philanthropy – Page 36 – The Healthy Non-Profit

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!

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

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!

The Philanthropy Phlog is here: Part 3

July 12, 2012 DonorDreams Uncategorized

Last week I was on vacation in Michigan, and I decided to test a theory that I’ve had for a long time. I believe that philanthropy is something that occurs all around us every day, and we’re usually way too busy to notice it. Sometimes, it is hard to put it in words, which makes it difficult to blog about. So, I decide that I would try to take pictures of “every day” philanthropy while I was on vacation and share it with you this week.

Today’s picture is obviously of a renovated old theater. If you look closely, you can see that they use the digital marquee to thank their major donors and sponsors. How many times have you walked right by a donor recognition wall or signage, and it blended right in to the background? I’m sure that it has been way too many times for me.

As I’ve been promising all week long, we have a big announcement today at DonorDreams blog. Drumroll, please?

Starting next week, we are launching DonorDreams2, which will be a “phlog”. For those of you unfamiliar with this term, it is a photo blog (aka phlog). 🙂

DonorDreams2 will focus on capturing every day philanthropy in a photographic manner. Click here to preview the new phlog site (I’ve already posted a picture other there. Please go check out the difference in formating between DonorDreams blog and DonorDreams2 phlog.) Oh yeah . . . when you’re over there, please use the subscription widget to subscribe over there, too.

Since it would be boring just seeing pictures of philanthropy from Elgin, IL and wherever else I travel, we’re opening up the DonorDreams phlog to you. Please submit pictures of philanthropy in action from your hometown or your non-profit organization. Email me your pictures (my address can be found at the bottom of my blog and the phlog every day). Include your name, city/state, and a brief description of what we’re looking at.

Come on, folks . . . this can be fun! Dust off your camera phone and keep your eyes open for philanthropy. It might just broaden the way you see the world around you and open your mind to all sorts of new non-profit ideas.

Here’s to your health!

The Philanthropy Phlog is coming: Part 2

July 11, 2012 DonorDreams Uncategorized

Today’s picture is obviously of a blood drive poster. While bumming around the downtown square, we stepped into a coffee shop for a quick pick-me-up beverage. How many times have you busily zipped into such an establishment and didn’t take the time to read the event posters? So, many of those events are sponsored by non-profit organization.

As you have probably guessed, this week’s series of philanthropy pictures will lead up to an announcement tomorrow. Yes, it probably has something to do with something called a “phlog”. Stay tuned and please take a brief moment to enjoy what I consider the “every day pictures of philanthropy” this week.

Here’s to your health!

The Philanthropy Phlog is coming: Part 1

July 10, 2012 DonorDreams Uncategorized

Sometimes, it is hard to put it in words, which makes it difficult to blog about. So, I decide that I would try to take pictures of “every day” philanthropy while I was on vacation and share it with you this week.

Today’s picture is obviously of a flower bed. While many municipalities ask their public works department to plant and maintain flower beds, some communities partner with non-profit organizations to get the job done.

How many times have you busily zipped by such a public garden and didn’t take the time to appreciate the non-profit work put into its creation? I know that I have done so way too many times.

I wonder how much money it took to plant and maintain those flower beds? Hmmm . . . how many volunteers were recruited? How much enjoyment do residents reap from those efforts? Is there an impact on tourism and economic development?

As you have probably guessed, this week’s series of philanthropy pictures will lead up to an announcement on Thursday. Yes, it probably has something to do with something called a “phlog”. Stay tuned and please take a brief moment to enjoy what I consider the “every day pictures of philanthropy” this week.

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!

Marketing your organization’s volunteer program

June 28, 2012 DonorDreams volunteers

This morning I woke up to a very nice email in my inbox from Helene Schmidt. She had read the three-part blog series on non-profit degrees and certifications, liked what she read, asked me to read an article that Onlinecollege.org recent published titled “12 Reasons Community Service Should Be Required in Schools” and share it with the DonorDreams online community.

So, I did read the article and can honestly say it is very good. As you can see, I’ve already shared the link in the first paragraph and you should totally go read it.

I didn’t decided to share this post on “why volunteerism should be required in school” because I agree with the policy position. Honestly, I’m not sure how I feel about it. I’m not for it. I’m not against it. However, I do think that making volunteerism “required” feels antithetical to the entire idea of volunteerism.

