If you love me, you’d never ask me run another non-profit raffle again

IMG_20130719_171856_480The other day it was hot in the Chicago area, and I decided to run to the grocery store to get some sugar-free ice cream for my diabetic spouse. As I trudged through the hot blacktop parking lot, I saw an unfortunate sight . . . a volunteer sweating his rear-end off standing behind a booth selling raffle tickets for the Knights of Columbus (see picture to the right). I was immediately reminded of a time not-so-long-ago when that used to be me.

The year was 2000 and I had just been hired as the new executive director of the Boys & Girls Club of Elgin. Just the year before this organization attempted to run its first Duck Race special event fundraiser. Without going into the details, it didn’t make them money. However, I was young and dumb. I was an inexperienced and a newly minted executive director. I had seen a very dear friend run a Duck Race in a different community, and he had been wildly successful netting close to $100,000.

If he could do it, then I could do it. After all, how hard could it be? All it seemed to entail was:

  • selling corporate sponsorships,
  • standing in high traffic areas and selling $5.00 duck adoptions to people who want a chance at winning a new car, and
  • putting numbers ducks in the river and pulling the winners out of the water to determine who wins which prizes.

What was the big deal? OMG . . . I wish I knew then what I know now.

As I approached the poor hot and sweaty Knights of Columbus volunteer, all of the pain came flooding back to me:

  • Recruiting 100 volunteers to help with every aspect of the race (e.g. marketing, tagging ducks, putting ducks in the water, taking ducks out of the water, data entry, and not to mention selling duck adoptions),
  • Organizing countless teams of volunteers to sell duck adoptions and trying every trick in the book to create a sense of fun-excitement-competition,
  • Chasing down volunteers to sign-up for weekend sales shifts (standing outside of the same grocery store where the Knights of Columbus volunteer was sweating),
  • Spending the entire weekend driving from sales location to sales location to support the volunteers by replenishing petty cash banks, restock merchandise, and fill gaps in between shifts where necessary, and
  • Personally filling holes in the schedule . . . standing outside of the grocery store or hardware store or bank . . . yelling out your sales pitch at people leaving the store . . . getting scowled at by people who don’t appreciate the disturbance . . . selling an adoption to approximately one-out-of-ten people.

ducks2These five bullet points are just the tip of the iceberg. The fact of the matter is that we started planning next year’s Duck Race in the immediate days and weeks after wrapping one up. This special event raffle was a year-round affair.

For me personally, it represented an eight week period of my life every year when I worked seven days per week . . . 56 days in a row without a day off for good behavior. I did this for six years, and when I was weighing the options associated with another job offer, the Duck Race was one of the Top Five reasons I left for greener pastures.

As I passed by the Knights of Columbus booth for the refuge of an air conditioned store, I put my head down and refused to make eye contact with that poor volunteer (just like thousands of other people did to me when I was selling duck adoptions). The last thing that ran through my head was the promise I’ve made myself to never work for a non-profit agency that runs any kind of raffle. The following is a list of reasons for this decision:

  1. Raffles are nothing more than gambling and there are laws, rules and regulations that don’t seem to be worth the time, energy or effort.
  2. Raffles entice donors to make a contribution to your charity for reasons other than your mission and getting these donors to crossover to other campaigns or events is next to impossible.
  3. Raffles involve prizes which means you better not mess things up or you run the risk of being sued.
  4. The record keeping is overwhelming and can involve double and triple entry of financial data depending on how your donor database, financial management system and raffle software are configured.
  5. Opportunity cost and return on investment calculations point to greener pastures when you look at using the same amount of time in other fundraising efforts (e.g. annual campaign pledge drives, etc).

The bottom line for me is that selling raffle tickets and chances should be an activity that is beneath every non-profit board volunteer. Their time is too valuable to ask them to sweat outside of a grocery store selling raffle tickets $5.00 at a time. How many donors could they have sat down with in the same amount of time and asked for a $250, $2,500 or $10,000 pledge?

Here is another way to think about it. If you don’t have the type of volunteers who feel comfortable sitting down individually with important donors and if your volunteers are more willing to sell raffle chances, then you probably have the wrong people sitting around your boardroom table. Perhaps, these people are  well-intentioned fundraising volunteers, but they certainly aren’t good board prospects.

