Giving USA report is out. Are you benchmarking yet?

waybackmachineI love this time of the year because Giving USA allows fundraising professionals to jump in Mr. Peabody and Sherman’s “Way Back Machine” (aka WABAC machine) and look at what happened in philanthropy in the previous year. This activity has become an event of sorts. Reports are released. There are webinars. The media covers it, and then there is lots of chatter throughout the sector.

For those of you who are hoping for a quick down-n-dirty synopsis, here you go:

  • Overall, charitable giving is up, but it is small and reflects our slow economic recovery (1.5% increase when adjusted for inflation.)
  • An increase in corporate giving was robust (but it still only accounts for less than 6% of total private sector fundraising.)
  • Individual giving is still the biggest piece of the pie (approximately three-fourths of philanthropy . . . DUH!)
  • The sector is still nowhere near approaching its pre-recession peak. (at this pace, it may take another five to eight years to get back to 2007 charitable giving levels . . . welcome to the “New Normal” for non-profit organizations.)

groundhog day clockIn a nutshell, slow-and-steady progress which is a re-run from the last many years of Giving USA reports. Is it just me or is this beginning to feel a little bit like that scene in the movie Groundhog Day?

Maybe you will feel better if you click the Giving USA link I provided in the first paragraph, purchase the report, and try smashing it like Bill Murray did to that alarm clock in the movie.  LOL (Well, it is worth a try because nothing else seems to be working. Right?)

For me, this time of the year isn’t so much about the excitement and the numbers. Instead, it is a gentle reminder that benchmarking opportunities exist all around us, and non-profits should invest more of their time in benchmarking if they want to improve their performance.

I was reminded of this while on the Giving USA website where I ran into the following testimonial from Heidi Jark, who is the Managing Director & Vice President at The Foundation Office at Fifth Third Bank:

I look forward to the Giving USA report every year to better help me work with not for profit organizations and our private foundation clients.  The data helps me to better understand the philanthropic world around me and, many times, confirms what I see on a day to day basis.  We can better serve our clients when we have research data. It helps us to better explain and structure gifts to meet both the needs of our individual clients and the missions they wish to advance.”

I think Heidi and I are kindred spirits. While she didn’t specifically talk about benchmarking, she is in the ballpark.

Some of you might still be a little hazy on the concept of benchmarking so here is a quick thumbnail sketch:

  • It is a process where you: 1) measure your performance, 2) measure like-minded organizations’ performance, and 3) compare and contrast to draw conclusions on how well you’re doing.
  • It is a process by which you will manage and improve your performance.
  • It goes beyond measurement, it also involves looking for and using best practices that make sense for an organization of your size.

benchmarking2Here are some resources for those of you who are intrigued and want to learn more:

As I thumb through the Giving USA numbers and reports, I think I’d be asking myself some of the following questions if I were still on the front line running an agency:

  • Did our private sector fundraising increase last year? Did it mirror the national numbers? Better? Worse?
  • How well did other local non-profit organizations who are approximately our size do last year?
  • What did those organizations that did better than our agency and better than the national benchmarks do differently?
  • What changes (if any) should we look at making to next year’s written resource development plan to improve our fundraising performance?

Does your organization do any benchmarking? Do you benchmark your fundraising efforts? Programming? Marketing? Please share your thoughts and practices in the comment box below. We can all learn from each other.

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

How does your community compare to others in fundraising?

elgin giving1My side of town is doing better than people expect! Hip Hip Hooray!”  In my opinion, this is cause for celebration because I live on the east side of Elgin, Illinois, which can come with a stigma or two according to some people (mostly those who live west of the Fox River). This morning I discovered an amazing online benchmarking tool from our friends at The Chronicle of Philanthropy that allows me to explore philanthropy in my state, city, and neighborhood.

So, all of my celebration this morning stems from the fact that I discovered my zip code (60120) is doing better than average in total charitable contributions compared all zip codes in the State of Illinois. We rank 3,976 out of 28,725. Woo Hoo!  Of course, we’re still behind our west side neighbors who rank 2,347, but frankly I don’t care. I am thrilled to be doing this well!

