Fundraising – Page 31 – The Healthy Non-Profit

What’s in your mailbox? Part 1

August 14, 2012 erik Fundraising

I oftentimes get asked about direct mail as a fundraising vehicle by non-profit friends. My typical response is that direct mail is both an art and a science. I point them to experts like Mal Warwick and Tom Ahern, but they are always surprised when I point them to their own mailbox.

I have always said that the average American can become educated about what works and what doesn’t work when it comes to direct mail if they only pay attention to what is being sent to them, what they are opening (or not opening), and how and what they’re reading (or not reading). It is with this in mind that I’ve decided to focus this week’s blog posts on my personal mailbox.

As you can imagine, I get a lot of fundraising appeals — local non-profits, national charities, advocacy groups, and politicians. Today, we’re taking a closer look at my new BFF — Michelle Obama — who can’t seem to stop sending me mail.

Let’s open one of the three letters that my household recently received and see what we have:

It is a three page letter written on double-sided paper that looks like Michelle’s personal stationary (which it obviously isn’t).

I read the salutation first. “Dear Mr. Anderson”. I immediately frown and think to myself “why is she calling ‘mister’ when I am younger than her .” Nevertheless, I trudge on and keep reading.

I read the first paragraph. It is two sentences long and doesn’t capture my attention. It says something about doctor bills and mortgages and blah blah blah.

So, I start skimming and notice that she uses my name a lot throughout the body of letter. Here are a few examples:

“Erik, I’m writing to ask you to . . .”
“Erik, that is why he is challenging us to think . . .”
“Erik, that is what’s at stake in 2012.”
“And Erik, we’re also counting on you to . . .”

I also notice that there is a lot of emotion and values language laced throughout the letter. The following are just a few of the words and phrases that catch my attention as I skim:

persevere
struggles
fundamental American promise
my brother’s keeper
sustained by the relationships we build

Phew . . . that was a lot of skimming. In approximately three to five seconds, as I worked my way from the salutation to the signature, I was able to pick out those key words and phrases. I now see that Michelle (or should I say “Mrs. Obama” since we obviously have a formal relationship) has signed the letter.

Yes, it was a machine signature, but it isn’t a script font. It really looks like a signature. Thank goodness for autopen machine technology because nothing kills a nice, warm, emotional letter like a script font signature.

Just when I’m done and ready to shred the letter, Ron Popeil screams out from the bottom of the letter, “But wait, there’s more!”

That’s right. There is a postscript, and I find myself reading the whole thing. It contains two short paragraphs, and the sentences are super short. The verbiage is very emotional, and it is hard not get drawn in. Here is exactly what it said:

P.S. I’m not going to kid you. This journey is going to be long. And it’s going to be hard. But the truth is, that’s how change always happens in this country. We know in our hearts that if we keep fighting the good fight, doing what we know is right, then we eventually get there. Because we always do.

As Barack has said many times, “Ordinary people can do extraordinary things. That’s what our campaign is all about. Now the obstacles are even taller and the stakes are even higher — which is exactly why Barack and I need you more than ever. Thank you.

Sigh … the hook is set, and I turn back to page one. I start reading and stop skimming.

While there is a lot more to learn about direct mail (and we will talk about some of it over the next few days), we did learn the following valuable lessons from reading just one professionally written direct mail fundraising appeal:

Many people skim direct mail.
The first thing people read and pass judgement on is the salutation (isn’t that right, Mrs. Obama?)
People will pick-up key words and phrases as they quickly work their way from salutation to signature.
Good letters appear are very personal, emotional and focused on action and engagement. They are written in a first person voice, and passive voice language is avoided.
A signature (even if scanned) is always better than a script font, but a real signature is the icing on the cake for any personal letter.
The postscript can be the key to the entire letter. Everyone seems to read it, and a good one sucks the reader back in and can send them back to the beginning.

Tune in again tomorrow and we’ll do something similar with another piece of mail. In the meantime, I encourage you to go to your mailbox and go through this same exercise. In no time, you will feel much better about what you’re trying to do with your non-profit organization’s direct mail program.

How do you read junk mail . . . errrr, I mean . . . direct mail? Does your agency have a direct mail program? What does it look like? What have been your successes? What are your challenges? Please use the comment box below to share your thoughts and questions.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

Social media ROI — Non-profits shouldn’t make it difficult

August 9, 2012 erik Fundraising, technology

At the end of Tuesday’s post titled “Are non-profits yelling at their donors using social media?” I promised that I’d share a few revelations from a social media conference that Marissa and I attended last week hosted by SkillPath Seminars. Yesterday, I posted “Answers to the two most popular social media questions asked by non-profits,” and today we’re talking about that thing that for-profit companies are obsessed with and non-profits seem to struggle with . . . RETURN ON INVESTMENT (ROI).

