Month: January 2022

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Checklist for an Assessment of Legal Activities in U.S. Nonprofit Organizations

Young lady checking a list

Checklist for an Assessment of Legal Activities
in U.S. Nonprofit Organizations

Edited by Carter McNamara, MBA, PhD

(Be sure to read How to Use this Tool and Disclaimers before using information in this document.)

Also consider
Related Library Topics

Rating
*		 Indicator Met Needs
Work		 N/A

E

 1. All relevant filings to the Secretary of State are current. These filings might include: Annual Registration, Articles of Incorporation with all amendments, Change of Corporate Name, Change of Corporate Address. (The particular state office that processes these filings depends on which state you live in.)

E

 2. The organization is registered with and has filed its annual report with the Attorney General’s Office. (The particular state office that processes these filings depends on which state you live in.)

E

 3. The organization has filed the IRS form 1023 (application for 501(c) status, if applicable) and has received a letter of determination. If the Form 1023 was either filed after 7/15/87 or was in the organization’s possession on this date, it is made available for public inspection. (This requirement applies to tax-exempt organizations.)

E

 4. IRS form 990 and 990T (unrelated business income) if required, have been filed and copies of the 990 are available to the public. (This requirement applies to tax-exempt organizations.)

E

 5. Federal and state payroll tax withholding payments are current. (This requirement applies organizations with employees.)

E

 6. Quarterly and annual payroll report filings are current. (This requirement applies organizations with employees.)

E

 7. The organization has filed with the Minnesota Department of Economic Security and complies with all filing requirements of the Minnesota Unemployment Fund. (This requirement varies among states. Readers are encouraged to contact their Attorney General’s or Secretary of State’s office for any filing requirements in their state.)

E

 8. If the organization has qualified employee health and welfare and retirement benefit plans, they meet with all the federal laws, including: COBRA; initial IRS registration; plan documents; annuals filings of the 5500 C/R with copies available to employees. (This requirement applies organizations with employees.)

E

 9. Organization acknowledges and discloses to their board and auditor any lawsuits or pending legislation which may have a significant impact on the organization’s finances and/or operating effectiveness.

E

 10. When the Board of Directors makes decisions, a quorum is present and minutes are maintained.

E

 11. If the organization is subject to sales tax, State and City filings and payments are current.

E

 12. Organizations that participate in grassroots or direct lobbying have complied with all filings and government regulations.

E

 13. Organizations that conduct charitable gambling have complied with government regulations.

E

 14. Organizations with employees represented by a union must have copies of the union contracts on file.

E

 15. Organizations that operate in a fiscal or host-organization relationship with another organization or social service group have a written agreement on file.
Indicators ratings: E=essential; R=recommended; A=additional to strengthen organizational activities

This information may be copied. Please cite credit to the Greater Twin Cities United Way.

For the Category of Organizational Development:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.


Posted on

Checklist of Nonprofit Organizational Indicators

Business man checking a list

Checklist of Nonprofit Organizational Indicators

Edited by Carter McNamara, MBA, PhD

(This organizational assessment tool can be completed online for free.)

Description

The following checklist is a resource developed by staff and volunteers of the United Way of Minneapolis Area for internal use by nonprofit organizations. Management can use the checklist to identify their organization’s administrative strengths and weaknesses. United Way staff and community volunteers intend this to strengthen their administrative capabilities. It is believed that widespread use of the checklist ultimately results in a more effective and efficient nonprofit community. The checklist is not intended to be used as a tool for external evaluation, or by grantmakers in making funding decisions. This tool will be used to assist nonprofit organizations to gain a better understanding of their management needs and/or make improvements to management operations.

This checklist includes the following sections:

Also consider
Related Library Topics

How to Use the Tool

The checklist indicators represent what is needed to have a healthy, well-managed organization. Since it is a self-assessment tool, organizations should evaluate themselves honestly against each issue and use the response to change or strengthen its administrative operations.

Ratings:

Each indicator is rated based on its importance to the operation and effectiveness of any nonprofit organization. The ratings are:

  • E: Indicators with an “E” are essential or basic requirements to the operations of all nonprofit
    organizations. Organizations which do not meet the requirements of these indicators could place their organizations in jeopardy.
  • R: An “R” rating signifies that these indicators are recommended as standard practice for effective
    nonprofit organizations.
  • A: Additional indicators which organizations can implement to enhance and strengthen their management operations and activities are rated with an “A”.

Checklist Responses:

Organizations can respond in one of three ways to each indicators used:

  1. Needs work – An indicator that is marked as “Needs Work” implies that work has been done towards achieving this goal. The organization is aware of the need for this indicator, and is working towards attaining it.
  2. Met – All indicators marked as “Met” demonstrate that the organization has fulfilled as essential management need. However, the organization should review these indicators in the future to be sure that their management remains healthy in view of the many internal and external changes which constantly occur in all organizations.
  3. N/A – Indicators marked as “N/A” can mean several things, including:
    • the indicator is not applicable to the management operations of this organization
    • the organization is not sure of the need to meet the requirements of this indicator
    • the organization has not met, nor is working on this indicator presently, but may address it in the future

All organizations should take note: All responses to indicators should be reviewed carefully to see if they could improve management operations. Indicators checked “N/A” due to uncertain applicability to the organization must be further reviewed to determine if they should become a part of “doing business.” If the assessors simply do not know what the indicator means, further information may be needed to accurately assess the feasibility of its application. Indicators marked “N/A” because they have not been met but that apply to the organization, may require immediate attention. Technical assistance, consulting,
or training may be required to implement these indicators.