I am also intrigued by all of the data that The Chronicle of Philanthropy is able to put at my fingertips with regards to philanthropy and demographics data.  Here is some of what I learned about my side of town this morning:

  • Last year we contributed a total of $10.2 million.
  • The median level of contributions was $1,666 per household.
  • Median household discretionary income is $41,310.
  • Households in my zip code donate 4% of their income.
  • 55.6% of households identify as Hispanic.
  • 33.1% of people are under the age of 20 (which compares to 27% for the average zip code in the country).
  • 32.8% of people don’t possess a high school diploma (which compares to 14.4% for the average zip code in the country).

I could go on and on with amazing little factoids about my little corner of the world, but I will stop here because I don’t want to take some of the fun out of you exploring this online tool.

elgin giving2Now some of you might be scratching your head and asking the age-old question “Who cares?”

Simply put, this online tool puts a powerful benchmarking tool in the hands of every non-profit organization in America. Powerful!!!

Again, some of you still might be scratching your head and asking the age-old question “Who cares?”

The following are just a few reasons why every non-profit organization regardless of their size or skill level should be looking at benchmarking exercises for their fundraising program:

  • Benchmarking allows you to see where you stand in comparison to others.
  • When your organization is faced with making a difficult choice between a number of different options, then benchmarking can help you make tough decisions.
  • Benchmarking allows you to clearly see what you’re doing well and where you might need to improve.

Let’s go back to my hometown of Elgin, Illinois for a moment . . .

Elgin, Illinois is made up of four zip codes (e.g. 60120, 60121, 60123, and 60124), and the total charitable giving reported on tax returns filed from these four zip codes adds up to $39,582,326. If I operated a non-profit organization with $1 million per year in private sector fundraising revenue, then I would know that I am capturing 2.53% of the reported philanthropy in the area. With this knowledge, I can do a better job of measuring success and progress.

There are countless other ways to slice and dice this benchmarking data, and there are many ways it can be used. We’ve already made the case for how this information can be used to evaluate and assess your fundraising program. It could also be used to make decisions on who and where to target your fundraising efforts.

Does your non-profit organization do any benchmarking? If so, please share your success stories in the comment box below. If not, please weigh-in on some of the obstacles you encounter. If you took a moment to click around The Chronicle of Philanthropy’s online tool, please also share your comments or thoughts. We can all learn from each other.

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

Benchmarking: The non-profit sector requests your assistance!

Last week a friend and non-profit consulting colleague of mine, Kirsten Bullock, sent an email asking me to encourage DonorDreams blog readers to participate in a study that “. . . is investigating charitable contributions, fundraising methods, donor retention, and how tactics have changed in these challenging financial times.”

This study is organized and run by Nonprofit Research Collaborative. If you are someone who is suspicious of things like this, then I encourage you to click the link that I just provided and check this organization out for yourself. However, if you don’t have a lot of time to scratch around the internet, take heart in the fact that this organization and the study are supported by:

  • Association of Fundraising Professionals
  • Giving USA
  • blackbaud
  • National Center for Charitable Statistics
  • Campbell Rinker

If you have 10 minutes, then please click this link and complete the questionnaire.

Still asking yourself . . . WHY?

If you are still reading, then I assume that you’re mulling things over and probably wondering why you should click that link.  So, let me try to make the case in one simple word:

Benchmarking

According to our friends at Wikipedia, “benchmarking is the process of comparing one’s business processes and performance metrics to industry bests or best practices from other industries.”

Let’s be honest for a moment. Few people who work in the non-profit sector have time to collect data and crunch industry numbers. We’re under-resourced, and we’re usually thankful when our workday comes in under 12 hours.

So, when an organization like Nonprofit Research Collaborative takes up the cause and only asks for 10 minutes of your time, all of us should really support the cause.

Still not convinced? OK, let me try this another way . . .

