The Passion of "Non-Profiteers"

Being one of the many people who work with a non-profit organization (I'll call us non-profiteers) is great. There is a huge sense of personal satisfaction in thinking about and doing things every day purely for the purpose of making the world a better place. Although many non-profits do work that evokes great sadness in participants (for example, helping homeless children escape the streets), the hope for a brighter future drives them to never give up the fight.

This passion is very powerful. A large part of the power comes from not being driven by financial rewards. When we are compensated by placing a value on our efforts as is done through financial compensation, it creates a boundry on how much effort we should assert towards whatever we are trying to achieve. In effect, financial compensation places monetary value on knowledge, skills, and experience along with an implicit or explicit degree of effort (ostensibly about 40 to 50 hours per week). Thus, there is less motivation to go much beyond what is expected of the position. It is true that there are typically bonuses and promotions to be doled out to over-achievers, but the fact that we label such individuals "over-achievers" is a problem in itself. It indicates that there is an acceptable level of achievement that is less than what the person has accomplished.

When one observes non-profiteers, they see something different. They see people motivated by internal forces like passion rather than external forces like compensation. When one is driven by internal forces, what they can accomplish is bound only by other internal forces such as their psychological and physical health. This maximizes the ability for one to reach their full potential.

Can welath itself be a passion? No. Wealth only serves to meet other needs. These might be status, power, freedom, etc. Digging deeper, you will find links to fulfilling more basic needs like a sense of security, nourishment, etc. While I don't have a background in psychology, it would certainly be worth the time investment to learn more about what human's most basic needs are and how they tie into higher-order desires.

I don't want to give the impression of naively assuming that most non-profits are ideal and that most for-profits are not. However, I have observed that non-profits tend to do better than for-profits in this particular area.

If you haven't spent much time with non-profiteers or non-profit organizations, take a look around your community to see if there are any volunteer projects that interest you and try volunteering. There are many excellent learnings that can be gained from non-profit work that are not as readily observable in for-profit work. The kicker is that what is learned can be brought back to for-profit companies to both benefit the workplace culture and, ironically, to increase profitability.

To all those working to make the world a better place, whether non-profit, for-profit, or however else you may define what you do, keep the faith! We salute your efforts!

Marketing: The Effect of Social Validation

I am a fan of Robert Cialdini's book "Influence: The Psychology of Persuation" and recently started reading "Yes: 50 Scientifically Proven Ways to Be Persuasive". I highly recommend both to anyone who cares about convincing anyone of anything!

One of the six key means of influence Cialdini identifies in "Influence" is social proof. This is essentially the idea that people will behave in a manner similarly to others around them, and particularly those who they find to be like themselves. As much as we may fight to be unique individuals, such behavior is logical given our built-in survival mechanisms. For example, if you see a crowd of people running in terror, it's probably a good idea to take action quickly. This isn't necessarily always the case, but for most scenarios I can think of, it's better to run. If you run and you're wrong, you might end up a little embarassed. If you don't run and you're wrong, you might end up severely injured or worse.

In "Yes" Cialdini presents additional information about social proof through discussion of research showing it's effect. In that discussion, we find that merely sharing information in our communication with clients and customers about what most people do is enough to stimulate a response. And it is quite an impressive one.

For MwtM, our marketing consists purely of an email list and word-of-mouth. We send one email per month listing our lesson schedule for that month with some information about the lessons and one email per week thereafter reminding people of that week's lesson. We decided to give the social proof concept a try. We simply added the following to the beginning of our email:

May salsa lessons begin this evening. Participation has been picking up every week, so combined with the gradually warming weather and longer days, it’s a great time to join your co-workers to meet some new people and pick up salsa before summer arrives.

While we can't be certain that this has a causal relationship with the participation that followed (as mentioned, participation was already increasing at a gradual rate), we got several reply emails shortly thereafter to ask for more information. The number of participants at the lesson that followed the email was around 18 versus 14 at the previous lesson, which represents an increase of greater than 25%. If nothing less, this does seem indicate that it is worth continuing to excercise the concept.

Taxes are Easy When You Don't Have Income

I'm excited to say that during the past two weeks we've had a substantial increase the number of participants in our weekly lessons. I'm not sure whether it's because the sun is staying out a little longer or something else, but I hope that it at least partially reflects on us providing a quality service that is of value to the community.