The indicators in this checklist should be informative and thought provoking. The checklist can be used to achieve not only a beginning level of good management, but improve existing management to provide the organization with greater stability, reliability and success in the nonprofit community. It is also a useful too if an organization is experiencing management problems, to help pinpoint any weaknesses so action can be taken or assistance sought to improve the organization’s health. All organizations should use the checklist to re-assess themselves periodically to ensure compliance with established rules and regulations, and to continue improving administrative health through the indicator’s helpful suggestions.

Disclaimer

This checklist is designed to provide accurate and authoritative information regarding the topics covered. Legal requirements and non-legal administrative practice standards reflected herein are capable of change due to new legislation, regulatory and judicial pronouncements, and updated and evolving guidelines. All stated legal requirements are in effect as of September 1, 1995. The same are utilized with the understanding that the provision of this checklist does not constitute the rendering of legal, tax or other professional services.

If the organization requires professional assistance on these or other nonprofit tax, management, or accounting issues, please contact your own professional advisors.

This information may be copied. Please cite credit to the Greater Twin Cities United Way.

For the Category of Organizational Development:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.


Posted on

Checklist of Human Resource Management Indicators for Nonprofit Organizations

Writing notes for nonprofit

Checklist of Human Resource Management
Indicators for Nonprofit Organizations

(certain sections of the following may be specific to the U.S.)

Edited by Carter McNamara, MBA, PhD

(Be sure to read How to Use this Tool and Disclaimers before using information in this document.)

Also consider
Related Library Topics

General Human Resources (see Volunteer HR Management below).

Rating
*		 Indicator Met Needs
Work		 N/A

E

 1. The organization has a written personnel handbook/policy that is regularly reviewed and updated: a) to describe the recruitment, hiring, termination and standard work rules for all staff; b) to maintain compliance with government regulations including Fair Labor Standards Act, Equal Employment Opportunity Act, Americans with Disabilities Act, Occupational Health and Safety Act, Family Leave Act, Affirmative Action Plan (if required), etc.

R

 2. The organization follows nondiscriminatory hiring practices.

R

 3. The organization provides a copy of or access to the written personnel policy to all members of the board, the Executive Director and all staff members. All staff members acknowledge in writing that they have read and have access to the personnel handbook/policies.

R

 4. The organization has job descriptions including qualifications, duties, reporting relationships and key indicators.

R

 5. The organization’s Board of Directors conducts an annual review/evaluation of its Executive Director in relationship to a previously determined set of expectations.

R

 6. The Executive Director’s salary is set by the Board of Directors in a reasonable process and is in compliance with the organization’s compensation plan.

R

 7. The organization requires employee performance appraisals to be conducted and documented at least annually.

A

 8. The organization has a compensation plan, and a periodic review of salary ranges and benefits is conducted.

A

 9. The organization has a timely process for filling vacant positions to prevent an interruption of program services or disruption to organization operations.

A

 10. The organization has a process for reviewing and responding to ideas, suggestions, comments and perceptions from all staff members.

A

 11. The organization provides opportunities for employees’ professional development and training with their job skill area and also in such areas as cultural sensitivity and personal development.

A

 12. The organization maintains contemporaneous records documenting staff time in program allocations.
Indicators ratings: E=essential; R=recommended; A=additional to strengthen organizational activities

Volunteer HR Management

Rating
*		 Indicator Met Needs
Work		 N/A

E

 13. The organization has a clearly defined purpose of the role that volunteers have within the organization.

E

 14. Job descriptions exist for all volunteer positions in the organization.

R

 15. The organization has a well-defined and communicated volunteer management plan that includes a recruitment policy, description of all volunteer jobs, an application and interview process, possible stipend and reimbursement policies, statement of which staff has supervisory responsibilities over what volunteers, and any other volunteer personnel policy information.

E

 16. The organization follows a recruitment policy that does not discriminate, but respects, encourages and represents the diversity of the community.

E

 17. The organization provides appropriate training and orientation to the agency to assist the volunteer in the performance of their volunteer activities. Volunteers are offered training with staff in such areas as cultural sensitivity.

R

 18. The organization is respectful of the volunteer’s abilities and time commitment and has various job duties to meet these needs. Jobs should not be given to volunteers simply because the jobs are considered inferior for paid staff.

R

 19. The organization does volunteer performance appraisals periodically and communicates to the volunteers how well they are doing, or where additional attention is needed. At the same time, volunteers are requested to review and evaluate their involvement in the organization and the people they work
with and suggest areas for improvement.

R

 20. The organization does some type of volunteer recognition or commendation periodically and staff continuously demonstrates their appreciation towards the volunteers and their efforts.

A

 21. The organization has a process for reviewing and responding to ideas, suggestions, comments and perceptions from volunteers.

