetary) support, my buddy and I knew that it was an earnest ask. After this employee moved on, I thought that maybe I was wrong in beginning to judge the inability of this organization to operate a proper, special event fundraiser because this person gave the perfect set up for one of the professional fundraisers to come over and talk to me about giving to the cause.

But that personal, one-on-one follow-up never came.

Oh sure, I saw the head of the fundraising department walking around as well as the head of this special unit walking around – neither of them talking to most of the 15 to 20 donors (and about as many friends and relatives) who attended the event. It was shocking, really. Again, without going into too much detail believe me when I say that this is an organization that has a great deal of experience in fundraising and I’ve seen them throw phenomenal special events in the past. But this event a few weeks ago did not put their best foot forward at all.

My takeaways from this special event were: 1) the organization’s employees must have seen this as an opportunity to get free food and drink without having to work (i.e. socialize and sell the product) for it, 2) the organization didn’t really care enough for me to continue increasing my donation each year since I wasn’t spoken to by anyone whose job it was to raise money, and 3) the new employee who talked to my buddy and I showed just how out of touch the organization’s long-time employees are with the hard work of raising money and building support.

Coming out of this event, I re-evaluated my budget for the rest of 2012. Back when I created my budget last year, I planned to donate a few additional dollars to this organization in 2012. However, I was so turned off by the way the organization’s huge number of employees preferred to socialize with one another while eating the food and drinking the drinks that were there for the donors, that I rolled back the amount of money I was going to donate to its 2011 level. In fact, the more that I think about how poorly operated the fundraising portion of the event was (especially since there were a variety of high-level people walking around also doing nothing but eating and socializing with each other), I’m considering rolling back my donation even further.

Like I wrote above, there are several organizations where I choose to donate my money. And look, I don’t expect to have an organization kiss my ass because I cut them a check – that’s not why I donate. However, I wouldn’t mind having a fundraiser come and shake my hand and “dance the dance” with me. I serve on the Board of several nonprofit organizations and – in my nonprofits – I would never tolerate the type of organizational gluttony and lack of focus that I saw a few weeks ago. Frankly, it was so off-putting that I would have fired a few people (yes, more than one) by now.

But, I’m not in charge of the organization who hosted the event nor do I want to be. I’m just an aware, cognizant donor who understands the value of the dollars that I choose to invest in nonprofit organizations. I have a variety of similar special events coming up in the next few months. It’ll be interesting to see which of those nonprofits can keep their house in order during the special events and play the game with the donors the way that it is supposed to be played. Sure, I don’t salivate over the prospect of someone asking me for money at one of these events, but I do expect that my prior contributions will be respected enough for someone to at least consider asking me for a future donation.

It’s Fundraising 101.

That’s why I was a little surprised when I received an e-mail from the Kars-4-Kids people asking me to vote in an online poll for a new version of their theme song. Here is the current version of the song, which is iconic in local radio, I think.

And here is the potential replacement – a newer version of the same song.

So, what do you think? Which version of the song is better? You can vote by clicking on this link and be sure to leave your thoughts in the comments box on this page – we’d love to read what you think!

Happy Five Year Anniversary!

And, honestly, that strategy pretty much worked.

However, what I learned as I went along was that my original intention of focusing on websites for start-up businesses was a losing proposition. The truth is that many local start-up businesses do not (and will not) generate any revenue from their website. And as we saw over the last few years with the tough economy, when times are tough companies begin to cut costs. So, if you’re a small business owner and you have to decide what gets cut in your budget – do you opt for cutting your website services or for cutting your salary?

I think we all know how that usually ends up…

Over the last few years, I’ve had a surprisingly large number of clients simply stop paying me for contracted services (i.e. deadbeats). In fact, altogether I’ve had 36 contracted clients since I opened up Usable Web Solutions, LLC. Actually, that’s not a bad amount of clients to sign up over a five year period considering that this website company is my side gig after my day job, teaching at the local university, and teaching at the online college. But to get back to the deadbeat clients – of the 36 contracts I signed in the last five years, 12 of my clients turned out to be deadbeats.