  • At the end of the year, some of you will report to your board of directors that your donor loyalty rate is 64.8% . . . and they are going to ask if that is good or bad.
  • At the end of your annual campaign, some of you will report to your board of directors that of the 100 prospects and donors who received face-to-face solicitation visits by staff and volunteers 78 of them decided to make a pledge or contribute . . . and they are going to ask if that is good or bad.
  • At the end of the year, some of you will report to your board that your private sector fundraising efforts brought in 1% fewer dollars this year than last year . . . and they are going to ask if that is good or bad.

In order to answer your board’s questions, you need to provide context and that is what benchmarking is all about.

Every organization should commit itself to benchmarking activities. You should do it with your program outcomes. You should do it with your resource development program. You should do it with board development and so many other things that you do.

Not doing so essentially means that you’re collecting data for the sake of collecting data.

I assume that you don’t have the time to independently do benchmarking of the non-profit sector for comparison purposes. So, come on . . . what do you say? How about taking 10 minutes out of your crazy busy schedule, click this link, and complete this important survey.

Pretty please?  🙂

Has your organization ever completed a benchmarking project with another non-profit organization? Or how about with another company from a different sector? If so, please tell us about it in the comment box below. We’d love to know what motivated you and what you found out.

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

Taking a page out of GE’s playbook

Have you ever been watching television, trying to zone out during the commercials, when all of a sudden “WHAM!” a powerful advertisement grabs your attention and almost moves you to tears? Come on! I know it has happened to most of you, and I am no exception.

I was most recently the victim of such an occurance last night. I was in my hotel bed watching television and trying to avoid doing work. Out of nowhere came this General Electric (GE) commercial . . . the ad was about cancer survivors who were given the opportunity to meet the GE employees who built the medical machinery that helped save their lives.

If you haven’t seen it, grab a tissue and click here to view the YouTube video of it.

It wasn’t more than 5-seconds after this commercial ended that I had these two thoughts:

  1. This GE commercial is the same thing as a non-profit organization’s “case for support” for their annual campaign pledge drive. The only difference was that it was in video format instead of a written case statement.
  2. Putting cancer survivors in the same room as GE employees was so powerful. It was almost like GE was stewarding their employees by reminding them of how powerful their gift of labor really is to everyday people who are trying to work through personal crisis.

I think the thing that got me most was when the employee at the end of the commercial says: “[It was] one of the most heartwarming events I’ve ever experienced”.

Earlier this week my Monday blog post titled “What gets measured gets done” spoke to the power of benchmarking. Tuesday’s blog post titled “Taking a page out of NPR’s playbook” highlighted National Public Radio (NPR) as a potential benchmarking opportunity for agencies looking for a successful road map to reduce dependency on government funding.

Today’s post continues on this week’s theme of benchmarking; however, the twist is that non-profits can also learn from and benchmark their for-profit cousins. For example, this GE commercial has me wondering:

  • Does putting employees together with the people who benefit from their efforts improve employee retention? If so, how significant is the retention? Can the same effect be produced if non-profit donors are given more regular access to the people whose lives they changed (e.g. your customers/clients)?
  • Does creating this commercial and storyline help GE’s sales force more effectively articulate the case to purchase this particular product? If so, how significant is the improvement in sales? Can the same effect be produced in board members and volunteer solicitors who are reluctant to solicit charitable contributions to the annual campaign?

I’ve been hearing way too often from non-profit professionals that donors don’t have time for personal stewardship visits and touches. I’ve also recently had the opportunity to spend lots of time with a number of donors, and they don’t seem to be saying the same thing. What I am hearing donors say is they are sick and tired of one solicitation after another after another. They look forward to events where they can see, hear, and touch the charity’s mission.

I am going to hold onto the visual imagery of how those cancer survivors and GE employees looked when they met for the first time. Am I wrong or was it powerful? They were moved to tears, right? Heck, I was moved to tears. My “fundraiser’s gut feeling” is telling me that there are many valuable take-aways for non-profit organizations from that commercial. I suspect successful non-profits are tapping into that same raw power and emotion when it comes to donors and those folks you serve everyday.