A

 22. The organization provides opportunities for program participants to volunteer.

A

 23. The organization maintains contemporaneous records documenting volunteer time in program allocations. Financial records can be maintained for the volunteer time spent on programs and recorded as in-kind contributions.
Indicators ratings: E=essential; R=recommended; A=additional to strengthen organizational activities

This information may be copied. Please cite credit to the Greater Twin Cities United Way.

For the Category of Organizational Development:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.


Posted on

Checklist to Assess Fundraising Activities in Nonprofit Organizations

Young lady working in an office

Checklist to Assess Fundraising Activities
in Nonprofit Organizations

(certain sections of the following
may be specific to the U.S.)

Edited by Carter McNamara, MBA, PhD

(Be sure to read How to
Use this Tool and Disclaimers
before using information in this document.)

This document includes general fundraising and using
an outside professional fundraiser.

Also consider
Related Library Topics

General Fundraising

Rating
*		 Indicator Met Needs
Work		 N/A

E

 1. Funds are raised in an ethical manner for
activities consistent with the organization’s mission and plan.

E

 2. The Board of Directors and organization staff
are knowledgeable about the fundraising process and the roles
in the organization.

E

 3. The organization’s Board of Directors has
established a committee charged with developing, evaluating and
reviewing fundraising policies, practices and goals.

E

 4. The committee is actively involved in the
fundraising process and works to involve others in these activities.

R

 5. The Board of Directors, executive director
and committee supports and participates in the total fundraising
process, including project identification, cultivation, solicitation
and recognition.

R

 6.The fundraising program is staffed and funded
at a level consistent with fundraising expectations.

A

 7. There is direct communications and relationship
between information services or marketing, accounting and other
administration support functions to assist in the fundraising
needs and efforts.

E

 8. The organization is accountable to donors
and other key constituencies and demonstrates their stewardship
through annual reports.
Indicators ratings: E=essential; R=recommended;
A=additional to strengthen organizational activities

Using an Outside
Fundraiser

Rating
*

Indicator

 Met Needs
Work		 N/A

A

 9. The organization meets the nonprofit standards
of the state charities review council (if one exists in the state,
e.g., the Minnesota Charities Review Council provides standards
for Minnesota’s charitable nonprofits).

R

 10. If the organization chooses to use outside
professional fundraisers, several competitive bids are solicited.
Each prospective outside fundraiser’s background and references
are checked.

E

 11. The organization makes legal, mutual agreed
upon, signed statements with outside professional fundraisers,
outline each parties’ responsibilities and duties, specifying
how the contributed funds will be physically handled, and to
guarantee that the fees to be paid are reasonable and fair.

E

 12. The organization has verified that the contracted
fundraiser is registered as a professional fundraiser with the
Attorney General and all filings necessary have been made before
the work commences. (Registration requirements are dependent
on state requirements.)

E

 13. The fundraising committee or appropriate
representatives from the Board of Directors reviews all prospective
proposals with outside professional fundraiser and reviews and
accepts all agreements before they are signed.

R

 14. If the outside professional fundraiser plans
to contact potential donors directly, the organization must review
the fundraising materials (e.g., public service announcements,
print or broadcast advertisements, telemarketing scripts, pledge
statements, brochures, letters, etc.) to verify their accuracy
and to ensure that the public disclosure requirements have been
met.

E

 15. The organization properly reports all required
information regarding use of outside professional fundraisers,
amount of funds raised and the related fundraising expenses as
required by state and federal governments. The gross amount of
funds raised by the contracted fundraiser is reported on the
organization’s financial statement. The fees and costs of the
campaign must be reported on the statement of functional expenses.
Indicators ratings: E=essential; R=recommended;
A=additional to strengthen organizational activities

This information may be copied. Please cite credit to the
Greater Twin Cities United Way.

For the Category of Organizational Development:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books


Posted on

Checklist to Assess Financial Activities in Nonprofit Organizations

Financial graphs in a laptop screen

Checklist to Assess Financial Activities in Nonprofit Organizations

(certain sections of the following may be specific to the U.S.)

Edited by Carter McNamara, MBA, PhD

(Be sure to read How to Use this Tool and Disclaimers before using information in this document.)

Also consider
Related Library Topics

Rating
*		 Indicator Met Needs
Work		 N/A

E

 1. The organization follows accounting practices which conform to accepted standards.

E

 2. The organization has systems in place to provide the appropriate information needed by staff and board to make sound financial decisions and to fulfill Internal Revenue Service requirements.

R

 3. The organization prepares timely financial statements including the Balance Sheet [or statement of financial position) and Statement of Revenue and Expenses [or statement of financial activities!] which are clearly stated and useful for the board and staff.

R

 4. The organization prepares financial statements on a budget versus actual and/or comparative basis to achieve a better understanding of their finances.

E

 5. The organization develops an annual comprehensive operating budget which includes costs for all programs, management and fundraising and all sources of funding. This budget is reviewed and approved by the Board of Directors.

R

 6. The organization monitors unit costs of programs and services through the documentation of staff time and direct expenses and use of a process for allocation of management and general and fundraising expenses.