“43% of current social media marketers haven’t measured ROI.”

This number was shared with Marissa and me by our lovely SkillPath Seminars trainers at last week’s social media conference. They cited this information from King Fish Media in 2010.

Well, if I were a betting man, I would guess that this number is much, much higher when you just look at non-profit organizations using social media.

Let’s be honest. Most non-profit organizations are stretched too thin. So, asking employees to track a lot of stuff as it relates to your social media presence just doesn’t make a lot of sense. Right? However, it is important to measure something. Right? After all, resources are tight and you are dedicating time and resources to this thing called social media. If the ROI is very poor, then you probably have 101 ways to better spend those hours and dollars.

Additionally, keeping an eye on certain metrics also helps you evolve your social media presence and approach because when you see that something isn’t working then you stop and when you see something is working you do more of it.

This brings us to the big question . . . “What can non-profits easily measure and how should they do it?”

Looking across the fence at our for-profit cousins, I can tell you that they start by asking “What is most important to the success of the company?” It usually boils down into one of four things: conversion rates, generating sales leads, increased site traffic/number of new customers, and brand awareness.

Once they narrow their focus, they then pay a visit to their social media analytics buffet and look around at all of the yummy things that you can track including:

web traffic
viral video activity
bounce rate
page views
comments
social bookmarks
inbound links to your website
ratings
number of new followers
comments / mentions
leads generated
downloads
uploads
engagement activity

As we discussed in yesterday’s post — “Answers to the two most popular social media questions asked by non-profits“– your organization probably uses different social media platforms to achieve different objectives in your resource development plan (e.g. Facebook = stewardship; Twitter = cultivation; etc). So, it makes sense that what you measure might look a little different for each of the platforms your agency uses.

If I were using Facebook to steward donors and didn’t have enough time or money, then I would simply track: 1) how many Friends does my Facebook page have (and how did that number change in the last year), 2) how many “likes” and comments did my posted content generate, and 3) how many Facebook friends remained a donor to my agency in the last year (e.g. donor database loyalty report cross referenced to Facebook Friends list)?

If I were using Twitter to introduce and cultivate new prospective donors, then I would track: 1) how many Followers does my Twitter account have (and how did that number change in the last year), 2) what is my Klout score and level of online influence with my Twitter followers, and 3) how much traffic back to the agency’s website comes from Twitter (e.g. Google analytics from your website will tell you this number and much more).

As I’ve just done in the last two paragraphs, I suggest you do the same for each of your social media platforms: 1) determine your target audience and main objective for each platform and 2) select a small handful of metrics from your analytics program (e.g. Facebook Insights, Google analytics, etc) that make the most sense for what you’re trying to accomplish.

But wait . . . there’s more!

Measuring data for the sake of measuring data is a waste of time. You need to turn your data into something “actionable“. Here are just a few thoughts:

include it an annual performance plan for the employee who is responsible for managing your social media communities
build a social media dashboard and share with your marketing or resource development committee every month
place it on committee meeting and staff meeting agendas and facilitate conversations around the questions: “What does the data tell you?” and “What should we do differently with our content?”

Here are a few links that you might also want to read on this subject from me, Marissa or others:

Keep it simple. Don’t go overboard. And whatever you do, make sure you use the data.

Does your agency use social media? Are you measuring stuff? What are you measuring? Why are you measuring it? What are you doing with it? Has it made a difference in anything you do online or offline? Please scroll down and share answers to these questions or whatever else is on your mind in the comment box. We can all learn from each other.

Here’s to your health!

Answers to the two most popular social media questions asked by non-profits

August 8, 2012 erik Fundraising, technology

At the end of yesterday’s post titled “Are non-profits yelling at their donors using social media?” I promised that I’d share a few revelations from a social media conference that Marissa and I attended last week hosted by SkillPath Seminars. Today, we’re talking about two of the most popular social media questions that I’ve been asked by non-profit organizations:

Which social media platforms should your non-profit organization use to speak to donors and supporters?
How can your agency do a better job at engaging its supporters using social media and gain more traction?

