Tag: Obama

Do your donors think the non-profit sky is falling?

Fundraising

chicken little2When I hear one donor say something once, I chalk it up to something interesting. When I hear two donors say the same thing, I usually think it is an interesting occurence. However, when three or more donors express the same sentiment, I sit up . . .  take notice . . . and treat it like a potential trend.

Since the Presidential election was decided more than a month ago, I’ve more than three donors say alarming things about the state of philanthropy in this country. Here is some of what I am hearing:

  • “Congress and the President won’t agree on the fiscal cliff negotiations. We’re going off the fiscal cliff, and charitable contributions will go down.”
  • “Obama wants to get rid of people’s charitable tax deductions, and this will result in a reduction in donations.”
  • “The Bush tax cuts on the wealthiest Americans will be allowed to expire, which means wealthy Americans will stop giving to charities.”
  • “Congress and the President will go off of the fiscal cliff. Everyone’s taxes will go up. Another recession will surely result, and charitable giving will dip as a result.”

I am not exaggerating. There are a number of donors and non-profit board members with whom I have spoken in the last month that think the sky is falling.

At first, I thought this talk was the result of Republican donors being unhappy about a Obama re-election. However, I’m beginning to re-think this original opinion. I honestly think people are getting scared.

There are multiple reasons for this hysteria and probably include a 24-hour media cycle, political rhetoric, etc. Regardless, the ‘WHY’ doesn’t matter . . . non-profit professionals need to focus on ‘WHAT’ they should be doing and saying.

chicken little1While fear is irrational, it definitely impacts human behavior. I believe most students learn this in Psychology 101. So, if people “think” the sky is falling, it is falling regardless of the facts.

You can passively sit by and let your donors and board members whip themselves into a frenzy, or you can be a responsible non-profit professional and do something about it.

I have always believed that an “ounce of prevention is worth a pound of cure”. In this instance, I believe that good non-profit professionals will inject a calm and reassuring voice into any local discussion being had with board members or donors.

Of course, being calm and reassuring is easier said than done, and it requires a firm grasp of facts. Unfortunately, the facts shift and change and are subject to interpretation. However, I was very encouraged when I saw that BoardSource is hosting a webinar featuring Tim Delaney, CEO of the National Council of Nonprofits. He will speak to the issue of fiscal cliff, capping deductions, etc.

THIS WEBINAR IS SCHEDULED FOR TODAY (WEDNESDAY, DECEMBER 12, 2012) AT 2:30 PM CST, BUT IT LOOKS LIKE YOU CAN STILL REGISTER BY CLICKING HERE AND FOLLOWING THIS LINK.

Once you get some of the facts about the issues, you should feel more comfortable participating in these type of conversations when they come up with donors and volunteers.

chicken little3Here are a few quick tips you may want to remember when jumping into these discussions:

  • Don’t express partisan opinions. Stick with the facts about what is being discussed. I encourage steering clear of expressing an opinion on what you think the impact will be. Put the crystal ball away!
  • Be reassuring and express confidence that these things always work themselves out in the end. History proves this to be true time-and-time-again.
  • Remind donors that tax considerations are rarely a motivating factor in most people’s charitable decisions. Donors give to good causes with good missions. Tax considerations (if they are even in the equation) are frequently a final factor and contribute to size of gift and rarely on whether or not to give.
  • No one can predict the future, and getting all worked up about something we can’t control is an exercise in futility. All we can control is our own actions .(e.g. who do we ask now, for how much as we asking, when are we asking, etc). Let’s remain focused so we don’t accidentally get swept up in something that doesn’t yet exist.

Are you hearing some of your donors and board members wring their hands over this policy debate in Washington D.C.? If so, what are you doing to make sure your year-end giving isn’t negatively impacts? Are you doing anything at all? Are you remaining silent?

If you end up attending the BoardSource webinar today, please circle back and share a few of the details in the comment box below. If you can’t attend, please weigh-in with your thoughts on the the questions I just posed or any of the ideas I just expressed.