E

 7. The organization prepares cash flow projections.

R

 8. The organization periodically forecasts year-end revenues and expenses to assist in making sound management decisions during the year.

E

 9. The organization reconciles all cash accounts monthly.

E

 10. The organization has a review process to monitor that they are receiving appropriate and accurate financial information whether from a contracted service or internal processing.

E

 11. If the organization has billable contracts or other service income, procedures are established for the periodic billing, follow-up and collection of all accounts, and has the documentation that substantiates all billings.

E

 12. Government contracts, purchase of service agreements and grant agreements are in writing and are reviewed by a staff member of the organization to monitor compliance with all stated conditions.

E

 13. Payroll is prepared following appropriate State and Federal regulations and organizational policy.

E

 14. Persons employed on a contract basis meet all Federal requirements for this form of employment. Disbursement records are kept so 1099’s can be issued at year end.

E

 15. Organizations that purchase and sell merchandise take periodic inventories to monitor the inventory against theft, to reconcile general ledger inventory information and to maintain an adequate inventory level.

R

 16. The organization has a written fiscal policy and procedures manual and follows it.

E

 17. The organization has documented a set of internal controls, including the handling of cash and deposits, approval over spending and disbursements.

E

 18. The organization has a policy identifying authorized check signers and the number of signatures required on checks in excess of specified dollar amounts.

E

 19. All expenses of the organization are approved by a designated person before payment is made.

R

 20. The organization has a written policy related to investments.

R

 21. Capital needs are reviewed at least annually and priorities established.

R

 22. The organization has established a plan identifying actions to take in the event of a reduction or loss in funding.

R

 23. The organization has established, or is actively trying to develop, a reserve of funds to cover at least three months of operating expenses.

E

 24. The organization has suitable insurance coverage which is periodically reviewed to ensure the appropriate levels and types of coverages are in place.

E

 25. Employees, board members and volunteers who handle cash and investments are bonded to help assure the safeguarding of assets.

E

 26. The organization files IRS form 990’s in a timely basis within prescribed time lines.

R

 27. The organization reviews income annually to determine and report unrelated business income to the IRS.

R

 28. The organization has an annual, independent audit of their financial statements, prepared by a certified public accountant.

R

 29. In addition to the audit, the CPA prepares a management letter containing recommendations for improvements in the financial operations of the organization.

R

 30. The Board of Directors ,or an appropriate committee, is responsible for soliciting bids, interviewing auditors and hiring an auditor for the organization.

R

 31. The Board of Directors, or an appropriate committee, reviews and approves the audit report and management letter and with staff input and support, institutes any necessary changes.

E

 32. The audit, or an organization prepared annual report which includes financial statements, is made available to service recipients, volunteers, contributors, funders and other interested parties.

A

 33. Training is made available for board and appropriate staff on relevant accounting topics and all appropriate persons are encouraged to participate in various training opportunities.
Indicators ratings: E=essential; R=recommended; A=additional to strengthen organizational activities

This information may be copied. Please cite credit to the Greater Twin Cities United Way.

For the Category of Organizational Development:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.


Posted on

Capacity Building (Nonprofit)

Business man presenting

Capacity Building (Nonprofit)

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC

Capacity building has fast become a major topic among nonprofits and management support organizations (funders, associations, training centers, consultants, etc.) that provide services to nonprofits.
There are a variety of definitions for capacity building. Perhaps the most fundamental definition is “actions that improve nonprofit effectiveness” (from Investing in Capacity Building by Barbara Blumenthal, published by The Foundation Center). Some other discussions about capacity building refer to the concept as actions that enhance a nonprofit’s ability to work towards its mission.

The concept of capacity building in nonprofits is similar to the concept of organizational development, organizational effectiveness and/or organizational performance management in for-profits. Capacity
building efforts can include a broad range of approaches, eg, granting operating funds, granting management development funds, providing training and development sessions, providing coaching,
supporting collaboration with other nonprofits, etc. Prominent methods of organizational performance management in for-profits are beginning to be mentioned in discussions about capacity building, as well, for example, the Balanced Scorecard, principles of organizational change, cultural change, organizational learning, etc.

Information in this topic of the Library will acquaint you with the concept of capacity building in nonprofits, including offering you a broad background from some suggested previous readings, numerous perspectives on capacity building from numerous articles, and then review of various common functions in nonprofits (eg, boards, role of CEO, programs, marketing, fundraising, finances, evaluation, etc.). The topic closes with review of major methods of organizational performance management.

Sections of This Topic Include

Also consider

Learn More in the Library’s Blogs Related to Nonprofit Capacity Building

In addition to the articles on this current page, also see the following blogs that have posts related to Nonprofit Capacity Building. Scan down the blog’s page to see various posts. Also, see the section “Recent Blog Posts” in the sidebar of the blog or click on “next” near the bottom of a post in the blog. The blog also links to numerous free related resources. Get updated on nonprofit capacity building.

Suggested Previous Readings

Articles About Capacity Building

There are an increasing number of publications about the general topic of nonprofit capacity building. The following list will help you to get you started. Some items on the list are not available as online articles and need to be ordered from the publisher.