Let me first say that I highly recommend this SkillPath training conference to all non-profit professionals who are responsible for managing their agency’s social media communities. You can find more information at the other end of the link that provided above. (No, I was not paid to say this)

When looking through the conference materials on this subject, they list more than 20 different platforms that companies are using to market their efforts. However, it came as no surprise that Facebook, Twitter and LinkedIn were the top three “networking platforms;” YouTube was the most popular “promotional platform;” and various blogging platforms (e.g. WordPress, Blogger, and Tumblr) were the most popular “sharing platforms”.

Our trainers suggested that a company should give serious consideration to developing a presence on all three platforms and five sites. While that might sound easy enough, it becomes more complicated when you consider that you’ll be saying different things in each of these places. You need to figure out who your target audiences are and which social media platforms are best at communicating with them.

As I sat through many of the sessions, I found myself trying to translate the training curricula into non-profit speak. Assuming that my universal translator is working well, I concluded the following:

Facebook looks like a great stewardship tool where you can engage donors and show your “friends” how their contribution is being put to good use.
Twitter and its 140 character limitations could be an awesome cultivation tool where you catch the attention of prospects and drive them to a place where they learn more about your mission.
LinkedIn is more than a human resource tool. It is a place to build relationships with potential corporate supporters and identify special event sponsors.
YouTube can be a multi-purpose resource development tool and used in many different ways. However, it might be best used for raising brand awareness and developing a pool of interested prospects who you are positioning for cultivation activities.
Your blog is a friendly online place to engage in conversations with supporters and potential supporters. You can establish yourself as a “thought leader,” advocate and engaged listener.
All of these social media tools should be used to drive traffic to your website where there is more information, volunteer forms, donation pages, etc.

Yes, this is a lot of work and at some point you’ll need to frame your agency’s strategy in a written social media plan. While it is easy to think that it might end up on the fundraising department’s plate, I think there is an opportunity for thoughtful organizations to transform their agency into a “social company” and share the workload and transform your workplace culture.

Enough on platforms.

What about building momentum? Gaining traction? Engaging more deeply?

The following are just a few of the suggestions offered by our SkillPath trainers:

Write content that is interesting to your reader. (If you don’t know what that is, then go ask them)
Host contests
Offer coupons
Make your content interactive
Include links to things that your audience will find interesting and useful

Perhaps, one of the best ideas I heard was that a picture is worth a thousand words. Write less and post more pictures of your mission, your programs, your volunteers, and your donors. This one simple idea that will probably result in increased traffic, more content sharing, and deeper engagement.

Is your agency using social media? How’s it going? Do you feel like it is working? Why or why not? Please scroll down and use the comment box to share your thoughts. We can all learn from each other.

Here’s to your health!

Survey Says? We can all learn a lot from top non-profit brands!

July 26, 2012 erik Fundraising

When I think about opinion polls and surveys, the first thing I think of are the folks at Harris Interactive, who are widely known for The Harris Poll. Sure, there are lots of people in America who are in the business of knowing your opinion, but Harris is the granddaddy of them all. So, when Harris released the results from their 2012 Non-Profit EquiTrend study, I decided to click-through and see which non-profit brands average Americans recognize most, trust and value.

The following is how Harris describes this project:

“The 2012 Harris Poll Non-Profit EquiTrend (EQ) study measures the brand health of 87 non-profit brands across seven important categories, including Youth Interest, Animal Welfare, Health, Social Service, Disability, International Aid, and Environmental. Harris Poll EquiTrend provides the insight our communities, corporate sponsors, and non-profit organizations require to make informed decisions about donations and overall support.”

I must admit that I was a little confused when I first read the webpage that described their findings, and I had to go back and re-read everything a second time. Click here to see that page and read more about this project. I think the confusion resulted from Harris dividing their findings into seven different categories, and it was difficult to figure out which agencies were at the top of the “collective” non-profit branding survey. For example, the Girl Scouts were at the top of the EquiTrend Youth Interest Non-Profit Brand survey, but they weren’t one of the “overall” top four brands when you combined all seven categories into one comprehensive list.

The following are the top four non-profit brands in 2012 according to what people told Harris:

American Red Cross
Habitat for Humanity
Salvation Army
Feeding America

If you are a regular reader of this blog, then you know that I regularly say: “We can all learn from each other.” I think this expression comes from a deep-rooted belief that re-inventing the wheel is a waste of time. With this in mind, I decided to share with you this morning YouTube videos from each of these top non-profit brands. Please take a brief moment and click-through these videos.

When you’re done (and it will take only a few minutes), please use the comment box below to share some of your thoughts and observations. What do you see these well-recognized non-profit brands telling people about what they do? Why do you think their messaging is so effective? Why does it resonate and stick with people?

