Public Interest Fundraising

FALLING LEAVES

2011-11-12T04:52:00.006-06:00

Fall is that time when we clean up the yard, put the garden to sleep, and take stock of the coming winter. In the fundraising world, fall is for reviewing results to date and raking up the leaves of various fundraising programs. To help us out, Target Analytics, which reports on direct mail giving, including web acquisition, but not individual gifts over $10,000, released its “Q2 2011 Index of National Fundraising Performance” findings. This report includes results through June 2011 based on analysis of actual donor transactions. It does not include university or hospital responses, but it does have the nonprofit organizations that I know do direct mail well, in a big way: Morris Dees’ Southern Poverty Law Center, the American Civil Liberties Union, NARAL, Planned Parenthood, and Anti-Defamation League. In a nutshell, even though donors are giving larger gifts, that isn’t balancing out revenue losses from fewer donors.

Only 43 percent of the organizations in the Index had year-over-year revenue increases in the first half of 2011. While revenue declined only slightly, donor numbers dropped noticeably. Index donors declined a median 4.2 percent from the second quarter 2010 to second quarter 2011. Only 31 percent of the organizations in the Index had year-over-year donor increases in the first half of 2011.

This continues a trend that predates the recession. Direct mail donor populations have been shrinking for the past five years, primarily due to declines in new donor acquisition. Falling donor populations may be due to a mix of factors: The recession, aging population of givers, shifting attitudes of donors about giving, and a change in focus by fundraisers toward high dollar donors.

Giving USA Foundation indicates that once a recession is over, it has taken an average of three to four years for inflation-adjusted charitable giving to rise back up to pre-recession levels. This recession, which is a doozy, wasn’t considered “over” by the economists until June, 2009.

Does this information help you determine your 2012 budget? Plan your 2012 fundraising calendar?

Wake Up, NY Times!

2011-09-02T10:59:00.006-05:00

We have been dealing with an economic situation for three years that reminds me of Washington, D.C.’s travails this August – earthquake, hurricane, political turmoil. Today’s Jobs Report is more of the same. Paul Krugman, the NY Times columnist, posted a blog a while back that relates to what so many nonprofits need today: Optimal fiscal policy in a liquidity trap!

Wednesday’s NY Times business section carried an article entitled “A Philanthropic Recession” – yoo hoo, where have you been living these last few years, under a rock? The focus of the article was John Hope Bryant, who founded Operation Hope, a nonprofit organization supporting financial education centers. Mr. Bryant, who has a salary of $300,000, laid off 14 staff people in response to a short fall in corporate donations. The same yoo hoo question could have been asked of Mr.Bryant. In 2008, I and nonprofit advisers world-wide were warning of “Recession Suicide.” http://publicinterestfundraising.blogspot.com/2008_10_01_archive.html

To bear real fruit — in the way it took Amazon six years to turn a profit — charities must invest more time, talent, effort and money in fundraising, not less. Does every body hear this?

Listen up: Below is the first batch of free advice from my professional fundraising colleagues: What four tips about fundraising would you give in today’s economy?

1. Speak from the heart when asking for donations. (If you don't care about your cause, no one else will.)

2. Diversify your donor-base. What market area have you missed?

3. Utilize some sort of online donation system. Convenience for donors is essential.

4. Don't despair. Donors understand development work must continue regardless of the recession!

ooo Google

2011-08-31T13:20:00.006-05:00

Google for Nonprofits offers free or discounted versions of its apps, increased uploads on YouTube, free licensing for mapping technologies, and more to non-profit organizations. Google grant guidelines have caused a recent brouhaha regarding religious applicants.

Google precludes communities or groups that require "membership and/or provid[e] benefit solely to members;" that have "religious content or proselytizing on their websites as well as organizations that use religion or sexual orientation as factors in hiring or populations served...."

Under the First Amendment's Free Exercise and Establishment clauses, churches that discriminate in hiring or firing for religious reasons are protected as a matter of religious freedom. Google, however, as a private organization, does not have to support discrimination against homosexuals. Google's restrictions should come as no surprise -- all funders have guidelines and priorities -- things they fund and things they don't.

YOO HOO, BOARD MEMBERS!

2011-05-07T06:25:00.009-05:00

Kelly Kleiman, respected fundraising consultant and theater critic, caused a bit of a stir this week with a piece she wrote for the Stanford Social Innovation Review blog about another smarty pants group of for-profit executives running to the rescue of not-for-profit management.

Sour subject, but a fun read: “This approach ignores the fact that nonprofit markets usually consist of clients who are not profitable to serve—because if they were profitable to serve, the for-profit sector would be serving them.”

I won’t repeat her observations. You can find her here: http://www.ssireview.org/opinion/entry/everything_old_is_new_again_and_nonprofits_should_stay_that_way/

The group Kelly cites, Palindrome Advisors, is a match.com for nonprofit board member acquisition. The Chicago Foundation for Women is doing something similar with “Board Boot Camp,” with two important distinctions: CFW is training women in nonprofit governance before the match and they aren’t requiring a major contribution.

Get this: Palindrome “Advisors” have to serve on a nonprofit board of directors for 1 year – an appreciation for stability, I presume. Further, Palindrome requires those volunteers to have “skin in the game” to the tune of at least $1,000.* “Founding Palindrome Advisors and Palindrome Hubs (those donating over $5k or taking leadership roles) will be acknowledged throughout the Palindrome program and in our national press initiatives. Remember, Palindrome is also a nonprofit (501c3), so this is tax-deductible.” Does that sound familiar?

Thanks once again, Big Business Geniuses!

*Palindrome Advisors plans to hold those funds in escrow and will contribute a portion of the initial pledge to the non-profit depending on the wish of the volunteer board member once a match with a nonprofit is made.

3 TIPS IN THIS ECONOMY

2011-03-25T23:07:00.003-05:00

Today, I sat in the audience at the Union League Club listening as Illinois leaders outlined continuing grim details of cuts to public funding for government programs. Without a doubt, the most compelling part of the morning was when the Secretary of Human Services told personal stories. Those of us in fundraising know how enormously influential stories can be -- billions of people around the world follow religions based on stories that are thousands of years old. Stories open people’s hearts and their wallets.

What are the stories your organization has to tell? What are the best ways to get them across? And, how much more time do you have to tell them before your doors close?

Imagining a worst case scenario, what are the top three fundraising tips you would give in today’s economy? After some stewing and brewing, mine would be:

1. Concentrate on existing and regular donors.

2. Diversify your sources of income -- be creative.

3. Take a long hard look at your expenses. (Sometimes a tough economy forces us to make the decisions we should have made a long time ago to make our offices more efficient.)

What do you suggest?

Direct Mail Gets Smarter!

2011-03-13T12:21:00.005-05:00

In May, 2011, the United States Postal Service will be rolling out its next generation of mail delivery services – Intelligent Mail Barcodes (IMB) -- the "USPS Automation Initiative" for direct mail with advanced information technology. We've come a long way! The following information provided by Mike Jais of Graphics Plus.

By using the new Intelligent Mail Barcode, direct mail will now have the benefits that come with online tracking. From the moment a piece leaves your mail house to the moment it reaches your prospects, it will be connected to the USPS network via a unique barcode and this information will be available to you. What does this mean for marketers? Analytics! You will now have the power to test different types of direct mail media and obtain a detailed measure of the response. You will be able to learn more about your prospects and improve your targeted marketing. Use of the IMB will provide additional benefits:

Improved delivery efficiency and less undeliverable mail while at the same time updating your mailing list

Address changes for First Class Mail (while in the system!)

Predictable mail piece delivery dates

Uniquely identified mail, enabling end-to-end tracking of mail

Savings by having access to all available postal discounts!

Envelope window sizes will change to accommodate the IMB code.

For more information, contact Mike Jais, Graphics Plus, 630-968-9073,

www.gpdelivers.com

Foundation Management

2011-03-10T02:00:00.003-06:00

File this under "The more things change, the more they stay the same." The Council on Foundations’ Foundation Management Series: Governance & Administrative Expenses, 2010 Edition is out. The report is intended to help independent and family, community, and public foundations “benchmark their board composition against peers.”

No surprise here: The majority of foundation board members in 2009 were white, male, and over 50.

Some key demographics:

- Respondents indicated that 62 percent of board members are male.
- Approximately 75 percent of board members are over age 50, followed by 18 percent who are age 40 to 49. Family foundations reported the largest share of board members under age 40 (16 percent).
- Eighty-five percent of board members are white, with African-Americans comprising 7 percent, Hispanics 4 percent, and Asian/Pacific Islanders 2 percent.
- Some 16 percent reported having at least one lesbian, gay, bisexual, or transgender board member.
- Twenty-nine percent reported having a written board diversity policy.

Other interesting information:

- Median administrative expenses as a share of qualifying distributions for 234 responding staffed foundations in 2008 totaled 15.8 percent.

- Less than one-quarter of foundations compensated their board members in 2009. Larger foundations—those holding at least $250 million in assets—were more apt to provide compensation to some or all of their board members. Independent foundations were far more likely to provide compensation (58.7 percent), while only a handful of community foundation respondents reported compensating their board members (1.4 percent).

BOARD FUNDRAISING PLANS

2011-03-04T05:10:00.007-06:00

Board members are a key to success. They are the best means for nonprofit organization to build stronger relationships with supporters, attract new donors, and raise money. Involving board members in fundraising, however, can be like herding cats.

In collaboration with Michael Divers, now Chief Development Officer at CancerCare in New York City, I developed a board member Individual Fundraising Plan form covering the main fundraising food groups: personal giving, major giving, events, prospecting and cultivation.

An Individual Fundraising Plan form makes expectations clear. It offers a structure to link board members’ time and talent to existing fundraising programs and needs. The design is specific to the board member. The form and the conversation surrounding its creation offers each board leader options for participation, playing to their strengths in personal giving, fundraising, cultivating donors and increasing an organization’s visibility. It is a means to commit to what they can and WILL do each year to raise funds. The form also makes it easier to track results of board fundraising activities and to acknowledge meaningful support. If you would like a copy of the IFP, email

Kathy@publicinterestfundraising.blogspot.com

SUPER BOWL BETS

2011-02-06T12:01:00.009-06:00

At this time, five hours before game time, the Green Bay Packers are favored to win the Super Bowl over the Pittsburgh Steelers by two and a half points. (Full Disclosure: I’m a Franco Harris fan since before his 1972 “Immaculate Reception.”) I don’t have money on the game, but I do have a suggestion.

There are now many imaginative wagers on this game. Sports books found more ways to draw in more money from fans looking for more action, these are known as proposition (a.k.a. prop) bets. For example, one can bet on the duration of Christina Aguilera's performance of the national anthem. In Chicago, we remember the betting on whether Chicago's 380-pound William "Refrigerator" Perry would score a touchdown in the Bears-Patriots 1986 Super Bowl XX game (which he did).

Elected officials have their personal bets. This time, if the Steelers win, Green Bay Mayor Jim Schmitt will shovel snow from the walkway of a Steelers fan in Green Bay, while clad in Steelers attire. He'll also fly the Pittsburgh city flag at Green Bay's city hall for a day and send Pittsburgh Mayor Luke Ravenstahl a package of local food products. If the Packers win, Mayor Ravenstahl will shovel the walkway at St. Rosalia in Greenfield, the family church of Pittsburgh-born Packers head coach Mike McCarthy. Mayor Ravenstahl also will fly Green Bay's flag at the City-County Building and donate Pittsburgh food to a Wisconsin food bank.

The nonprofit world has gotten into the act. The Director of the Carnegie Museum of Art in Pittsburgh has wagered the temporary loan of their Pierre Renoir “Bathers with a Crab” (1890), to the Milwaukee Art Museum, should the Steelers lose. The director of the Milwaukee Art Museum, the closest art museum to the Packers, has agreed to loan Gustave Caillebotte’s “Boating on the Yerres” (1877) to the Carnegie.

We can all get in on the win-win proposition of doing good for the big game: Make a donation to your favorite charity in honor of which ever team wins!

MERGERPHOBIA

2011-02-06T10:09:00.003-06:00

Rocco Landesman, the controversy magnet sitting in the chairman's chair at the National Endowment for the Arts, gamely tried to address the issue of scarce funding for non-profit arts organizations in January. Mr. Landesman, himself in the cross-hairs of conservative Republicans who would like to obliterate the NEA, adds to a critical conversation that reaches beyond the arts world, given current economic conditions and the competition for scare dollars.

For years, foundations have been discussing the best use of their grant-making dollars in the economic downturn. Yet the same consideration of cost efficiencies in operating foundations could be considered by grantmakers themselves.

Only a few nonprofit organizations and smaller foundations seriously contemplate the possibilities mergers and acquisitions have for cost efficiency, as well as expanding reach, strengthening effectiveness, and in turn making the best use of scarce resources. A 2009 Bridgespan Group poll of nonprofit executives found “that 20 percent of 117 respondents stated that mergers could play a role in how they respond to the economic downturn. These leaders may consider mergers and acquisitions (M&A) reactively, as a way to shore up finances, to make their organizations appear more attractive to funders or to address a succession vacuum.” The time is right for savvy leaders in all sectors of the nonprofit world, whether financially stable or struggling, to face economic reality and consider the benefits from a potential merger or acquisition.

IN THE NICK OF TIME

2010-08-13T02:16:00.003-05:00

The IRS is granting a brief one-time reprieve to small nonprofit organizations at risk of losing their federal tax-exempt status.

The Pension Protection Act of 2006 mandated that any 501(c)(3) public charity, other than churches and church-related organizations, that failed to file a required Form 990 for three consecutive years would automatically lose their tax-exemption. (Before 2007, it wasn’t necessary for nonprofit organizations with under $25,000 in annual revenue to file.) The three years are now up and some groups are currently not in compliance.

Two types of relief are available for small exempt organizations — a filing extension for the smallest organizations required to file Form 990-N, Electronic Notice (e-Postcard) , and a voluntary compliance program (VCP) for small organizations eligible to file Form 990-EZ, Short Form Return of Organization Exempt From Income Tax.Small organizations required to file Form 990-N can go to the IRS website, supply eight information items called for on a form, and electronically file it by October 15 to be back in compliance.Under the VCP, tax-exempt organizations eligible to file Form 990-EZ must file their delinquent annual information returns by Oct. 15 and pay a compliance fee. Details about the VCP are on the IRS website, along with frequently asked questions.

LANDMARK LEGISLATION

2010-07-18T06:22:00.000-05:00

The Nonprofit Sector and Community Solutions Act, H.R. 5533, introduced by Rep. Betty McCollum (D-MN) on July 16th is one of the first federal initiatives to strengthen the partnership between government and nonprofits. This Act proposes integrating the nonprofit sector into the federal policymaking process. The purposes of the Act are the following:

- To strengthen interagency coordination and enhance transparency with respect to greater support for the work of nonprofit organizations.
- To enhance data collection, assemble and make available federal data and research on the nonprofit sector and generate new data and research where necessary to support the development of effective federal policy.
- To produce reports, make recommendations and convene summits to raise awareness of the nonprofit sector and the vital civic, social, and economic contributions nonprofit organizations make to the United States.

The bill would create a 16 member bi-partisan Council on Nonprofit Organizations and Community Solutions, as well as an Interagency Working Group on Nonprofit Organizations and the Federal Government. Members of the working group would include the head of the White House Office of Faith-based and Neighborhood Partnerships, head of the Office of Social Innovation and Civic Participation, CEO of the Corporation for National and Community Service, Internal Revenue Service commissioner, and chairman of the National Endowment for the Humanities and the chairman of National Endowment for the Arts, director of the Census and the director of the Office of Management and Budget.

The benefits of one federal agency tackling data collection on nonprofits and creating performance metrics would include establishing reporting requirements and expanding information to better inform Congress of the importance of the nonprofit sector to the United States economy and to the success of many federal, state, and local policy initiatives. The bill, if passed, will “…give the nonprofit sector a voice to raise concerns and propose solutions to our nation’s challenges,” Rep. McCollum said. The next step is to get a companion bill introduced in the Senate.

DOUGH IS RISING

2010-05-16T20:36:00.004-05:00

According to the recent Association of Fundraising Professionals (AFP) Compensation and Benefits Study, the average salary for U.S. charitable fundraisers increased by 7.4 percent – from $71,199 in 2008 to $76,482 in 2009. This growth in salary is a stark difference to the two percent drop in salaries reported in last year's survey.

"The results of the 2009-2010 compensation survey show that in spite of difficult economic conditions, nonprofit leaders understand the critical role fundraisers play in the financial success of their organizations, and are willing to compensate them accordingly," according to Paulette Maehara, president and CEO of AFP.

"Fundraising knowledge and know-how are still in huge demand, especially in a challenging economy when giving is at a premium," she said. "With government budgets at all levels declining, charities must look more than ever to private support from individuals, corporations and foundations. The need for trained and capable fundraisers who can reach out to and inspire diverse groups of donors is greater than ever."

Fundraising remains one of the strongest professions with opportunities for both new and experienced practitioners. The number of postings on AFP's job board has doubled over the past year.

If you change jobs, send your new email to Kathy@publicinterestfundraising.com

LANGUAGE OF TRUST

2010-05-09T17:14:00.005-05:00

The other evening I had a “we’re still not communicating” conversation with someone who had acted badly. In a time where trust has gone astray and doubt is the norm, how do we build and keep the trust of the people most important to our organizations and ourselves?