Common Functions in Nonprofits

The following links are to information about the major functions typically carried out in nonprofit organizations. An understanding of these functions is important to the success of capacity building efforts.

Organizational Change and Performance Management Approaches

The following approaches are some of the most common for enhancing the performance of an organization.

Shutting Down a Nonprofit

There seems to be an increasing number of people who believe that, once a nonprofit has addressed the social need that it was started to meet, then it should shut down — or “sunsetted.”





For the Category of Capacity Building (Nonprofit):

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.


Posted on

Checklist to Evaluate a Nonprofit Board of Directors

Employees Gathered on a Conference Room

Checklist to Evaluate a Nonprofit Board of Directors

(certain sections of the following may be specific to the U.S.)

Edited by Carter McNamara, MBA, PhD

(Be sure to read How to Use this Tool and Disclaimers before using information in this document.)

Also consider
Related Library Topics

Rating
*		 Indicator Met Needs
Work		 N/A

E

 1. The roles of the Board and the Executive Director are defined and respected, with the Executive Director delegated as the manager of the organization’s operations and the board focused on policy and planning

R

 2. The Executive Director is recruited, selected, and employed by the Board of Directors. The board provide clearly written expectations and qualifications for the position, as well as reasonable compensation.

R

 3. The Board of Directors acts a governing trustees of the organization on behalf of the community at large and contributors while carrying out the organization’s mission and goals. To fully meet this goal, the Board of Directors must actively participate in the planning process as outlined in planning sections of this checklist.

R

 4. The board’s nominating process ensures that the board remains appropriately diverse with respect to gender, ethnicity, culture, economic status, disabilities, and skills and/or expertise.

E

 5. The board members receive regular training and information about their responsibilities.

E

 6. New board members are oriented to the organization, including the organization’s mission, bylaws, policies, and programs, as well as their roles and responsibilities as board members.

A

 7. Board organization is documented with a description of the board and board committee responsibilities.

A

 8. Each board has a board operations manual.

E

 9. If the organization has any related party transactions between board members or their family, they are disclosed to the board of directors, the Internal Revenue Service and the auditor.

E

 10. The organization has at least the minimum number of members on the Board of Directors as required by their bylaws or state statute.

R

 11. If the organization has adopted bylaws, they conform to state statute and have been reviewed by legal counsel.

R

 12. The bylaws should include: a) how and when notices for board meetings are made; b) how members are elected/appointed by the board; c) what the terms of office are for officers/members; d) how board members are rotated; e) how ineffective board members are removed from the board; f) a stated number of board members to make up a quorum which is required for all policy decisions.

R

 13. The board of directors reviews the bylaws.

A

 14. The board has a process for handling urgent matters between meetings.

E

 15. Board members serve without payment unless the agency has a policy identifying reimbursable out-of-pocket expenses.

R

 16. The organization maintains a conflict-of-interest policy and all board members and executive staff review and/or sign to acknowledge and comply with the policy.

R

 17. The board has an annual calendar of meetings. The board also has an attendance policy such that a quorum of the organization’s board meets at least quarterly.

A

 18. Meetings have written agendas and materials relating to significant decisions are given to the board in advance of the meeting.

A

 19. The board has a written policy prohibiting employees and members of employees’ immediate families from serving as board chair or treasurer.
Indicators ratings: E=essential; R=recommended; A=additional to strengthen organizational activities

This information may be copied. Please cite credit to the Greater Twin Cities United Way.

For the Category of Organizational Development:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.


Posted on

Major Methods of Advertising and Promotion (Methods of External Communications)

loudspeaker-megaphone-with-lightings-red

Major Methods of Advertising and Promotion
(Methods of External Communications)

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.

Sections of This Topic Include

Also consider

Learn More in the Library’s Blogs Related to This Topic

In addition to the articles on this current page, see the following blogs which have posts related to this topic. Scan down the blog’s page to see various posts. Also see the section “Recent Blog Posts” in the sidebar of the blog or click on “next” near the bottom of a post in the blog.

First, A Word About Writing Ads

It’s almost useless to review lists of alternatives for advertising if you haven’t developed well-written ads. Writing ads is a skill. There are important aspects to think about, including the wording, graphics, arrangement of wording and graphics, coloring, how your audience will interpret the ads, their placement, etc. Poorly done ads can hurt you worse than not having ads at all. Therefore, very carefully consider getting help to write your first ads. (See Writing Your Ad.)

What Should You Write in Your Ads?

The answer to this question depends almost entirely on the reading and listening habits of your current and potential customers. This is where some basic market research can help you a great deal. A lot can be learned by using a few basic methods. (See Basic Methods to Get Customer Feedback and Some Major Sources of Market Research Information.)

Before you write your ads, you should give careful thought to your unique selling position so you know what unique features and benefits to convey and to whom. Review information in Positioning.

Note that a common mistake among inexperienced ad writers is to write the ad to themselves, rather than to their current and potential customers. Your ads should clearly the benefits (of products and services) to customers, not the benefits to you — clearly state the ads in terms that the customer will value, for example, easy access, low cost, easy to use, reliability, etc.

Your ads should answer the customer’s question: “What’s in it for me?” Your ad should also specify what they are to do next. What action should they take and how do they take it, for example, who do they call and how.