If this last revelation upsets you, please accept my apologies. However, don’t dismiss this thought too quickly. Like a good cup of tea, let this idea steep and then share your thoughts in the comment box below.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC

Dear board volunteers . . . Can we please follow our fundraising policies?

carnival1DonorDreams blog is honored to be hosting the May 2013 Nonprofit Blog Carnival. The theme this month is “Dear board volunteer . . .” and the idea is “If you could write an anonymous letter to a nonprofit board about something they do that drives you crazy, what would that letter look like and what suggested solutions would you include?” If you are a blogger and would like more information on how to participate and submit a post for consideration, please click here to learn more.

I wanted to expand the Nonprofit Blog Carnival concept in May. So, I reached out to real non-profit professionals and asked them to also write an anonymous letter to their board volunteers. These people are executive directors, fundraising professionals, board members, donors, community volunteers, consultants and front line staff. I promised everyone anonymity in exchange for their submissions.

We will celebrate May’s Nonprofit Blog Carnival on Wednesday, May 29, 2013. Up to that fun-filled day, I will publish real anonymous letters every day from real non-profit professionals right here at DonorDreams blog.

I hope you enjoy this real look at real issues that our community deals with on a daily basis.

Here is today’s letter:

Dear Board Members,

We are so excited that our upcoming fund raiser is nearly at capacity. You all have done an outstanding job in talking up the event to your friends and colleagues, and in getting others to buy tickets to the event. Thank you for that.

Several years ago, you established a process that let each event committee determine the policies around which each event would operate. Once the policies were established by each committee, they were accepted or modified by the full Board. Now I know that each of you did not agree personally with all the policies, but majority rules and the policies were set, or at least I thought so.

To my surprise, and dismay, now I find out that there are many of you asking, assuming, or demanding that we don’t enforce these policies, at least as it concerns you. Some of you want to bring more people with you, of course at no additional cost. Some of you even think you should be allowed to come for free because you are a Board Member.

Good grief, this is a Fund Raising Event. It is designed to make money! Don’t you get it?

Now here is what really ticks me off. You don’t call or email me — the executive director — with these ideas. No, you call or email my event staff, who are already intimidated by you. What kind of spot do you think this puts them in?

So what do we do about this?

First, if you want to make a difference in how an event operates, volunteer to serve on the committee that designs the event. We would love to have more of you actively engaged in these committees. Second, when the committee presents the event at the Board Meeting, speak up, express your concerns then. Make your vote count. Third, once the Board accepts the policies surrounding an event, accept them. We all need to follow the direction the Board sets.

And please, call or email me if you are having issues or concerns with an event. Calling or emailing my staff with this sort of thing just isn’t appropriate or helpful. However, you must know that while I will listen to you or read your email, I will always back up the Board’s decision. You really would not want me to do otherwise.

Lonely at the top

If you have some advice for the author of our anonymous letter, please be respectful and share it in the comment box at the bottom of this post.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC

Your non-profit event isn’t over until you critique it

evaluation2For the last few months, I’ve been involved in the planning and implementation of one of my favorite non-profit organization’s special event fundraisers. I was reminded last night at the post-event gathering of how important critique meetings really are to the long-term success of a special event. I was also reminded that post-event evaluation needs to focus on so much more than simply the question “Did we make our financial goal?

Before last night’s meeting, staff gathered information on the following metrics:

  • Amount raised vs. event goal (e.g. revenue)
  • Amount spent vs. event budget (e.g. expense)
  • Costs as a percentage of amount raised
  • Number of donors
  • Number of new donors
  • Number of repeat donors
  • Number of lapsed donors
  • Breakout of various revenue streams compared to previous years (e.g. ticket sales, sponsorships, raffles, auction, fund-a-need, etc)

evaluation1After getting past the numbers, deeper questions were asked about process such as:

  • What did we do well and what should we have done differently when it came to recruiting the committee?
  • What did we do well and what should we have done differently when it came to event planning and project management?
  • What did we do well and what should we have done differently when it came to selling sponsorships?
  • What did we do well and what should we have done differently when it came to securing auction items?
  • What did we do well and what should we have done differently when it came to conducting the raffles?
  • What did we do well and what should we have done differently when it came to check-in and check-out?
  • What did we do well and what should we have done differently when it came to the script and program?
  • What did we do well and what should we have done differently when it came to post-event communication and stewardship?
  • Should we change the event theme? Has this event gotten old and stale? Is it time to change format?
  • What are three things we must tell next year’s committee to keep doing because it really made a huge difference?
  • What are the three things we must tell next year’s committee to re-examine and change because it was a challenge?