Michael Maslansky takes a line of reasoning in his book The Language of Trust in a World of Skeptics that “for every issue there are multiple, reasonable points of view.” Right now in IL, when the state budget hole is so enormous social service providers aren’t being paid and education is on the chopping block, it is hard to find a reasonable point of view from the No-New-Income-Tax legislators. He points out that, “… when faced with the task of convincing someone of something—that taxes should be raised, that banks should be bailed out—we find it hard to comprehend why everyone doesn’t share our point of view.” Exactly! How best to present our point of view in the face of diametrically opposed opponents?

I have a little brain trust of experts I turn to on questions such as these, my Communications Task Force. We all need one of those. I’m lucky to have Dan, Kathleen, and Nina a click away. If you don’t have such a group at your disposal, check out Maslansky’s book. Go here for excerpts: http://languageoftrust.maslansky.com/wp-content/uploads/2010/05/LanguageofTrust_BookDigest.pdf

STRATEGIC DECISIONS

2010-05-03T01:01:00.000-05:00

Donors make thoughtful contributions. They want to invest in their areas of interest. So our fundraising efforts should be equally thoughtful and deliberate. Right now the most dangerous thing could be the decisions WE make. It is extremely important that we operate strategically.

· Determine where your money comes from.
· Assess which income streams are hardest hit.
· Focus on building a sustainable income base.
· Concentrate on high-yield activities.
· Go for growth where you can achieve this cost-effectively.
· Educate your management team and your board on the need for flexibility to react to change (both positive and negative).

PEPFAR, HOW FAR?

2010-04-30T23:28:00.002-05:00

This from a Soros Open Society Institute Public Health Program officer on the Global Fund to Fight AIDS, Tuberculosis and Malaria, who reports the Obama Administration is notifying the health providers it funds that they can only put new people on AIDS treatment if some of the patients they are already treating die: “Well, we just got our hands on a letter the U.S. government sent to (AIDS) treatment providers in Uganda in October, 2009. It says:

“PEPFAR Implementing partners who directly provide antiretroviral treatment should only enroll new ART patients if they are sure that these new patients can continue to be supported without a future increase in funding...

“In filling treatment slots that are made empty through attrition – i.e. deaths and loss to follow-up estimated at 12-30% annually – priority should be given to the sickest patients, eligible pregnant women, children, TB/HIV patients, and family members of persons on ART. Partners should provide support as needed to ensure that patient information records are up to date and an equitable system of triage for total ART slots is worked out within their sites before enrolling any new patients.”

Yoohoo, Boston Globe, follow up here, please.

*President’s Emergency Plan for AIDS Relief (PEPFAR)

BE AWARE

2010-04-29T00:06:00.003-05:00

Adweek reported that a Facebook Fan is worth $3.60 of media value. The reason for quantifying how much a “fan” or “follower” is worth in dollars and cents is so companies and organizations can have some clue of ROI to justify being in social media. As Adweek said, “…the most powerful incentive for brands building fan bases: social customer-relationship management. Marketers often use their Facebook hubs to inform fans of new products, services and promotions.” A company called Vitrue did the “study” Adweek cited. They are in the business of selling technology solutions for social media management – a fact I didn’t see in the AdWeek piece. Vitrue investors are Comcast Interactive Capital and Turner Broadcasting System, Inc., a Time Warner company. How much is that research worth?

WAKE UP CALL

2010-04-28T21:14:00.002-05:00

Many small nonprofit organizations could lose their tax-exempt status this year. Why? Because 2009 is the third year that the IRS has required the filing of Form 990-N for nonprofits with under $25,000 in annual revenue. Before 2007, filing wasn't necessary. IRS regulations now require that any 501(c)(3) public charity that fails to file a required Form 990 for three consecutive years will automatically lose their tax-exemption. Don’t let your status be revoked. Like the bunnies in my yard, hop on it!

NOBLE NOBEL GIVING

2010-04-05T06:36:00.000-05:00

As is customary, President Obama donated his $1.4 million in Nobel Peace Prize money to qualified not-for-profit organizations. He split it among 10 charities, supporting veterans and higher education, as well as Haiti relief and global outreach programs. Two of the organizations had previously received contributions from the Obamas: The United Negro College Fund and the Clinton-Bush Haiti Fund. This is a fine example of private funding for the public good.

AccountingWeb.com reminds us that former Pres. Jimmy Carter and Vice President Al Gore “took advantage of a subsection of the Tax Code that allows prize winners, under certain circumstances, to funnel the money directly to their chosen charities, rather than receiving the money into their own taxable incomes.” Carter gave his prize money to the Carter Center and the Rosalyn Carter Institute for Caregiving; Gore donated all of his to the Alliance for Climate Change. Dr. Martin Luther King Jr. donated his prize to the civil rights movement. By directing donations directly to the organizations, the money did not become taxable income. (They also forfeited any charitable deduction.)

The “Yes We Can” message, development version: President Obama’s philanthropic support could have served an additional purpose. In the press coverage of the President’s charitable gifts there was no mention of the decisive factors he used to select the organizations. Doing so might have influenced how other Americans make charitable choices. And, it would have “stimulated” the call for charitable foundations to specify the logic behind the grants they make. The charitable funding ecosystem would have been enriched with this information.

PREDICTIONS II

2010-01-09T04:14:00.003-06:00

What can we expect in 2010?

“….I hope that in 2010 nonprofits do not forget the importance of marketing and PR. These go hand-in-hand with development and if done correctly can be very successful with little expense; especially with all the social media tools available. Creating a well thought out social media strategy can have enormous results!" Michele Savoldi, Sr. Project Director at Shoestring Creative Group

"I don't want nonprofit professionals to get the impression that social media is a 'cheap' option. The tools may be free but it is not just a matter of setting up a Facebook and Twitter account and waiting for the donors to flood in - they won't! As Michele rightly said, it requires a well thought out strategy - and that takes expertise, which costs money. Social media is about community engagement and community engagement can only work as part of a nonprofit's daily routine. It requires understanding, training and time - it is a totally different mindset to traditional marketing …. not only is it worth the investment, it is probably going to be an imperative to survival. As with businesses, consumers have the power now and they want to be engaged by the people they spend their money with. If YOU don't engage them, they will go to someone who will. It’s all about putting a human face on your operation and being seen to be responsive…. Future communications managers employed by nonprofits will need to be social media savvy." Jasper Blake, Social Media Manager for UOWHO

PREDICTIONS

2010-01-09T04:08:00.003-06:00

Happy New Year! What can we in the nonprofit sector expect in 2010? Here are a few responses of fundraising colleagues to that question. Let me know what you think: 847.227.7174.

“The proverbial belt will need to be tightened - programmatically and fiscally as the impact of the recession continues to be felt. However, smart, nimble nonprofits will make necessary adjustments and create a class of creative, strategic, stronger, leaner more efficient organizations. It's organizational evolution - and it's not always a bad thing - much good can come of it - especially in an age of collaboration and technology.” Sara Brueck Nichols, Director of Marketing & New Media at Operation Kids

“We need to work together to reduce duplication, initiate mergers and focus entirely on the clientele we serve. This financial crisis is an opportunity for us to entirely re-think how non-profits address community need.” Hilary Morgan, New York City Coalition on the Continuum of Care

8 PARTS GRANTSMANSHIP

2009-11-29T17:42:00.001-06:00

In our quest to promote the common good, moving a foundation or corporation from a prospective donor to a giver involves homework and hard work. Fashion a plan with a carefully designed series of sprints:

Prospect identification: Your most significant prospects are those that have already given to your organization. Have a keen awareness of the philanthropic community. Look for matches between your needs and the areas of interest of the grantor. Determine linkages from within your leadership.

Research and evaluation: Use key databases and directories, including Foundation Center information, to create your prospect list. Review giving guidelines and donation history. Formulate effective and efficient strategies for your research process . Whenever practicable, place a telephone call or make an appointment with the prospect as you do research. Develop a tailor-made approach to funders by designing a competitive proposal. Bear in mind that there are multiple sources for corporate research information.

Planning: Tailor a step-by-step action plan for each foundation’s grant program. Be imaginative in your thinking of how to solve problems and build partnerships, efforts many foundations are looking for. Realize that the grantsmanship process is often lengthy. If the plan involves insiders, let them know their role.

Cultivation: Get to know foundation staff members and corporate giving officers; personal contact with a funder increases the likelihood of success. Send regular updates with meaningful, relevant information about your organization. Find out specifically if a Letter Of Intent is required. Be ready with questions based on your careful review of submission guidelines, your proposed budget line items, and the details of your project implementation plan. This discussion with foundation staff can lead to excellent feedback on such points as timelines, evaluation expectations, and allowed expenditures. Call the prospect before submitting the proposal to alert them that it is coming.

Solicitation: Follow application guidelines precisely. Be specific about what you want funded. Check and re-check budget figures. Make the request realistic. Know what happens to your application once it arrives. Extend an invitation to visit your organization.

Acknowledgement: Before you pop open the champagne on good news, thank the donor. And, if the application is not funded, mail a thank you note and try to learn something from it.

Stewardship: See whether a meeting or telephone conference with the Foundation’s Executive Director or Program Officer is encouraged or discouraged. Foundation reporting requires more than a minimal report at the end of a funding cycle. Send regular information updates about the project’s accomplishments. Adopt a method to guarantee that proper gift acceptance procedures and reporting are followed to the letter.

Evaluation: Remember, you can’t improve what you don’t measure or evaluate.

GREAT BOSSES

2009-11-10T12:27:00.002-06:00

David Axelrod, President Obama’s senior advisor and longtime political strategist, came home to hail the Chicago premiere of the HBO documentary By The People. Directors Amy Rice and Alicia Sams had the exclusive access and, thus, exclusive footage – shooting Obama from May 2006 to June 2009 – indispensable for an historic film. Among those at the screening was Lynn Sweet, who covered the campaign for the Chicago Sun-Times and is featured in the documentary. She said "the most important stuff in this movie is the stuff that shows Obama talking about Obama. That is why this is an important movie.”

In his introductory remarks Axelrod shared three basic premises Obama enumerated from the start of his campaign that are good rules for nonprofit leaders to live by:

* This was going to be a grassroots campaign. Everything was to percolate up. Issues, messages, organization start from the ground up.

* Have fun. The campaign was going to be long, hard work, so “we might as well have some fun while we’re doing it.”

* No finger pointing. There will be mistakes; things will go wrong, but no blaming others.

For those of us in nonprofit organizations, that means listening to and responding to our clients, donors, directors. Having fun is very good advice in this economic climate. Outlawing the blame game is a key factor in being able to build a successful, respectful team.

I gleam some of the same managerial wisdom from Phil Jackson’s Sacred Hoops: Spiritual Lessons of a Hardwood Warrior. One of the most successful coaches in NBA history, Jackson, who has dealt with some of the biggest egos in the universe, espouses selfless team play and compassion. Tall order from a tall man, however, it would behoove nonprofit managers to tap the potential of the human spirit in their midst and not to work in isolation or their own version of corporate silos. Good relationships are vital to success in work, as well as in one’s personal life. Stressing fun along with self-discipline can motivate and stimulate teamwork among disparate followers. If it’s good enough for the Commander in Chief….
Photo credit: Kuni Takahashi

ROLLOVER TIME FLIES

2009-10-29T15:49:00.003-05:00

ALERT: The IRA Charitable Rollover Act extends to December 31, 2009. Be sure to include the following information in an e-blast or newsletter to your supporters asap!

What is the IRA Charitable Rollover Act? This provision allows anyone 70-1/2 years or older to make an outright gift from their Individual Retirement Account up to $100,000 a year to a qualified charity – like (insert name here) - without first claiming it as income and being taxed. Take advantage of this important extension today! Consult your tax advisor or call us at (insert phone number here) for additional information.

GRANT WRITER COMMENT

2009-10-29T09:27:00.002-05:00

I couldn't agree more. Hiring an outside grant writer might make sense --- in very limited situations, but is rarely the right approach and almost never the best long term solution. It's all about relationships and the wise nonprofit takes grant writing as an opportunity to build upon ... the secret to writing good grants: READ THE GUIDELINES AND FOLLOW THEM. Then, keep these two things in mind: 1) guidelines are written for applicants and not donors. You have to follow them but the donor doesn't and; 2) grant making is personal. People give to people, not to causes. So, a well written grant simply earns you the opportunity to start building that relationship.
Posted by David Zemel

OUT OF THE MOUTHS OF....

2009-10-27T23:05:00.001-05:00

I started a small conversation on LinkedIn the other day. My point was that schools and organizations and consultants are offering grantwriting courses, but writing is not enough to secure a grant. “Many nonprofits do not realize the value of program knowledge, foundation research and relationship building to the grantsmanship process. Writing in a vacuum rarely leads to success.”

Gail Perry, author of Fired Up Fundraising: Turn Board Passion into Action and former major gifts officer at Duke wrote, “You are totally right. So many nonprofits - and board members too - think that hiring a "grantwriter" is the magic bullet that will rescue their fundraising program. They don't understand that grantseeking is what you might call "a body contact sport." That is, it requires person-to-person conversation. You have to cultivate grantor relationships just like you do individuals. Grantwriting courses shortchange their students if they don't include relationship-development and cultivation strategies.”

Two development pros – same advice – free. You’re welcome!

GOURMET CONSIDERATION

2009-10-24T01:54:00.000-05:00

You won’t be able to devour Gourmet magazine after the November issue. Even with a 68-year history and nearly 1 million subscribers, television food shows and online sites have taken a serious bite out of Gourmet's advertising revenue. (Gourmet will remain in book publishing and television programming; Gourmet recipes will still be available on Epicurious.com; and Bon Appétit, Conde Nast’s other epicurean magazine, will continue to publish. Editor Ruth Reichl will be on PBS.) How is this relevant to the nonprofit world?

There are arguments, particularly from the foundation sector, about the proliferation of nonprofit organizations. Since 1996, the number of 501(c)(3) organizations has increased by 81 percent to nearly 1.2 million – is that too many or is that in proportion to the unmet needs of society? Speaking of unmet needs, foundations provide only 13 percent of charitable dollars, usually highly restrictive dollars, often only partial funding, over short periods of time, with burdensome application and reporting requirements.

The Lodestar Foundation takes a carrot approach to overlapping nonprofit interests -- they've created the Collaboration Prize ($250,000) to inspire mergers, acquisitions and collaborations among nonprofit organizations that provide “the same or similar programs or services and compete for clients, financial resources, or staff.” The Museum of Nature and Science won this year for merging three museums in Dallas: The Science Place, Dallas Children’s Museum, and Dallas Museum of Natural History. Lodestar contends the new entity is an “all-encompassing museum with greater attendance and quality of education content. The staff consolidation saved $600,000 in the first year and the ratio of benefits to salaries went from 17.6% to 10.5%, without reducing quality.” YMCA/JCC Integration also won for their merger of the Jewish Community Center and the Young Men’s Christian Association in Toledo. “As a result of combining, the organizations did not build a new YMCA which realized savings of $5-8 million. Staff consolidation alone saved $300,000 and there was administrative savings of $130,000.”

If you are having serious financial problems, for the greater good, should your organization consider a merger? Mergers have to make sense. They are painful, disruptive, expensive and there is no guarantee of a stronger entity. However, because of market forces, merging may be the best way to sustain services. Nonprofit Mergers Workbook Part I: The Leaders Guide to Considering, Negotiating, and Executing a Merger, Updated Edition by David La Piana, might be a good group reading project, when you’re not out raking leaves.

(Oct. 1970 image via cover browser where you can view Gourmet covers from 1959 - 2007)

CROSS OVER

2009-10-20T11:41:00.001-05:00

One of my favorite lawyers recently joined LinkedIn. Smart decision for anyone in business, profit or nonprofit. For lawyers, in particular, it is over 30 years from the decisive law firm marketing case, Bates v. Arizona, in which the Supreme Court held that allowing lawyers to advertise would not harm the legal profession or the administration of justice, and, in fact, would supply consumers with valuable information about the availability and cost of legal services.

We see the television commercials and hear the radio ads. Law firm marketing has evolved, yet it continues to be an enigma to many members of the bar. Like my friend, lawyers need to focus their presence online just as nonprofit entities do.

A great website can be a wonderful promotional tool to generate traffic to your site, which in turn can become leads, which in turn can become clients. Web presence can be very helpful for crisis communications. If you are considering getting a website, plan what you want it to say and look like. There are professional web builders available. If you have a website, but aren’t getting the traffic from it you think you could, consult a technology marketing agency for search engine optimization which includes on-page optimization, content creation and link building.

Attorneys should have their own presence on LinkedIn and Facebook. No, not to post pictures from the firm party, but to enable potential clients to have a sense of the person they will hire. If you need help improving business development strategies the way nonprofits do with donor initiatives, feel free to call me for a confidential conversation – 847.227.7174.