Yes, we can learn a lot from each other as non-profit professionals, but I suspect we are limiting ourself. If we expand our world, we can learn a lot from everywhere we look everyday. Don’t just benchmark organizations that are just like you . . . expand your horizons and look at for-profits that you can benchmark, too.

While benchmarking multinational corporations might not be realistic for many of you, I bet there are a number of small businesses in most of our backyards that will work equally well.

What did you take away from the GE commercial as it relates to your non-profit work? How do you connect your donors to mission in similarly powerful ways that don’t involve more solicitation (e.g. special events don’t count when answering this question)? How does your organization track the effectiveness of those personal and powerful stewardship touches? Have you ever done any benchmarking? Who? And what was the result of your experience?

Please use the comment box below to weigh-in with an answer to any of these questions. Remember, we can all learn from each other.

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

What gets measured gets done!

The turkey was no sooner packed away in its Tupperware containers and Americans were running out their front doors to cash-in on Black Friday sales and promotions. In fact, according to early projections, this Black Friday was a record-setting day with more cash finding its way into cash registers and more feet stampeding through the malls than ever before “on the same day”.

When I read this, the phrase that jumped out at me was: “over the same day last year”. It caught my attention because it was used in every article I read about this year’s Black Friday phenomenon. There was something that bothered me greatly about this phrase, and it wasn’t until my long drive home on Saturday and Sunday from my Thanksgiving travels that it finally dawned on me.

This phrase is powerful because it represents an industry’s commitment to measurement and benchmarking, and it isn’t a phrase that you hear many non-profit organizations using. Sure . . . you hear non-profit folks say things like “the campaign will exceed last year’s amount raised” or “event revenue is down compared to last year”. However, you almost never hear non-profit folks say things like:

Our agency’s philanthropic contributions are 6.1-percent higher than they were for the same period last year, which is perfectly in line with industry trends for non-profit’s our size.

While I am not sure why we don’t hear this more from our charity’s of choice, I am certain it isn’t because of a lack of information. I can confidently say this because at the bottom of my new website’s homepage I link to Blackbaud’s “Index of Charitable Giving”. This is one of the best things Blackbaud has ever done for the non-profit sector. The service is a broad-based fundraising index that reports total giving trends of 1,319 nonprofit organizations representing $2.3 billion in yearly giving on a monthly basis.

Here are just a few ideas that you might consider using this number to make your agency stronger:

  • Measure your fundraising performance against similar sized agencies. Share this comparative information with your resource development committee and use it to spark engaging conversations around “WHY”. You may be surprised where you end up.
  • Measure your fundraising performance against the same time period last year. Use this baseline data during your agency’s annual resource development planning efforts. It might spark engaging conversations and help make good adjustments to next year’s fundraising plan.
  • Use the benchmarking and baseline data during year-end reviews with agency staff who have resource development responsibilities (including non-profit CEOs). I guarantee board volunteers asking why the agency failed to keep pace with or greatly exceeded the industry’s pace during a year-end evaluation will spark engaging conversations.
  • Publish in your agency’s newsletters, website and impact reports how well your fundraising efforts did compared to other similar sized organizations compared to the same time last year. I guarantee that being transparent with this information will spark engaging conversations.

I can almost hear some folks saying that it doesn’t make sense to compare their agency with a national index because their community is so “unique” (kind of like a unicorn). To those of you whose minds are already there, I have two things to say:

  1. Poppycock!
  2. If you must have it your way, there is nothing stopping you from pulling a few non-profits in your “unique community” together and sharing data every quarter in the spirit of benchmarking and measurement.

It has been said by many different people over the centuries: “What gets measured, gets done!”

So, let me end by asking you: What are you measuring at your non-profit organization? Please use the comment box below to share what you’re measuring and how you are using that information. We can all learn from each other.

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