The reason I am sharing this article is because after reading it I thought, “Wow! These are all great selling points for any non-profit organization’s volunteer program.”

You might want to incorporate some of the “12 reasons” offered in the Onlinecollege.org article in your volunteer marketing materials.

Speaking of volunteer program marketing materials . . . you do have marketing materials for your volunteer program, right?

Uh-oh. Well, if you are like many of the organizations with whom I’ve worked, then you have volunteer opportunities and not-so-actively “hope” volunteers walk through your doors. Many of the programs I’ve seen lack structure such as:

volunteer coordinator
written volunteer plan
written volunteer job descriptions
orientation and training opportunities
evaluation opportunities

I just haven’t seen many agencies actively marketing their volunteer program. Perhaps, your agency is different; however, have you looked closely at who and who you are marketing your volunteer opportunities?

I’ve read a lot recently about how the retiring Baby Boom generation is looking for volunteer opportunities. I’ve also read a lot about how the Millennial generation is really into volunteerism.

It doesn’t take a marketing professional to conclude that what motivates a 20-something-year-old to volunteer is probably very different from what motivates a Baby Boomer. So, targeting your marketing message might increase your effectiveness and bring many more volunteers through your agency’s front doors.

If the recent economy has your non-profit organization turning to volunteers to fill gaps and get things done, then you will need to do more than cross your fingers and hope volunteers find you. You need to invest in a volunteer program.

One such investment will be in how you market your volunteer opportunities. The article that I shared at the beginning of this post provides 12 great selling points that you might want to share with young people. Click here if you want to read more about how to more effectively market your volunteer opportunities to Baby Boomers.

Does your agency have a volunteer program? If so, what investments have you recently made and have they paid off? How do you market these opportunities and recruit volunteer? Please use the comment box to share your experiences. We can all learn from each other.

Here’s to your health!

Marissa was right . . . crowdfunding works

June 27, 2012 DonorDreams Fundraising, Mondays with Marissa, technology

Let me take you back and set the scene. It was Monday, February 13, 2012, which can can only mean one thing at DonorDreams blog — it was “Mondays with Marissa”. On that particular Monday, Marissa wrote a post titled: “Can your non-profit raise $1,000,000 in 24 hours using a crowd funding site?” I have a confession to make this morning. When I was editing that post, I was a little skeptical. I have seen crowdsourcing sites and know they be a powerful fundraising tool for certain types of projects, but I thought $1,000,000 was a bit exaggerated.

Apparently, I was wrong and Marissa was more right than I gave her credit for.

A few weeks ago that YouTube video of the bus monitor, Karen Klein, being bullied by middle school children went viral. Almost 8 million people have viewed the video, and every media outlet in America has been all over this story. After hearing the story and viewing the video, a good Samaritan set-up an online campaign using a crowdfunding platform called Indiegogo with the intent of raising enough money to send Karen on a vacation.

As of this morning, the fund sits at $660,756, and I am wondering how close it will come to $1,000,000 before it closes down in 24 days.

Now please don’t misunderstand me. I am not suggesting that you rip up your organization’s written resource development plan and put all of your fundraising eggs in a crowdfunding basket. Most of the crowdfunding campaigns that I’ve seen raise relatively small amounts of money. This situation was different (e.g. fueled by public outrage, the viral nature of YouTube, and an insane amount of media attention).

If you have the same ingredients for a project at your non-profit organization, then by all means double down on a crowdfunding strategy. If not, then I suggest recognizing crowdfunding is a viable fundraising strategy and placing it inside of your already crowded fundraising toolbox. Use that tool whenever the situation warrants it.

So, you’re probably asking: “When might the situation warrant a crowdfunding strategy?”

I believe crowdfunding works for non-profit organizations when they are trying to raise money for a specific project from a specific audience. You may want to go back an re-read Marissa’s February 13th post because it contains a few fantastic pointers. Catherine Clifford at entrepreneur.com wrote a post titled “Want to Raise Money With Crowdfunding? Consider These Tips” that you also may want to check out.

Have you ever used a crowdfunding site to raise money for a non-profit project? If so, please share your experiences and lessons learned in the comment box below. We can all learn from each other.

Here’s to your health!

Add a tribute gift strategy to your fundraising plan

June 26, 2012 DonorDreams 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:

People like to be honored by their friends and family. It makes them feel good.
Most Americans own too much “stuff” and don’t have space for more “stuff”.
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.