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

More non-profit lessons from 2012 election

Fundraising

I plead guilty when people charge me with being a political junkie, which is why I can’t get my focus away from various election tidbits this week. On Election Day 2012, I blogged about my polling place and a few “ah-ha moments” I had while standing in line waiting to vote. The day after the election, I couldn’t help but indulge in the post-game analysis including fascinating data about the political fundraising landscape. There are definitely some lessons to be learned from those numbers.

Here are a few interesting articles and websites that caught my attention:

Here are just a few interesting observations:

  • OMG, did you see how much money was raised on both sides of the political divide? I really think that non-profits need to stop saying that no one is donating because of the economy. Wow!
  • Was anyone else surprised by where the political contributions came from when broken out state-by-state? I was shocked to learn that my home state of Illinois appears to be second only to California.
  • There was an interesting contrast between the two candidates around the issue of “source of funds” with Obama’s largest source of funding coming from individuals donating $200 or less compared to Romney’s strength emanating from people donating $2,000 or more.

What does this all mean for you and non-profit fundraising? Here are just a few casual observations:

Individual giving is the key to raising serious money!

Even with the Supreme Court’s Citizens United ruling, both campaigns kept their focus on raising money from individuals because just like with charitable giving individual giving dwarfs everything else. By some accounts, companies only accounted for 11% of the money raised by Super Pacs in this political cycle.

Huh?

This isn’t much more significant than the 5% charitable giving number that companies contribute to non-profits every year.

Am I missing something?

Renewed debate over big guys vs little guys?

A few weeks ago a board member said to me, “Erik, all we need to do is find one Warren Buffet or Bill Gates to serve on the board and our financial issues will be a thing of the past.”

As I look at Romney’s fundraising numbers, I think: “Maybe that board member wasn’t totally off-base.” When I look at Obama’ fundraising numbers, I think: “Wow, a small gift strategy might just work.”

When I get beyond the numbers and start reading editorials and letters to the editor, I can’t tell you how many people openly questioned how much influence big donors might wield over their candidate if they make it to the White House.  All of that coverage got me thinking about the influence that big donors have over the non-profits they support.

I think this is a great boardroom discussion that should get translated into your agency’s annual resource development plan.

Staffing matters!

There was a lot of talk about “The Ground Game” on election night, and it showed up in the spending numbers. Did you notice the payroll number for each campaign? Here is the score: Obama $91.7 million to Romney $44.2 million. This wasn’t administrative dollars because that was broken out separately. This was money spent on something referred to “boots on the ground“.

Non-profit boards talk until they are blue in the face about the merits of paying for more fundraising staff or ponying up more salary to attract better staff.

Staffing and organizing field work made a difference in this election. Attracting top talent is a constant concern at for-profit corporations, and non-profit boards would be well-served to take a second look at these ideas.

What lessons learned did you walk away from Election 2012 for your non-profit agency? Did you have any “ah-ha moments” while watching news coverage or reading a news story? Please use the comment box below to share your thoughts.

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 non-profits can learn from a homeless man in Indianapolis

Donor-centered fundraising, Fundraising

A few weeks ago I attended Boys & Girls Clubs of America’s Midwest Leadership Conference in Indianapolis as an exhibitor. I love conferences because they are great opportunities to learn and meet new people.

However, this time I walked away a little surprised at myself because the biggest takeaway for me didn’t come from any of the sessions or people I met, it was an ah-ha moment generated by a homeless person panhandling on the streets of downtown Indianapolis.

Meet Fred (or at least that was what I was told his name was).  Fred is homeless and needs money. His revenue generating strategy is to sit on the street and ask people to give him money.  From what I’ve seen, this is a fairly typical strategy employed by many homeless panhandlers.

However, Fred knows something that many non-profit organizations don’t understand and something that Seth Godin blogged about this morning:

The easiest way to get people to do what you want them to do… is to start with people who want what you want.

Please take a close look at the two pictures of Fred that I’ve included in this morning’s blog post.

Fred’s revenue strategy goes beyond the typical homeless person’s approach that I’ve seen, which includes tugging at my heart with a story about being stranded, cold, down on their luck, or hungry.

Fred figures that you already know the typical homeless person’s case for support, and he communicates that without having to say a word. However, he is trying to do something that makes him stand out from every other homeless person in downtown Indianapolis.