It’s an astonishing number when you think about it. A full third of my clients either just stopped paying, were horrible clients and screwed me out of contracted revenue, or just randomly disappeared. It’s outrageous. But, like I said above, I learned as I went along and what I learned was interesting on its face, but not totally surprising.

When I was working with outside clients, the chances of me getting screwed over were 1 in 2. However, when I was working with websites that I had a direct stake in, the chances of me getting screwed over were 0%. Some of you may ask, “what does it mean that you had a direct stake in the website?” Good question. As it turns out, of the 36 contracts that I signed over the last five years, 10 of them were with myself! That’s right – my best client looks at me in the mirror every morning.

Websites that fall within the boundaries of me having a stake in them include the one that you’re reading right now – JerseySmarts.com. In addition, I own 3 professional wrestling websites, 2 fraternity websites, 2 websites that are nothing more than domains right now, the actual Usable Web Solutions, LLC website, and a photo hosting website for my Mother’s eBay sales. Over the course of the last five years I’ve actually owned more than these 10 websites, but I’ve been shedding the websites that don’t turn a profit.

About two years ago, it became glaringly apparent that the majority of Usable Web Solution, LLC’s revenue was earned via advertising on the websites that I had a direct stake in. Further, it became apparent that with at least half of my outside clients screwing me over, chances were that I was wasting my time with them. So I began doing what any good businessman would do – I began shedding the outside clients and increasing my investment in the revenue generating websites.

From my perspective, this change in strategy from focusing on local nonprofits and start-up businesses to focusing on websites that I have a direct stake in paid off. For example, in its first three years of operations, Usable Web Solutions, LLC was losing money each year. Sure, it wasn’t losing huge sums of money, but it was losing money nonetheless. However, in the last two years the company has lost much less money. Now, some folks will read that and say that it’s still losing money and that’s true. But there’s no comparison between losing, say, $1,000 during one of the first three years of operations and losing, say, $20 during one of the last two years of operations.

Besides, the truth is that these losses are simply based on income versus expenses. Anyone who works in accounting could look at my books and know that, in terms of real dollars, Usable Web Solutions, LLC has been generating revenue since I started shedding the deadbeats. It’s been great, actually.

And that’s about as succinct a wrap up that I can provide after five years as a small business owner! I suspect that during the next five years I’ll continue this trend of shedding third party clients (I still have some) and focusing more on the websites that I have a direct stake in because – at the end of the day – it makes smart business sense.

Today, we’re headed to North Jersey to a statewide workshop where we will educate our younger members on just what the Foundation is and what the Foundation provides for them. In addition, we’ll be talking to some of New Jersey’s alumni volunteers and thanking them for their continued support.

It’s been a busy staycation to say the least – I’m actually looking forward to going back to work on Monday so that I can slow down a little bit! As I said in the last update, I have a lot of pictures and other stuff to post on the blog in the coming days, so stay tuned.

The Sigma Pi Educational Foundation

Oh, and to wrap up the time frame for the whirlwind trip to Nashville, I was back in my townhouse in Tinton Falls by 10:15pm on Saturday night. No big unpacking and cleaning after the trip either since I only had a small carry-on bag with me for the entire trip. Quick and efficient!

Now that I’m back in New Jersey, though, I’m looking at my upcoming schedule and I didn’t realize how jam packed it was for the rest of this month. Actually, over the last few days I’ve been making plans as far ahead as November 2010. Not that I mind – I think it’s good to know your schedule well in advance (yes, even months in advance).

How are your schedules coming along? Does anyone else out there plan themselves weeks and months in advance or do most of you just wing it? I always wondered about how most people plan their days, weeks, and months. Hmmm… I bet there’s a study out there somewhere that I can download to read some research about the issue. Of course, I’m not sure if I have the time for that…

Before I finish up for the day, I’d be remiss if I didn’t mention that if anyone is looking for a great, extremely efficient nonprofit organization to donate any amount from $1 to $1,000 (or more) to, the Sigma Pi Educational Foundation is the right choice. I know many of my readers are financially savvy and know the tax planning benefits of making tax deductible donations to 501(c)3 nonprofit organizations, so consider the Sigma Pi Educational Foundation the next time you’re putting together your tax planning donations. And don’t worry, we have a variety of funds that you can donate to that benefit folks outside of Sigma Pi Fraternity, including a fund for disabled veterans that awards some great scholarships to even better people each year. Something to consider…

Hang in there, I can actually draw a correlation here and make this make sense!