American Red Cross
[youtube=http://www.youtube.com/watch?v=fny_spkbC0s]

Habitat for Humanity
[youtube=http://www.youtube.com/watch?v=Ur_2bpPvKtQ&feature=BFa&list=PLF93D4C1B5F0A2648]

Salvation Army
[youtube=http://www.youtube.com/watch?v=QheOmr8C4dA]

Feeding America
[youtube=http://www.youtube.com/watch?v=8l-ojOoFSCo&feature=relmfu]

So, what did you think about what these four top non-profit brands had to say? Did you have any “big ideas” about your agency’s branding efforts while watching these videos? If so, please share that thought with us in the comment box below.

Here’s to your health!

Advice for all non-profits: “It is time to talk human again!”

July 25, 2012 erik Donor-centered fundraising, Fundraising, organizational development, Planning, technology, volunteers

So, I was sitting in my living room watching television and trying to multitask last night when one of the commercials that I was trying to ignore jumped out of my television, grabbed me by my shirt collar and shook me hard. It was an advertisement by Skype and it was very cute. You probably know which one I am talking about . . . it is the commercial with the middle school aged boy and girl passing notes in class. I’ve embedded it below if you want to view it again.

[youtube=http://www.youtube.com/watch?v=pCJAASK50lY]

I especially love the following line in this ad:

“Long before email threads, we turned to each other. It is when the spirit of collaboration meant more than an ‘FYI’ or ‘Reply All’. When messages were passed along by simple gestures, validated by an honest expression.”

Long after this commercial was over, my mind kept straying back to it. I must have re-played it over and over and over again in my head all night long. After a few hours, it dawned on me that there is something about this message that obviously resonates with me and my point of view about non-profit organizations.

For the last few years, I became more focused on using technology to engage people (e.g. non-profit clients, donors, board volunteers, etc) in a way that felt efficient and productive. Thinking back on it, I have tried all sorts of technology tools all in the name of saving time:

Email (Ugh . . . I can send wickedly long emails with lots of detail)
Google Docs
GoToMeeting
Conference call bridges
e-newsletters

I suspect this trend is rooted in the idea of being respectful of a donor and volunteer’s time. After all, life is so busy and very fast nowadays. However, are we really being more efficient? Are we really getting more done? Are we really simplifying things or do our efforts really just de-humanize the experience and end up doing more harm than good?

I think United Airlines hit the nail on the head more than 20 years ago when they run this iconic television ad:

[youtube=http://www.youtube.com/watch?v=mU2rpcAABbA]

Please don’t misunderstand what I am saying. I believe technology is here to stay, and we all better learn how to appropriately use it to keep our donors and volunteers informed and engaged.

I suspect that technology will also continue to creep into our lives and become a stronger fundraising solicitation tool over the next decade. I also suspect that more and more board and committee meetings will happen over Skype and other online video platforms.

Before you totally surrender your non-profit and its relationships to the “Technology Gods,” I encourage you to take the following advice from our friends at United Airlines and Skype:

Scale back your email and non-personal technology efforts with volunteers and donors.
Don’t make-up reasons for volunteers to attend a committee meeting or board meeting. Make sure that the agenda contains important stuff.
Don’t make-up reasons to sit down with a donor. Make sure every touch is engaging, enlightening, fulfilling, and fun for them. It is more about them and less about you. Right? Connecting people with your mission in an emotional way is a recipe for success! And technology is anti-emotional.
Visit people in-person, but do so in a way that feels important and not a waste of time.
Try your hand at online video conferencing. Of all the technology available to you, this one somewhat allows some sense of personal interaction. Start small with an individual or committee first.

I think we can embrace technology in a way that makes sense and is not de-humanizing. It will take a conscious effort on your part. Are you up to the challenge? Or are you just going to continue ‘forwarding’ that email thread with an attachment and clicking ‘reply all”? Please scroll down and share your thoughts about either commercial? Did either have an impact on your non-profit point of view? I would love to hear your thoughts and what you plan on doing about it.

Here’s to your health!

Stop thinking. Stop planning. Start doing!

July 19, 2012 erik Fundraising, leadership

Tuesday’s post “Does your non-profit organization make a difference? Americans don’t think so!” introduced one of the main points in Dan Pallotta’s book Uncharitable, which is that non-profit organizations are under-resourced thus have a difficult time driving results and change. Pallotta argues that the reasons for too few resources are cultural, attitudinal and legal. Yesterday’s post explored what this author believes is at the heart of the non-profit sector’s dilemma. Today, we’re talking about what to do about all of this.