As you can see from these two pictures, he is flashing a simple message about the Presidential election to people who pass him on the street. If he sizes you up as a Republican, he flashes his anti-Obama sign. If he thinks you’re a Democrat, then he reaches for his anti-Romney sign.

Here are a few things that I think non-profit organizations can learn from Fred:

  • A picture is worth a thousand words. Your case for support can be effectively supplemented using a visual or picture.
  • Know your audience. Your case for support doesn’t change, but how you talk about it and present it can vary based upon your audience. Segmenting and targeting your audiences is critical to your fundraising success.
  • Grab their attention. Prospects and donors are bombarded every day (in fact every minute of every day) with information from other non-profits and for-profits. You need to figure out how to cut through that noise if you want consideration. (Note: I wouldn’t advise that you use Fred’s tactic, but whatever you decide to do, it should be equally effective)
  • Personalize your message. Fred’s approach of sizing people up by guessing their political affiliation base upon your appearance sends a powerful message of:   “Oh, he is talking to me“.   I’ve always believed that “general appeals, get generally ignored”.
  • A smile and good humor go far. OMG . . . everyone is so serious and uptight nowadays. Using humor (e.g. jokes) can be dangerous when talking about serious issues; however, smiling, good humor (e.g. mood, temper, state of feeling, etc), and having fun when cultivating, soliciting or stewarding prospects and donors will likely set you apart from others.

Again, Seth Godin summed it up best in his post this morning better and quicker than I can: “The easiest way to get people to do what you want them to do… is to start with people who want what you want.”

Not only did I want Fred to get some food in his belly and get off of the street, but I wanted to laugh along and join in the joke that: 1) my small contribution can sway his vote in November and 2) this down on his luck gentleman was mocking Obama and Romney for their pandering to voters and donors. LOL   (Maybe I’m over-thinking this, but I think I’m close)

How have you targeted your prospects and donors? How have you adjusted your messaging to different audiences without changing your case for support? What appropriate visuals have you used to convey and supplement your case for support? How do you prepare and support your volunteers to have fun, smile and break through the noise with their network of friends with your case?

Please use the comment section below to share your thoughts and experiences. Not only can we all learn from each other, but we can learn from some unexpected and surprising people.  Please take a minute or two out of your busy day and share with your fellow non-profit professionals and volunteers.

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

Election 2012 can be called “The Year of the Donor”

Fundraising

I really try not to talk about politics on this blog platform because: 1) it is about non-profits, fundraising, and donors and 2) readers come from a variety of political persuasions and I don’t want to offend anyone. However, sometimes I see trends that I feel are important to share because there is a teachable moment or lesson to learn. Today, I’m going to dissect the 2012 Presidential election with regards to fundraising and donors. I think there are many interesting things happening that should give the average non-profit professional an opportunity for reflection and thought.

Gingrich demonstrated the power of major gifts

During the Republican primary season, it was well reported by most media outlets that the Gingrich campaign was able to sustain itself for longer than anticipated because of one very large donor — Sheldon Adelson. Fredreka Schouten illustrated this point in USA Today’s blog “On Politics” when Mr. Adelson and his wife each donated $5 million in January 2012.

A good friend of mine who works with Boys & Girls Clubs says that every non-profit organization needs a major gifts strategy even if they’re a small organization and it is just for one donor. Gingrich’s campaign certainly places an exclamation point on this piece of advice.

If your organization doesn’t have a major gifts strategy, I think Gail Perry at Fired Up Fundraising does a nice job talking about this issue as well as the trends she sees associated with major gift fundraising in 2012.

Donors are powerful and getting more influential every day

Recently, a Romney spokesperson said something that angered conservatives. I won’t go into the details because they aren’t relevant to my point; however, click on this YouTube video of MSNBC re-broadcasting Ann Coulter’s comments from Fox News and watch the first 20 seconds or so of the clip:

[youtube=http://www.youtube.com/watch?v=T-JN5egDH-c&feature=related]

Did you catch that?

Ann didn’t ask people to call the Romney campaign to express their outrage. She didn’t suggest conservatives flex their muscles in the voting booth. Nope . . . she specifically asked that donors flex their muscles and “not give another dime unless . . .”