No one likes to look in the mirror and talk about room for improvement; however, there is another way to look at these type of activities.  A post-event critique meeting is like writing a “love letter” to next year’s event planning committee. I believe that if it is done in this spirit, then this activity becomes significantly easier.

At the end of last night’s post-event meeting, we also talked about the importance of building a binder that can be passed along to next year’s committee. Of course, the notes from last night’s meeting would be included as would budgets, invoices, invitation lists, volunteer prospect lists, etc.

There was celebration and lots of hugs and appreciation was exchanged. Wine, popcorn, and awesome parting gifts for everyone!

How does your organization handle itself after the event is over? What do you look at? What questions do you ask at the critique meeting? What goes into your binder? Please scroll down and share your thoughts 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

Tips to improving your charity auction

Later this morning, I am facilitating a discussion among some non-profit professionals about how to improve your auction fundraiser event. I am apparently itching to get this conversation underway. So, I thought it might be fun to start it online with the DonorDreams blog community. I suspect that I also have auctions on my mind because a number of local charities that I support are gearing up for their 2013 auction fundraising events right now, and I see them working hard at securing donations.

Let me first start by saying that I am not an auction expert, but I attend a number of these type of events and can speak to the issue from a donor’s perspective. In my experience, I am spending money when:

  1. The mood in the room is fun, and I am surrounded by friends who are bidding.
  2. There are auction items that I find appealing.
  3. Alcohol helps open my wallet.
  4. The check-out procedure appears to be easy and hassle-free (e.g. I won’t have to stand in long lines to check-out if I win my bids)
  5. I can bid on a project to directly support the charity (e.g. underwrite a scholarship for a year, purchase a mattress for the homeless shelter, etc)

Here are a few things that I’ve seen fundraising professionals do to support the things I just mentioned:

  • Survey last year’s participants well in advance of the event to get an idea of what types of items that want to see in the auction.
  • Latch onto an event theme and use it throughout the event to create a sense of fun.
  • Offer both a live and silent auction format.
  • Don’t close the silent auction until AFTER the live auction is done. This way people who lost their live auction bids and still have cash in their wallet can still invest it in winning their silent auction bids.
  • Use auction software to automate the check-in and check-out procedures. Integrate other technology into the auction (e.g. electronic bidding) in order to add a new wrinkle.
  • Keep the theme focused on the auction (e.g. don’t mix-and-match your themes such as an awards dinner and auction).

As I always say at the end of my blog posts, “We can all learn from each other.”  Please take a moment this morning to answer one of the following questions (I plan on using these same questions to start my roundtable discussion off on the right foot this morning):

  • What is your check-in and check-out procedures (and what role does accepting credit cards in advance play in that process)?
  • What best practices have you seen used with “silent auctions” vs “live auctions” that can help drive revenue?
  • What kinds of policies do you have around alcohol and getting your bidding public “liquored up”?
  • What kind of data do you collect and how do you use it from year-to-year to drive revenue? How does it line up with pre-event engagement strategies?

I recently bumped into Dave Naffziger’s Blog and I think his post on “How to run a successful charity auction” is one of the better ones that I’ve recently seen. You may want to go check it out.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC

What non-profits can learn from a man skydiving at 128,000 feet

This week’s “Mondays with Marissa” post is going to be a little different. Something happened yesterday. Did you see it? Follow it? Of course, I am referring to a man by the named of Felix Baumgartner who jumped out of a capsule attached to a balloon 128,000 feet above Earth. Take a moment to think about that.

Beyond the pure awesomeness of this feat, what I want to draw your attention to today is:

  1. the social media that supported the mission, and
  2. some ways that non-profits learn from the coverage of this event.