I must admit that Uncharitable was a page turner for me. The more I read, the more I found myself thinking: ” Hmmm . . . I wonder how he suggests we overcome that challenge.” So, words cannot express my disappointment when I got to the chapter where solutions seemingly would be forthcoming and read the following:

“Some readers might expect that in this final chapter I would suggest some dramatic statutory re-engineering — the end of the entire not-for-profit tax-exempt classification or something on that scale. But that is to put the cart before the horse. Even sweeping and fundamental statutory revisions are of secondary importance to changing the way we think about charity.”

After putting the book down and drowning my disappointment in another cup of coffee, I decided to embrace this anticlimactic end to Pallotta’s book. In the final analysis, he is right. Of all the obstacles in the non-profit sector’s way of embracing capitalism and a free-market approach to charity, almost all of them are attitudinal and behavioral barriers and very few of them are structural (e.g. laws and regulations).

At the beginning of every chapter, Pallotta starts it with an inspirational quotation designed to summarize the content of that chapter as well as inspire thought on the part of the reader. One of the quotations was from John Kenneth Galbraith:

“All successful revolutions are the kicking in of a rotten door.”

From this thought, I take my inspiration for today’s blog post. Since most of this rotten door can be kicked in by changing our beliefs and actions, I thought I would share a few of my thoughts on what typical non-profit organizations can start doing to revolutionize the non-profit sector and embrace capitalism and free market solutions to solve our resource challenges.

Engage donors in this discussion

Penelope Burk tells us to become more donor-centered in our approach to fundraising. Her point of view is centered around the donor, and I think it provides the starting point for this revolution.

There is nothing stopping you from forming an Oprah-inspired book club with your most influential donors. Buy a copy of Dan Pallotta’s book Uncharitable for each of them. Meet with them after reading each chapter. Facilitate a conversation about what it means and what they think your agency should do about it and what it means for their personal approach to charitable giving.

Budget for a profit

There is no law that says your non-profit organization can’t make more money than it spends each year. Stop building budgets that don’t include profit. My suggestion is that you set aside 10 percent of your annual revenue every year for the rest of your agency’s life.

What should this money be used for? Well, that is a discussion for your board of directors to have. So, facilitate it! Some possible ideas include: building a rainy day fund (because you know that storm clouds are always on the horizon), saving for future project, or investing in capacity building and organizational development projects. The sky is limit, and board members need to engage in this conversation to make it realistic and plausible.

Use the power of the markets

In addition to building a rainy day fund with your excess profits, every non-profit agency should have an endowment strategy. Investing money with the intent of creating another revenue stream stemming from investment income has been a non-profit best practice for a very long time. Use capitalism and the capital markets to generate money for your mission.

You don’t need millions of dollars to start an endowment. You can start small and make it a policy or practice to reinvest your earned income back into the endowment.

Yes, of course . . . create a stand along investment committee and set-up policies to guide your agency. This can all start happening tomorrow if you just put your mind to doing it. No one is stopping you.

Follow in Pallotta’s footsteps

Dan Pallotta founded Pallotta TeamWorks. His for-profit company created, planned and implemented the world-famous AIDS Rides and Breast Cancer 3-Day events. His company netted hundreds of millions of dollars for the expressed purpose of funding non-profit organizations.

Form a strategic alliance with other non-profits in your community and look at starting a for-profit company with the intent of running a few high-profile special events. This for-profit event planning and management company would not be constrained by rules and laws that strangle your current efforts.

If you are thinking that Pallotta TeamWorks ended up failing and this is a crazy idea, I encourage you to think again. Sure, Pallotta’s company failed, but it left behind an impressive blueprint. I am suggesting that you are smart enough to engage other non-profit professionals and volunteers in your community to review this case study and use those things that work as well as fix those things that didn’t work.

In the back of the book, there is an entire chapter titled “Case Study — Pallotta TeamWorks“. Is there any harm in pulling a group together, reading the case study and talking through questions associated with ‘What if”?

Pallotta has, of course, started up a new for-profit company focused around the points he makes in his book. Click here to learn more about the company he calls “Change Course”.

Many more ideas and your thoughts

Since most of Pallotta’s proposed revolution is rooted in attitudinal and behavioral change, the sky is the limit. He suggests that you start compensating your employees better and attracting more qualified applicants. He suggests investing in advertising. He proposes removing charity watchdog group logos from your letterhead and website.