I’m not suggesting that non-profit agencies don’t understand how influential donors are; however, I do see a trend where donors are becoming more vocal when they see things that upset them.

For example, last year I blogged about a local donor in Elgin, Illinois who became very upset when his charity of choice started running deficits. He resigned from their board of directors. He pulled his financial support. He went to the newspaper, made a lot of noise, and suggested that other donors make noise and demand more accountability and change.

Is your non-profit prepared for a donor revolt?

Obama 2008 vs 2012

Team Obama certainly shouldn’t be crying poor because they have raised a lot of money; however, the following quotation caught my attention in an article by Julie Pace at boston.com:

In an email to supporters after the July numbers were announced, the Obama campaign said, ‘‘If we don’t step it up, we’re in trouble.’’

I’ve talked to a number of donors who wrote checks to the Obama campaign in 2008 and asked them to explain the perceived enthusiasm gap by some donors. I think it is fair to sum it up like this . . .

  • The first time a donor makes a contribution to your cause, they are investing in promises.
  • The second time a donor makes a contribution, they are investing in results.

According to many studies on the topic of donor loyalty, it is common for many donors not to renew their support. I’ve read studies that suggest the average turnover rate is in the neighborhood of 50 percent.

If this is the case for your agency, then I suggest you look at your program outcomes data and how you’re communicating that to your donors. You might also want to talk to those lapsed donors and ask them about their expectations after making their first contribution and what happened in the months leading up to the unsuccessful renewal solicitation.

You can bet that Team Obama has done this, which might be why we saw overt outreach efforts throughout the summer to specific special interest groups including women’s groups, Latino groups and LGBT groups.

Super PAC trend gives hope to United Way

Traditional political action committees (PAC) and the new Super PACs are playing a huge role in this year’s election. Paul Blumenthal wrote about it last week in his Huffington Post column.

I look at this trend and wonder why some individual donors aren’t  just giving their money directly to the campaigns. Why give it to a “middle man”?

While I am sure there is a number of reasons to explain this trend, I wonder if one of those reasons is that bundling money together allows donors to speak with a louder voice and bigger stick.

Non-profit professionals should pay attention to this phenomenon because it might explain the increasing popularity of “giving circles“. It might also become what re-energizes donor enthusiasm for supporting their local United Way.

Are you paying attention to the 2012 election cycle from a fundraising perspective? If so, what are you seeing that might be relevant for non-profit and fundraising professionals? Do you sometimes take a step back and look at what’s happening around you and your agency? What do you see? Please use the comment box below and share those observations with your fellow non-profit professionals.

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

Add a tribute gift strategy to your fundraising plan

Fundraising

Over the last few days, Team Obama has come under some mocking scrutiny from media outlets. While Mitt Romney has been cultivating and stewarding fundraising “bundlers,” the President’s team launch a new online wedding registration for couples who want to encourage tribute gifts to their campaign. Of course, the harsh critique springs from the comparison of fundraising strategies. The Romney strategy will literally net hundreds of millions of dollars, and the Obama strategy might bring in thousands of dollars.

Most non-profit organizations don’t have hundreds of fundraising “bundlers” at their disposal, but many of the fundraising professionals who I know are always looking around for good ideas to add to their fundraising plan. In spite of the harsh critique, I think the Obama campaign’s focus on tribute gifts might be something many non-profit organizations can replicate.

In my opinion, this fundraising strategy works for the following reasons:

  1. People like to be honored by their friends and family. It makes them feel good.
  2. Most Americans own too much “stuff” and don’t have space for more “stuff”.
  3. People like to know that they were involved in doing something that benefits the greater good.

Unlike the Obama campaign’s strategy of focusing on weddings, tribute gifts can come in all sorts of sizes and shapes. In fact, the following are just a few ideas that some non-profit organizations are asking their supporters to donate towards in someone’s honor:

  • birthday
  • anniversary
  • new baby
  • thank you
  • holidays

I am sure that your organization can get really creative, especially if you enlist the help of your resource development committee or a focus group of donors to help with the brainstorming.