FINISH LINE

2009-10-13T09:13:00.002-05:00

Last Sunday 48 yr. old Luis Carlos Mejia of Bogota, Columbia won the grueling 89 mile A2A (Athens-to-Atlanta) inline skate race with a time of 4 hours, 58 minutes and 22 seconds. Skaters from all over the world showed up for the 28th running of America's oldest outdoor road skate. The finish line in Piedmont Park had the feel of a Tour de France on little wheels as the brightly colored, lycra clad competitors forced themselves up the shoot to the finish line with onlookers yelling encouragement. Cindy Lamir, president of Impact Business Advisers, coach/non-skater, said, “These racers have what Americans need right now: courage, determination, stamina -- and a sense of accomplishment!”

Similarly, nonprofit leaders face soul-wrenching challenges every day, persevering through adversity. As nonprofit leaders confront doing the right thing with what may now be the fewest resources, we must use every creative morsel within to develop real solutions to real problems. Just as the Atlanta racers use the finish line to mark their accomplishment, year end is the finish line for organizations. At this point in the race, there are less than three months to leave a mark on 2009. Was your fundraising plan sufficient? How well did you stick to your fundraising calendar? Do you need to install some new strategies for success?

From the book Simple Abundance: "Authentic success is knowing that if today were your last day on earth, you could leave without regret. Authentic success is feeling focused and serene when you work, not fragmented. It's knowing that you've done the best that you possibly can, no matter what circumstances you faced.…” Don’t leave anything out of your regimen as you check off the milestones leading to what may be your greatest victory!

* Special congrats to Marcy Turek of Rockford, IL, skating with Team Rainbo, who finished 10th over all, winner of the women’s division at 5:15:46 – yeah, Marcy!

LEADERSHIP COMPETENCIES

2009-10-03T08:30:00.005-05:00

One of the most inexpensive research methods I employ is to look at lessons learned by universities and corporate America. Here’s one. Harvard Grad School of Education Prof. David Perkins heads the Learning Innovations Laboratory (LILA) looking at leadership strategies to determine what steps organizations should take to improve the effectiveness of their leadership development initiatives. At the crux of the matter are four things:

Thing 1 - Focusing on the development of leadership, not individual leaders;
Thing 2 - Distributing leadership responsibility throughout an organization;
Thing 3 - Embedding leadership development in the context of people's work;
Thing 4 - Assessing an organization's capacity for, and immunity to, leadership development.

Managing the people side of leadership, internally with staff and externally with donors, is crucial to organizational success. In his book, King Arthur's Round Table, Perkins identifies four different "archetypes" on which to plot the nuanced forms of leadership - Answer-Centered, Inquiry-Centered, Leadership by Leaving Alone (the sink or swim approach), or my favorite, Vision-Centered, which LILA describes as a strong energizing vision about the general direction of an organization, along with great personal commitment.

It is immensely helpful to have the right people on your bus, but, as a leader of the institution, the board or a department or project, you have a great deal to do with shaping the cultural infrastructure of your entity. Gain traction by knowing what kind of leader you are.

Five basic ingredients for transformational leadership, I believe, are:

- Developing a high-achieving culture
- Sharing vision with staff, board and colleagues
- Igniting your team's energies and abilities
- Fostering an innovative, experimental environment
- Creating influence and impact across the organization

With the proviso that every organization has unique needs and different colleagues may require a more directed or a more laissez-faire approach, in this recession, change is the prime responsibility of nonprofit leaders. When everyone wants to hunker down, overcoming resistance to change is difficult, but the struggle can bring success to your mission, to your organization and to your colleagues.

SAILING INTO THE SEASON

2009-09-28T08:41:00.003-05:00

Chicago is living up to its Windy City name. Christopher Columbus* may have stayed home on a day like this. So, too, many nonprofit organizations are staying close to shore in philanthropy land with no plans to let out the sails during the balmy days of October, November and December. For many charities, donations made in the crucial end-of-year fundraising season make up a disproportionate share of the money they receive for the entire year – in some cases as much as 60%.

The pressure on fundraising professionals is obvious. This recession is most similar to that of 1974 -- and it took three years for donations to return to the same level. Knowing that, nonprofits need to concentrate as much on strategic fundraising as they do on programs and service delivery to carry out their missions. The same old appeals and shop worn messages may negate their efforts in the current climate.

If that is the case, what are the best ways to articulate your program and your need? What are the best ways to deliver the message for major donors, special events, direct mail, telephone and online appeals? You cannot afford to leave these questions unanswered and leave money on the table. Call me if you want to learn how to increase your opportunities or if you need an additional hand on deck this quarter: 847.227.7174.

*“You can never cross the ocean unless you have the courage to lose sight of the shore.”

WONDERING AND WAITING

2009-09-27T05:38:00.004-05:00

Will Roger said, "Even if you're on the right track, you can still get run over if you're not moving." There is a lot of wondering and waiting going on in the nonprofit world right now. Some pretty big organizations that have enjoyed amazing ROI in the past have gotten cold feet. Anticipating that asking more donors for more money won’t be successful, they have chosen to ask for less and/or to ask less often. They’ve reduced development staffing; donor communications have suffered. Fear of failure can become a self-fulfilling prophecy!

People want to help 'causes' they believe in; so why are many nonprofits waiting to see what happens with the current economy and will re-think fundraising in 2010? We are facing the fourth quarter, traditionally the period when the lion’s share of income is generated. As I said a year ago in this blog, " Practical and tactical decisions will have more influence on resources than the economic downturn." It is important for leadership to focus on the path that leads out of the cramped habit of self-defeatism. My suggestions:

1. Don’t cut back on your fundraising efforts. If you can stick with your original budget, but do more with less, test your tactics to see what’s working. This is what will keep your organization before those who can still support your efforts. Disappearing from view can have disastrous long-term effects.
2. Retaining the supporters you already have should be the major focus, rather than more expensive acquisition and recruitment programs. For every $6 charities raise in new dollars, they lose $5 through donor attrition.
3. Not everyone has lost money in this economy. Solid prospect research gives volunteer solicitors a clear picture from which to work. Employ tried and true mechanisms to move your supporters "up the ladder" to increased giving.
4. Don’t diminish donor communications. Invest in massively improving the donor experience. There are creative ways to convey messages at less cost, like e-communications and social media. Even those donors who have to withdraw support for economic reasons will return when times are better -- if asked.
5. Stay positive. Take a can-do attitude with staff and volunteers. Be transparent about your organization's plans for these times. Otherwise, employees can become anxious, affecting performance, and donors won’t contribute.
6. Call your current supporters to thank them for their past support. Have conversations. Be empathetic to those in need. Find out if stakeholders have new ideas or access to new sources of revenue. You never know who can help, if you don’t ask.

Let action rather than reaction guide your fundraising. Call me, if you need help: 847.227.7174

LAWS OF DISRUPTION

2009-09-12T03:49:00.000-05:00

Larry Downes introduced me to the wonderful world of the worldwide web. As a talent volunteer at the ACLU, he would tweak software to my needs and show me how to stuff information into a machine and, more importantly, get it back out again in any configuration I wanted. He gave new meaning to the term “computer dating”.

Larry, author of the business bestseller, Unleashing the Killer App, has a new book coming out next month, The Laws of Disruption: Harnessing the New Forces that Govern Life and Business in the Digital Age, in which he explains how, 10 years after the start of the internet revolution, the increased speed of new technologies is at odds with the plodding pace of the law. Whether it’s privacy or fair use or digital copying of out-of-print books, “[T]he inability of rules optimized for an analog world to keep the peace in the digital age has paralyzed much of the legal system”. Larry offers nine principles for a new legal foundation, built on the unique economic properties of information, to form the Laws of Disruption. A “Fast-Forward” section at the end of each chapter offers guidance for policymakers, business leaders, and consumers. This is truly a work in the public interest.

Parenthetically, with tongue in cheek, Larry has suggested Microsoft protect itself from the litigation thrown its way by buying “a small country, and structure the deal as a reverse merger.” Owning Micronesia, for example, could provide protection from anti-trust litigation under the Foreign Sovereign Immunities Act!

As Paul Nunes of the Accenture Institute for High Performance says of The Laws of Disruption, “…not knowing the laws of disruption for companies in today’s rapidly digitizing world could prove fatal.” This caution applies to nonprofit organizations and institutions as well.

International consultant, fellow at Stanford Law School’s Center for Internet and Society (the other CIS) and my expert on all things internet, Larry is the guy who understands where Kryptonite is buried in the web. Read this book!

END OF SUMMER CAMP

2009-09-10T05:43:00.000-05:00

Last week my neighbors, Mark and Kim, and I went to a rollicking town hall meeting on health care hosted by Rep. Jan Schakowsky – signs waving outside; inside tales of heart wrenching experiences, some booing, some debate over what was in “the bill”. I wondered who had the burden of proof here – audience members wagging pages copied from somewhere on the internet or the Congresswoman with the bill in her hand?

Like summer camp, that is behind us.

President Obama’s speech to Congress last night was an example out of John Gardner’s In Common Cause: “It is precisely in the political forum that free citizens can have their say, trade out their differences, and identify their shared purposes.” We may get more out of this process than health care reform. Through discourse and bargaining, rather than partisan bickering, we may come to a shared purpose and restore a sense of community and compassionate relations between people – the essence of public interest.

John Gardner was Secretary of Health, Education and Welfare during Pres. Lyndon Johnson’s Great Society. He was also President of the Carnegie Corporation and founder of Common Cause and Independent Sector, as well as founder of The White House Fellowship and The John Gardner Fellowship at Stanford and Berkeley.

TED KENNEDY SAILS ON

2009-08-30T12:03:00.000-05:00

One of my favorite personal Ted Kennedy stories: Sen. Kennedy showed up unaccompanied at a reception my organization was hosting on Capitol Hill. As previous guests before him, Sen. Kennedy stepped to the registration table where our vigilant (and stunned) student interns wrote out his name tag. He made some polite chit chat with them before sticking the label on his suit and wading into the affair … as if anyone in Washington would mistake the man.

He carried out the Kennedy agenda his brothers were denied. He championed the rights of the poor, minorities and women; opposed any form of discrimination based on race, ethnicity, gender, disability, age or sexual orientation. This extremely wealthy man sided with workers, immigrants and refugees. He expanded access to education and health care and fairness in the courts, administrative agencies, and the Justice Department. He opposed the death penalty and fought to end war. He supported every major gun-safety initiative since the Gun Control Act of 1968. He was hard-working and always gracious to me. As Washington Cardinal Theodore McCarrick acknowledged at his interment service, “[W]e always were touched by his passion for the underdog, for the rights of working people, for better education and for adequate health care for every American. His legacy will surely place him among the dozen or so greats in the history of the Senate of the United States."

May the wind be at your back….

MOZILLA SERVICE

2009-08-24T22:20:00.000-05:00

The first annual Mozilla Service Week will match thousands of "techie" volunteers around the world with nonprofits in need of help with IT, web design, programming, blogging and more. Mozilla Service Week will take place September 14-21, 2009. Thousands of organizations have already posted their need for volunteers. If your group could use a hand or if you are a talented techie who would like to make a difference, please go to:http://mozillaservice.org

MAX-IMIZE BOARD EFFECTIVENESS

2009-08-23T21:32:00.001-05:00

Reminiscent of ol’ Mother Hubbard, recently my cupboard was bare and Max was without dog chow. I dashed to the nearest grocery store without a coupon, foregoing the pet store farther away that regularly discounts provisions. Like some nonprofits, I was desperate!

Many groups are practicing time-is-of-the-essence fundraising. In a financial crisis, they are turning to their board members to bring in money hastily to cover a budget shortfall or major financial loss. By doing so, development professionals are setting Board members up for unpleasant (and very often unsuccessful) fundraising experiences. Fundraising is about building relationships, friend-raising. It can’t be done on the fly.

Our rule of thumb is usually seven touch points before a supporter is asked for a major gift. Use information beyond donations to personalize and improve relationships. Track events; newsletters; correspondence whether by mass or individual email, letter or phone calls; personal meetings; correspondence; surveys; birthday greetings; previous appeals. Integrating interest and capacity ratings into your tracking system clarifies readiness and will focus your Board member solicitation process and appeals. Board members, a precious commodity, will appreciate it.

THE DECIDER

2009-08-13T12:08:00.000-05:00

A survey sponsored by Fidelity Charitable Gift Fund of 1,000 adults who had given $1,000+ to charity in 2007 — half of whom had donated $5,000 or more — found that more women than men act as primary decision-maker in determining how much to donate and which causes to support. Of the 11 percent of respondents who were women with household incomes of at least $150,000, these high-income women were more likely to make public gifts to charity, to use more complicated financial structures to make gifts, and to seek the guidance of financial advisors.

R U RELEVANT?

2009-07-23T09:39:00.000-05:00

Last week I had the pleasure of being the guest of the Chairman of the NAACP at its 100th Anniversary Convention in NYC. Focusing on the serious challenges of underrepresented people in America while in a wonderful city like New York is hard. We were feted at MOMA, Metropolitan Museum, Gracie Mansion and the Governor’s house. We were welcomed by Pelosi, Schumer, Rangel and Bloomberg. We were thanked by the 44th President of the United States.

Julian Bond, known as the “dean of civil rights,” is the big thinker in the civil rights movement today. He reminded us that the NAACP was founded by a multi-racial, multi-faith group of concerned citizens in 1909. “At the NAACP, we know colored people come in all colors.”

When asked about the relevance of the NAACP in a “post racial” Obama era, Julian responded, “We’re not the National Association for the Advancement of One Black Person, we’re for all…. While we have a brother who can walk in the front door of Air Force One, his daughters can’t swim in a pool in Philadelphia.” He pointed out that after we won World War II we didn’t dismantle the military; we didn’t eliminate the National Organization for Women because we have a woman as Speaker of the House. For the full presentation, go to http://www.youtube.com/watch?v=LxtwZ-ofACo

At a time of dwindling financial resources, some nonprofit organizations may go out of existence. The NAACP is doing the right things to run in the black*. Hopefully there won't be a need for an NAACP 100 years from now. If you would like to know more of what they are doing correctly, call me.

* Pun intended.

SUPREME BOARD MEMBER

2009-07-16T00:23:00.000-05:00

Yesterday, in response to a question from Senator Lindsey Graham about her role on the Board of the Puerto Rican Legal Defense Fund, Supreme Court nominee Sonia Sotomayor smiled as she said, “The main job of a Board member is to fundraise.” YES!

MUTUAL APPRECIATION HOLDER

2009-07-15T06:18:00.000-05:00

Eric Holder came for lunch Monday … to the NAACP’s Clarence Mitchell Memorial Luncheon. To understand what Eric Holder means to this organization, one has to realize that many people crowding around the luncheon tables desegregated lunch counters. Here was the first African American U. S. Attorney General as keynote speaker, the man who may do the most to eliminate sentencing disparities and close the school-to-prison pipeline. Holder took this opportunity to remind his audience that while the Reconstruction Amendments made equality a fact, equality is not self-enforcing. We must all be part of building a more equitable system of justice. (What a difference to hear a Justice Department official talk about the importance of integrating former offenders back into communities!)

Personal responsibility was his guiding refrain. “Laws can guarantee access to education, but they cannot guarantee a child will pick up a book. That is the responsibility of their parent,” Holder said. To achieve full equality “all of us must take responsibility for ourselves, our choices and our futures….The next Century will be less about changing our laws and more about changing ourselves.”

Monday’s luncheon was a heartwarming display of the intersection between an organization and its supporters: The organization was proud to host Eric Holder and Eric Holder, who stands on the shoulders of those who literally slaved to make his rise to the highest legal office in America possible, was pleased to bring his young son to the NAACP. They were making a memory together. Perhaps one day we will live in peace and harmony and equality and there won’t be a need for a National Association for the Advancement of Colored People.

HAPPY BIRTHDAY, NAACP

2009-07-13T01:26:00.003-05:00

This year marks the 100^th anniversary of our nation’s oldest, largest and most widely recognized civil rights organization. The NAACP was welcomed to NYC and congratulated by Mayor Bloomberg, who described his father’s support of the NAACP back in 1950, and by Sen. Chuck Schumer, Cong. Charles Rangel and House Speaker Nancy Pelosi.

The NAACP has much to be proud of – particularly the election of our first black president. Tonight Chairman Julian Bond reminded us that only one generation (his father’s) stands between Julian Bond and bondage. The recent incident of racial discrimination at the Valley Swim Club in Philadelphia, in which a group of black day-camp children were told to leave a pool because they “changed the complexion and atmosphere” of the facility shows their work is far from done.

Eugene Duffy and his Special Contributions Committee pledge to raise more money from more people than ever before because they know, as Clarence Darrow said, “You can protect your liberties in this world only by protecting the other man’s freedom. You can be free only if I am free."

MICROVOLUNTEERISM

2009-07-08T00:28:00.003-05:00

I should have gotten my mother an iPhone for her birthday. A reader reminded me about The Extraordinaires (.org), a social media website that sends micro volunteer opportunities to mobile phones. This is an easy way to slip good works into busy peoples’ free time. For example, Powerhouse Museum, Sydney, Australia seeks volunteers to tag photos from their exhibitions so thousands of images can be available for public search.

The opportunities here are limitless. Can we harness micro tasks for the overscheduled to be a real benefit, e.g. proofreading, graphic design, asking that alerts be passed on from friend to friend for lobbying, in-person events or volunteer activities? Will we keep up with data capture to bring casual iPhone encounters into our cultivation sphere? Who will be the in-house Snopes equivalent to fact check donated services of lawyers, accountants, art identifiers and the rest of us with walking around sense?