Like Saturday Night Live’s character Stuart Smalley used to say: “I’m Good Enough, I’m Smart Enough, and Doggone It, People Like Me!” You and your volunteers and your fellow non-profit professionals and their volunteers are smart enough to come up with many more ideas on how the non-profit sector and your agencies can utilize the power of capitalism to monetize your mission.

So, stop thinking about it and start taking some baby steps towards doing it!

Please scroll down and share one idea or thought that you’ve had while reading the last few days worth of blog posts. Let’s engage in doing some brainstorming and start a revolution.

Here’s to your health!

Why is the non-profit sector hamstrung?

July 18, 2012 DonorDreams Fundraising

Yesterday’s post “Does your non-proft organization make a difference? Americans don’t think so!” introduced one of the main points in Dan Pallotta’s book Uncharitable, which is that non-profit organizations are under-resourced thus have a difficult time driving results and change. Pallotta argues that the reasons for too few resources are cultural, attitudinal and legal. Today, I’ll share with you what this author believes is at the heart of the non-profit sector’s dilemma.

Executive Compensation

If you are a capitalist, then you understand that people are motivated by their self-interests (unless they are Mother Theresa). Money considerations are at the heart of many of these decisions, which hamstrings the non-profit sector because it operates on a completely different wage standard.

For-profit corporations are allowed to pay handsome sums of money for performance, but non-profit employees are expected to work for sacrificial wages. When a non-profit organization is seen by its donors and supporters as paying its executive director too much money, there is almost always a backlash because of this cultural belief that people should not benefit from their “good works”.

This is, of course, hypocrisy and Pallotta does a nice job of calling it out by pointing at the Campbell Soup Company. This food company profits from the sale of its product to soup kitchens and homeless shelters, but those same non-profit organizations cannot pay a competitive wage to its employes. Yes, hypocrisy!

The end result is simple, the for-profit sector cleans the non-profit sector’s clock when it comes to attracting the best and brightest talent and labor. These people go on to amazing jobs in banking, investments, sales, and business. They don’t put their talents to work trying to solve homelessness, cancer or the academic achievement gap.

Marketing & Advertising

For-profit companies invest heavily in advertising. Why? Because it works! It creates demand for products where there was once no demand. In fact, most for-profit corporations will continue to buy advertising until the incremental benefit is zero.

Non-profit organizations rarely buy advertising to build their brand and create demand for donors to invest in their case for support. Typically, when you see non-profit advertising, it is a public service announcement which means it was donated by the cable company or newspaper. It also usually means that you’re up way too late at night because many of those freebie ads are buried during times of low viewership.

Yes, there are exceptions to this rule. I assume that organizations like St. Jude Children’s Research Hospital and the American Society for the Prevention of Cruelty to Animals (ASPCA) pay for some of their amazing advertising. However, most organizations don’t and won’t because donors see it as a waste of their dollars. They generally won’t support it because they want to see their contributions go directly into mission-related activities rather than capital acquisition.

Severe risk aversion

For-profit companies can and do take risks. Sometimes, they take amazingly crazy risks and come close to taking down the entire global economy. Non-profits on the other hand rarely, if ever, take risks.

Economists tell us that “risk” is a necessary ingredient to generating profits and capital, which means it will always be difficult for non-profits to generate the necessary money to fund their mission.

For example, many non-profit organizations would shy away from starting a new special event fundraiser if they were told that the ROI in the first few years will be under 50 percent. Many for-profit corporations would jump at such an opportunity, but charity watchdog groups and donors frown upon this practice and call it wasteful.

Now versus later

Non-profit organizations spend much of their money in the same year they receive it. It is very much a “hand-to-mouth” approach. Why? Donors don’t want to see their contribution squirreled away for a rainy day or used to leverage future capital. Donors want to see their donations put to immediate use by feeding someone who is hungry now or helping a child with their homework today.

Sure, there are agencies who build endowments and have healthy reserve funds, but this is the exception and not the rule.

Return on investment

When you give your money to the bank or buy stock from a company, you expect a monetary return in the form of interest or hopefully a capital gain. However, no such return exists when you give money to a non-profit organization. In addition to laws forbidding key stakeholders from profiting, the idea of making money on a charity is frowned upon by out society.

For-profit companies have the stock market where they can access capital. Non-profits have no such mechanism.

According to Dan Pallotta, these cultural and structural obstacles are what plague the non-profit sector and contribute to its ineffectiveness. I was only able to scratch the surface of his arguments in this limited space, which is why I encourage you to buy his book. While I don’t necessarily agree with all of Dan’s arguments, I do appreciate that he challenges my belief system and causes me to think a little deeper on these issues.

