Nonprofits Are Evolving Into More Innovative and Creative Business Organizations.

Nonprofits are everywhere in our everyday lives.

So many of us in our lifetime have in some way or another supported a nonprofit organization, but very few of us actually know what a nonprofit is or how exactly they are run. Some of the most popular and best nonprofits around are the ones people don't even realize are nonprofits. Some of these include Goodwill, Girl Scouts of the USA, Red Cross, and YMCA, just to name a few. Since I hope many of you will continue or start supporting one or many nonprofits in the future, it is important for us to understand many of the managerial ways nonprofits are similar to for-profits and how nonprofits benefit our communities. 

Non-profits must cover many of the similar business expenses that for-profits have to cover.

The most simplified and basic definition of a nonprofit is an organization that uses surplus revenues to achieve its goals. Just like for-profit organizations, nonprofits have bank accounts; own productive assets of all kinds; receive income from sales and other forms of activity, including donations and grants if they are successful at finding that sort of support; make and hold passive investments; employ staff; enter into contracts of all sorts; etc. Just as important, nonprofits have to meet break-even margins to cover all the expenses of an organization. Academic Director of Executive MBA Programs at the Smith School of Business at the University of Maryland, Robert M. Sheehan, was a former CEO of two national nonprofits. Sheehan gives his opinion on the business organization of nonprofits and what they must do to meet break-even margins.

A lot of other legal and organizational planning goes into the continual success of a nonprofit. One of the major difficulties and challenges of nonprofits is that they are extremely limited in what they can charge and often provide their goods and services for little to nothing. This is not to say that non-profits don’t make money. Any surplus of funds is redistributed back into the goals of its mission, rather than becoming profits for the owners. According to the 501c3, a nonprofit must (1) serve charitable, religious, scientific or educational purposes, and (2) have no part of the income of which "insures to the benefit of" anyone. This is the main distinction from a for-profit organization. In order to incorporate a nonprofit, you must file a 501c3 status, granting you legal tax-exemption for nonprofit corporations. Depending on your state, there are particular provisions for forming corporations, as well. A lot of paperwork goes into creating a nonprofit. The 501c3 is just a small aspect of all the technical work behind running a nonprofit organization and while I can't say it's easy, there certainly are a lot of benefits that outweigh some of the more tedious dull paperwork.

Nonprofits are driven solely on their purpose to serve the public or some specific cause. 
Typically, nonprofits thrive off of awareness building or fundraising. Because it is not the intention of a nonprofit to incur a profit for individual benefit of the owners, the success of the organization is largely driven by the passion of the people providing those services. Being passionate and truly believing in the mission of an organization is key to the success of any nonprofit organization. In fact, some say that nonprofits are more so effective than for-profit businesses because of the individuals there, who are motivated and inspired by their jobs. Peter Drucker, an eminent writer, professor, and leader of management consulting, created the Drucker Foundation for Nonprofit Management on the basis of helping nonprofits develop more innovative ideas, but also, for businesses to learn from nonprofits. According to Robert Sheehan, mission focused can be one of the most difficult aspects of running a nonprofit. 

Robert Sheehan's book,  Mission Impact, is all about the importance of nonprofits having a clear mission and service goals. We, as a society, are expecting more and more from the nonprofit sector and leaders of nonprofits are trying to learn how to be more effective and innovative in serving the community. Today, it's extremely vital for nonprofits to be creative and original in their efforts to raise awareness and make a difference. This helps them get the resources and support necessary to keep a business stable. Support can include volunteers, donations, grants, and any investors that have felt inspired by a nonprofit. In the end, a nonprofit still functions like a regular business in meeting fiscal needs. There are lots of innovative and new ways nonprofits are generating support. Nowadays, social media is a big one.

Social media marketing strategies are empowering nonprofits with effective community outreach.
Social networking has become an extremely effective advantage of some nonprofits in spreading the word and fundraising. The results of social media use by nonprofits in the UK was shown in the Social Charity Index by Visceral Business. The report showed an increase of 12 million follows, shares, and likes for the top 100 UK charities. Facebook, Twitter, LinkedIn, YouTube, and Google+ are some of the many social medias being used in studies of charities and their social performance. Craig Newmark, founder of Craigslist, profiled the highest grossing nonprofits and their use of social media, and found that 92 percent of them link to at least one social media site from their homepage. Nonprofits have a wide range of social assets, today, with which they can build the impact of what they do. This includes creating mobile, innovative, interactive, crowd-sourced philanthropic experiences, and working with commercial partners in new ways that can amplify the strength of their social vision at a cultural level. Nonprofits are learning that they can convert the loyalty of their supporters on social networks into direct and interactive involvement, and generate cost savings by doing so through their use of social business planning and networked media. Social media is giving nonprofits power to reach far greater numbers in an innovative, yet, easy way.

