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© Laurence Verga Consulting - 2010 1

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Trends over time affecting funding directors…


Stress levels are SOARING… WHY?

• According to a 2009 non-profit organization survey…

• 80% reported some level of financial stress

• 40% considered the stress to be “severe” or “very severe”


Source: Impact of the 2007-09 Economic Recession on Nonprofit Organizations, Johns Hopkins University, Lester M. Salamon, Stephanie L. Geller, and Kasey L. Spence, 2009

• An organization’s financial health depends on adequate funding

• An organization’s financial health depends on adequate funding

Financing from non-operating funds is seriously low…• According to the American Hospital Association, from 1988 to 2008 the

percentage of total net revenue from investments and non-operating gains for community hospitals plummeted 3.2%, the lowest it had been in 25 years


Source: American Hospital Association 2010, Avalere, Avalere Health analysis of Amerian Hospital Assocation Annual Survey data, 2008, for community hospitals. Non-operating gains include income from non-operating activities, including investments, endowments and extraordinary gains, as well as the value of non-realized gains from investments

And… Charitable contributions are decreasing

• From 2008 to 2009…

• 30% of hospitals had a moderate decrease in charitable contributions

– 9% were significant decreases

• 43% had a moderate increase of needing subsidized services

– 9% were significant increases


Source: The Economic Crisis: Ongoing Monitoring of Impact on Hospitals, AHA, November 11, 2009

More regulations don’t help the issue, but they ARE and WILL increase…

• In 2010, the health care industry was 17.3% of the U.S. gross domestic product (GDP)

• Highly visible industries attract regulation and regulators, resulting in increased compliance costs as well as consequences of non-compliance


Source: Health Care Reform - Trends and Implications: 2010 and Beyond, Health News Digest, Marc Halley CEO, January 2010; Increased Regulation Driving Litigation Surge, Compliance Week, Jaclyn Jager, October 2010; Bbnet, Health Spending Hits 17.3 Percent of GDP In Largest Annual Jump, Ken Terry | February 4, 2010

• 39% of healthcare companies ranked new litigation from regulation as their TOP concern

• 39% of healthcare companies ranked new litigation from regulation as their TOP concern

So, organizations are trying to do more with less, however, healthcare costs are skyrocketing


Source: Supplementary Data Tables, Trends in Overall Healthcare Market, American Hospital Association, January 2010

In nearly 3 decades, total national health expenditures increased 823%

In nearly 3 decades, total national health expenditures increased 823%

Which drives up healthcare facilities costs

• From 2004 to 2008, 64% of growth for healthcare facility spending was due to rising costs


Source: The Cost of Caring: The Sources of Growth in Spending on Patient Care in Hospitals, AHA, March 2010

Because of these issues many are in the red

• 2007: 31% of hospitals had a negative total margin

• 2008: 53% were in the red


Source: Databank Project, American Hospital Association/Colorado Hospital Association, 2/25/09

• As issues continue to rise, negative margins will skyrocket

• As issues continue to rise, negative margins will skyrocket

So, they look to volunteers to lighten the burden

• Volunteering increased by 1.6 million from 2008 to 2009

• However, it is still 2 million lower than 2005 and MORE is going to be required to face current issues


Source: Volunteering in America, Issue Brief, June 2010

Barrier No. 1 Sales Force


The right people need to be in the right seats

A study concerning business failures showed,•56% were hiring the wrong people•58% were notdelegating correctly


Source: Ezine articles.com, Caroline Jordan, How to avoid the most common reasons for small business failure, 2009

Many organizations lack a formal “sales teams” with the physical and mental ability to acquire

funding, resulting in inadequate funds

Many organizations lack a formal “sales teams” with the physical and mental ability to acquire

funding, resulting in inadequate funds

Insufficient tools and advice limit success

• The control group of a study, who did not receive coaching demonstrated on average a:– 230% lower productivity

than those who received coaching

– 25% lower sales – Significant increases in stress,

and decrease in life satisfaction


Source: Increasing behavioral competencies in Financial Advisors, 1 to 1 Coaching, 2005.

• The right tools and advice must be readily available for your sales team to optimize success

• The right tools and advice must be readily available for your sales team to optimize success

Low producing sales teams don’t have a clear goal

• A survey showed…

• 99% of businesses don’t have a written plan for growth

• Success occurs when your funding goals are clearly communicated and your sales force knows what needs to be done and when

• A survey showed…

• 99% of businesses don’t have a written plan for growth

• Success occurs when your funding goals are clearly communicated and your sales force knows what needs to be done and when


Source: Source: Inc.com, “Most business owners feel stagnant”, 2007

Question?