Tomorrow, I will review a few of the ideas that Dan puts out there as solutions.

So, what do you think about the foundational arguments that I outlined today from Dan’s book? Agree? Disagree? Are you angered? Whatever you are thinking or feeling, please scroll down and share with the rest of us by using the comment box below.

Here’s to you health!

Does your non-proft organization make a difference? Americans don’t think so!

July 17, 2012 DonorDreams Fundraising

While driving around doing some errands yesterday, I was listening to sports talk radio WSCR 670 AM in Chicago. One of the radio hosts was talking about how teachers make a difference in people’s lives. He knew this to be true because his mother is a teacher and every year countless high school and college kids return home, visit their favorite teachers, and tell them so.

The radio host went on to share that he used to have doubts about the impact his work has other people’s lives; however, his opinion recently changed after one of the station’s listeners emailed him. The listener was diagnosed with cancer and needed to complete a rigorous chemotherapy regiment to find his way back to health. While that treatment path is a tough road to hoe, the listener scheduled his treatments during the this radio host’s show and credits him with getting him though some very tough times.

It dawned on me that many of us strive to make a difference in someone’s life or the world around us. In fact, I think it is at the core of the human condition and the non-profit sector, which got me thinking . . .

Does your non-profit organization make a difference?

I am currently reading Dan Pallotta’s book — “Uncharitable” — and it has been challenging my non-profit belief systems. In a nutshell, he argues that the non-profit sector is extremely under-resourced and constrained by laws and cultural beliefs that don’t apply to for-profit corporations. As a result, non-profits are seen as ineffective and are in many instances actually ineffective.

Does that sound overly harsh and upsetting? In the opening pages of his book, he eggs his critics on and encourages all of us to take a look around the non-profit sector and our community and ask questions such as:

Why do things seem to stay pretty much the same?
Why have our cancer charities not found a cure for cancer?
Why have our homeless shelters not solved the problem of homelessness?
Why do children still go hunger on the streets of America?

While Pallotta ends up blaming the system (not the people in the system) and points to the lack of resources, apparently many Americans aren’t as charitable and Pallotta points that out by sharing the following information from various opinion surveys:

“A study released in 2008 by Ellison Research showed that ‘most Americans believe non-profit organizations and charities are not financially efficient enough in their work.’ A 2004 Brookings Institution study found that ‘nearly one out of three respondents expressed little or no confidence in charitable groups, and only 11% said they believe that charities do a very good job of spending their money wisely.’ Seventy percent of people surveyed in a 2008 NYU study said that charities ‘waste a great deal’ or a ‘fair amount’ of money.”

As the radio show host said yesterday, all of us wake up every morning and strive to make a difference or at least make our lives matter. Pallotta posed some tough questions, but they aren’t out-of-bounds. The surveys cited by Pallotta paint a stark picture of what many Americans think of the non-profit sector, which includes your non-profit agency. In this context, it should come as no surprise that the average annual donor turnover rate in America hovers around 50%.

So, how do you know that you and your organization is making a difference? How are you sharing that with your donors and your community? Are you seeing any difference in your donor loyalty rates? Please use the comment section to tell us what you’re measuring to prove everyone wrong. Or are you having a hard time getting out of bed in the morning because you aren’t finding that sense of satisfaction and fulfullment from your non-profit job?

Over the next few days, I will share a few more observations from Dan Pallotta’s book “Uncharitable;” however, I encourage everyone to buy a copy of the book. It will make you mad, but I think it is healthy to have your beliefs challenged every now and again.

Here’s to your health!

Saying ‘NO’ to donors and minimizing how often it is done

July 6, 2012 DonorDreams Fundraising, organizational development

Welcome to O.D. Fridays at DonorDreams blog. Every Friday for the foreseeable future we will be looking more closely at a recent post from John Greco’s blog called “johnponders ~ about life at work, mostly” and applying his organizational development messages to the non-profit community.

Today, we’re focusing on a post that John titled: “I Disagree. Now What?“. In that post, he describes “the sound of righteous indignation hitting managerial prerogative,” and the lessons learned about when it is right to disobey and when it is not.

John’s post could send me off in a number of different HR directions this morning, but I am in a resource development mood and want to talk about donors — those investors in your mission.

When I read “I Disagree. Now What?” it got me thinking about all of those times I’ve seen donors throw their dollars around. They want you to develop and launch a new program. They only want their contribution to support certain programs or certain activities.