For those of you unfamiliar with what Felix did yesterday, here’s a brief overview:

  • Sponsored by Red Bull, this mission had a goal of studying the effects of acceleration on the human body in order to produce better spacesuits for space professionals and eventually space tourists.
  • Beyond that, Felix Baumgartner became the first human who wasn’t attached to an aircraft to break the sound barrier .

NASA’s evolving mission has led to  private companies such as Red Bull stepping in to provide financing to make these types of missions possible. When the day came millions of people around the world tuned in to watch the live stream of the Red Bull Stratos leaving the Earth and eventually see Baumgartner jump out of it. You can read more about the story here.

Looking beyond the scientific significance of this event, let’s look at it through the eyes of a non-profit special events planner. When it comes down to it, that’s what it was, right? This was an event run at a specific time and for a specific cause.


This space mission was funded by Red Bull and everyone knew it. Finding a corporate sponsor, especially a title sponsor, to cover the costs of your agency’s special event means profitability and ensures that donations from attendees will likely go directly to support programming. Similarly, finding a corporate partner that will match donations helps in the same way.

Word of Mouth

People knew about this event for months. If you have a once in a lifetime special event in your organization’s future (e.g. celebrating a milestone anniversary, etc), letting people know about it early and often only helps your cause. You can and should use social media to do this. How?

  • Create an event on Facebook.
  • Create an event on Google Plus.
  • Post about the progress being made during the preparation of the event.

Give the Event Its Own Website

Depending on the size of the event, it might warrant its own website. Doing so will make it easy for people seeking details about your event to find those facts easily online.

Take a look at the website for the Red Bull Stratos. Everything you need to know about that event is there. Make sure that you include the social media sharing buttons on the website to allow people to share what they find with others.


One of the great things that Red Bull did during the preparation for this event was to post videos about the progress leading up to yesterday. If it makes sense to do so for your event, videos are a great way to update people. Make them short and sweet, little clips and people will share them with others. If you can’t post videos as often, photos can work in the same capacity as well.

In addition to posting video to promote your event, you can also post clips of the actual event if you were lucky enough to secure a celebrity to speak or the event was particularly noteworthy. Click here to view a YouTube video of Felix Baumgartner’s historic jump.

Live Stream It

Again, this depends on your event and the legality surrounding it, but if it makes sense then you may want to consider live streaming it.

For example, if you are holding a competition such as a race, live streaming can help spread the word about what is happening and allow people to donate on the web during the event.

Sites such as YouTube and UStream allow users to set up their own channels to share with others. The videos from these channels can be embedded on your own site so you don’t have to send viewers somewhere else. Also, all of the live streams can be saved for future viewing as well.


While we were watching Felix jump out of his capsule at 128,000 feet above the Earth, many of us were participating in a social conversation on Twitter about what we are seeing as it happened. Creating a hashtag for your event can allow people to share news from your event in real-time. What’s great is that you can also use it to go back and easily see what people were saying after the event is over. For example, take a look at #livejump from yesterday.

Events like yesterday’s only come around once in a while. It is important to step back and see what we can learn from them when they do. I hope today’s post might have highlighted some new techniques for you when it comes to running special events.

Have you used any of the tools mentioned in today’s post? I’d love to hear about it in comments!

Reactivating lapsed donors doesn’t have to be complicated

Yesterday, my blog post titled “Take great care when trying to reactivate your LYBUNT donors” focused on a direct mail story of mine that I thought contained some valuable lessons for all of us. Today, I will attempt to pivot and start a discussion about simple things you can do to reactivate lapsed donors at the end of the year.

Last week, I spent the entire week in Indianapolis at Boys & Girls Clubs of America’s Midwest Leadership Conference as an exhibitor and trainer. When I saw one of my favorite bloggers — Gail Perry at Fired-Up Fundraising — as a general session speaker, I got very excited because she is a bundle of energy when it comes to fundraising.