Major Methods of Advertising (Repeatedly Getting Message Out)

Brochures or flyers

— Many desk-top publishing and word-processing software packages can produce highly attractive tri-fold (an 8.5 inch by 11-inch sheet folded in thirds) brochures. Brochures can contain a great deal of information if designed well, and are becoming a common method of advertising. (See Writing Brochures.)

Direct mail — Mail sent directly from you to your customers can be highly customized to suit their nature and needs. You may want to build a mailing list of your current and desired customers. Collect addresses from customers by noticing addresses on their checks, asking them to fill out information cards, etc. Keep the list online and up-to-date. Mailing lists can quickly become out-of-date. Notice mailings that get returned to you. This should be used carefully and it can incur substantial cost, you don’t want to inundate your stakeholders with information so make the most of your message. (See Using Direct Mail and Mailing Lists.)

E-mail messages — These can be wonderful means to getting the word out about your business. Design your e-mail software to include a “signature line” at the end of each of your e-mail messages. Many e-mail software packages will automatically attach this signature line to your e-mail, if you prefer. (See Netiquette – Techniques and styles of writing e-mail messages and E-mail vs. voice mail.)

Magazines — Magazines ads can get quite expensive. Find out if there’s a magazine that focuses on your particular industry. If there is one, then the magazine can be very useful because it already focuses on your market and potential customers. Consider placing an ad or writing a short article for the magazine.
Contact a reporter to introduce yourself. Reporters are often on the look out for new stories and sources from which to collect quotes. (See Classifieds of Newspapers and Magazines.)

Newsletters — This can be powerful means to conveying the nature of your organization and its services. Consider using a consultant for the initial design and layout. Today’s desktop publishing tools can generate very interesting newsletters quite inexpensively. (See Newsletters.)

Newspapers (major) – Almost everyone reads the local, major newspaper(s). You can get your business
in the newspaper by placing ads, writing a letter to the editor or working with a reporter to get a story written about your business. Advertising can get quite expensive. Newspaper are often quite useful in giving advice about what and how to advertise. Know when to advertise — this depends on the buying habits of your customers. (See Classifieds of Newspapers and Magazines.)

Newspapers (neighborhood) — Ironically, these are often forgotten in lieu of major newspapers, yet the neighborhood newspapers are often closest to the interests of the organization’s stakeholders. (See Classifieds of Newspapers and Magazines.)

Online discussion groups and chat groups — As with e-mail, you can gain frequent exposure to yourself and your business by participating in online discussion groups and chat groups. Note, however, that many groups have strong groundrules against blatant advertising. When you join a group, always check with the moderator to understand what is appropriate. (See the groups listed on the right-hand side, Netiquette – Techniques and styles of writing e-mail messages and E-mail vs. voice mail.)

Posters and bulletin boards — Posters can be very powerful when placed where your customers will actually notice them. But think of how often you’ve actually noticed posters and bulletin boards yourself. Your best bet is to place the posters on bulletin boards and other places which your customers frequent, and always refresh your posters with new and colorful posters that will appear new to passers by. Note that some businesses and municipalities have regulations about the number of size of posters that can be placed in their areas. (See Signs and Displays.)

Radio announcements — A major advantage of radio ads is they are usually cheaper than television ads, and many people still listen to the radio, for example, when in their cars. Ads are usually sold on a package basis that considers the number of ads, the length of ads and when they are put on the air. A major consideration with radio ads is to get them announced at the times that your potential customers are listening to the radio. (See Advertising on Radio and T.V.)

Telemarketing — The use of telemarketing is on the rise. (See Telemarketing.)

Television ads — Many people don’t even consider television ads because of the impression that the ads are very expensive. They are more expensive than most of major forms of advertising. However, with the increasing number of television networks and stations, businesses might find good deals for placing commercials or other forms of advertisements. Television ads usually are priced with similar considerations to radio ads, that is, the number of ads, the length of ads and when they are put on the air. (See Advertising on Radio and T.V.)

Web pages — You probably would not have seen this means of advertising on a list of advertising methods if you had read a list even two years ago. Now, advertising and promotions on the World Wide Web are almost commonplace. Businesses are developing Web pages sometimes just to appear up-to-date. Using the Web for advertising requires certain equipment and expertise, including getting a computer, getting an Internet service provider, buying (usually renting) a Website name, designing and installing the Website graphics and other functions as needed (for example, an online store for e-commerce), promoting the Website (via various search engines, directories, etc.) and maintaining the
Website. (See Building, Managing and Promoting Your Website and Online Advertising and Promotions.)

Yellow Pages –The Yellow Pages can be very effective advertising if your ads are well-placed in the directory’s categories of services, and the name of your business is descriptive of your services and/or your ad stands out (for example, is bolded, in a large box on the page, etc.). The phone company will offer free advice about placing your ad in the Yellow Pages. They usually have special packages where you get a business phone line along with a certain number of ads.

Promotional Activities Through the Media (Reporters, Newspapers, etc.)

Articles that you write — Is there something in your industry or market about you have a strong impression? Consider writing an article for the local newspaper or a magazine. In your article, use the opportunity to describe what you’re doing to address the issue through use of your business. (See Basic Writing Skills.)