The following are just a few good examples of non-profit organizations who have already added this fundraising tool to their toolbox:

It is important to remember that tribute gifts are not quite the same as regular contributions to your annual campaign. In addition to sending acknowledgement letters to those who make the contributions, you need to send a nice letter to the person who is being honored. It is also customary to tell the honoree the names and addresses of those who made a contribution in their name so that they can also follow-up with a personal note of appreciation.

I also suggest that you consult your donor database manual before embarking on a tribute gift strategy. Every software program that I’ve seen deals with this type of contribution a little differently, and it is important that you appease your technology platform.    🙂

If you’re still skeptical that anyone would ever do such a thing, please take my word that some people get really excited by this kind of opportunity. When my partner and I celebrated our civil union, we rented out a local restaurant and invited 100 of our closest friends and family and begged them not to bring gifts. Instead, we asked everyone to please make a tribute gift to Equality Illinois in honor of our commitment to each other. I must admit that I was a little skeptical, but in the end we ended up raising more than $5,000 for our charity of choice.

Does your organization have a tribute gift strategy? If so, how do you let donors know that this is an opportunity? Is it a stand alone strategy or is it woven throughout your annual campaign? Please share your ideas in the comment box below. We can all learn from each other.

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 can fundraising professionals learn from the Iowa Caucus?

Fundraising

Welcome to the 2012 Presidential campaign season! I watched hours of news coverage of the Iowa Caucus and my eyes are about to melt out of my head. However, I walked away from the coverage with what I think is a very clear lesson to be learned for fundraising professionals.

The Obama campaign has been chugging along and exceeding its fundraising for about a year now. They have done this in the middle of a soft economy, which has seemingly posed problems for many non-profit organizations. Many political observers believe that Obama will raise a record-setting $1 billion for his re-election bid.

While Team Obama has continued to raise money, the same can’t be said for the Republican field. If you add up all of the fundraising efforts from all of the current Republican candidates, it still doesn’t come close to Obama’s totals. Is this because Obama is that much better at fundraising? Or is it because Obama is the clear choice of the political donor base?

The current political thinking is that once Republicans settle on their general election candidate, donors will line-up and both candidates’ war chests will equalize. It might be possible that both the Democratic and Republican candidates will have in the neighborhood of $1 billion EACH to run their campaigns.

So, you’re probably asking yourself: “Where is the lesson for non-profit fundraising professionals?”

I think there is a valuable lesson to be learned about your non-profit organization’s case for support.

I believe many Republican donors are sitting on the sidelines because the case for support isn’t focused. There are too many different reasons to donate to too many candidates.

  • Mitt Romney’s case for support involves “electability” and business experience.
  • Ron Paul’s case for support focuses on libertarian principles and shrinking the size of government.
  • Rick Santorum’s case for support centers around traditional values and national security.

Eeeeeeek! If I were a Republican donor, I’d probably take a wait-and-see approach, too.

In these tough economic times, non-profit organizations would do themselves a favor if they spent the first few weeks of January 2012 re-focusing their case for support documents.

Donors like clarity. Donors like winners.

When is the last time your organization revisited its case for support documents? How do you ensure your case is aligned with your donor base? What have you found to be the most difficult part of developing your case? Have you ever considered that your written case for support might actually be costing you money? Please use the comment box below to weigh-in with your thoughts and opinions. 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

Fundraising lessons from Team Obama

Fundraising

Since starting this blog back in May, I have twice posted articles about Team Obama because I firmly believe that non-profit organizations can learn a lot from what our political fundraising cousins are doing on the other side of town. Please don’t misunderstand me. I don’t just mean that through careful observation non-profits will be able to steal all of their strategies and best practices. I also mean that we can learn from their mistakes.

For example, let’s look at what happened in my household just yesterday . . .

My phone rings. I answer it, and the person at the other end identifies herself as a someone working for an independent fundraising firm who is raising money “on behalf of” the Obama campaign.

Lesson #1: Think twice about farming out your fundraising to external firms. Keep it internal and recruit volunteers from your board of directors and the community to help solicit prospects and donors. There was nothing this woman could’ve done to prove to me over the telephone that she was actually representing the Obama campaign and not some kind of scam. Volunteers have more credibility than any staff person or hired gun.