As she dazzled the audience with her fundraising stories, she turned her attention for just a moment to the idea of reactivating lapsed donors. She talked about the boring, ineffective and sometimes upsetting LYBUNT letters (like the one I talked about in yesterday’s post) that too many non-profit organizations use at the end of the year to re-engage lapsed donors. While direct mail is probably a necessary re-engagement tool, Gail suggested that throwing a party for some of those donors might be a better strategy. She shared a story about such a party that she had themed:

“We love you, we miss you, we want you back!”

These 10 simple words got my mental wheels turning. I envisioned a Thanksgiving or holiday themed event with a room full of lapsed donors who didn’t pay a penny to attend. I pictured mission-focused activities and possibly even activities (e.g. focus groups) designed to solicit input on how to improve your fundraising and donor communication programs.

Hmmm . . . how does this strategy compare to the HRC letter strategy that I talked about in yesterday’s post? For me, it feels like night and day. I like Gail’s suggestion of throwing a party for the following reasons:

  1. It feels personal
  2. It is what we do with our family and friends (and aren’t donors part of our extended family and friends circle)
  3. It is fun and energetic
  4. It fits with the spirit of the season
  5. It sends a donor-centered message rather than a “me-me-me” message

For some non-profit agencies that have a large direct mail program and hundreds (or thousands) of lapsed donors, this strategy might be a little more difficult to implement. However, this problem is easily overcome by segmenting your LYBUNT report into two lists: 1) those who get invited to a party and solicited at the event or using a follow-up solicitation letter AND 2) those who just get a well-crafted, personal LYBUNT letter that doesn’t use “guilt” as the message.

There is literally a bushel basket full of good ideas and best practices when it comes to reactivating your lapsed donors at the end of the year. Throwing a party is just one of those ideas.

Would you please take 60 seconds out of your busy day and share one idea from your agency’s year-end LYBUNT strategy playbook? You can easily and quickly do this by using the comment box found at the bottom of this blog page. Please? After all, we can all learn from each other.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC

What’s in your mailbox? Part 3

We started a conversation on Tuesday about direct mail and dissected a fundraising letter from Michelle Obama. Yesterday, we changed course by looking at a newsletter from my state senator. Today, we’re going to my mailbox and pulling out a few postcards that I recently received from a few different charities in my hometown.

I don’t know about you, but I’ve been receiving more and more postcards from charitie,s and I have a theory about that.

As you know, the first rule in direct mail is not creating your letter or even developing the stuff that goes into the envelope. The very first thing you need to think about is designing the outer envelope in a way that entices people to open the letter.

This is where postcards are genius. There is nothing to open. The information that you want your supporters to read is readily visible.

Larkin Center

The first postcard in my stack of mail this morning is from a behavioral health non-profit organization in Elgin, Illinois called Larkin center.

One side of this small postcard has a four-color photograph of renowned pianist and composer Emily Bear. The few words on this side of the postcard simply inform me that she is playing a concert that will benefit Larkin Center.

When I flip the postcard over, there is also very little information; however, it is everything I might need if I want to learn more about this event or register:

  • Date/time of the event
  • Location of the event
  • Where can I purchase tickets (e.g. website, phone, fax, box office hours, etc)
  • Ticket pricing

This is short and sweet and to the point. Whoever designed this postcard understood that most people spend just a few seconds with each piece of mail.

Open Door Clinic

The second postcard in my stack of mail this morning is from an AIDS treatment non-profit organization in Elgin, Illinois called Open Door.

One side of this small postcard simply has my address, their return address, the non-profit permit indicia, a barcode for postal automation, and big words that say “SAVE THE DATE”.

When you flip the piece over, you see a four-color picture that divides the postcard into two parts. One side of the postcard sports a graphics for the Chicago AIDS Run & Walk. There is one simple sentence that says:

“Join Open Door Clinic’s AIDS Walk Team & help us reach our goal by joining our team or donating at http://bit.ly/JYRGr2”

The other side of the post card has a beautiful picture of chocolates and encourages readers to “save the date” for their All Things Chocolate special event fundraiser on April 20, 2013.

You read that right . . . this non-profit organization has the wherewithal to tell its donors to plan for something in the next calendar year. Wow! I guess someone prides themselves on being organized and well-planned. LOL

University of Illinois Urbana Champaign College of Fine & Applied Arts

The final postcard in my stack of mail this morning is from my college alma mater.