Editorials and letters to the editor — Often, program providers are experts at their service and understanding a particular need in the community; newspapers often take strong interest in information about these needs, so staff should regularly offer articles (of about 200 to 900 words) for publication. (See
Managing Media Relations and Basic Writing Skills.)

Press kits — This kit is handy when working with the media or training employees about working with the media. The kit usually includes information about your business, pictures, information about your products, commentary from happy customers, etc. (See Managing Media Relations.)

Press releases or news alerts — They alert the press to a major event or accomplishment and requesting,
e.g., it get included in the newspaper; they explain who, what, where, why and when; some include pictures, quotes, etc. to make it easier for the reporter to develop an announcement or story. (See Managing Media Relations.)

Public service announcements (PSA’s) — Many radio and some television stations will provide public service announcements for nonprofit efforts. Usually, these PSAs are free.

Other Promotional Activities and Events

Annual reports – Disseminate these to key stakeholders; they’re ripe with information if they include an overview of your year’s activities, accomplishments, challenges and financial status. (See Annual Reports.)

Collaboration or strategic restructuring – If you’re organization is undertaking these activities, celebrate
it publicly. (See Organizational Alliances.)

Networking – Spread the word to peers, professional organizations and those with whom you interact outside the organizations, e.g., educators, consultants, suppliers, clients, etc. (See Networking.)

Novelties — It seems more common to find ads placed on pens and pencils, coffee cups, T-shirts, etc. These can be powerful means of advertising if indeed current and potential customers see the novelties. This condition often implies additional costs to mail novelties, print T-shirts, etc.

Presentations — You’re probably an expert at something. Find ways to give even short presentations, for example, at local seminars, Chamber of Commerce meetings, trade shows, conventions, seminars, etc. It’s amazing that one can send out 500 brochures and be lucky to get 5 people who respond. Yet, you can give a presentation to 30 people and 15 of them will be very interested in staying in touch with you. (See Presenting.)

Relationships with key stakeholders — Identify at least one representative from each major stakeholder group and take them to lunch once a year. What seem as short, informal exchanges can cultivate powerful relationships of interest and concern.

Special events — These tend to attract attention, and can include, e.g., an open house, granting a special award, announcing a major program or service or campaign, etc.

Special offers — We see these offers all the time. They include, for example, coupons, discounts, sweepstakes, sales, etc.

Recent Movement in Marketing, Advertising and Public Relations — Social Networking (Online)

Social networking involves a variety of online tools that can be used by people and organizations to quickly share a great deal of information at very little cost. Many people are now hearing of some of those tools, e.g., Facebook, Twitter, MySpace and Youtube. Experts are asserting that social networking is a must for people and organizations wanting to share information with others — after all, that’s what marketing is all about! For more information, see Social Networking (Online)

For the Category of Public Relations:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.


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All About Advertising and Promotions

A group of young people sitting together with text advertise written over them

All About Advertising and Promotions

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.

Before you learn more about advertising, you should get a basic impression of what advertising is. See What’s “Advertising, Marketing, Promotion, Public Relations and Publicity, and Sales?”. Advertising is specifically part of the “outbound” marketing activities, or activities geared to communicate out to the market, for example, advertising, promotions and public relations. (“Inbound” marketing activities are geared to communicate in from the market, and includes, for example, market research to learn about customers needs and wants.) Now quickly scan the list of subtopics and their order on this page to understand even more about Advertising.
Then scan the subtopics and their order in the topic Marketing, to better understand the relationship between advertising and marketing.

Sections of This Topic Include

Basics of Advertising and Promotions

Preparing for Advertising and Promotions

Various Methods of Advertising and Promotions

Evaluating Advertising and Promotions

General Resources

Also consider
Related Library Topics

Learn More in the Library’s Blogs Related to Advertising and Promotions

In addition to the articles on this current page, see the following blogs which have posts related to advertising and promotions. Scan down the blog’s page to see various posts. Also see the section “Recent Blog Posts” in the sidebar of the blog or click on “next” near the bottom of a post in the blog.

BASICS OF ADVERTISING AND PROMOTIONS

Advertising Law

Basics and Planning

Introduction

Advertising and promotions is bringing a service to the attention of potential and current customers. Advertising and promotions are best carried out by implementing an advertising and promotions plan. The goals of the plan should depend very much on the overall goals and strategies of the organization, and the results of the marketing analysis, including the positioning statement (these are described more in the topic of Marketing).

The plan usually includes what target markets you want to reach, what features and benefits you want to convey to them, how you will convey it to them (this is often called your advertising campaign), who is responsible to carry the various activities in the plan and how much money is budgeted for this effort. Successful advertising depends very much on knowing the preferred methods and styles of communications of each of the target markets that you want to reach with your ads. A media plan and calendar can be very useful, which specifies what advertising methods are used and when.