Without getting into lots of boring political talk, let me just say that I explained to this solicitor that my partner and I won’t be making a direct contribution to Team Obama’s 2012 re-election efforts. Instead, we’ve decided to shift all of our political contributions to a national political action committee (PAC). I told her to go talk to them if she wants our money.

Lesson #2: My partner and I have changed our giving strategy because we feel powerless and unable to hold national politicians accountable to the things they promised (non-profit translation: the talking points from the campaign’s 2008 “case for support” that inspired us to give in the first place because we wanted to invest in that “impact agenda”). So, here is the lesson for non-profits . . . don’t make promises you cannot keep. Not only will it disenfranchise donors, but they might very well shift their charitable giving to third party funders like United Way in an attempt to attach more accountability to their contribution.

After explaining my position to the telephone solicitor three different ways, she started arguing with me. In the middle of her diatribe, she blurted out her solicitation: “Would you consider making a $5,000 contribution today?” I politely said no. She continued with her rant, and then blurted out “Would you consider making a $2,500 contribution today?” I politely said no and referenced all the reasons I gave 5 minutes earlier. Believe it or not, she continued onward and asked if I could just make an exception and contribute $250. Finally agitated, I firmly said that I wouldn’t even consider $25 and that she needs to go talk to the PAC I referenced earlier. I also asked her to update her donor database records so that I can stop getting these phone calls, emails and direct mail appeals.

By the way, this YouTube video does a nice job capturing what that phone conversation looked like. Check it out if you need a good chuckle today.  🙂   However, I think I just cast myself into the role of the “goat” in that video. Oh well!

Lesson #3: When a donor says “NO” there are two things you need to train your volunteer solicitors to do: 1) don’t argue with them and enter into a auction-like bidding war for their contribution and 2) shut-up, listen, take good mental notes, pass the info back along to staff, and enter the conversation into the donor database as a contact record. Hopefully, staff have developed good systems to address these kind of disenfranchised donors with intense cultivation and stewardship efforts before re-soliciting them in the future.

I used to think that United Way’s best days were behind them, but taking a step back and looking at my household’s new political giving strategy has me re-thinking this position. I suspect that if non-profits don’t start investing in measuring program outcomes and implementing an impact agenda, we might be looking at a time of re-birth for United Way.

What are your thoughts about third-party fundraisers and fund distributors like United Way? Am I way off base in my thinking? What about your thoughts on the three lessons I’ve highlighted? How do you train your volunteer solicitors to deal with donors like me? What systems do you have in place to secure donor conversations and react to a failed solicitation?

Please use the comment box below to weigh-in with your thoughts because we can all learn from each other.

Here is to your health!

Erik Anderson
Owner, The Healthy Non-Profit LLC
eanderson847@gmail.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

NIMBY meets Ant and Grasshopper

Board development

Since yesterday’s post I have “cooled off” just a little bit about the charitable tax deduction debate going on in Congress and at the White House. One of my dearest friends — Fred — emailed me last night suggesting the tone in yesterday’s post might have been a little over the top (and I thank Fred for watching my back). Nevertheless, I am not done blogging about this subject, but I will try to do better with my tone today.

As someone who received his formal education in “urban planning,” I learned at a very early age the meaning of the word “NIMBY“. Of course, it is an acronym that stands for “Not In My BackYard and has been stretched to also include people who advocate a policy position but oppose implementation of it in a manner that would affect them or their cause.

Looking at our nation’s fiscal and budgetary situations, I think almost everyone sees that something needs to be done (e.g. spending cuts, tax increases, closing loopholes, etc). Unfortunately, it seems like everyone wants this done in a way where others will be asked to sacrifice while their budget allocations or special tax breaks or loopholes are preserved.

Isn’t this exactly what fundraising professionals are saying to Congress when they lobby to save the charitable tax deduction?

Additionally, as I said yesterday, we (the resource development community) need to keep this issue in perspective. President Obama and the Congress are not proposing the elimination of the deduction. As I understand it, the proposal is simply to cap the deduction at 28%, which means that only those Americans in the 33% and 35% tax brackets will be affected.