We’ll keep an eye on it! Mark your calendars for Using Social Media/ePhilanthropy, Sept. 11, Chicago.

THE BLUE GARGOYLE

2009-07-01T07:39:00.002-05:00

A Sword of Damocles is hanging over a lot of nonprofit organizations. Many were without adequate financial reserves before the recession hit. Now nearly one in six nonprofits that filed tax returns in 2000 seem to have gone out of business or fallen below the IRS reporting threshold ($25,000 in revenue). The Blue Gargoyle is among those without a pulse.

The Blue Gargoyle was an after school tutoring program closely tied to its University of Chicago volunteers in Hyde Park, Pres. Obama’s Chicago neighborhood. Many years ago, when my consulting partner and I were called in by a Blue Gargoyle Board member to help them out - fundraising was being done on an "as needed" basis. Our first task was to analyze their development program to involve Board members in a more meaningful way in leadership of the organization. Then we attacked the annual appeal and outlined a calendar of activities.

Since then, Blue Gargoyle’s mission broadened into adult literacy and they grew their program. However, our national economic crisis drew far more clients than this already financially challenged service organization could handle. On April 8th, Blue Gargoyle shut its doors.

America needs to concentrate on improving education, including those who want a second chance. This is a loss far beyond the South Side of Chicago. Don’t become a casualty. If you want to discuss your organization’s needs, call me for a free, confidential consultation.

Happy Birthday, Clara Miller!

2009-06-28T07:17:00.003-05:00

My mother turns 85 this week. How did that happen?

When we were growing up, Mom told us about her mother giving food to the unfortunate out the back door of their modest home in Highland Park, MI during the Great Depression. My mother became a nurse. She did “charity work”. She passed this sense of caring and community and the satisfaction that comes from doing good on to her children and we have passed it on to ours.

My mother has a generosity of spirit worthy of emulation. What if everyone embraced the social responsibility movement, not just government tax dollars or corporate responsibility, but individually? Could we bridge the giant chasm between rich and poor? What changes would we see in the world? I wonder....

INCOME PIE

2009-06-22T21:44:00.001-05:00

What does your source of support chart look like?

Do you have all the fundraising food groups?

Need to diversify your income stream? 847.227.7174 for more information. (Click on chart to enlarge.)

GIVING USA

2009-06-15T13:01:00.000-05:00

The Giving USA report findings released last week weren’t a big surprise.

- Individuals donated $229.3 billion to charity last year, a decrease of 6.3 percent. Giving through bequests also dropped: $22.7 billion was contributed through wills, a 6.4 percent decline. Gifts from individuals, including bequests, accounted for 82 percent of all charitable giving in 2008.

- Foundation grants decreased only slightly, 0.8 percent, totaling $41.2 billion. Grants from private, community and operating foundations made up 13 percent of the total contributed last year. But, there are reasons this drop will have a more long-term affect on grantmaking.

- Corporate donations totaled $14.5 billion in 2008, an 8 percent decrease. Half of that was in in-kind contributions and half of that was pharmacological. Corporations provide 5 percent of all giving.

The big take away: diversify your income streams. Tall order, I know. What are you most reliant on? Note that individuals not only provide the lion’s share of gifts, they are the most loyal.

The days of drive-by donor relationships are over. Learn how to massage your supporters with a series of effleurage and petrissage (stroking and kneading) to keep them copacetic with the changes at your organization. If you need a road map on donor relations, call me: 847.227.7174.

NOT IN KANSAS ANYMORE

2009-06-14T10:17:00.000-05:00

Wednesday’s Giving USA 2009 report on last year’s charitable contributions put hard numbers to that sense of "We are not in Kansas anymore”. Although charitable giving exceeded $300 billion for the second year in a row, charitable giving fell by 2 percent. Adjusted for inflation, total giving was down 5.7 percent, the largest drop recorded since the group has been keeping track of America’s charitable donations. Those of us invited to hear the statistics interpreted by Jimmie Alford at North Park University were urged by a lovely nonprofit board member on the panel to be even “more rigorous” in cutting back our organizations. We washed down the harsh reality with strawberries, chocolate and a toast to The Alford Group’s 30 years in business.

The U.S. stock market was the wealth-generating engine for many, including nonprofit organizations. The plunge of stock values from when the Dow Jones Industrial Average hit its’ high of 14,164 on October 9, 2007 to one year later, in the midst of the newly coined "cascading crash," when they closed at 8579, a 40% decline, has had dire consequences for nonprofit groups, particularly social service organizations serving the most needy among us. Charities are faltering as demand for services skyrockets.

“Researchers who compile Giving USA said that today’s recession most resembles the one in 1974, and it took three years after that downturn ended for philanthropy to return to the same levels of donations as before the economy soured,” according to The Chronicle on Philanthropy.

Charities weather downturns when they have solid fundraising programs, compelling cases for support and good governance. Now is the time to pick ourselves up, dust ourselves off and find the best ways to help our organizations weather this storm! Feel free to call me to hear my ideas.

WILD GIFTS

2009-06-10T03:02:00.001-05:00

I am blessed with knowledgeable friends who are willing to answer questions -- which came in handy after a topsy-turvy discussion about prospects for planned giving. My suggestion to go beyond the pool of mature major gift donors and consider frequency of donations was left on the cutting room floor.

I turned to Payson Wild, President of Wild Associates (doesn’t that sound like a fun group?) and Executive Consultant at The Alford Group (which is a fun group) for some pearls of current wisdom:

“To address your question, my experience that consistency of giving is a very good predictor of the potential of planned giving. Consistency of giving indicates identification with an organization's mission. The size of a gift can be a predictor as well but a one time major gift may, or may not, indicate a real passion for mission. Of course, if you have a planned giving prospect who has given consistently and made a major gift or two, you have the best of all worlds.”

So, listen to Payson; look beyond your large donors. Further, rather than run a nice little box in your newsletter touting the benefits of planned giving, take the same pro-active approach as with cultivating and soliciting major gifts. Visit them.

IT’S WHAT YOU KEEP

2009-06-07T13:13:00.002-05:00

Nonprofit organizations are like Alice Through the Looking Glass, running madly beside the Red Queen and being reminded, "it takes all the running you can do to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”

Since we do not know what the future may hold, we must figure out innovative strategies to make and save money. One lap in this race is cost reduction.

Just as we fundraising professionals know that it is more cost effective to retain a donor than to acquire a new one, in the corporate world it has been said that every dollar saved in expenses is equal to 50 - 100 times as much in new revenue because of the costs associated with generating new revenue. It is just as important to keep what we raise!

My friend Joe Szuba, a fellow former Board member of Victory Gardens Theater, is President of National Cost Reduction Corporation (NCRC). He and his partners have cut their teeth on saving money for corporations and are turning their attention increasingly to nonprofits because of the dire need in this economy. NCRC offers a free analysis of expenses and a free projection of savings on non labor expenses (not HR or producing goods). This year they saved one Chicago nonprofit $100,000! They have an impressive list of references – Fourth Presbyterian Church, Gilda's Club of Chicago and Lawrence Hall Youth Services among them.

Nonprofit managers face constant pressure to maintain cost effectiveness and reduce expenses. You may feel you already do this. In my opinion, the most important aspects of using specialists like NCRC is to take advantage of their connections with vendors, who have reduced prices before or seen business go elsewhere; what is, thus, their aggregate buying power; and the fact they do the job and the only cost is sharing the first year savings...they only get paid out of savings.

Joe appreciates sensitive donor relations and the need for confidentiality. He’s a nice guy. Contact him or call me, if you’re considering checking this out for your organization: 847.227.7174.

ROUSE YOUR BOARD TO RAISE $

2009-05-27T08:36:00.003-05:00

Hank Rosso, fundraising guru and founder of the Fund Raising School at the University of Indiana, said “Fund raisers must take the wisdom of leadership (art) and apply it to management and administration (science).” He described major gift fundraising as the right leader asking the right prospect for the right amount for the right organization at the right time. The hard reality for nonprofit organizations is the endless need for the board to participate in fundraising solicitations. However aloof, unwilling or unenthusiastic they may be toward supporting the organization beyond their own gifts, ultimately, they must participate. If not the leadership, then who?

How does a development officer convince board members to be involved?

1. Empower them through training, systemization and accountability.
2. Teach them how to take the fear out of asking for the gift.
3. Show them the benefit of leveraging their relationships.
4. Assure peer accountability with leaders who model behavior.
5. Motivate and persuade with grace.

Each Board is unique and has its own idiosyncrasies. If you need help, call us: 847.227.7174.

REFOCUSING AT FORD

2009-05-23T13:43:00.002-05:00

Luis Ubinas is shaking things up at the Ford Foundation. He’s been President for 16 months and he’s initiated new strategies to ensure that the Foundation's grantmaking will address the challenges of “the next generation,” while drawing upon Ford's 50+ years on the frontlines of social change around the world, fighting for social justice focused on marginalized members of society.

After a year-long evaluation process in which Ford obtained feedback from some 2,000 individuals and organizations across the many regions it serves, they plan to focus grantmaking in eight areas: access to education; democratic, accountable government; economic fairness and opportunity; freedom of expression; human rights; natural resources and sustainable development; sexuality and reproductive health and rights; and social justice.

“We believe that the next generation of Ford's work has the potential to help achieve the lasting social change in which we all believe. But it will not be easy. The challenges of discrimination, economic inequity and lack of access to opportunity are real and growing. In many areas where our past support contributed to significant gains, ground is being lost. More immediately, all of us are feeling the pain of the global economic crisis, and this year will likely be harder than last,” Ubinas said.

At a tough economic time, we seem to have ushered in an atmosphere of serious consideration for the human condition.

DISRUPTION

2009-05-20T01:14:00.000-05:00

Sometimes great volunteers get away from us, go to law school, move to a warmer climate, write books. In appreciation for technifying me, I’m going to recommend Larry Downes’ new book: The Laws of Disruption, which will be published in October by Basic Books. Larry explores the “accident-prone intersection of innovation and the legal system, and why the crashes are getting more numerous and more deadly all the time.” You can read part one of Inc.'s interview with Larry at www.inc.com. In October you’ll find an autographed copy in the “Books by People I Know” section of my bookcase.

VOLUNTEER IMPACT

2009-05-15T19:41:00.006-05:00

The 2009 Deloitte Volunteer IMPACT Survey findings are amazing -- 24% of nonprofit executives said they have no plans to use skilled volunteers or pro bono support in any capacity. I love volunteers for many reasons, but especially because their work is for free. Free is my favorite four-letter word! In addition to all of the outstanding Board volunteers I have worked with, there is a special place in my heart for the remarkable, immensely accomplished "office" volunteers who have populated my life: Diane Citrino, Larry Downes, Jerry Lehrman, Dede Pascal, Kathy Roin, Dan Sheridan, Chris Smith, Marge Sondler, Jane Tougas and the list goes on and on.

The Deloitte Survey suggests that the slow embrace of skilled volunteer services has been due in part to a widespread lack of knowledge of how to find volunteers. Some organizations have a hard time balancing need vs. risk. You know the old saying about teaching a man to fish, well, the U.S. Fish and Wildlife Service's 65-page "Guidebook for Working with Volunteers" can teach anyone how to recruit, screen, train, supervise, support, evaluate and account for volunteers. Available at www.fws.gov/policy/volunteer_guidebook.pdf, it's valuable currency in this economy!

FY 2010 - LEGAL SERVICES

2009-05-08T13:25:00.005-05:00

I have been reminded of something Studs Terkel once said when I hear about the job cuts and furloughs being taken at my favorite nonprofit organizations: “I can’t survive the day unless everyone else survives it, too. I live in a community, and if the community isn’t in good shape, neither am I.”

My sentiments exactly as I heard Pres. Obama’s proposals to the fiscal 2010 $3.5 trillion federal budget. Some of this is good news; some of it bad. I will outline several in following blogs.

First, I am overjoyed by the fact President Obama's request includes $435 million for the Legal Services Corporation ($45 million over last year) AND, further, the end of the long harmful restrictions on non-LSC funds imposed by previous Republican administrations, including the restrictions on attorney's fees and participation in class action lawsuits.

A March 14 Washington Post editorial pointed out that, “Legal Services is also barred from using public or private funds to engage in a range of activities…. none should limit what local legal-aid clinics can do with money they raise privately. Sen. Tom Harkin (D-Iowa) is spearheading an effort to address many of these issues…. Such reforms are long overdue.”

I can’t begin to describe what this will do for social justice! Let’s make it happen!

GOOD NEWS

2009-05-04T04:18:00.003-05:00

Not all the news is gloom and doom. Have you heard this?

South Dakota philanthropist Denny Sanford completed the $400 million commitment he made to health care in 2007 -- five years ahead of schedule with the final installment of his gift on April 3.

CA philanthropist Eli Broad, best known for his support of the arts, announced that he is giving $2.5 million to two public charter school management organizations to open and support existing charter schools in New York City. He is also committing hundreds of thousands of dollars to support the Detroit Public Schools’ efforts to turn that city's faltering school system around.

Sanford Weill, former chairman of Citigroup, and his wife, Joan, have agreed to provide $170 million of a nine-figure pledge they made in 2007 to Weill Cornell Medical College that they had intended would be a bequest. Instead, the cash payment, made to the university in December and January, will be used to underwrite a challenge designed to boost the medical college's $4 billion capital campaign. The timing couldn't be better. The university's endowment lost roughly a third of its value over the last year and, with donations down, its $2.9 billion budget has an 8 percent shortfall. Weill himself has lost a huge portion of his personal fortune, but he told the New York Times he wanted to send a message about giving in times of need.

Michigan’s Kresge Foundation has announced nearly $73 million in first-quarter grants – the largest quarterly commitment in its 85-year history!

100 DAZE

2009-04-30T08:34:00.000-05:00

100 days into the Obama presidency and I’m irritated – with the press corps. I’m tired of the 24/7 doom and gloom. My anecdotal take on the economy is: A few houses in my neighborhood have SOLD signs on them, a dear friend’s new job pays 37% more than the one she left last year, the Jewel grocery stores cut food prices by 20%, I’m still paying my mortgage and my elected officials are primed to spend federal stimulus money on improving my state and my hometown.

What’s the outlook for the nonprofit sector? 181 nonprofit groups of various sizes responded to a survey in late January sent by a collaboration of groups and foundations to assess the impact of the current economic crisis on nonprofits. The purpose of the survey was to better understand how nonprofits are managing the situation within their organizations. Survey respondents were in positions of fundraising accountability: 44% were executive directors and 27% were development directors.

The majority of organizations across the board predict a recovery time of two years or less. For many groups, the economic downturn is an opportunity to focus on strategic priorities, reconnect with their mission, build relationships, collaborate with new partners, and get creative.

No surprise here: The report points out that nonprofits with diverse revenue streams, good management, and what could be labeled “learning cultures” appear to be coping markedly better than others. Many have seen an increase in the use of their services and pro-actively plan to expand programs/services in 2009. Organizations that are faring better appear to be putting more focus on fundraising activities, especially individual donor relations, including major donor development. Respondents highlighted some necessities:

- Board members need to be more actively engaged in fundraising, cultivating relationships, and being ambassadors for the organization.
- Nonprofit leaders need to set the tone, be calm, and communicate clearly about decisions, priorities, and organizational vision and goals. They, too, should be more visible and more involved with individual donor fundraising.
- More effort should be expended on donor outreach and cultivating relationships, requiring a corresponding investment in development staff, resources, and activities.
- Better internal communication among organizational team members is vital to surviving in this difficult economic climate.

PIF specializes in major gift fundraising, as well as the array of income producing programs. If you need fundraising help, feel free to email us: 847/227-7174

TWEETIE PIE

2009-04-29T20:17:00.001-05:00

The nonprofit world is atwitter* about using social media to connect with prospective supporters and to get messages out to the broader public. Todd Cohen of the Stanford Blog recently wrote that nonprofits “should start looking at building social media into their overall fundraising and communication strategies. Often reluctant to move beyond traditional strategies, whether or not those actually produce positive results, nonprofits should look at social-media tools that are changing the way people communicate, connect and spur one another to action.”

"If you don't get started now, you're going to be playing catch-up," says Beth Kanter, a social-media strategist who is serving as scholar in residence for nonprofits and social media at the David and Lucile Packard Foundation in Los Altos, Calif.

Questions, I have questions: What nonprofit organizations are employing blogsters? Is there hard data on ROI yet? Can the internet be used to draw in large donations? You think none of that can be done? Watch this space for information on a future e-Philanthropy seminar. We’ve got some tech/media savvy early-adopters in development and communication departments willing to present on texting, tweeting, YouTubing, friending and other internet socializing. Interested?

* pun intended

HOW LONG?

2009-04-25T07:56:00.001-05:00

Taking the temperature of our audience Wednesday at the Fundraising Summit at IIT, I asked for a show of hands of those who had been in fundraising for various amounts of time ... the only people among the 50 folks in the room who had been asking for money for 20 or more years were Ray Merenstein, my co-presenter, and me! (That may be why the Center for Nonprofit Success tapped us for this session.) In the car on the way back to Evanston with the sunshine glistening off Lake Michigan, I thought about the real answer to that question.