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Final Project Info Assignment

  So many of us in our lifetime have in some way or another supported a nonprofit organization, but very few of us actually know what a nonprofit is or how exactly they are run. Since I hope many of you will continue or start supporting one or many in the future, it is important for us to understand in many of the managerial ways nonprofits are similar to for profits. Non-profits must cover many of the similar business expense, such as overhead, cost of goods sold, and personnel. However, they are extremely limited in what they can charge and often provide their goods and services from little to nothing. This is not to say that non-profits don’t make money. Any surplus of funds is redistributed back into the goals of its mission, rather than becoming profits for the owners. This is the main distinction from a for-profit. Non-profits are driven solely on their purpose to serve the public or some specific cause, typically, through awareness or fundraising. Because it is not the intention of a non-profit to incur a profit for individual benefit of the owners, the success of the organization is largely driven by the passion of the people providing those services. Being passionate and truly believing in the mission of an organization is key to the success of any non-profit organization, but a lot of other legal and organizational planning also goes into the continual success of the organization. Unfortunately, a lot of paperwork goes into filing for non-profit status. Every non-profit organization must file a 501c3 status, which is tax-exempt non-profit corporation. The 501c3 is just a small aspect of all the technical work behind running a non-profit organization and while I can’t say its easy, there certainly are a lot of benefits that outweigh some of the more tedious dull paperwork. 

2 Questions to Expert:

1.    As a not-for-profit business organization, how do you balance maximizing the services rendered with break-even margins?

2.     What are the most difficult aspects of running a non-profit?

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SixDegrees.com and Friendster are the "Grandaddies" of Social Network Sites.

     When you think social network, the first thing that comes to mind are sites like Facebook, Twitter, and MySpace. What about Friendster, eCrush, and SixDegrees.com? Do you even know what any of these are? The history of social network sites essentially began with SixDegrees.com.

Six degrees of separation is the concept behind the social network service known as SixDegrees.com. 

     Created in 1997, SixDegrees.com was developed by CEO of MacroView the company, Andrew Weinreich. At the center of all social networks, MacroView created a web of contacts that allowed users to connect with friends, family, and acquaintances on the site. It allowed its users to create a profile, send messages, and post bulletin board items to their first, second, and third degrees. At the time, there were already dating sites and online communities, such as AIM, that included profiles and friend lists, but none of them allowed others to view friends.  After reaching a nearly 1,000,000-membership population, SixDegrees.com was bought out by YouthStream Media Networks for $125 million. Unfortunately, the social network pioneer failed to have a sustainable business due to its leader position in the social network industry. The lack of people online was not able to establish enough online friend networks. Today, YouthStream has “restarted” SixDegrees.com and only keeps it open to people who had previous membership or whom previous members invite. Another group of social network pioneers were sites AsianAvenue and BlackPlanet, which were created in 1999. 

AsianAvenue and BlackPlanet were the beginning of goal-oriented social network sites. 

     Both sites specialized in specific demographics. For example, BlackPlanet was created to connect people of the black community. AsianAvenue followed this same idea of community identity. These goal-oriented social network sites fit in the categories of socializing and networking social networks. The sites that fit in the socializing category are created for recreational social communication between its members. On the other hand, sites that fall into the networking category aren’t meant as much for socializing, but more for interpersonal communication. The main goal of networking social network sites is to find new contacts. The best example of a networking site, today, is LinkedIn. Just three years later, the next of the pioneering social network sites, Friendster, was created.

Freindster was considered one of the original and even the “granddaddy” of social network sites. 

     The name Friendster was derived from a mix of “friend” and Napster. Napster was a controversial site at the time, popular for it’s peer-to-peer file sharing. It was practically a household word due to the number of high-profile lawsuits filed against it. Friendster allowed its users to contact other users and share online content and media with those contacts. It was used for dating and discovering new events, bands, and hobbies. Within the first few months of the launch of Freindster, it had generated about three million users. It remained in the number one spot until the creation of MySpace in 2004. At the base of Friendster was the “circle of friends” technique for networking individuals in virtual communities, demonstrating the small world phenomenon. Similar to the “six degrees of separation,” the small world phenomenon was a group of experiments conducted to examine the average path length for social networks of people in the United States. The study was groundbreaking and concluded that the world is a small-world-type network characterized by short path-lengths.

2003 marked the explosion of the emergence of various competitive social network sites. Friendsters new competitors provided even more options for diverse communication and involvement features. Some of these competitors included Windows Live Spaces, Yahoo! 360, and Facebook.  In 2003, Google offered $30 million to buy out Friendster but the owners refused. Friendster was reported to have a value of $53 million. Despite it’s numerous strides to globalize and reach audiences in other countries in Asia, Friendster suffered significantly from the rise of Facebook. It was eventually bought out by MOL Global, one of Asia’s biggest Internet companies, and shifted to expansion in Asia. It discontinued all its user social network accounts and became a social gaming site.

The main challenges of survival for social network sites, such as SixDegrees.com and eCrush, were creating high customer value in an extremely competitive market and generating enough revenue to maintain a business. 