While I see both sides of this debate very clearly (and AFP does make some good points which I agree with regarding wealthier donors and tax implications), I think my biggest objections are three-fold:

  1. there is far too much rhetoric and very few facts in this debate,
  2. “Shared” sacrifice is the only our nation will find its way out of this current situation and the non-profit community has more credibility than stooping to NIMBY-like arguments, and
  3. Shouldn’t AFP focus more time helping non-profits prepare for the inevitable day where government grants and preferential tax loopholes dry up?

I also find myself torn on the issue of “subsidizing” other people’s charitable contributions to their churches and social service non-profits. After all, isn’t that really what is happening when Uncle Sam” offered “Joe Q. Public” a tax deduction on anything?

Regardless of whether the end is near or not, there are things I believe non-profit organizations should start doing today in preparation for what I see as an inevitable decision our politicians will need to make one day. Here are just a few of my ideas:

  • Invest time, energy and money in getting better prospect identification and cultivation
  • Invest time, energy and money in development and use of an awesome case for support
  • Invest time, energy and money in donor stewardship
  • Invest time, energy and money in development of outcomes measurement and an impact assessment model
  • Double down on board development efforts to recruit new board volunteers with dynamic social networks who are enthusiastic fundraisers
  • Invest time, energy and money in marketing efforts (e.g. building a marketing committee, creating online social networks, improving transparency via your website, etc)

Let me leave you with this thought … challenges like this one are NOT new. In fact, they are as old as Aesop’s Fable about “The Ant and the Grasshopper”. Take a few minutes to watch this YouTube video and refresh your memory. After you do so, please take a moment to reflect on these questions: “What should you do to prepare?” and “What can I start doing today to begin preparing?”

I encourage you to share some of your thoughts using the comment box for this blog. We can all learn from each other!

Here is to your health!

Erik Anderson
Owner, The Healthy Non-Profit LLC
eanderson847@gmail.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

Romper Room time for fundraisers

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“Romper bomper stomper boo! Tell me, tell me, tell me do. Magic mirror tell me today …”

Ah, now that brings back childhood memories of watching “Romper Room“. Sadly, I was always afraid of that last bit to end the show where the host recites those magic words and allegedly turn our TV set into a two-way window where she could see things that in reality really weren’t there. It was kind of like a magic crystal ball.

After reading an article on PNNOnline this morning about the future of the charitable tax deduction as part of the debt ceiling and budget debates, I’ve come to the conclusion that it is “Romper Room” time for the philanthropy community. Why? Quite simply, I believe everyone is pulling out their magic mirrors, trying to predict what “might happen” and how that “might impact” charitable giving, and weighing in with an opinion wrapped in rhetoric. Here is just one example from the PNNOnline article:

“The White House and Congress must understand that limiting the value of itemized deductions for charitable contributions will dramatically affect the charitable sector and those it serves,” said Andrew Watt, FInstF, president and CEO of AFP.

OMG … it is Godzilla! Run!

Additionally, AFP asked its members what they thought using a “web poll,” and more than half said they thought a reduction in the charitable deduction would result in a 10-percent drop in charitable contributions to their charities.

Seriously?!? There is no way that anyone including the President & CEO of the Association of Fundraising Professionals (AFP) can make statements with that much certainty. I need everyone to take a deep breath and consider the following:

  • It is a web poll … how scientific can that be?
  • Do we need to talk about the shortcomings of survey data? If so, there are two great reading assignments for you — assignment #1 and assignment #2. A piece of advice … this is bedtime reading. Zzzzzzzzz! Please trust me when I say the results are garbage.
  • Very few people make charitable contributions because of the tax code. They give because it makes them happy, they want to change the world around them, the right person just so happened to ask them, and the list goes on and on. Sandra Sims at Step By Step Fundraising did a nice job make this point in her blog on what motivates people to give.
  • While it is impossible to say with certainty, a large number of Americans don’t itemize their taxes and receive no tax benefit for making their charitable contributions.
  • There have been many “scientific studies” done on the effects of tax policy on philanthropic giving. Needless to say, their conclusions are all wishy-washy because there are too many factors to consider including: the state of the economy, income, perceived personal wealth, state of mind (e.g. consumer confidence), quality and degree of training of the non-profit volunteer solicitor, etc etc etc. Click here to read an academic paper by Lise Vesterlund based on the scientific method and psychology. Go ahead and try to read all 70-pages objectively. If you were being honest and fair, you’d agree that the conclusions should best be summed up by saying “I dunno!”