I bet most of the folks in the room had sold Girl Scout cookies or took gift wrap orders or washed cars for their team. In reality, we've been in fundraising so long we should be experts at it!

My kids were fundraising as toddlers! Their major gift requests may have had a few less 0's in the number, but they knew how to establish rapport, they educated me on the benefits of a gift (even if the benefit was only to them, like so many organizations' appeals) and they definitely asked for a specific amount or specific gift! (And, far more often than not, they got the gift!)

One point I hope everyone took home from the Summit was the need for being donor centric. Successful fundraising is done on a win-win basis, matching donor interest with organizational needs. Only by knowing your donors, will you be able to make that match.

If you would like notes from our presentation, leave a request here.

* Maggie Blake, fundraiser in training.

COMPLEX GRANDE GIFTS

2009-04-20T03:03:00.004-05:00

Nothing like short notice -- but, if you want help, here it is!

You can catch me this Wednesday (4/22) at the Center for Nonprofit Success’ Chicago Fundraising Summit taking place at the Illinois Institute of Technology. I’ll be speaking on “Complex Issues Affecting Major Gift Solicitation” with Ray Merenstein of RDM Communications, Inc. from Denver. We’ll be addressing challenges such as getting your Board on board, benchmarking, goal setting and managing multiple priorities.

You can join us by registering at www.cfnps.org.

SYMPOSIUM NOTES: FOLLOW-UP

2009-04-20T02:51:00.001-05:00

“Great seminar!” “So many good ideas!” “Just what I needed!”

Everybody was in exclamation mood! Sixty-six percent of anonymous evaluation respondents said Fundraising in This Economic Crisis was among the best fundraising training they had ever received. Thank you!

If you would like a compendium of the suggestions for reducing expenses that were sprinkled throughout the symposium, copies are available at kamblake@aol.com.

Attendees wanted more info on using new media: texting, tweeting, blogging, etc. Look for an upcoming PIF session on e-Philanthropy!

SYMPOSIUM NOTES: FUNDRAISING

2009-04-06T00:55:00.002-05:00

We are sharing some of what we learned at the Fundraising in This Economic Crisis: Unearth Potential symposium. For a full copy of minutes, email kamblake@aol.com.

Addressing the handouts, Yours Truly, consultant to nonprofits at Public Interest Fundraising, discussed how to develop a Donor Base. Individuals are the largest and most loyal group of support. At the center of your donor universe will be people who have Linkage of some sort to the organization, Interest in what you do and the Ability to do it. In the outer reaches of the universe is where you prospect to acquire donors through cold, direct mail.

Use a Donor Pyramid to analyze and conduct your fundraising program. It gives you a clear snapshot of where your donors lie and the rational relationship between different sizes of financial contribution, different levels of donor commitment and different means of appealing to those donors…. Organizations must constantly be searching for new donors that form the base of the pyramid. Direct mail has been a tried and true, yet expensive means of acquisition; less expensive are e-Philanthropy online options for fundraising. You can't rely on one type of fundraising; you need to have a diverse set of fundraising mechanisms, especially in this economy.

Events and high dollar mail form the mid-level of the giving pyramid…. Track your responses each year – total dollars, average gift, and response time – so you know what works.

At the top of the Pyramid are individual donors. This is where the best use of Board and staff comes into play…. Every Board member needs to participate in major gift fundraising. The multiplier effect and equal responsibility for Board members make a stronger organization….

SYMPOSIUM NOTES: BOARD MEMBERS TODAY

2009-04-05T08:01:00.000-05:00

The Fundraising in This Economic Crisis: Unearth Potential symposium was fortunate to have fantastic presenters. This week we will share some of what we learned.

There is no substitute for an informed, engaged and committed governing board. Dan Luber, Corporate V.P. of Social Responsibility and Environmental Affairs, Lawson Products and Board member of Little City Foundation, Anorexia Nervosa, Kupcinet Foundation and numerous non-profit organizations gave us his opinion on the role of Board members and what they need from staff to do their jobs well.

Success is dependent upon your staff. Run your non-profit like a business …. define your expectations, focus on your goal and get the board’s commitment. Don’t let them limit your vision and goals. Staff members should support the nominating committee by preparing Board members for the position. Let the committee know who’s donating, bringing in new members, who supports events. He suggested everyone subscribe to the Chronicle of Philanthropy.

Dan believes Board members must lead by example. His personal philosophy is to meet people, continue to educate, network….be open to the opportunities around you….

A full copy of Symposium minutes is available by emailing kamblake@aol.com.

SYMPOSIUM NOTES: AVOIDING BERNIE MADOFF

2009-03-31T09:15:00.005-05:00

The Fundraising in This Economic Crisis: Unearth Potential symposium was fortunate to have fantastic presenters and the generous support of the Unitarian Church of Evanston. This week we will share some of what we learned.

Michael Pierce addressed our questions regarding avoiding the next Bernie Madoff. Michael is a CPA and Certified Fraud Examiner. He is a partner in the CPA firm of McGladrey & Pullen. He is Vice Chair of the Illinois CPA Society. AND, he serves on the board of an organization that was ripped off by Bernie Madoff. He shared his valuable insight into “fraudsters.”

The reason Bernie Madoff’s Ponzi scheme came to light was because the economy has compelled people and organizations to withdraw money from their investments. According to Michael, “When times are tough we find just how many times we’ve been taken.” ....

It is difficult to find fraud until you know it exists. Often suspicion arises when a staff person goes on vacation and a back-up person steps in and questions what they see. It is very difficult to protect against fraud: different organizations have different challenges....

Non-profits should have sophisticated accounting systems to track where the funds go and have standards in place to protect themselves. Michael said the best protection is having a system that would require multiple people to group together in order to perpetrate the fraud. The fraudsters are very focused. There’s more of a chance that the wrong person will be approached and will blow the whistle. Michael described the three elements almost always present in organizational fraud, and much more.

If you would like a copy of the 46-page "Audit Committee Guide for Not-for-Profit Organizations" that attendees received, contact Michael Pierce at McGladrey & Pullen, 570 Lake Cook Rd., Deerfield, IL 60015 or 847-940-1300 x3600 or Michael.Pierce@rsmi.com.

A full copy of Symposium minutes is available by emailing kamblake@aol.com.

SYMPOSIUM NOTES: GRANTSMANSHIP

2009-03-30T07:55:00.003-05:00

The Fundraising in This Economic Crisis: Unearth Potential was well-attended, well-received and very, very fortunate to have fantastic presenters and the generous support of the Unitarian Church of Evanston. Below is a small idea of some of what we learned.

Marybeth Schroeder, Senior Program Officer at the Evanston Community Foundation, shared her knowledge and perspective of how charitable foundations have been affected by the economy -- ECF, as well as local and national foundations. The ECF's activities are three-pronged:

1. Raise and manage endowment
2. Make grants to Evanston organizations
3. Serve as a community convener by bringing together other community partners

Marybeth urged the audience to consider, when applying for a grant from a foundation, if the mission of the organization fits with the guidelines of the foundation.... Organizations should not spend time pursuing grants from sources that are unlikely to fund them.

Be familiar with application deadlines. ECF has three giving cycles in 2009....

Foundations must have careful management of its endowed funds, ECF lost only 19% on its investments last year, while the national average is about 30%. They are not pulling into their shell and shunning new commitments....

For a copy of the full minutes of the Symposium, email kamblake@aol.com.

DON'T MISS THIS ONE

2009-03-25T17:41:00.000-05:00

Fundraising in This Economic Crisis: Unearth Potential!

We have a wonderful array of presenters and fundraising colleagues attending the symposium (see below). We will cover the state of charitable foundations, financial oversight in the face of Bernie Madoff, the role of Board members in today’s nonprofit organization, how the fundraising pyramid applies to all nonprofits, cost-cutting ideas and innovation.

Sponsor: Kathy Miller, Public Interest Fundraising consultant to local, state, national and international organizations for over 20 years.

Host: Sandra Robinson, Manager of the Unitarian Church of Evanston, overseeing all programs related to ministry and outreach.

Panelists:

The State of Charitable Foundations
Marybeth Schroeder,
Senior Program Officer, Evanston Community Foundation

Financial Oversight in the Face of Bernie Madoff,
Michael Pierce,
CPA, CFE, Partner at McGladrey & Pullen and Vice Chair, Illinois CPA Society

Role of Board Members in Today’s Nonprofit,
Daniel Luber,
Corporate Vice President of Social Responsibility and Environmental Affairs, Lawson Products

When: Friday, March 27, 2009 from 12:30 PM – 3:30 PM. We will start at 12:30 sharp!

Where: Unitarian Church of Evanston, 1330 Ridge Road, Evanston, IL

Registration - Share This Opportunity: Organization representatives, board members and fundraising volunteers are encouraged to attend. They must RSVP with name, organization and contact information to 847/227-7174 or email kamblake@aol.com to reserve a place. Registration is free, but space is limited.

Note: Case Statement Challenge participants must be in attendance at the Symposium to secure the charitable donation.

Your Marketing: If it could benefit your organization to have pictures of you at this event, bring a camera and we can help you capture the occasion.

CUDDA, WUDDA, SHUDDA

2009-03-10T06:29:00.000-05:00

Don’t let “Cudda, wudda, shudda” be your year end review (or the theme of your exit interview). Start now, at full throttle, with an action plan rather than a reaction plan! Join us for Fundraising in This Economic Crisis: Unearth Potential on March 27th. Register at kamblake@aol.com. (See Feb. 13 blog below for details.)

PINCHING PENNIES

2009-03-01T22:18:00.000-06:00

Non-profits are pinching their pennies so hard their fingers are bleeding!

• Food lines are stretching further out the door.

• The arts are shrinking and dying.

• Community mental and public health services are being curtailed.

• Education is waaaay underfunded.

The list goes on and on.

The last thing charities should do is put their heads in the sand. They need to keep making the compelling case, inviting people to participate in giving through tough economic times.

On March 27th I am hosting a free symposium in Evanston for Chicago-area non-profits to discuss the economics of philanthropy right now and methods for long-term fundraising success, cost-cutting and innovation. Participants will receive relevant materials, share information and network with colleagues in the field.

"Fundraising in This Economic Crisis, Unearthing Potential," 12:30 - 3:30 at the Unitarian Church, 1330 Ridge, Evanston, IL 60201 Register at kamblake@aol.com.

WWWD?

2009-03-01T12:54:00.000-06:00

I wrote a recent blog about What Would Warren Do? I've been reminded by a conscientious friend of what the investing guru did in 2008:

Berkshire Hathaway's net worth fell by $11.5 billion, according to its annual report. Since peaking at $151,000 a share in December 2007, it has fallen to $78,600, a decline of 48 percent. The S&P 500 has dropped 49 percent over the same period.

Thank you, John.

CASE STATEMENT CHALLENGE

2009-02-17T09:55:00.000-06:00

Special donors are offering a cash contribution to the charitable organization with the best Case Statement submitted prior to the "FUNDRAISING IN THIS ECONOMIC CRISIS" symposium on March 27th.

A Case Statement, also known as a Case for Support, is the essential first document for institutional fundraising readiness. The Case Statement tells the story of the need an organization meets – not the need to raise money – but the need that is met through services and programs.

Challenge participants must be 501(c)(3) organizations and must submit a copy of their Case Statement with a brief cover letter, contact information and proof of tax status to Public Interest Fundraising: kamblake@aol.com. Deadline is Friday, February 27, 2009.

Participants must be in attendance at the Symposium to secure the charitable donation.

If you need assistance or have questions, contact Kathy Miller at 847/227-7174.

FUNDRAISING IN THIS ECONOMY!

2009-02-13T14:31:00.000-06:00

Join us for a PIF sponsored interactive symposium that will be informative and free!

When: Friday, March 27, 2009 from 12:30 PM – 3:30 PM

Where: Unitarian Church of Evanston, 1330 Ridge Road, Evanston, IL

This is an event for those who recognize that the economy has changed drastically, those who understand they can’t wait for donors to contact them, those who are prepared to do more than just weather the difficult giving climate. Join us to unearth the potential in the organizational three Rs: Raise more money. Reduce costs. Restructure services.

This symposium will dissect the thorniest problems facing non-profit participants. Presenters and colleagues will share information, search for ingenious solutions, address the Giving Pyramid in this economy, and discuss how to do more with less, benefit from collaboration, finish the year strong and recession-proof your cause.

Call 847/881-8033 or email kamblake@aol.com and leave your name, organization and contact information. Registration is free, but we need a count. March 26 @ Noon is the last day to register – seating is limited.

More information on the Case Statement Challenge to follow!

WWWD

2009-02-05T04:09:00.000-06:00

I spent lunch yesterday with a colleague, chewing on a salad and the problems of a client. Naturally, we wondered: What Would Warren Do? Warren Buffet, the Big Kahuna, what would he do in this dreadful economic climate if he ran a NON-profit? Here's what he's said (albeit in another context):

“I buy on the assumption that they could close the market the next day and not reopen it for five years.” OK, he’s talking stock market, but, if your donors closed their wallets, how much money is available for your organization to meet future expenses? Do you have an endowment?

“If a business does well, the stock eventually follows.” People aren’t going to spend their hard earned dollars on a badly managed organization – at least not twice. If the development department is the main means of keeping an organization on supporters’ radar screens, it behooves every development officer to run a whiz bang shop.

“You only have to do a very few things right in your life so long as you don't do too many things wrong.” There are plenty of things in our organizations that need to be done right. Everyone must rise to the challenge. I’d start with the Board of Directors. Every Board member should give, get and give again – you're probably way ahead of me already -- I mean contribute, fundraise and contribute. Hard choices have to be made, whether it’s taking a salary cut so everyone keeps a job or cutting a program, like Brandeis University, which voted to close their art museum,

“Your premium brand had better be delivering something special, or it's not going to get the business.” Donors and volunteers want to know their giving is making a difference. Now is the time to let your supporters know how and what you are doing. Keep them close.

Non-profits make possible and impossible possibilities reality! Do what you do better. Do more. Adjust so you make change rather than have change foisted on you.

Join colleagues on March 27th at the Unitarian Church in Evanston, IL from 12:30 - 3:30 for the Non-Profit Symposium on Fundraising in a Challenging Environment. We'll drill deeper into best practices. Registration is free (due to Public Interest Fundraising's fundraising) and guests are encouraged to attend. Call me to reserve your spot: 847/881-8033.

CORPORATE MOVEMENT

2009-02-03T11:34:00.000-06:00

A new report on corporate giving will be music to some ears and will be ringing in others for quite some time to come. Forty-two percent of corporations and 37 percent of corporate foundations recently surveyed said their charitable giving budgets will decrease in 2009. LBG Research Institute predicts that the overall decrease will be in the 3 percent to 5 percent range.

Fully half of corporate foundations said that their giving budget (including cash and non-cash) will stay the same in 2009. Thirty-seven percent, though, said this budget will decrease. Only 4 percent said their charitable giving budget will increase.

As for corporations themselves, more respondents are decreasing their giving budget (42 percent) and fewer said their budget will remain the same in 2009 (35 percent).

The 76 corporations and corporate foundations that participated in the survey indicated an abrupt move from arts and culture toward basic needs and environmental causes. Forty-nine percent of those that supported arts and cultural institutions in 2008 said they will decrease their giving in that area, while 24 percent of corporations and corporate foundations that support environmental causes plan to increase their support in 2009 for that area. Of those that in 2008 supported organizations serving basic human needs, 23 percent will increase their support this year.

The overwhelming majority of respondents said they plan to be more strategic with their giving, meaning they will shift to supporting local organizations instead of national ones. Corporations said they want to give more money to fewer organizations to increase the impact of their gifts.

LBG Research Institute’s report, Doing More With Less: How the Economic Downturn Will Impact Corporate Giving in 2009, is available for a fee at the institute’s website www.lbgresearch.org. Diversifying your income stream, as well as recouping support, will be discussed in greater detail at the Public Interest Fundraising symposium next month.

ENTRE NOUS

2009-02-02T12:24:00.000-06:00

Grantsmanship used to be simpler. I can recall, back in the day, when foundation founders were intimate participants in local organizations and made commitments on a verbal exchange. In the last 25 years, troublesome “customs” have led to where we are now – buried alive applying for a grant and swamped after we’ve been lucky enough to receive one!

The Rand Corp. studied a nonprofit social service agency in western PA a couple of years ago and found that work hours spent on compliance reporting consumed 11 percentof the agency's annual budget! Hindsight is 20/20 -- grantsmanship needs lasik surgery.

That just might be Project Streamline, a coalition of grantseekers and grantmakers founded to study the impact of grant application and reporting practices. The Project commissioned a report last year that should be receiving far more attention in the non-profit sector than it has. Drowning in Paperwork, Distracted From Purpose: Challenges and Opportunities in Grant Application and Reporting looked at the burdensome grantsmanship practices grantseekers have decried for years now.

Acknowledging an “effectiveness paradox,” foundations are “beginning to discover that some measures they’ve adopted to ensure strategic and accountable grant making might be backfiring, resulting in a system that creates burdens on time, energy and ultimately effectiveness not only of nonprofit practitioners but foundations themselves.”

Sara Engelhardt, former program officer at the Carnegie Corporation who left the presidency of the Foundation Center, says the process is congested with middlemen, including trustees and program officers. She believes charities often have to “rewrite their budgets according to very specific requests related to a grant maker's needs.”