Over the last few weeks I’ve been dabbling in this iTunes U and some of the more educational-focused podcasts offered on iTunes. By using some of the features on iTunes and more specifically iTunes U, I’ve been able to get the mental stimulation that I would normally reserve for reading books. Seriously! I downloaded a bunch of podcasts from a doctor who interviews other doctors at the University of Michigan and asks them about health questions that pertain to their fields of study. These people are experts in the topic and they give away free information about the disease or condition for free. How great is that?!

And with iTunes U I’ve been able to turn some of my daily commutes into mentally stimulating experiences as I listen to professors for Yale and Harvard Universities talk about topics that I’m interested in (business management, nonprofits, leadership, American Colonial History, writing, personal finance, etc). It’s absolutely wonderful if you’re an information junkie like I am!

With this comes the integration of other services into iTunes like Audible. I’ve downloaded a few audiobooks from a family account and I plan on listening to some of them in the next few weeks during my trips to and from work. Hey, we all know that I absolutely hate my commute so if I can turn it into something more than just mindless driving to and from Trenton, then I’d be happy to do so!

But to keep with the theme of the last few days – by utilizing electronic media more often I’ll be able to cut back on the amount of books that I buy. Now, I’d never give up books altogether because I’m one of these readers who thinks that there is something that you lose when you don’t have the actual book in your hand and the words in front of your face. However, if I can purchase a few less books each year by listening to a few audiobooks instead, then that only helps to reduce the overall amount of clutter in my home – and that’s not a bad thing at all.

And now, after four years of owning a small website company in New Jersey, I’ve decided to share just a few pearls of wisdom that I’ve picked up from the last few years. For those of you who are looking to start your own businesses, maybe this information may come in helpful.

• The Competition Will Lie.Since the economy went south in the last year and a half I’ve learned that the competition – even for a small website company like mine – will do whatever it takes to steal away your business. In my line of work this translates to: No web designer will ever give any credit to any other web designer – ever! And it’s the truth!

  I’ve found that no matter how great, how near-perfect, or how absolutely outstanding a website that you create for a client, some huckster will try to convince that client that you’ve done a shitty job and that they could do a much better job. I’ve been diligent in fighting back against the hucksters which relatively few of my clients have come into contact with (thank God it’s relatively few of them). What always gets me over in the end is the fact that I’m completely truthful and up front with my clients.

  When a huckster says that they can get my client to be the top result in Google searches, I explain to them how they do this by using AdWords and buying the advertisements above certain search results. And then I show my clients the real price to buy these types of ads (dirt cheap) and they compare those prices to what the hucksters try to sell them and they are floored by the difference every single time. These hucksters come in trying to sell advertising packages worth thousands of dollars when, in reality, the service that they “provide” can cost my client nothing more than a few minutes of time and less than $100 each month. Remarkable.

• The State Takes Their Pound of Flesh. Each year I have to pay the State of New Jersey $50 so I can be in “good standing.” I’m not sure why I have to make this payment, but I have to make it every year. None of my company’s contact information ever changes and I have no tax obligations to the state, yet I have to make this payment every year. I don’t have the time to attempt to figure out the State of New Jersey, but I invite you to have a wonderful time trying to understand why I have to make this payment…
• Most Clients Don’t “Get” My Company’s Services. Believe it or not, I actually turn away quite a bit of new business. My reasons for turning away new business usually have to do with my personal and professional time constraints, but sometimes it has to do with sensing a bad thing coming…

  You see, after four years of owning and operating this company it has become very apparent to me that most people don’t understand the difference between a web design and maintenance firm and a “go to guy” for all computer-related problems. For example, I have a client that calls me once every two or three months to tell me that their e-mail doesn’t work. And, every two or three months, I remotely check their e-mail servers and, invariably, they are perfectly fine. Then I go on to tell them that they probably have (another) virus on their computer and that they should call a computer repair person if they can’t get the virus off of the system themselves. I’m a website guy, not a computer repair guy!