The fact of the matter is that the tax rates bounced all over the place in the 1980s and there didn’t seem to be much of a noticeable change in charitable giving.

So, if you are one of my fellow resource development colleagues running around like Chicken Little, I beg you to please sit down, take a pill and put down your Romper Room magic mirrors. There is no need for hysteria, and let’s stop trying to use science to bolster opinions because the reality is that human behavior is too difficult to explain by using “web polls” and rhetoric.

Tomorrow, I will continue this discussion and even try to play devil’s advocate. In the meantime, please use the comment box and weigh-in with you thoughts on this subject. Am I being too dismissive? Have you seen more convincing evidence? Do you have a strong opinion on how your non-profit might be affected? If so, what do you base it on?

Here is to your health!

Erik Anderson
Owner, The Healthy Non-Profit LLC
eanderson847@gmail.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

Fundraiser-in-Chief?

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My partner and I have been bombarded in the last few weeks by the Obama fundraising team with countless solicitations. There have been phone calls, emails and even snail-mail appeals. There is even one interesting email enticing us to donate in order to get entered into a raffle for a chance to have dinner with the President. Ohhh, let the fundraising fun begin!

After closing the “Dinner with Barack” email, I randomly decided to look at the Wikipedia page for “fundraising“. Interestingly enough, the only picture on that page was of U.S. President Barack Obama.

These two unrelated things in my life got me thinking. “Is Barack Obama not just the Commander-in-Chief but also the nation’s Fundraiser-in-Chief?”  Here are some of the thoughts floating around in my head as I contemplate this question:

  • Team Obama raised approximately three-quarters of a billion dollars in 2007-08 and experts are predicting they will top the $1 billion mark in 2011-12. I don’t know of anyone who has done that in any sector.
  • Team Obama raised their money from approximately 4 million donors, many of which were individuals.
  • Many fundraising experts who looked closely at the numbers said the Obama people did very well with getting small donors to contribute to their first political campaign and then did an even better with getting small multiple gifts from those same donor.

While I’ve come to learn the hard way that political fundraising is very different from doing so for a non-profit organization, I still believe the upcoming Presidential campaign fundraising efforts (all of them and not just Team Obama) are worth watching because there will likely be some interesting take-away lessons for social service non-profit organizations.

Team Obama did much to move the needle with regards to making political fundraising more “donor-centered” and less “transactional” compared to previous campaigns, and they seemed to do so using a blended approach of traditional fundraising (e.g. events, mail, phone, face-to-face) and e-philanthropy (e.g. email, website, social media, text, etc).  I personally came to these conclusion because of the countless “update emails with videos” I received in 2008. It was obviously an attempt at stewardship and a way of demonstrating ROI to individual donors. It must have also been successfully because of the number of small donors who made multiple contributions.

In addition to non-profit resource development professionals getting an opportunity to observe up-close-and-personal donor-centered techniques being applied, I think it will also be interesting to watch how 2008 Obama donors behave in 2012. There were lots of promises made in 2008. As non-profit organizations have learned (mostly the hard way), when we over-promise and under-deliver, donors tend to be a little more reluctant to renew their contribution.

Finally, I’m also interested in watching how “transparency” in political fundraising continues to evolve in 2012. Have you ever checked out The Huffington Post’s “Fundrace” resource? Unfortunately, I have done so and found myself sucked into countless hours of looking up friends, family and donors to see who was donating what and to whom. Interestingly, I found my personal contributions to be under-reported. I wonder if that was a problem that resulted from having to reconcile contributions made via so many different avenues (e.g. website vs. snail-mail vs phone).

So, I think the jury is out on whether Barack Obama is our country’s Fundraising-in-Chief and the proof will be in the 2012 numbers. What do you think?

Were there any best practices or lessons learned that your non-profit used after the 2008 campaign? Are you watching anything in particular from a fundraising standpoint as we head into 2012?

Here is to your health!

Erik Anderson
Owner, The Healthy Non-Profit LLC
eanderson847@gmail.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/home.php#!/profile.php?id=1021153653
http://www.linkedin.com/in/erikanderson847