For some of my clients a grant is a pyrrhic victory – it costs more to service than the grant is worth. Those are the people Project Streamline wants to hear from at www.projectstreamline.org -- and so would I. You can share your thoughts and opinions and experiences anonymously: “…most of the red tape involved prohibits XXX organization from getting funded,” “…some grantmakers have developed complex application requirements that are not proportionate to the size of their grants.” Let’s hear it!

More on the Common Grant Application and right-sizing of grant applications at a later date.

TIPS FOR THE NEW YEAR

2009-01-19T19:40:00.000-06:00

Instead of resolutions to diet or exercise, my friend, Kathleen Reidy, Director of Communications for the Lake Bluff School District, and I came up with a few marketing and fundraising tips for you for the New Year:

1. Review and update your web site. Enhance or augment the content. Refresh images and graphics on a regular basis. Besides, the more you do online: blogs, surveys, articles, content changes, for example, the more you optimize your organization's site and the more people find it.
2. Is your fundraising plan in place? If not, checkout online resources and books to develop a condensed plan right now or, better yet, call me.
3. Use your database to best advantage. Segment your lists and create communication campaigns that pay the biggest dividends. Keep your organization uppermost with your target market segments.
4. Focus on what makes your cause or service or organization different or special. Find the one or two top points and then drive them home in all of your messaging.
5. Think about fundraising from the donor’s point of view:
• Is it meaningful? Does the request for funds matter to them. Are you changing your message for the appropriate groups? Do they get something from it (a membership, a feel-good feeling)?
• Is it easy to do? Online, use a credit card, tax donation receipt follow-up without being asked.
• Will they want to tell others? This is dependent on the first two.
6. Mix it up. Always doing the same thing and results are sliding? Try something new.

GET YOUR BOARD "ON BOARD"

2009-01-15T07:32:00.000-06:00

If your board is unenthusiastic, unwilling or unaccounted for when it comes to raising money for your organization, you’ve got a tough row to hoe.

More and more nonprofits are reshaping board of director practices and policies regarding resource development. Here are four ways to get your board and senior management to embrace fundraising with the awareness that all volunteers and staff share the responsibility:

1. Enlist a committee.

Ensure you have the “right” people serving on your development committee. Find volunteers dedicated to resource development who have experience in one or more areas of fundraising, whether as a volunteer or professional. Certain leaders on a board are capable of having a huge impact on ‘buy in,’ so be sure to enlist them to make recommendations to the board. A development committee should manage vision and purpose, make quality decisions and define priorities, lead by example. If you don’t have such a committee, recruit strategic volunteers for this crucial function.

2. Share what works.

When you find information by fundraising professionals and other organizations describing their success in fundraising, be sure to share copies with the board and staff. Distribute it at meetings where members might read the hard copy, may bring it up for group discussion or talk with you about it. This gives board members an opportunity to identify what works and to assess what your organization should be doing. Highlighting what other organizations’ fundraising efforts have earned, can, over time, affect performance and board decision-making.

3. Hire an authority.

No matter how hard a senior development officer may try to change the culture of a non-fundraising board, they often need an outside voice to turn on the “responsibility” switch. A nonprofit consultant can do a convincing presentation on why fundraising is crucial to an organization’s ability to raise money and grow. Plus, you can gain a knowledgeable colleague.

4. Laud participants.

Nothing influences other people’s participation than a little praise of their colleagues. You can see the light bulbs go off when another Board member is acknowledged for fundraising. This goes a long way toward producing the next generation of board member. Praise: You can’t do enough of it!

If you need help to inspire, engage and involve your board in fundraising, call me: 847/881-8033.

A LUMP OF COAL

2009-01-13T08:47:00.000-06:00

H.R.7327 was the usual rigmarole of Congress making technical corrections related to the Pension Protection Act of 2006 for things like airline carrier bankruptcy funds to Roth IRAs. The “WHAM!” sound heard when this bill passed Congress was non-profit fundraisers slapping their foreheads because the legislation waived the mandatory minimum IRA distribution rule for 2009!

Until President Bush signed the “Worker, Retiree and Employer Recovery Act of 2008” into law on Dec. 23rd, people who are 70½ and older were required to distribute a certain amount of funds from their IRA to avoid a stiff tax penalty. And, the two-year extension (2008 and 2009) of the IRA Rollover provision also allowed those individuals to contribute up to $100,000 from their IRAs as a direct gift to a charity tax-free.

This new law allows individuals who are 70 1/2 and older to keep all of their funds in their IRA without receiving a tax penalty. This temporary waiver of the mandatory minimum distribution rule could detrimentally affect donations under the IRA Rollover provision. All the more reason to communicate clearly, persuasively and regularly with your donors!

CHUCK MORGAN

2009-01-11T03:47:00.000-06:00

We’ve lost a fine attorney in the New Year. Charles Morgan, Jr. died Thursday at his home in Destin, FL of complications from Alzheimer's disease. He was 78.

The day after four black Sunday-school girls were killed in a Birmingham church bombing (1963), Chuck Morgan spoke at the Young Men's Business luncheon, accusing the city's white community of complicity in the murders. Driven out of town by death threats from the KKK within a year, the American Civil Liberties Union asked Chuck to open a Southern Regional Office in Atlanta. He sued for integrated prisons and juries, legislative reapportionment and voting rights, argued the "one man, one vote" principle that redrew political maps. He successfully defended Muhammad Ali in his conscientious objector case.

The Encyclopedia of Southern Culture said Chuck was “involved in much of the litigation that altered political and social life of the South.” In 1966 he successfully appealed to the U.S. Supreme Court on behalf of Julian Bond, the black political leader refused a seat in the Georgia legislature because of an anti-Vietnam War statement. "He was a giant who remade the South through the courtroom as Martin Luther King, Jr. remade it through marching feet," said Bond, now chairman of the NAACP's national board.

I met Chuck in 1972 when he became head of the ACLU Washington Office. Under his leadership ACLU was the first organization to call for the impeachment of Richard Nixon and represented plaintiffs in the Watergate break-in. Our work to change the mindset of America and the Senate led to Nixon's resignation. We attacked government secrecy at the highest levels.

Chuck found time to author a few books, including a chapter on race relations in “Playing Around: The Million Dollar Infield Goes to Florida.” In 1974 a group of mostly authors, "average age forty-one, average condition deplorable" that had a combined income of $1 million joined the Pittsburgh Pirates for spring training. That was the period of stretch knit uniforms that weren’t too flattering on a sedentary attorney.

Working for Chuck Morgan was interesting, exciting and at times unorthodox. Those of us who knew him best know that the American people have lost an eloquent and fearless advocate.

CONNECTORS

2009-01-04T21:53:00.000-06:00

Malcolm Gladwell contrasts Paul Revere and William Dawes in his book “The Tipping Point, How Little Things Can Make A Big Difference.” Gladwell believes Revere was far more effective than Dawes, who also rode to warn, because Revere was what he calls a “Connector,” a person with a special gift for bringing the world together. Connectors know lots of people. “Sprinkled among every walk of life, in other words, are a handful of people with a truly extraordinary knack of making friends and acquaintances. They are Connectors.”

Naturally, we expect fundraisers to be Connectors, but we can all be Connectors to varying extents. Merge Gladwell’s Connector theory with Seth Godin’s line “We get what we promote” and there is a means to transform ideas, services and organizations.

Heaps and heaps of people hesitate before spreading the word about a prospective political candidate or a new restaurant or an unknown product out of fear of looking silly -- or that we won't be able to get a table! We’re afraid one misstep will reflect badly upon us. It’s that paralysis that is hurting businesses and causes.

I’m feeling especially bad about not doing more to promote participation in GALLERY 659, the cooperative art gallery supported by Glencoe's Human Relations Forum. They closed their doors late in 2008. They mounted some wonderful exhibits featuring outstanding emerging artists. (I was in their January 2008 show.) Now they are gone -- the North Shore art community's loss is great.

Local non-profit organizations are worrying about having to shut their operations due to this economic climate. In February Public Interest Fundraising will host a symposium to talk about what to do. (Call for info: 847.881.8033)

The uproar over the closing of a favorite gallery or a charity should be enough to remind one that hesitation has its cost. Paul Revere’s ride is cited as the most historically significant case of word-of-mouth communication. In a world where supporters have power, as Barack Obama-voters demonstrated, people can make a difference. If you will miss an organization, a service, or a professional, when they close up shop, stand up, speak up and bring them oodles of new supporters.

There are many reasons for failure, don’t make it because you didn’t do enough.

SOME ARE GIVING MORE

2009-01-02T02:45:00.000-06:00

We're counting our blessings as the calendar flips to the new year. Buried among the dire news of joblessness and cutbacks and losses are the facts that people and institutions are stepping up.

The Chicago Community Trust announced a new $3 million initiative designed to expand the capacity of nonprofit agencies working to meet basic needs, such as food and shelter. In response to rising unemployment and increased demand on food pantries and homeless shelters, the "Unity Challenge" will match new donations on a two-to-one basis up to $1 million. The first round of grants will be announced the week of February 1, 2009.

The Ford Foundation has announced that it will honor all outstanding commitments to its grantees and will increase, in 2009 and 2010, the percentage of its endowment that is paid out in grants. The foundation's portfolio was "highly liquid" going into the economic downturn, ensuring the foundation's capacity to continue making grants without disruption. In addition, Ford instituted a series of aggressive internal cost controls early in 2008 that have helped make more funds available for grantmaking.

The GE Foundation will shift its grantmaking priorities next year to include a greater focus on basic needs.

Even as some wealthy individuals are responding to the financial crisis and economic slowdown by giving less, many of America's top philanthropists (George Soros, Eli Broad, Pete Peterson) are choosing to give more, according to BusinessWeek.

These are clear signs that charities cannot afford to stick their heads in the sand and wait "until this is over." They have to keep making the compelling case, inviting people to participate in making things better. That is my New Year's wish!

MADE OFF

2008-12-30T22:19:00.000-06:00

Has your Budget, Audit, Investment Committee asked itself whether your organization could suffer the fraud allegedly perpetrated by investment manager Bernard Madoff? What controls do they have in place?

SYBNTS

2008-12-24T03:57:00.000-06:00

Follow up to a party conversation: When identifying prospective donors, oodles of data sure helps!

On the hot, warm and lukewarm spectrum, after you have appealed to current donors and to the LYBNTs (Lie-bunts -- donors who gave “Last Year But Not This”), you still have SYBNTs, donors who gave “Several Years But Not This.” Peruse your donor history records to identify those you may have purged from previous appeals, people who already know who you are, what you do and once cared enough to make a contribution. Fashion a stirring appeal to persuade them to renew. Don’t allow your previous supporters to get lost in the shuffle.

Feel free to call: 847.227.7174

DARK ENERGY

2008-12-18T07:16:00.000-06:00

Last night my sweetheart spent an inordinate amount of time explaining dark energy to a cosmology dummy – me. It has something to do with increasing the rate of expansion of the universe, supernovas, Einstein and possibly Obama’s energy appointee from Lawrence Berkeley Laboratory. I thought dark energy was that negative force being emitted by the economy!

All types of assets are being affected by the recession; even the wealthiest people are taking losses. Psychologically people are anxious about the future, which is affecting philanthropy.

In times like these, weaker organizations tend to panic -- cancel their programs, stop spending, freeze hiring of fundraisers (the profitmakers). Organizations that are better prepared, however, can make a substantial case for support.

As George Will pointed out, nearly 94 percent of Americans are still working. People want to help their favorite charities make a difference and will continue to give. But, they must be more selective. With donors’ finances tightening, now is the time to do more, not less -- buckle down, reassess priorities, have a strategic development plan -- and do it!

Eileen Heisman, CEO of the National Philanthropic Trust, a $725 million-asset public charity based in the Philadelphia area that has raised more than $1.3 billion in charitable assets since it was formed in 1996 and granted over $715 million to more than 25,000 nonprofits, advises nonprofits to keep working to generate contributions.

“You cannot stop asking,” she says. “There are going to be loyal donors who continue to give. People still get their paychecks. A lot of annual giving comes out of paychecks.”

If the sky is falling, pick up your pieces!

As a fundraiser or nonprofit leader, it is your job to assure your organization remains financially strong. Present a logical, urgent, airtight case for why the work of your organization is so important. Do you address needs made even more urgent by the economy? If so, say so. Weaker organizations don’t want to ask right now, but if your group needs the money, then ask for it. If you have cultivated your donors effectively, they will respond. They may need you to be more flexible – try offering more long-term options or combinations of giving methods that fit their financial realities. In hard times, planned giving and estate giving can be very effective options.

In his victory speech in Chicago, Barack Obama said, “So let us summon a new spirit of patriotism, of service, and responsibility where each of us resolves to pitch in and work harder and look after not only ourselves, but each other.” You are going to hear that echoed in his inaugural speech. Be ready. Have your envelopes in the hands of your donors…or someone else will.

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In February PIF will convene local nonprofits to talk about fundraising in the current economic climate, offer ideas and brainstorm options. Watch this spot or call for info: 847.227.7174.

IRA NOW

2008-12-13T09:49:00.000-06:00

I used to think of IRA as the Irish Republican Army. (Until my late teens I had no idea there were Protestants in Ireland!) What does it say now that my frame of reference is Individual Retirement Account?

Fortunately, the IRA Charitable Rollover is back! Congress extended it to the end of 2009 as part of the recent Emergency Economic Stabilization Act. This provision allows donors age 70½ to “roll over” funds up to $100,000 annually from their traditional IRA or Roth IRA and contribute them tax-free directly to a charity.

This could mean up to $1 billion or more in new charitable giving from IRAs. The fact that not all non-profits are marketing this opportunity to their donors makes me sick.

Larry Stelter, President of The Stelter Company, reports on a web-based survey they did in August and September 2007 in which 652 nonprofits participated. Among the 18% of respondents who said they did NOT market the IRA Rollover promotion, the most common reason for failing to do so was lack of staff or time. As Mr. Stelter points out, “That may have been a costly failure, however, because the organizations that did promote the law change...closed an average of eight gifts each. The average size of a gift was $28,278, which means that the organizations promoting the change brought in an average of more than $200,000 each as a result of their efforts to spread the word about the change in the law.”

The Stetler findings offer helpful information on how non-profits can market this opportunity. Their survey revealed that “universities were among the most successful organizations in raising more money and in reaching new donors, primarily because they were nearly twice as likely (38 percent) as other nonprofits (18 percent) to use multiple methods of promotion. Another reason was that universities started their promotions early. Nearly three out of five of those that responded (58 percent) sent out promotional materials before November 2006, compared to less than half (46 percent) of the other organizations.”

So: Use at least two methods of promotion – whether letter, newsletter, postcard, email blast -- and do it now! Organizations reported receiving more responses, closing more gifts, raising more funds and reaching more first-time donors. (Stetler advises that if you can do only one of these things, using multiple methods of promotion is more significant in producing stronger numbers than early promotion.) Do it now! Plug catch phrases into everything you print!

IRA ROLLOVER EXTENDED

MAKE A TAX-WISE AND GENEROUS GIFT USING YOUR IRA!

TRANSFER UP TO $100,000 FROM YOUR IRA DIRECTLY TO US WITHOUT INCREASING ANNUAL GROSS FEDERAL INCOME TAXES.

NOTE:

The new Act applies only to gifts made in 2008 and 2009, so time is of the essence!

To qualify for IRA rollover treatment, the donor must direct the IRA manager to transfer funds directly to a charity (not cash out and issue a check).

The donor must be at least age 70 ½ at the time of the gift.

Donor-advised funds and creation of life income agreements are not eligible.

The distribution will count toward the mandatory withdrawal amount.

Each spouse may make a transfer of the full amount.

Non-profits that plan to use this incentive in their fundraising efforts should advise their donors to consult with their own professional tax or legal counsel to ensure that their gifts will qualify under this new provision.

The information in this blog is for general guidance and should not be a substitute for professional advice.

For more information visit the National Committee on Planned Giving: http://www.ncpg.org/gov_relations/hr4_center.asp?section=8

SECRET MILLIONAIRE

2008-12-04T11:19:00.000-06:00

Last night we were treated to – or subjected to depending upon your point of view – Fox network’s new Secret Millionaire reality show. This is a twist on what Oprah did earlier. On last night's premiere a rich father and son in CA and a wealthy married couple in Louisiana went “undercover” in impoverished neighborhoods to live for 10 days on a meager welfare budget and work among financially destitute people. At the show's conclusion, the millionaires revealed their true identity and gave a minimum of $100,000 of personal money to deserving people.

I may have been uncomfortable with the cameras, but the vicarious experience of giving brought me to tears. This is a contemporary “Christmas Carol" of the privileged learning how the Bob Cratchits of America live. It is no surprise to those of us in fundraising for nonprofit organizations that wealthy people are deeply concerned about their own physical, spiritual, intellectual and emotional health and that of their community.

This show comes on the heels of a conversation I had the other day with organization leaders about the wisdom of investing time and money in making sure the donor and volunteer experiences at our charities are rewarding for those who help us do what we do best. Here are a few items to put on the year end checklist:

Our donors and volunteers must regularly be assured in meaningful ways that they are wanted, needed and appreciated!

Be sure those donors who do have to withdraw their support for economic reasons are still in the communications loop, as a common courtesy and so they will return when times are better.