  Other times I get clients that want me to do advanced software programming to make their companies integrate better with their websites – I have no idea how to do that stuff! Those are not the type of services that I offer.

• Typically, Friends Are the Worst Clients. I’m blessed to have a great deal of friends and professional networks to tap into if an occasion to do so ever comes up. However, I’ve learned that when friends or professional acquaintances come to me to be their “web guy,” it usually will end in a friendly “parting of ways” after about a year. The problem, as I suggest in the point above, is that my friends and professional associations tend to think that I am going to be more than just a web designer for them because we have that outside relationship.

  Unfortunately, just because I know someone outside of my website company doesn’t mean that I’ve acquired new skills that I will use to their benefit! I offer a price break to those friends and professional associates that choose to engage my web company’s services, but I simply cannot offer services that I don’t know how to do – no matter what my relationship is with the client.

• Some People Are Just Deadbeats. Sometimes you have a deadbeat client and you have to face that fact. You may not want to admit that your buddy or a friend of a friend is a deadbeat, but if they don’t pay their bills on time and they make your life a living hell just to have them meet their contractual obligations then guess what – they’re a deadbeat. I have two or three deadbeat clients that I’m looking to spin off in the coming year. I have to get rid of them – they’re just more trouble than they’re worth and they take time away from my paying clients and new clients that will likely be better to work with than they are…

The final thing that I’ve learned over the last four years is that as long as I keep a day job (which I intend to always keep!), I can’t run Usable Web Solutions, LLC by myself. Thankfully, I have two paid consultants that I can farm different types of work out to when the need arises. I also have two or three other consultants that I can engage on a case-by-case basis.

Here’s to four more great years of Usable Web Solutions, LLC!

Anyway, in his op-ed, Mr. Abruzzo makes a statement that I think bears repeating on this blog:

Contrary to its name and to what many believe, the nonprofit sector is not non businesslike; in fact, compared to government and the commercial sector, nonprofits are better managed and more efficient. Yet, by providing services that would otherwise be unaffordable in the marketplace, the sector relies on contributions and grants and it is this that makes the sector vulnerable during the financial crisis.

Bravo, Mr. Abruzzo! This is the truth, people. Nonprofts are created to fill a gap. That gap can range from a social services gap to a gap in opportunity to access certain resources or even a personal gap left in one’s family after a person passes away from a specific cause. The point is that nonprofits fill a gap that otherwise would not be filled by the government or private sector. As Mr. Abruzzo suggests, many of the services provided by nonprofits are unaffordable in the marketplace and thus the sector must rely on generosity to succeed.

Which brings me to my first point of this entry – please try to continue to send your weekly, monthly, or annual donations to your favorite charities! I’m not asking you to go out and find a new charity and start making donations to it (though if you’re in the business of donating money to new charities, let me know and I can hook you up with some good ones in Morris, Monmouth, and Mercer Counties). What I am saying, though, is that if you can afford to continue your existing donations to your favorite nonprofit organizations, please do so.

My second point in writing this entry is to reiterate a point that Mr. Abruzzo makes in his op-ed, namely that the nonprofit sector is not non businesslike. In other words, nonprofit does not mean “no profit!” In fact, nonprofit organizations have begun using the term not-for-profit instead of nonprofit to describe their business activities. The basic difference between a for-profit organization and a not-for-profit organization is that for-profit generate profits which can be distributed back to its shareholders, not-for-profits are not allowed to do this as per IRS regulations. That’s the difference in a nutshell.

Do not expect a not-for-profit company to expect not to make money on its activities. In fact, you should expect the opposite. The best not-for-profit organizations are financially healthy despite the current economy since they are built on a fiscally responsible framework made for success. I’m glad that Mr. Abruzzo kept that point in his op-ed. The world needs to know that a good not-for-profit organization should generate profits and even bank some of those profits. A good not-for-profit organization will not, however, break the law and redistribute those profits to their shareholders.

Remember this if you ever deal with a not-for-profit company!

