Digital not-for-profits can make more money...if they know how.

I was reading this article in the Globe and Mail. It recounts the history of a small canadian firm, TakingITGlobal which...does something involving youth and connecting them to changing the world. In the words of the founder "social networking for social change." Hmmm. Formally, "Our mission is to provide opportunities for learning, capacity-building, cross-cultural awareness and self-development through the use of Information and Communication Technologies."

I know very little about TakingITGlobal. The article is part of the G and M's "business incubator" series which examines and solicits solutions from consultants to problems faced by small businesses.

TIG, like almost all not-for-profits, would like to secure and increase their revenue streams and membership, as the majority of their funding is from government or foundation sources. I discussed the demands made on not-for-profits to secure grants this week in connection to the Wellesley Institute's report, We Can't Afford to do Business this Way.

The solutions offered to diversify revenue:

Typical not-for profit solutions:

• seek sponsorship (that hopefully won't conflict with your mandate and values). Sponsorship is often suggested as a way of underwriting not-for-profit enterprises but has great potential with TIG because of their global reach and sizeable membership. (this was mentioned)


• more government/foundation funding


• earned revenue (institutions: ancillary revenues i.e. gift shops and restaurants; cultural groups: merchandise; corporate fees; service providers: membership fees, product sales, other ancillary revenues)

Uniquely digital solutions:

• on-site advertising. I am surprised they don't have advertising on the site, as hasn't this been the major revenue stream for internet businesses? And, with an estimated 200,000 members, guaranteed clicks)


• create and collect fees for "premium" membership. But will people pay? My personal experience: I blanche at paying for content. Why pay when there is so much good content for free? I really despise when I am forced to watch a video ad before reading an article, but I will put up with it if it means not having to pay! One of the more brutal responses to the G&M article summed it up like this: "only think[sic] people pay for online is gambling, porn and ebay. how many people pay to read newspapers online?" But I know Nerve and Salon have gone this way.


• rebrand in order to attract new members (which would involve redoing parts of the site, I assume). I personally find the site has no point of entry for new users. I'm 26. Am I considered youth or not? Is the site for me or not? It's hard to tell. Confused at the point of entry, I do not waste time going further.


• also to attract new members: use other social networking sites, ie. Facebook. I found out about this wonderful micro-lending organization through Facebook. Funnily enough, my friend whose page it was on wasn't even a lender, but now I am.

The wonderful thing about these (ok, run of the mill) solutions is that they are applicable to any organization that is moving towards a primarily digital offering like....the Canadian Music Centre (with whom we met today!) They are in the process of putting a whole wack of digital music online...

Last comment on the article: I was suprised at the vitriole directed at the organization in the comments section. They can't see why the organization exists at all and generally see it as a charity that sucks money away from 'real' cash-stricken charities. I have found that that is a constant and legitimate question about not-for-profits whose primary role is to direct people or information or funds to/about other not-for-profits.

The problem with grants

I was having a conversation with my brother who works with Big Brothers Big Sisters, a mentoring program in Toronto. Oh, and by the way, if you are a visible minority male-- he is always looking for more mentors. Apparently they have no problems finding women mentors for girls. But I digress. He also works with a number of other not-for-profits and the conversation turned to grants. He told me about a report called "We Can't Afford to Do Business This Way" (Officially, "A Study of the Administrative Burden Resulting From Funder Accountability and Compliance Practices"). If you work with a non-profit at the organizational level and have been responsible for grant writing, this report won't tell you much that you haven't already experienced first hand, and the data collection was not in the area for the arts. It is still an eye-opener and I recommend it highly.



Download the report here.



Three findings that could be applied to arts/culture generating organizations:



The cumulative administrative burden on agencies is all consuming. The agencies respectivelycompleted 182, 48, and 94 major funder reports a year. Each funder and/or program had its ownreport requirements and formats. Securing and reporting on grants is the priority activity for thesurvival of organizations and their programs, pushing aside other organizational priorities suchas overall agency budgeting and strategic planning, community relations, staff development, and program management.

Funders are slow to approve/reject grants, and the slow response time causes “gap”problems for service delivery [here, substitute "arts programming or planning" for "service delivery"]. Agencies often found themselves with “nine months” to deliver“12 months” of service. If an agency guesses wrong and retains staff during the “gap” and thendoes not receive the grant, it incurs significant debt. If it lets staff go, program delivery and continuitysuffer. Response time for 73% of grants was four to five months or longer from the time the proposalwas submitted to the time the funder made a decision.

Grant applications and reporting, and addressing the challenges posed by funder practices andrestrictions, dominated the attention of senior management [...]. Senior managers are very aware and worried that they cannot replace themselves.Senior managers reported that frontline staff are reluctant to take on management jobs.Moreover, the agencies do not have the administrative capacity to train the next generation ofsenior managers. The reluctance of funders to compensate senior managers adequately iscompounding succession-planning. Grant management, of necessity, takes priority over other management responsibilities.

Scary, isn't it.