As some of you know, I graduated from the University of Illinois in 1992 with a BA in Urban Planning and in 1994 with a Masters in Urbana Planning. For the last 18 years, I have been trying to hide from those fundraising professionals. Regardless of where I move or how many times I’ve changed my phone number, they keep finding me.

It is impressive. And the postcard they sent me is equally impressive.

he message is simple and to the point . . . we want your email address. However, they go about asking for it in a very cleaver way. Here is how they asked:

“We are gathering current email address from our alumni to start a conversation about how your education shaped your professional and life experiences. Your experiences and ideas will assist us in shaping arts education for future students. To share your address with us, please visit: http://go.illinois.edu/FFAAlums”

I don’t know how many times I’ve heard my  non-profit friends talk about how hard it is get more in-depth information (e.g. email addresses, birthdays, etc) out of donors, but it has been often. I just love the approach that my alma mater is taking.

So, what can we learn from these three postcards:

  1. K.I.S.S. — the information you want your supporters to see must be simple and easily digestible in a few seconds.
  2. Four-color — Reader surveys seem to indicate that people’s eyes are attracted and drawn into pictures and graphics that are vibrant and full color.
  3. Postal automation — Using a mail house to certify your mailing lists allows them to add a barcode to address label. This saves the post office money, and in turn saves you money.
  4. Not just for events — The most common use of postcards seems to be advertising an event or asking donors to save a date for an event. However, the University of Illinois example illustrates that we can be more creative with this direct mail tool if we put our minds to it.

Does your non-profit agency use postcards? If so, what for? Have you measured the effectiveness of this strategy (e.g. increased event attendance, etc)? If so, what did you find? Please use the comment box below to share your thoughts because we can all learn from each other.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC

What non-profits can learn from the Olympics: A lesson in social media

I don’t know about you, but I can’t get enough of the Olympics. It is a chance for me to see sports that I don’t normally have an opportunity to watch. For instance, have you seen handball?!!? That stuff is crazy!

Sports watching aside, the London 2012 Games have been a little different from the Olympiads before them. They are the most “social” games that we’ve ever experienced. I thought today, since we are smack dab in the middle of The Games, we could take a look at how social media has made an impact and what non-profits can take away from it.


Last week, reporter Guy Adam’s Twitter account, was taken down. This was shocking to hear because Twitter has been social media’s liberation network. Twitter is supportive of free speech . . . just look at their public positions on WikiLeaks and the Arab Spring movement. When reporter Guy Adams tweeted criticism of NBC’s coverage of the Opening Ceremonies, Twitter responded by shutting down his account. After media coverage of this censorship, Adams’ account was reactivated.

What can non-profits take away from this?

Just because social media is, in most cases, a free service and covered under the First Amendment, it doesn’t take away from the fact that Twitter, Facebook, et al, are still corporations. They can still regulate your account without your knowledge. As a result, I recommend that all non-profit organizations have their own websites and not solely rely on social media. After all, social media is only one tool that you should use to drive people to your website and share their message with the world.


People will talk. There’s no doubt about that.

However, there are times when people are not only representations of themselves, but they are also representing an organization and something larger than just themselves. So, when USA Women’s Soccer Team member, Hope Solo, tweeted her disdain for the commentary that was being given during her games, her coaches and captains called her in for a meeting. She wasn’t suspended, but since the meeting, her tweets have had a different tone to them.

Similarly, athletes have been suspended from participating in the The Olympic Games due to racist tweets they published.

What is the lesson in all of this for non-profit organizations? The need for a social media policy is stronger than ever.

What is the lesson in all of this for non-profit professionals? Employees and volunteers need to understand what restrictions might exist when it comes to sharing things on their personal accounts as it pertains to your organization.

Finally, this all begs one simple question: “How does your organization know who is saying what about you online?”

I believe that someone at your organization should be assigned the responsibility of monitoring what (if anything) is being said about your organization on the internet. Please don’t misunderstand . . . I’m not suggesting that you break any privacy laws here, but if an employee has a public twitter account, it can be seen by anyone.

One way to set up something without being as much of a stalker is to set up a Google Alert to notify you when the name of your organization or a key word attached your mission is mentioned on the internet.