As mentioned in a previous post, Move with the Music received notifcation of acceptance as a 501(c)(3) non-profit in December of last year. We are registered as a non-profit in Washington state and are licensed to operate in two cities. With those registrations, we've already filed taxes twice this year. The first filing was for the state and the second was for one of the cities in which we are licensed. If there is a bright-side to not having income, it is that filing taxes is really easy.

A year ago, I would have thought otherwise, but non-profits do have to pay taxes on goods sold and services rendered. However, we do not have to pay taxes on the donations we get and neither do doners as long as nothing of substantial value is given in reciprocation for the donation.

Because taxes can come up quickly (and frequently in our case), it is best to make sure you stay on top of keeping good records for any financial transactions your organization has. This is important regardless of whether you have sales, but all the moreso if you're going to have to deal with the organization's taxes. All of us running MwtM work fulltime, so complicated taxes would be a burden if we had to deal with them.

Small Setback

We have had a small setback in our plans. Unfortunately, we have thus far been unable to find a venue for our lessons that fits into our budget. Even the local community centers are priced such that it would be difficult to sustain our programs without taking dependencies on donations, which we feel creates too much risk at this point in time. There are some venues that we might be able to use for a large discount or for free, but they would impose age restrictions, which we are leery of given that we are about making dance accessible to EVERYONE. Nonetheless, we have to start somewhere and if this could give us a sustainable model that we can grow from, this might end up being a fine route to take.

For now, we will continue operating as previously. While we hope to move by April, we have the good fortune of having time to continue exploring the differnt possibilities.

Seperately, we have had the misfortune of losing one of our team members, who is moving out of state. We will miss him and appreciate all the effort he put into helping us have a positive impact on our community.

Back in Action, 2011

This past Monday, we had our first dance lesson of 2011. This month it remains in employer-provided facilities (and is only open to employees and their friends/family), but it was a success. We had about 40 participants and everyone seemed to enjoy themselves a great deal.

Through the month, we will do some final fine-tuning around the structure of our lessons (which have already come a very long way since we started in 2008) in preparation for moving them to a public location opening them up for public participation. We even have a new volunteer to help with lessons. We are all very excited about what's to come in March and are on track with preparations for the transition.

Aside from that, our website is almost complete and can be visited at: http://www.movewiththemusic.org.

Recap: Tasks Involved in Starting a Non-Profit

We are about to start our lessons back up this coming Monday and we are making steady progress towards making them public in March.

We finally have all our registrations and thought we'd recap on a recommended order of doing things. We didn't do things in this order, but in retrospect, it would have made things easier.

1. Do research on the need you want to address and how you might address it.
2. Create a business plan or something close to one.
3. Write the Articles of Incorporation. Be sure to include the right language to register for 501(c)(3) status.
4. Incorporate with the state. Incorporation differs slightly state to state.
5. Register with the federal government to get an Employer Identification Number (EIN).
6. Create a conflict of interest policy.
7. Write the organizational Bylaws.
8. File for 501(c)(3) status with the federal government.
9. Register to operate in the applicable state and city. This may require a master business application and license applications.
10. Open a bank account.

If you plan to employ people, you will probably have one or two additional steps, though we are not familiar with them as we are an all-volunteer organization. A few others items that can be worked on in parallel and don't really need to be done in any particular order include the following.

• Build a team.
• Recruit a board of directors.
• Create a record-keeping process.
• Create a logo.
• Build a website.

Bylaws Ready

We have completed writing Move with the Music's bylaws. We were able to find ample resources online to determine the what the bylaws should contain, created an outline, and filled the document out from there. The legal aspects of the document were largely modeled off of the of other non-profit organizations that we were able to find. Given the legal pertinence of the document, we still have several questions. Because of this, it appears quite important to seek legal counsel at this point to, at a minimum, have the bylaws reviewed. We really want to ensure that they provide the organization (including its directors, officers, and volunteers) with adequate protection, flexibility, and balance of organizational power.

Our board currently consists of only one individual. However, with the bylaws prepared, we are ready to begin seeking candidates to round out the board.

On another note, we will begin planning our return from Winter break tomorrow. We intend to start our dance lessons back up in February. By March, we want to be ready to open our lessons up to the wider community and to do so, we will need to find low-cost facilities. Our area has decent community centers, so we'll be taking a closer look at those. However, we will need to evaluate the associated costs since to our knowledge, the community centers provide non-profits with a discount rather than a fee waiver.