Thinking back upon those situations reminds me a lot of the boss character in John’s post. This got me wondering: “Is there ever a situation when a non-profit organization can say ‘NO’ to a donor and use their contribution in a manner that is inconsistent with the donor’s wishes?”

To be honest, I can’t think of any situations where you can take someone’s money and disregard their expressed intent. However, that doesn’t mean you shouldn’t say ‘NO’ . . . you just need to do it by declining to accept the contribution.

While it is hard to say ‘NO’ to money, especially in today’s philanthropic environment, non-profit organizations need to know when it must happen. If you’re having a hard time thinking of when this might be appropriate, the following are a few examples of when I might do so:

When Bernie Madoff calls and wants to write me a big check.
When a company whose brand is inconsistent with your non-profit image wants to contribute (e.g. Hooters, local bar, strip clubs, the tobacco industry, etc)
When a donor’s wishes are not compatible with your mission.
When a donor’s wishes are not compatible with your strategic direction.

In my experience, the first two examples are easily identifiable and actionable for most non-profit organizations. It is the last two examples that are very challenging.

For example, it might make sense for you to accept money to develop a new intergenerational program that brings kids and senior citizens together, but it might not be a strategic priority for your organization. As a matter of fact, it might distract from other more important and pressing strategic initiatives.

Declining a donor’s contribution is really hard and should be done rarely, which is why having the right mindset, approach and tools in your fundraising toolbox is important. John does a really nice job addressing this issue in his post:

When John says, “Pick your battles” . . . I read this as: “Don’t over-solicit. Be very thoughtful about when and what you ask your donors to support.”
When John says, “Some things I can’t control, but I can influence” . . . I read this as: “Cultivate new prospects and steward existing donors significantly more than you solicit them, and only solicit when it feel right.”
When John says, “Craft my argument, with data and facts” . . . I read this as: “Develop an amazing case for support and train fundraising volunteers to use it as the foundation of their solicitation.”
When John says, “Make my case in a compelling fashion” . . . I read this as: “Convince donors to support your mission and the agency’s strategic direction. Demonstrate how doing so aligns with their philanthropic wishes and dreams.”
When John says, “Take my hits; the pain is temporary” . . . I read this as: “Once in a blue moon, you will have to politely turn down a donation. It will not be the end of the world.”
When John says, “Seek to understand even while I strive to be understood” . . . I read this as: “The listening-to-speaking ratio involved in donor interactions needs to significantly favor listening. Doing so will improve the odds of understanding, which in and of itself should minimize the number of times you have to say ‘NO’ to a donor because you are able to align the solicitation with their known interests.”

Non-profit organizations should strive to never be in the position of having to say ‘NO’ to a donor, but they need to be prepared to do so.

Have you ever been in a position of having to say ‘NO’ to a donor? If so, how did you go about doing it without damaging the relationship? What mindsets, approaches and tools are in your fundraising toolbox to ensure that you are rarely in this position? Please use the comment box below to share your answers.

If you are responsible for HR at your organization or are currently at odds with your boss, I encourage you to click over to John’s post titled “I Disagree. Now What?” and read it from that perspective, too.

Here’s to your health!

Charitable giving was anemic in 2011

July 3, 2012 DonorDreams Fundraising, resource development

It is that time of the year when Giving USA releases its findings on how well (or not so well) the charitable giving sector did in the previous year. After adjusting for inflation, the experts tell us that charitable giving rose less than one percent in 2011, and individual giving did about the same.

You can secure a free copy of executive summary of Giving USA’s report from their online store or by clicking here.

A few observations

Nothing has changed. The charitable giving sector has been in a holding pattern for a number of years since the economic crash of 2008. It mirrors the slow sluggish economic recovery numbers. Is anyone surprised? I know that I am not.
It could be worse. Charitable giving dropped by dropped by double digits in 2008 and 2009. Complaining about a one percent increase feels wrong when juxtaposed against those historic numbers.
Good is still good. Look around your community and you will see three different kinds of non-profit agencies . . . ones that are struggling, ones that are holding their own, and ones that are have found a way to do well.

The bottom line is very simple for me. Donors have less money (or feel like they have less money) and started prioritizing their charitable giving. Figuring out their priorities and how to remain a priority is as simple as asking them.

Are you a non-profit organization that has either weathered the storm or done fairly well since the 2008-09 economic crash? If so, please scroll down and share why you think that is in the comment section.

Here’s to your health!