Regular, top notch, active communication with your donors about your work, impact and achievements fosters confidence and loyalty.

Engage potential donors in non-financial ways (advocacy, hands on help, enewsletters, etc.); tap their volunteer spirit and expertise. Their solidarity may grow stronger and the enthusiasm you generate for your cause may lead them to consider your organization as their new social investment opportunity.

For more on Public Interest Fundraising’s January symposium on fundraising in this economy, email KatMiller1000@aol.com

CEREMONIES & STORIES

2008-11-30T09:20:00.000-06:00

My twin boys brought a small stomach flu from Boulder home for the holidays. First Matt, then Jeff succumbed. My turn was Tuesday. Fortunately, advance preparation assured that 24 hours of downtime for either playing with the kids or being knocked out by flu wouldn’t hurt the festivities at my house. Linens were pressed, candles placed, center piece assembled, shopping completed, side dishes only needed to be heated. (Thanks, Bob, for grilling the bird and, Joan, the pies were superb.)

Nothing could stand in the way of our celebrating all that we have been blessed with this year! Naturally, part of our Thanksgiving is to share what each of us is grateful for. Celebrations and ceremonies have always had a place of special importance in society and organizations, too. Ceremonial expressions affect us on a subtle, often unconscious level. They bond a family; they connect community.

All non-profit organizations can employ ceremonies, internally and externally, to

- Create a feeling of affiliation
- Provide recognition
- Promote interaction
- Highlight accomplishments
- Convey a message
- Challenge and inspire

To achieve these goals a ceremony must be more than a ritual; it must be meaningful. The essence of a ceremony is the program and the two major components of a program are the characters and the narration. These two elements provide the purpose and message of a ceremony. For this reason, it is important for organizations to find their voice.

Good examples are everywhere.

“The Secret Life of Bees” novel and film drove home the fact group loyalty and personal identity are enhanced and reinforced by the use of ceremonies.

Our local private school, Roycemore, has a charming tradition relating to its events modeled after the Palio di Siena. The senior class presents its coat of arms to the kindergarten class, which will carry that banner until their graduation in twelfth grade.

Adler School of Professional Psychology President Raymond Crossman heralded ceremony in his inaugural address four years ago, “I believe that it is a brilliant and useful academic tradition for the stakeholders of a school to come together … to consider together who we are and who we might be.”

For the Adler School's recent commencement, held in the beautiful Chicago Symphony Orchestra Center, author and keynote speaker Alex Kotlowitz stressed the importance of telling stories. At this ceremony his stories informed the audience and became another part of their shared experience. Stories are “Essential to understanding from whence we came and where we are headed….Stories capture not only the present… but as Elie Wiesel suggested, help us understand the past which informs the future…”

http://www.adler.edu/UserFiles/File/Keynote_Address_by_Alex_Kotlowitz_102608.pdf

I'd be interested in hearing stories of your ceremonies.

CONVERTING MOBILE DONORS

2008-11-19T03:02:00.000-06:00

Boomers and GenXers can't live without email; Millennials (now referred to as Generation O) can't live without their mobile phones. Barrack Obama used a cutting edge text message campaign to sway voters and encourage financial support – John McCain didn’t. On Election Day U.S. subscribers transmitted more than 1.2 billion text messages between 7 p.m. and midnight EST. Last year, total mobile Web users grew by 23 million. For non-profit organizations, this is an incredible new communication tool.

One example: R & B singer Alicia Keys had a big hand (thumb might be more accurate) in raising money to fight AIDS through one of the first text message donation efforts. During her "As I Am" concert tour she showed a clip from her film "Alicia in Africa: Journey to the Motherland" and encouraged fans to donate $5 by text messaging the word 'ALIVE' to 90999. She raised $40,000 from around 8,000 people with the mobile giving campaign. (Go to http://www.mgive.com/, the service provider that enabled a small donation to be charged to the donor's cell phone bill, collected from cell phone carriers, and distributed to the non-profit organization.) This was a valuable fundraising mechanism for Keep A Child Alive's efforts to combat the African AIDS pandemic.*

The long-term and larger considerations for organizations are whether mobile donors can become long-lasting contributors and whether they can become larger donors. While mobile fundraising can bring in money with little expense, fundraising is about relationship building. Mobile fundraising circumvents relationships.

Incorporating mobile communications into existing customer relationship management systems is critical. So far, mobile donations are micro-gifts, effective for impulse giving and emotional calls to action. Handled correctly they might lend themselves to a monthly giving option. I particularly like the ability to activate supporters on issues or events, as Obama did.

There are ways to synchronize donor profile information each time someone opts-in through a mobile phone and replies with an email address. (For those of you who can understand this: a Mobile Application Service Provider, like mgive.com, which charges for setup, monthly usage, and per-message usage, contacts say Convio's Constituent API -- Application Programming Interfaces which supply the technical hooks that link applications together for the purpose of sharing data -- which sends email address and source code to Convio's database that eventually makes it into an organization's donor management database.** Whew!) Organizations can track the conversion of small mobile donors or mobile advocacy participants, measure gift giving and provide basic reporting which can lead to actionable insights.

Rev up your thumbs, folks, and see how this new fundraising mechanism evolves.

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*Over 28 million people are dead and 15 million orphaned; an African child dies from AIDS every minute.
** Thanks Arbor Solutions, Inc.

FIVE LESSONS

2008-11-17T17:10:00.001-06:00

You can’t turn a corner without bumping into an election post mortem. My recent favorite is HR guru Liz Ryan’s lessons for managers in her Nov. 11th Businessweek column. (Muchas gracias!) She points out that Barack Obama's political organization “built and sustained an impressive level of coordination, communication with supporters, and thoughtful media relations that observers say has set a new standard for campaign leadership in the 21st century.” Can we do the same for our organizations?

Her top five leadership lessons are as pertinent for fundraisers and non-profit managers as for corporate execs. Here they are:

1. Don't skimp on infrastructure.

The technical, logistical, and on-the-ground organizational structure of the Obama campaign enabled the broad-scale "civilian" donation efforts, virtual-phone-bank program, and other just-in-time human and financial contributions that continued right up through poll-closing time on Election Day. Managers who focus on a robust, flexible business infrastructure built on sturdy mechanical and technical platforms and supported by clear, logical processes don't end up having to waste time patching holes and fighting fires….

2. Keep the mission top-of-mind.

Daily crises can make it easy for a leader to take his or her eye off the ball. The Obama campaign stuck fast to its mission of spreading the message of change, even when tempting opportunities to veer off-topic presented themselves (the temptation of slamming John McCain's choice of running mate, for example). It paid off well for the campaign to stick to its game plan….

3. Fight the right battles.

The economic crisis threw an enormous monkey wrench into the campaign process in September, and it's clear that Obama's decision to stick to his campaign efforts throughout a week of tumult in Washington was the right one….

4. Make every person count.

Organizational leaders proclaim—but don't often enough build into their management practices—the notion that every person on the team is important. The Obama campaign's emphasis on small donors and small acts of volunteerism won the day for the Democrats. In this election cycle, Americans for the first time opened their e-mail in-boxes to see what looked like personal messages from the candidate. That seemingly personal connection and easy access to concrete action (via Donate Now and Volunteer Now buttons) made it simple for people to act on their beliefs.

5. Keep your cool.

… cool prevailed as Obama's opponent seemed to become more biting and curmudgeonly at each public appearance, raising questions about his leadership capabilities in a crisis. Given the nature of some of the slurs repeated about Obama … angry responses would have been understandable, albeit unwise. Could you let an onslaught of personal remarks slide? If the game is won, the personal slurs amount to little or nothing.

Share this with your colleagues. And, may your organization and our country become as well-oiled a machine as Obama’s presidential race.

RISK AVERSION

2008-11-10T12:13:00.000-06:00

What can we learn from President-elect Barack Obama’s all-volunteer economic recovery advisory group that can be applied to non-profit organizations? The question they face is one many non-profits are asking themselves right now. Given the depth and breadth of our economic problems, will the new administration tackle issues of health care, education, energy independence, climate change all at once or stagger these major initiatives over time? For non-profits, do we add fundraising activities and fundraising staff or do we tighten our belts and make due with what we have or less?

Scrutinizing “the other guy” is an easy and cheap way to learn something -- how the experts behave, what thriving businesses do, how successful non-profits perform. This past Sunday’s New York Times was instructive in itself. Thirteen of the 22 pages of the front section of the Times had full page ads. Eleven of them were full-color, which is quite pricey. They are spending that kind of money during this time of hardship.

Certain economists underscore the need for a lot of federal spending. Sound like John Maynard Keynes? Dr. E. Kathleen Adams of Emory University explains that Keynesian economics, which helped pull us out of the Great Depression and stresses the use of government tools to stimulate the economy and direct government spending, is perhaps our most effective fiscal policy tool. This could mean businesses hire, families spend, and the entire economy thrives once again.

For non-profits, cutting back on fundraising is the best way to reduce your income. The paradox is, if we stop spending money to make money and stop investing in the future, we risk further hardship. Death by risk aversion!

http://recessionwatch.blogspot.com/ is sharing what is happening in other countries during this global recession. Feel free to share your experiences with them and with me. 847/227-7174 or Katmiller1000@aol.com

H I G H HOPES

2008-11-08T02:25:00.000-06:00

A new Johns Hopkins Listening Post Project survey done between September 8, 2008 and September 22, 2008 of over 1,000 nonprofit organizations working in areas of children and family services, elderly housing and services, community and economic development, and arts and culture asked nonprofit executives what a new national administration could do to equip nonprofits to help Americans deal with the economic crisis.

“Heading the list of priority measures identified by these executives were four specific measures:

• Restoration and/or growth of funds for their field in the federal budget;

• Reinstatement and expansion of tax incentives for individual charitable giving;

• Federal grant support for nonprofit training and capacity-building; and

• Reform of reimbursements under Medicare, Medicaid, and other federal programs to ensure that they cover the real cost of services.”

The vast majority of nonprofit executives reported little improvement in government policy toward their organizations in the recent past, and pin high hopes on the Obama Administration to establish a more supportive policy environment for their work during the worst recession since the Great Depression. Can member groups like the Alliance for Children and Families, the Alliance for Nonprofit Management and the National Council of Nonprofit Associations make those suggestions happen?

ELECTION RESULTS

2008-11-04T04:49:00.000-06:00

I sit here tonight on the cusp of one of the most momentous events of my lifetime contemplating those who are not alive to see Americans voting for Barack Obama.

On April 4, 1968, the Reverend Martin Luther King Jr. was assassinated on the balcony of the Lorraine Motel in Memphis, Tennessee, depriving the world of one of the greatest moral authorities of the twentieth century. He was thirty-nine. King had achieved so much at such a young age that it is hard to believe that he has been gone longer than the brief time he spent on this earth. He spoke out not only on segregation and racism against African Americans, but about many other issues of the day, from police brutality and labor strikes to the Vietnam War. Given the current state of the world, we would all benefit from hearing Martin's voice, if only he were alive today. . . .

That paragraph is from “What Would Martin Say?” by Clarence B. Jones. Stanford Professor Jones was Rev. King’s personal attorney who brought the Letter From The Birmingham Jail out of the Birmingham jail. In this book Prof. Jones considers what Dr. King would say about the serious issues of today: Islamic terrorism, the war in Iraq, reparations for slavery, illegal immigration. I’m sure Barack Obama would like to know.

Civil rights workers Michael Schwerner, James Chaney, and Andrew Goodman disappeared at approximately 10:00 p.m., Sunday, June 21, 1964. The next day their burned-out station wagon was found in a swamp; their bodies were found 44 days later, buried in an earthen dam near Philadelphia, Mississippi. Schwerner was 25 years old; Chaney and Goodman were only 21. Goodman had been in Mississippi only one day before he was kidnapped and murdered. If only those boys could have known that their sacrifice would make it possible for a black man to be a serious candidate for the highest office in the country.

Medgar Evers, state field secretary for the National Association for the Advancement of Colored People (NAACP), became one of the first martyrs of the civil rights movement when he was shot in the back in his driveway in June, 1963. His death prompted President John Kennedy to ask Congress for a comprehensive civil-rights bill, which President Lyndon Johnson signed into law the next year.

Viola Liuzzo was a white 39 year old Detroit mother of five stirred to participate in the Selma to Montgomery civil rights march. I can’t imagine how frightened she was being chased down an unfamiliar highway in Lownes County, Alabama, by Klansmen bent on killing her for giving rides to local marchers. Two shots through the car window killed her immediately. Many credit this heinous act with catapaulting the Voting Rights Act into law.

Medgar Evers children got to watch him die. Now I hope they and Viola Liuzzo’s children will watch a black man become president.

Other people were not directly on the civil rights front lines, but were just as committed. Buelah Horton, a Howard University nursing graduate, was my mother’s friend and colleague. Her son Douglas and I shared the same birth day and various family celebrations. If only Buelah and Douglas could have lived to see this day.

Who will you be thinking of when the election results are in?

RECESSION SUICIDE

2008-10-30T09:01:00.000-05:00

The Aesop fable about the doe that sought refuge from hunters in the cave of a lion points out that avoiding one evil can lead to another. These difficult times are a wake up call to charitable organizations to step up fundraising.

Practical and tactical decisions will have more influence on resources than the economic downturn. Organizations that don’t make the right decisions now will suffer the fate of a group that was close to my heart – the National Welfare Rights Organization, instrumental in fighting for the interests of people reliant on government assistance, went bankrupt in 1975 and their voice in the national debate is sorely missed.

As Sean Triner, co-founder of Pareto Fundraising in Sydney, Australia notes, “We fundraisers need to prevent our boards and management making the possibly fatal mistake of cutting fundraising expenditure…. Don’t commit recession suicide.”

Sean points out that if the economy gets worse, your organization may have to spend more to generate the same net income, which is crucial to continue delivering services. Information in your existing donor database holds the answer to the success of various fundraising efforts…for some organizations it’s a “secret” source of information that has yet to be exploited.

Don’t jump to conclusions. Find out what is working and what isn’t. Take the time to calculate your sustainable income streams. For some of you it may be online and direct mail, but for most I can safely advise focusing on major giving, annual fund and planned gift programs.

Do it better, quit wasting your time. Segment your donors and develop and coordinate organization-wide messaging accordingly. Regular, effective and active communication with donors about your work, impact and achievements fosters confidence and loyalty. Set up a working group to evaluate funded activities or projects and to find ways to contain or reduce costs.

People vote not only at the polls but with their dollars. Donors will be more selective in their choices so transparency and accountability are crucial.

Drop marginal or unprofitable activities. This may be very hard to do when a certain dinner or marathon is a cherished part of the organization’s image. One group I have advised spent an inordinate amount of staff time acquiring port-o-johns, mapping courses and signing up sponsors for a small pay off – develop a volunteer corps to make such activities happen.

Discourage pessimism in your Development Department and the organization as a whole. Realize you have more control than you think. Don’t panic; focus on the fundamentals; focus on the long haul. Don’t be the deer in the headlights.

DONOR-ADVISED FUNDS ANYONE?

2008-10-20T17:52:00.000-05:00

Having worked at the Evanston Community Foundation, an exemplary organization in my hometown, I’m a little concerned about IRS focus on community foundation donor-advised funds. (DAF for short.) I’m also curious about how a non-profit organization could involve donors in an advisory role for an endowment fund emulating DAFs – smell my wheels burning?

You and I are in luck because I’m going to share with you an exchange I had with Attorney Gene Takagi, an attorney for nonprofits in San Francisco.

As background, the IRS description of these funds follows (if you know this, skip this paragraph). “A donor advised fund is a separately identified account maintained and operated by a section 501(c)(3) organization. These accounts have become very popular in recent years. Each account is funded with contributions made by a donor or a group of donors. For the payment to qualify as a completed gift, the charity must have legal control over the donated funds. While the donor, or individuals selected by the donor, may advise on the distribution of funds from the account and the investment of assets in the account, the charity must be free to accept or reject the donor’s recommendations. For example, a donor may contribute $1,000,000 to a donor advised fund and claim the whole amount as a charitable deduction for the year in which the contribution is made. In future years the donor may advise the fund as to desired distributions to qualified beneficiaries (e.g., other charities). In operation these funds allow considerable input from the donor but are not classified as private foundations. Again, in a legitimate donor advised fund, the charity must have legal control over the donated funds and must have the right to disregard the donor’s advice.”

It is always chilling when the IRS says something like this: “We have seen abuses in this area…. we are aware that some promoters encourage clients to donate funds and then use those funds to pay personal expenses, which might include school expenses for the donor’s children, payments for the donor’s own ‘volunteer work’, and loans back to the donor. We have over 100 individuals under audit in connection with such cases.”

Abuses aside, my question is: If people can receive a tax deduction for donations to community foundations, are there any drawbacks to or less incentive for those same people making earmarked donations to non-profit organization endowment funds, in essence donor advised funds (DAF)? Non-profits don't have the 5% payout rule community foundations face.

Gene responded:

“There are of course many advantages to contributing to a DAF as opposed to an endowment fund of a nonprofit, including:
· The ability to advise on distributions to a different charity or charitable area from one year to the next;
· The opportunity to have a discussion with community foundation staff regarding the effectiveness of their contributions and the reputations and progress of the charitable beneficiaries.