     New social Network sites are constantly popping up. In order to stay relevant and popular among online users, sites must create user satisfaction among its target group by constantly evolving and keeping up with new technology. Although Friendster wasn’t able to generate as much popularity as sites like Facebook and Twitter, it pioneered many of the different methods to generate revenue by advertising. Some the advertising strategies it adopted were pop up ads, contextual ads from Google, sponsored links in the web search, and an upgrade in Friendster blog (a product selling service of Friendster). Some of these strategies are still used, today, by the top social network sites, as well as the use of newer revenue generation methods. Premium membership is an example.

            Although sites like SixDegrees.com and Friendster aren’t as relevant in the US as they use to be, they paved the way for a new and more advanced group of social network sites. It’s hard to say whether these sites could gain Facebook popularity because of how far they’ve declined in the past years. Maybe not in the United States, but Friendster has popularized itself greatly in Asia with 8.2 million users. I personally believe that it would be extremely difficult, if not impossible, to reach popularity levels of sites like Twitter and Facebook because of the amount of time Friendster and SixDegrees.com have been off the market or not in the public eye. It would take something extremely innovative or some type of new technology to create a wave of followers to switch from Twitter and Facebook to Friendster or SixDegrees.com

Michael Hart’s groundbreaking eBook has left his mark on the world.

      It all started with a printed copy of the United States Declaration of Independence. On July 4^th, 1971, a man named Michael Stern Hart came up with the ingenious idea to create an electronic book, or eBook. While attending the University of Illinois, the school had given Hart a user account meant for data processing. Little did they know, Hart had bigger plans. He decided to type the entire Declaration of Independence into his computer and attempt to mass email it to a numerous amount of people. However, computers back then were not built for this type of mass communication and to avoid the system crashing, Hart made the text available for people to download instead. This was the start of Project Gutenberg.

 Photo: Michael Hart never had a real stable job. He worked various odd jobs, such as managing Project Gutenberg, and never had any real office space except for the confines of his own home.

Using the computer network at the University of Illinois, Michael Hart started what was known as Project Gutenberg. 
     The university network consisted of a measly hundred users. It became Hart’s life work to transmit and distribute works of literature via computer networks. This was unheard of in those times and keep in mind, it was also two decades before the creation of Tim Berners-Lee’s World Wide Web. In the lifespan of Hart’s own personal work, he had digitized a total of 313 literary works. Some of these works included entire books, like the Bible and Alice’sAdventures in Wonderland, as well as works of Homer and Shakespeare. Michael Hart’s work at the University of Illinois on Project Gutenberg had only begun.

Just sixteen years after Hart’s creation of Project Gutenberg, he broke down more boundaries with the help of the university’s PC User Group and a programmer by the name of Mark Zinzow. 
      Hart and his helpers were able to recruit volunteers and create an infrastructure of mirror sites and mailing lists for the project. This boosted the development and growth of Project Gutenberg significantly. By 2006, the serve had a total of 17,000 eBooks uploaded after the volunteers’ work. Today, Project Gutenberg is recognized as the earliest online literary project and holds over 42,000 free eBooks.

      Michael Hart was an extraordinary thinker with a vision to create a proficient way of sharing unlimited and free literature. In his own words, Hart created an environment for users that was “open access without proprietary displays, without the need for special software, and without the requirement for anything but the simplest of connections.” He was constantly thinking about the future, moving through life with so much ambition and an open mind. Michael Hart was a talented man with many aspirations in life, but there was never a time when money was one of them.

      
Perhaps, the most unusual aspect of Michael Hart’s life was that fact that a man with such a natural aptitude for technological innovation lived a very frugal and poor life. 
      Hart never made any money off of Project Gutenberg and although he wrote a handful of books, he never made a penny from them because they were all available free of charge on Project Gutenberg. He supported himself doing a number of odd jobs, one of them being an unpaid appointment at Illinois Benedictine College to solicit donations for Project Gutenberg. Hart was the epitome of a handy man. He fixed his own car and house, and built his own computers and stereos. He even took care of his own body with home remedies. “I know it sounds odd to most people, but I just never bought into the money system all that much,” Hart once said. 
     Rather than thinking about his own personal luxury, Hart embraced life through his friends, his work, and his vision. His dream was that someday, everyone would be able to have his or her own duplicate of the Project Gutenberg collection. Although he’s not alive to witness it, that dream has become a reality thanks to the advancements in technologies, such as computers, smartphones, and even portable eBook readers.

About Me

Hi there!

My name is Alexis Eng but I go by Lexi for short! I'm from VA Beach, Virginia. I decided to take J150 Intro to Mass Communication because I'm really interested in how technology and social media affects our world, today. As of right now, I am in Letters and Science but I plan on applying to the Smith School of Business this Spring. I think that technology plays a large role in my intended major, especially in the communications and marketing aspects of businesses. Just like any other student, I love using social media and I find J150 as an awesome opportunity to learn in an environment that's very familiar and fun. I look forward to taking this class this semester and hope to get a lot out of it!

-Alexis