In particular, Schmitz says the following:

By virtue of their low pay, long hours, and high-intensity nature, campaigns are always filled with young people. But the Obama campaign recognized and empowered young leadership…The campaign’s all-hands-on-deck approach meant that the top fundraisers and policy advisors – whether they were Goldman Sachs partners, Hollywood stars, or law professors – were expected to canvass door to door and be managed by 22-year-olds. They did so, reporting for duty enthusiastically and building respectful and supportive relationships with these young field organizers rather than questioning them or taking over.

Ah! Talk about music to the young, nonprofit professional’s ears! The biggest problem that I’ve found so far in New Jersey’s nonprofit sector is the entrenchment – for better or for worse – of aging leaders. I cannot stress enough the phrase “for better or for worse” in this statement, though. There are people like Msgr. William Linder in Newark who should be involved in community development at all costs and at all times! This man is a saint for the work that he’s done to bring much needed services to the underserved communities of Newark. The same is true of so many dedicated, older professionals in the state’s nonprofit sector.

However, in my work I find many organizations that have a tremendous glut of young talent who are suppressed under an old style of management. What’s more concerning is that in New Jersey you rarely find high-level executive positions in the nonprofit field being filled by the under 35-year-old crowd. And that’s a shame because it pushes talented folks out of the nonprofit arena and into the private sector. You do see younger folks being named Executive Vice Presidents and Directors of this or that program, but that’s generally in young organizations with less than five employees and they are usually organizations that aren’t too substantial.

What I’ve seen in my own experiences are the elevation of inept individuals with little-to-no leadership skills. Actually – let’s just say that there are NO leadership skills! Anyway, reading Schmitz’s article was nice because it reminded me of how things are supposed to be.

The latest in this miniseries talks about how the colleges themselves are losing their actual monetary value in this market. In other words, college endowments are taking a hit. The New York Times put this article up two weeks ago and it’s an interesting read which I recommend if you get a chance. This struck me from the article:

They found that while endowments gained in value by about 0.5 percent in the old fiscal year, they lost nearly a quarter of their worth in the subsequent five months, a period in which the financial markets sank.

“It’s a rolling contagion that hit us,” Mr. Griswold said.

The pain was spread among institutions large and small, private and public. When endowments were categorized by size, even the least affected — those worth more than $1 billion — were found to have lost an average of 20 percent. Those of $500 million to $1 billion saw the biggest decline, about 25 percent. Public institutions lost an average of 24 percent, private institutions 22 percent.

I have two thoughts about this blurb. First, that’s horrible for the universities and colleges. Losses of that magnitude create real problems for nonprofits and I expect that we’ll see the biggest impact of these declines in September 2009 unless the economy roars back and some of this lost value returns.

Second, for some of the richer colleges I can’t help but think that they got what was coming to them. Come on – you can’t sit on $1 billion (or more) dollars and only offer the most piddling of scholarships and merit awards to your students who really need it. That’s not right. On the same point, I do feel somewhat bad for the major ivy league schools like Harvard who have now all but eliminated undergraduate tuition due to the recent backlash against colleges hording money instead of spending it on their students.

I went to Monmouth University and various places on the internet report that they have an endowment between $41.6 million and $50 million. I’m going to assume that they were at $50 million. If they took the same 25% hit that the Times article is talking about, then they’re down at $37.5 million. Online sources also report an annual tuition of about $35,000 (which has been rounded up from $33,464 to include the cost of books and other random fees). Wikipedia suggests that there are 4,744 undergraduates at Monmouth University right now.

What’s amazing to me is that if you do the math, Monmouth makes some $158.7 million in tuition and fees each year. Wow! For an institution that has been around since 1933, you’d think that they’d be able to raise more than $50 million in their endowment at this point. What is going on/wrong at Monmouth University that their endowment is so small, you ask? Look at the damn tuition!

It seems somewhat interesting to me that the tuition is so high for this school and that the endowment is so low. You would think that those who can afford to go to such a school (by straight payments or student loans like me) would be able to donate back to the school. Is there something going on at Monmouth that is prohibiting its alumni from wanting to donate? Speaking from experience I can tell you that after racking up such a gigantic debt attending the school, I haven’t donated back to it. I have donated back to Rutgers University, though, since they rewarded my good grades with essentially free tuition in my graduate program.

Monmouth might have to revisit its policy towards rewarding those students who are performing well in their classes. Their endowment might depend on it.