What Is Your Ultimate Business Strategy?

What Is Your Ultimate Business Strategy?


Source: Source: Inc.com, “Most business owners feel stagnant”, 2007

The wrong impressions are often made

• 91% of unhappy clients will never do business with you again

• 97% of unhappy clients don’t express their dissatisfaction to the organization, however…

• They will tell at least 15 other people


Source: Statistics, Customer Satisfaction, Accessed November 15, 2010

The right people, with superior training, who share a vision, will leave a positive impression IF an effective marketing message is present…

Barrier No. 2 Marketing


Marketing competition is fierce

• In 1971, the average American saw 560 advertisements per day

• 1977: 3,000 ads per day

• 2005: 5,000 ads per day

• 2009: 30,000 ads per day


Source: Practical Advice from the Union of Concerned Scietistis, Union of Concerned Scientists, Accessed November 15, 2010; Data Smog: Surviving the Information Glut by David ShenkISBN 0-06-018701-8, HarperEdge, 1997; Hidden Messages : advertising and the messages they send to society about women, Alyssa Michaelides, Easter Michigan University, Digital Commons, 2005; The Ultimate Business Mastery System, Chet Holmes DVD #1.

However, many don’t market effectively becausea marketing plan is missing

• A study showed…

• 35% of companies were operating without a marketing plan or budget

• 60% of companies using social media had no plan


Source: Study: 60 percent of companies using social media have no plan, Fuel Lines, June 2010; VisionEdge Marketing Survey Predicts 40-60 Percent Of Companies Will Miss 2003 Sales And Revenue, All Business, February 2003

The results… Over $112 billion is WASTED on advertising each year• A study of companies with a total

of $1 billion in ad spending revealed:

– 83% of campaigns were suboptimal

– 31% failed on messaging (People didn’t understand the message)

– 36% of media didn’t connect with the marketing motivations


Source: Marketing’s Inconvenient Truth, Future Now, Bryan Eisenberg, June 2007

It’s more critical than ever that your message is truly heard by your affiliates and is delivering results

It’s more critical than ever that your message is truly heard by your affiliates and is delivering results

Barrier No. 3 Affiliations


Having the right affiliations portrays credibility to others and opens the door to increased…

• Donations • Grants• Advocates for

your organization to other potential donors

• Loans


The right affiliations are key

“Affiliating yourself with an organization or obtaining a fiscal sponsor can increase your likelihood of receiving funding”

~ Foundation Center

You know the right affiliations are vital… How do you gain and keep them?


Source: Guide to Fiscal Sponsorship, Foundation Center, 2010

Steps to overcome these

challenges

Build a strong team


Start by implementing a plan

• A study revealed, businesses who begin with a plan decrease likelihood of failure by 60%

• Create a written plan as to how you will increase efficiency and effectiveness of your sales team


Source: F. Delmar and S. Shane Strat. Mgmt. J., 24: 1165–1185 (2003)

Recognize your sales personnel need specific training

• Compared to other groups, your sales team often requires the most soft-skills training of all due to their continual interactions with current and prospective affiliates

• A top expert should be sought after to ensure the right skill sets are being taught and enforced


Source: Investigating Sales Team Performance Problems – Diagnose the root problem to tackle the issues, Jennifer Eichenberg, 2008

Please help me succeed…

I’m willing to learn if

you’re willing to train me

What critical skill sets need to be taught?

• Spanning communication

• Sales tactics

• Customer service

• Negotiation

• Presentation

• Conflict resolution


Source: Investigating Sales Team Performance Problems - Diagnose the root problem to tackle the issues, Jennifer Eichenberg, 2008

How do you portray an effective message?

• Know your audience

• Focus on your marketing offer

• Deliver consistent messaging

• Create value


What else?

• Utilize integrated marketing

– Use multiple media sources to meet your goals

• Never work alone

• Partner with an experienced professional


This person should be able to build effective marketing messages

Train your team on how to portray the right message

This person should be able to build effective marketing messages

Train your team on how to portray the right message

An industry expert makes all the difference

• Non-profit organizations gain approximately $40 Million from fund raising events each year

– 50% of fund raising events have a featured local expert

• $13Billion is given out in corporate sponsorship which is generated from a cold call

• A properly coached sales force will be able to gain larger portions of available funds


Source: Brenan Burchard, DVD #8, UBMS

And now a word from our sponsor…


This study discussed how to find TRUE VALUE, NEW IDEAS, VISION, EFFICIENT CHANGES, BUSINESS GROWTH, PRINCIPAL CENTERED LEADERSHIP and PEACE OF MIND… Verga Consulting is a company based on these principles