Share Your Successes

The Olympics are all about results. Who ran the race the fastest? Which country has the most gold medals? Athletes, teams, and news networks constantly updating their feeds with success stories.

People like good news. Non-profit organizations should share their successes, big or small, with their online communities.

Did you recently make a purchase that will improve the work that you do? Tell people about it. Were you recently awarded a grant that will make an impact on furthering your mission? Scream it from the mountaintops of cyberspace.

People will “like” the good news on Facebook and retweet the news on Twitter. This can gain you new followers and supporters.

We still have about a week left of Olympic coverage, and new stories regarding social media are bound to pop up. I encourage you to keep your eyes open and see what happens. After all, in its most basic form, The Olympics are simply one big special event that is runs by an organization. Non-profits run special events, too. What social media stories have caught your eye recently? I’d love to talk about them in the comment section below!

Gift acknowledgement letters, quid pro quo and the IRS

I cannot count the number of times that I’ve attended a non-profit organization’s special event fundraiser and walked away with a gift acknowledgement letter that was not compliant with “IRS Publication 1771, Charitable Contributions–Substantiation and Disclosure Requirements”.

Rather than use the language of accountants and tax professionals to explain, I’ll let the following hypothetically example speak for itself.

  • My first contribution to “Agency X” is the purchase of two dinner tickets for what I am hoping will be the best rubber chicken of my life. My out-of-pocket expenses to get in the room is $120.
  • When I show up, I am assaulted by happy volunteers selling 50-50 raffle tickets. My out-of-pocket expenses to get these intensely happy people who are blocking my path to the bar is $20.
  • With a nice glass of wine in my hand, I am finally able to mingle with old friends, but I end distracted by all of the shiny objects in the silent auction. <<Sigh>> At the end of the evening, I discover that “Agency X” is deeper into my wallet for another $250 in out-of-pocket expenses.
  • The final blow came many glasses of wine into the evening during the live auction (ahhhh, of course it is always the booze and the live auction that sinks most donors). Those Opening Day Chicago Cubs tickets had my name written all of them and only cost $1,000.

So, the next morning usually comes with a hangover and regret (even though “Agency X” is an amazing charity and you’re always happy to have supported their awesome mission). A few days later in the mail comes a gift acknowledgement letter. It tells me how wonderful I am and contains some nice “return on investment” and stewardship verbiage. Ahhhh, gotta love that warm fuzzy feeling.

You’re probably wondering “What’s wrong with all that?”

Well, the gift acknowledgement letter thanked me for my charitable contribution of $1,390.

Sure, if you do the math $120 + $20 + $250 + $1,000 does add up to $1,390, but this was not size of my “charitable contribution” according to the Internal Revenue Service, and now  I need to take time out of my busy day to chase down the executive director or fundraising professional at “Agency X” for a correct letter. To help clarify the math, here is exactly what the IRS has to say on the subject:

“A donor may only take a contribution deduction to the extent that his/her contribution exceeds the fair market value of the goods or services the donor receives in return for the contribution; therefore, donors need to know the value of the goods or services.”

Let’s circle back and do the math one more time:

  • The event tickets cost $120, but the food I received in exchange for the ticket purchase was valued at $20 per plate. So, $120 minus $40 means that the charitable contribution only amounted to $80.
  • The $20 in raffle tickets got me four chances at a cash prize. The “value” I received for those chances was twenty bucks. So, $20 minus $20 means that I didn’t make a charitable contribution in the eyes of the IRS.
  • The silent auction was a huge benefit to me because I got some amazing bargains. Woo Hoo! Move over Wal-Mart! So, I might have spent $250, but the items I won totaled $500 in value. So, $250 minus $500 means that I didn’t make a charitable contribution in the eyes of the IRS.
  • And last but certainly not least, there was the booze fueled live auction. The bad news . . . it was $1,000. The good news . . . I finally got something to write off on my taxes. Opening Day tickets to see another woeful season of the Chicago Cubs are valued at $500 (of course, White Sox fans would argue that they are worth nothing). So, $1,000 minus $500 means that I can deduct $500 from my taxes next year.