For each product or service, carefully consider:

  • What target markets are you trying to reach with your ads?
  • What would you like each target market to think and perceive about your products (this should be in terms of benefits to them, not you)? Realize that each target market might be different.
  • How can you get that target market to think and perceive that, that is, what message do you need to convey?
  • What communications media does that target market see or prefer the most? Consider TV, radio, newsletters, classifieds, displays/signs, posters, word of mouth, press releases, direct mail, special events, brochures, neighborhood newsletters, etc.
  • What media is most practical for you to use in terms of access and affordability for that target market (the amount spent on advertising is often based on the revenue expected from the product or service, that is, the sales forecast)? Use that preferred media to convey the message(s).
  • Who will communicate the messages in the most appropriate media to that target market.

You can often find out a lot about your customers preferences just by conducting some basic market research methods (see the topic Market Research). The following closely related links might be useful in preparation for your planning.

Also consider

PREPARATION FOR ADVERTISING AND PROMOTIONS

Writing Your Ad

Before you write your ad, you should know what you want to say.

Also consider



(adsbygoogle = window.adsbygoogle || []).push({});

MAJOR METHODS OF ADVERTISING AND PROMOTIONS

Using Direct Mail

Mailing Lists

Email Marketing

Using Signs and Displays

Using Classified Ads in Newspapers and Magazines

Advertising on Radio and T.V.

Online Advertising and Promotion

Social Networking (Online) for Marketing, Advertising and Promotions

Social networking involves a variety of online tools that can be used by people and organizations to quickly share a great deal of information at very little cost. Many people are now hearing of some of those tools, e.g., Facebook, Twitter, MySpace and Youtube.

Experts are asserting that social networking is a must for people and organizations wanting to share information with others — after all, that’s what marketing is all about! For more information, see Social Networking (Online)

Measuring Results of Advertising

Also consider

For the Category of Marketing:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books


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Basic Definitions: Advertising, Marketing, Promotion, Public Relations, Publicity, and Sales

A corporate workspace with several office spaces

Basic Definitions: Advertising, Marketing, Promotion, Public Relations and Publicity, and Sales

Entered by Carter McNamara, MBA, PhD

Also consider
Related Library Topics

It’s easy to become confused about these terms: advertising, marketing, promotion, public relations and publicity, and sales. The terms are often used interchangeably. However, they refer to different — but similar activities. Some basic definitions are provided below. A short example is also provided hopefully to help make the terms more clear to the reader.

One Definition of Advertising

Advertising is bringing a product (or service) to the attention of potential and current customers. Advertising is focused on one particular product or service. Thus, an advertising plan for one product might be very different than that for another product. Advertising is typically done with signs, brochures, commercials, direct mailings or e-mail messages, personal contact, etc.

One Definition of Promotion

Promotion keeps the product in the minds of the customer and helps stimulate demand for the product. Promotion involves ongoing advertising and publicity (mention in the press). The ongoing activities of advertising, sales and public relations are often considered aspects of promotions.

One Definition of Marketing

Marketing is the wide range of activities involved in making sure that you’re continuing to meet the needs of your customers and getting value in return. Marketing is usually focused on one product or service. Thus, a marketing plan for one product might be very different than that for another product.

Marketing activities include “inbound marketing,” such as market research to find out, for example, what groups of potential customers exist, what their needs are, which of those needs you can meet, how you should meet them, etc. Inbound marketing also includes analyzing the competition, positioning your new product or service (finding your market niche), and pricing your products and services.

“Outbound marketing” includes promoting a product through continued advertising, promotions, public relations and sales.

One Definition of Public relations

Public relations includes ongoing activities to ensure the overall company has a strong public image. Public relations activities include helping the public to understand the company and its products. Often, public relations are conducted through the media, that is, newspapers, television, magazines, etc. As noted above, public relations is often considered as one of the primary activities included in promotions.

One Definition of Publicity

Publicity is mention in the media. Organizations usually have little control over the message in the media, at least, not as they do in advertising. Regarding publicity, reporters and writers decide what will be said.

One Definition of Sales

Sales involves most or many of the following activities, including cultivating prospective buyers (or leads) in a market segment; conveying the features, advantages and benefits of a product or service to the lead; and closing the sale (or coming to agreement on pricing and services). A sales plan for one product might be very different than that for another product.

An Example of the Definitions

The following example may help to make the above five concepts more clear. I recently read that the story comes from the Reader’s Digest, a quote found in “Promoting Issues and Ideas” by M. Booth and Associates, Inc. (Thanks to Jennifer M. Seher, participant in the CONSULTANTS@CHARITYCHANNEL.COM online discussion group.)

“… if the circus is coming to town and you paint a sign saying ‘Circus Coming to the Fairground Saturday’, that’s advertising. If you put the sign on the back of an elephant and walk it into town, that’s promotion. If the elephant walks through the mayor’s flower bed, that’s publicity. And if you get the mayor to laugh about it, that’s public relations.” If the town’s citizens go the circus, you show them the many entertainment booths, explain how much fun they’ll have spending money at the booths, answer their questions and ultimately, they spend a lot at the circus, that’s sales.

Learn More in the Library’s Blogs Related to This Topic

In addition to the articles on this current page, see the following blogs which have posts related to this topic. Scan down the blog’s page to see various posts. Also see the section “Recent Blog Posts” in the sidebar of the blog or click on “next” near the bottom of a post in the blog.

For the Category of Marketing:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.