The IRS tells us that it is legitimate to acknowledge my overall gift of $1,390 as long as somewhere (usually at the bottom of the letter in a footnote) there is language that explains that the fair market value of the items I purchased was $810 and only $580 of my $1,390 contribution is tax-deductible.

In my experience as a donor, this rarely happens and I end up wasting my time chasing after a new gift acknowledgement letter. The harm to “Agency X” is twofold:

  1. It is counterproductive to annoy the donor. This is not good stewardship and doesn’t help “Agency X” in its efforts to secure the next contribution from me.
  2. It can result in fines to “Agency X” if the IRS ever found out.

What is the potential penalty? Here is what the code says:

“A penalty is imposed on charities that do not meet the written disclosure requirement. The penalty is $10 per contribution, not to exceed $5,000 per fundraising event or mailing.”

If you want to learn more, Joanne Fritz at about.com does a nice job explaining it. You can also click here to get it directly from the IRS.

Note: “Agency X” does not exist. I am not calling out any one particular non-profit organization in my philanthropy portfolio. The aforementioned examples are a “compilation” of things I’ve purchased over the last 10 years. Please don’t add me to you special event mailing list.  🙂

Please scroll down and use the comment box below to share the “boilerplate language” that your agency uses at the bottom of its special event gift acknowledgement letters. Please trust me that 30 seconds of your time will benefit countless smaller non-profit agencies. If I had a nickel for every time I was asked for sample boilerplate language, I’d be rich! We can all learn from each other.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC

Non-profit lessons from the Illinois primary election

It is Tuesday, March 20th, and for those of you living in Illinois it means that Election Day has finally arrived. For me, it couldn’t have some sooner. While I am one of those strange birds who loves the act of voting, I am also really ready for all the political yard signs to come down. I guess I am just visually tired of them. Or, perhaps, I’m just getting old and cranky.

While walking the dog yesterday, I was reminded that politicians don’t really have a corner on the yard sign market. As a matter of fact, some non-profit agency’s have found creative ways to integrate yard signs into their marketing efforts. Here are just a few examples:

  • Many moons ago when I ran a rubber duck race fundraiser, I used yard signs to help promote online adoptions.
  • The Boy Scouts of America sometimes use yard signs during “Back to School” time to support recruitment and encourage kids to register for the Cub Scouts in their community.
  • While walking the dog yesterday, I came across a non-political yard sign in someone’s yard advertising Easter Sunday services for one local church.

While I don’t think yard signs are the most effective marketing tool in your non-profit toolbox, I do believe they can be effective in some circumstances. Here are just a few suggestions for those of you contemplating their application:

Use yard signs in a cross-channel marketing approach. For example, how many politicians do you see ONLY using yard signs? Slim to none! Those candidates lose. Successful candidates use yard signs in conjunction with television, radio, door-to-door brochures, etc. When it comes to messaging, don’t use this marketing tactic to “generally” promote your agency. You use yard signs to promote something specific and actionable like a special event, prospect cultivation open house, recruitment drive, etc.

Focus  . . . don’t scatter your yard signs. You can’t buy enough yard signs to sprinkle them throughout your community on small streets in little subdivisions. Identify the busiest streets and ask residents on those main arterial routes to proudly display your sign in their front yard. You do this by knocking on their door and asking permission (even if you don’t know them or have a previous relationship). This will maximize how many people see your signs and keep your costs down.

K.I.S.S. — Keep it simple. Remember, less is more when it comes to small yard sign design. People are likely traveling by in their cars anywhere from 30 to 45 mph. They won’t be able to read small text. A few key words and a web address or phone number is about all you can do. This isn’t a mini billboard (and even if it were, most effective billboards also follow this same principle).

Sure, many of us find yard signs obnoxious, but this shouldn’t deter you. Why? Because everyone reads them. How do I know this? Because politicians wouldn’t be using them if they weren’t effective. The only catch is that you need to use them effectively.

Has your agency every used a yard sign approach to promote something? If so, how did it work? What lessons did you learn. Please scroll down and share your thoughts and experiences in the comment box below.

Here’s to your health! (And happy election day, Illinois)  😉

Erik Anderson
Founder & President, The Healthy Non-Profit LLC