“On the other hand, where the donor’s intent is to give to one particular charity with which the donor has a strong connection, a gift to the endowment may better fulfill the donor’s desires. It may also result in greater recognition. Note that endowments have their own payout requirements.

“The endowment payout requirements are generally established by the organizations, consistent with the applicable state laws (e.g., UMIFA or UPMIFA). While state laws do not set a minimum payout, I don’t believe many organizations will allow you to set up an endowment that is subject to restrictions against annual distributions. [My emphasis added.] Note as well discussion on the Hill about a 5% payout requirement for university endowments.”

We’ll have more on lawmakers' backlash over Harvard/Princeton/Yale endowments at a later date. I’m curious as to how you involve your donors once they have made gifts to your endowment. If so, are you marketing that? Care to share?

In appreciation for Gene Takagi’s insight, I extend my thanks to him and I will leave you with the following from him:

Circular 230: This communication was not written or intended to be used, and may not be used, by any taxpayer for the purpose of (i) avoiding any tax-related penalty under the Internal Revenue Code, or (ii) promoting, marketing or recommending a tax-related transaction described herein.

The Law Office of Gene Takagi 703 Market St., Suite 1412 San Francisco, CA 94103415.977.0558 (office) 415.977.0559 (fax) gene@attorneyfornonprofits.com www.attorneyfornonprofits.com www.nonprofitlawblog.com

THOSE BABY BLUES

2008-10-19T19:28:00.001-05:00

Paul Newman played a big role in some of my first dates. There he was up on the big screen in the peak of his drop dead gorgeous years while I sat in a darkened theater with wonderful young men watching him portray Luke, the feisty prisoner on a Southern chain gang who refuses to buckle under to authority in Cool Hand Luke or the handsome scoundrel Butch in Butch Cassidy and the Sundance Kid. How often have you heard someone recite, "What we've got here is failure to communicate?"

He passed away at his tree shrouded home on a rolling back road of Wesport, CT after a long battle with cancer. He was 83. There are attractive younger movie stars on film these days, but few of them are conscientious charitable role models for the rest of us to emulate. As Roger Ebert said of Newman’s passing, “He seemed above all a deeply good man, who freed himself to live life fully and joyfully, and used his success as a way to follow his own path, and to help others.”

Paul Newman met Joanne Woodward in his 1953 debut Broadway production of Picnic. They shared an apparently love-filled 50-year marriage. They were artists, sweethearts, parents and dedicated philanthropists together.

I lived in Westport for three years in the 90’s and regretted that I had not one Newman/Woodward sighting. Off-stage, their tireless devotion to philanthropic work enhanced many lives and worthwhile causes locally. Their family's support of the renowned Westport Country Playhouse, for which Joanne Woodward is artistic director, is famous.

Newman is celebrated for founding The Hole in the Wall Gang Camp, named for the outlaws in Butch Cassidy, where seriously ill youngsters enjoy summer camp in the great outdoors for free. Newman’s Own Foundation, the philanthropic arm of his food empire founded along with author A. E. Hochner, donates all profits and royalties after taxes to educational and charitable purposes. He has donated more than $250 million to charities, including The Scott Newman Center for drug abuse prevention, Parkinson's research and the Canary Foundation on the early detection of cancer (for which he drove in the San Jose Grand Prix - where he came in second - to raise money), as well as Help USA to empower the homeless and many, many other worthy causes. In 2007, he donated $10 million to Kenyon College, where he had enrolled after being discharged from the Navy.

He took my breath away in the 60's and his passing takes my words away now. In the spirit of Paul Newman, we should all leave such a lasting legacy.

COMFORT ZONE

2008-10-15T02:28:00.000-05:00

A girlfriend of mine, a gemologist, has been asked by a major university's geology professor to give a presentation to his class, something she has never done before. While she will be fantastic, this will take her out of her comfort zone, something we humans are so loathe to do. Right now the economic situation is taking nearly everyone out of their comfort zone. Like countless investors, many non-profit executives are hunkering down, leaving fundraising positions unfilled, cutting back on publications and mailings. One local group is considering a merger.

McKinsey & Company, advisor and counselor to many of the most influential businesses and institutions in the world, suggests that rough economic periods can create opportunity as well as danger. An archived copy of The McKinsey Quarterly has an article that is pertinent today: Learning to Love Recessions.

To see how economically troubled times can be used to advantage, McKinsey studied the performance of 1,000 mainly industrial companies in the United States during an 18-year period (1982–99) that included the recession of 1990 to 1991.

Companies that retained or gained market leadership during the 1990–91 recession, their study found, were not afraid to spend their cash reserves on strategic acquisitions. Also, those companies refocused their spending in line with competitive opportunities instead of tightening their belts on operating expenses. McKinsey reports a counterintuitive strategy—investing for future growth—often makes more sense than pulling in your horns to cut losses.

In the non-profit arena John Glier, President and Chief Executive Officer of Chicago fundraising consultants Grenzebach, Glier & Associates, examined the past fundraising performance of 20 to 50 large colleges and universities during each of four previous recessions.

Institutions whose contributions dropped during one or more recessions were those that failed to hire a sufficient number of fundraisers, lagged in their efforts to recruit donors, or failed to promptly fill a key fundraising or other leadership job, Mr. Glier said.

Colleges and universities where fundraising continued to flourish during hard times, he says, tended to be those that expected the economic downturn as well as those that were sensitive to the need to take special action and took a long view of their fundraising operations.

He points to one university he is working with now that exemplifies the type of institution likely to keep contributions growing throughout the current turbulent economy and beyond. Mr. Glier says the institution, which he declines to name, but which I believe is the University of Chicago for reasons below, “has one of the highest compound annual growth rates in higher education” and is already spending $40 million annually on fund raising. Just recently, he says, it decided to put another $21 million into its development operations, $9 million in the 2008-2009 academic year alone. The decision, Mr. Glier says, has nothing to do with an impending campaign; the university has just completed its biggest fund-raising drive yet.

To survive a recession, says Mr. Glier, “Take the long view. High performance makes the difference.”

Consider this: Since the Foundation Center began collecting data on private and community foundations in 1975, the United States has experienced several recessions. “During most of these recessionary periods -- 1980, 1981-82, and 1990-91 -- U.S. foundation giving in inflation-adjusted dollars did not decline -- and, in fact, increased slightly.”

According to data from the Center on Philanthropy at Indiana University, as of June 2008, 13 gifts of $100 million or more and 214 gifts of between $10 million and $100 million have been reported, suggesting that market oscillations of the first half of 2008 have not stopped the pipeline of significant charitable contributions.

To remain financially strong in this rocky economy, non-profit organizations need fundraising and fundraising professionals even more than ever. Heed Mr. Glier’s advice … it’s prescient AND it’s free.

NOT SO DIRE PREDICTION

2008-10-14T15:52:00.000-05:00

It’s not news that economic cumulonimbus clouds have been casting shadows over the fundraising landscape. However, not everyone is so glum.

Quoting liberally from the Oct. 8, 2008 issue of The Chronicle of Philanthropy below (because there is a lot we can learn from universities, pun intended), a noted wealth researcher at Boston College says charitable giving may not face circumstances as dreadful as predicted in this rocky economy.

“Extrapolating from data on charitable giving in the last recession, John J. Havens, a researcher at Boston College’s Center on Wealth and Philanthropy, told a conference of fund raisers that it may be a year before the troubled economy begins to take a toll on the sums charities collect.

"More important, he said, unless national incomes drop sharply, the decline in giving may not last long or be significant.

"The current crisis is similar to the conditions nearly a decade ago, said Mr. Havens, at a conference on “The Supply and Demand of Philanthropy in the 21st Century,” sponsored Boston College’s Center on Wealth and Philanthropy, the Association of Fundraising Professionals, and the Eaton Vance Investment Council.

"In the last recession, said Mr. Havens, the United States began to see a decline in net wealth in 1999, even before the burst of the dot-com bubble precipitated the 2000 stock-market crash. The downward growth in wealth continued for three years, with aggregate household wealth declining by 15 to 20 percent from 1999 to 2002 — the largest and deepest downturn in wealth since the 1930s.

"Those variations in net worth, however, did not directly correlate with changes in philanthropic giving, Mr. Havens said.

"Average household contributions did not begin to fall until 2000, and they did not drop as much as households’ net worth did. From 1999 to 2002, household donations decreased by 10 percent, while their net worths dropped by as much as 20 percent. Moreover, said Mr. Havens, once net wealth began to grow again in 2002, donations also rebounded.

"The net wealth of households began to decline in the fourth quarter of 2007, said Mr. Havens. Based on the previous recession, Mr. Havens predicted a lag of up to a year before donations decline – -in part because most high-net worth donors plan their charitable contributions a year in advance — and the decline in aggregate donations may not be significant.

"But Mr. Havens’ prediction, he warned, assumed there would be no big drops in income. If household incomes decline sharply, the impact on giving would probably be more severe and prolonged, said Mr. Havens. However, he added, household income levels have historically tended to remain more stable than net wealth."

Next: What you can and should do.

CONFLICT OF INTEREST

2008-10-06T05:07:00.000-05:00

The talk here in Atlanta is all about the New York Times' front page article on the failure of Emory University psychiatry professor Dr. Charles Nemeroff to report $1.2 million in income he received from drug makers.

Dr. Nemeroff, one of our country’s most influential psychiatrists who earned more than $2.8 million consulting with drug makers from 2000 to 2007, failed to report his income to his university and violated federal research rules, according to documents provided to congressional investigators. Sen. Charles Grassley (R-IA), ranking member of the Senate Finance Committee, is leading investigations of academic research with the intention of curbing inappropriate relationships and conflicts of interest. He, along with Sen. Herb Kohl (D-WI), Chairman of the Special Committee on Aging, has introduced the Physician Payment Sunshine Act, S. 2029, for transparency in drug industry payments to physicians, requiring pharmaceutical drug, medical device and biotechnology companies to publicly list payments over $500 they make to doctors in return for time and expertise with product development, research and training.

There is a serious question of whether payments alter medical judgment in ways that benefit companies at the expense of patients. Can Dr. Nemeroff put the welfare of the public before personal benefit?

Dr. Nemeroff was head of his department (before he voluntarily resigned), has written over 850 research reports, is editor in chief of the journal Neuropsychopharmacology, and is a successful fundraiser. He was instrumental in securing generous gifts for Emory from Smith-Kline Beecham Pharmaceuticals and Wyeth-Ayerst Pharmaceuticals beyond funds that financed him. He has sought funding from many other companies for the university.

Let me digress here a moment for those who might not appreciate the need for conflict of interest rules for nonprofits. A conflict of interest surfaces when a board member or staff member has a personal interest that clashes with the interests of the organization or where a board or staff member has divided loyalties (also known as a “duality of interest”). Situations arising out of a conflict of interest can result in either inappropriate financial gain or the appearance of a lack of integrity by the organization, both damaging to the organization -- in this case Emory and, by extension, people who may rely on unbiased appraisals of pharmaceutical materials or devices by Emory doctors.

Avoid the possibility that those in positions of authority with your organization may receive an inappropriate benefit by adopting a conflict of interest policy. While not fail safe or required by the Internal Revenue Service to obtain tax-exempt status, the IRS (and I) strongly urge nonprofits to develop conflict of interest policies which all board members, staff, consultants and volunteers must sign. The IRS has published a suggested conflict of interest policy, included in the instructions for completing Form 1023 (the Application for Recognition of Exemption under Section 501(c)(3) the IRS Code). This detailed and comprehensive policy is published as Appendix A starting on page 25 of http://www.irs.gov/pub/irs-pdf/i1023.pdf

How hard is it for any organization to rein in a successful fundraiser? What elements of transparency need to be in place to determine conflicts?

As Emory has found out, policing conflicts of interest is no easy matter. Perhaps we in non-profit organizations can learn a lot from this reassessment of academic/industry relationships.

FOURTH QUARTER

2008-10-02T01:39:00.000-05:00

I’m not talking football here. The last quarter of each year is crucial for nonprofit fundraising. Forty percent of charities raise on average between one-third and one-half of their entire annual donations from October - December. Like the American Lung Association, for example, almost three in 10 charities raise more than half of their revenue in the fourth quarter. Nearly two in 10 respondents receive more than 40 percent of their annual contributions in the month of December alone!

How much the Wall Street crisis will affect people's charitable giving has yet to be seen. Some non-profit executives believe the prolonged primary election season and presidential campaigns will also adversely affect fourth quarter donations. Presidential campaigns raised $580.4 million in 2007 according to the Federal Election Commission, which is less than one-quarter of one percent of the $306 billion raised for charitable purposes, according to Giving USA 2008.

"If you look at the history of philanthropy since the '50s, it has dropped about 1 percent on average in a recession," said Reynold Levy, the president of Lincoln Center. Quoted in the Washington Post, he added, "Whenever there's a recession, or the closure of a given firm, the natural tendency is to extrapolate and predict a very strong downturn. But that has not been the case."

This is no time to cut back on marketing and communications. Do not give up on your long-range strategies and long-term cultivation plans, but be creative with your fundraising. Identify new sources of revenue.

When times are tough, we need to communicate that honestly and loudly! Be sure you are making a really compelling case. If you commiserate with your donors and allow them to sympathize with you and the people or cause you serve, they can come through for your organization.

Specifically, scrutinize each of your major donors; some have suffered a setback in this economy, some are still fine. Matthew Haag, senior director of major gifts and regional programs at the University of Rochester says, “Now is an opportunity to show that you are interested in them beyond the financial, because you know some just don’t have it to give right now.” This is a great opportunity to forge enduring, long-term donor relationships.

These last months of 2008 could support you through a thorny economy. Remember, in the face of our nation’s slow economy, Jerry Lewis’ annual Labor Day Muscular Dystrophy telethon raised a record $65 million, $1.2 million more this year than last.

You can win the game in the Fourth Quarter!

FUNDRAISING COSTS

2008-09-22T05:08:00.000-05:00

It’s not always easy to explain in a sound bite why certain fundraising costs are necessary for long-term growth or why the return on investment (ROI) for a specific fundraising campaign or event may be low in terms of dollars earned. In an effort to inform charities and the public at large about properly measuring ROI in fundraising, the Association of Fundraising Professionals has a new report out addressing fundraising cost ratios to ensure strategic growth and to equip advocates with information to discuss this with donors and potential supporters.

With thorough recordkeeping, it should be little effort to create full transparency about your fundraising program -- what types of programs you are investing in now to get big rewards in upcoming months and years. Evaluation, accountability, transparency and professionalism should be a part of every fundraising program. The goal is to prove effectiveness and show donors that their money is being well spent.

For example, direct mail aimed at donor acquisition is going to have lower returns to start out. That’s a good reason to focus on renewing and upgrading donors first, but acquisition is still necessary for the base of the donor pyramid. A special event may bring in less than what you spend the first time it is held, but if you are building new contacts and supporters, the investment may be well worth it.

While professional fundraisers may know the particulars of fundraising costs, most boards and donors do not. As the AFP report says, being able to answer those questions “is the best way to assure they will see beyond the simple cost-ratio dial on their dashboard and check under the hood for a more complete assessment. The transparency that keeps their hands steady at the controls will also keep their foot pressed firmly on the gas in soliciting support and backing overall mission.”

“There are a lot of complexities that nonprofit board members need to understand, and unfortunately it’s often a lone chief development officer who has to make the case for fundraising expenditures,” says Leslie Weir, CFRE, ACFRE, director of family philanthropy at The Winnipeg Foundation in Winnipeg, Manitoba.

The document lists six key guidelines in making decisions about fundraising costs and return on investment:

1) Measure fundraising expenses, number of gifts and amount of gifts by fundraising activity and calculate the return on investment for each activity each year.

2) Determine priorities for resource allocation based on the outcomes envisioned in your organization’s strategic plan. Social Return on Investment (SROI), quantifying the added non-financial value created by organizations, obviously informs strategies and decisions.

3) Calculate fundraising costs and revenues using rolling averages over a period of three to five years. Evaluating performance over a period of years allows you to better forecast results of each type of fundraising activity and decide how to allocate fundraising resources, including staff and dollars, most effectively.

4) Develop benchmarks and targets for your organization’s return on investment for various fundraising activities based on past performance and your best estimate of what you can accomplish in the future.

5) Consider increasing your organization’s overall investment in fundraising. If spending more for development costs allows your organization to develop its capacity to generate more net revenue, it could be a wise decision in the long run – even if the cost per dollar raised increases.

6) Remember a basic tenet related to fundraising return on investment: It is much less expensive to renew or increase a donor’s support than to acquire a new donor.

UH OH - POLITICAL ACTION

2008-09-20T11:57:00.000-05:00

I have greeting cards of me standing with a certain presidential candidate that are fun to send out in this political season. But, I can detect a slight tremor of hesitation in my hand when stuffing one of those cards into an envelope addressed to a nonprofit executive. Have the prohibitions placed on nonprofit involvement in politics, enacted in the 1950s, become so intimidating that they threaten a vital sector of America?

It should come as no surprise that I believe nonprofit organizations, operating in a free society, must not only be allowed to address issues of public policy that are determined by the political process, they must exercise their right to be heard. Lobbying in the public interest goes to the heart of free expression. So, too, nonprofit organizations’ political expression should not be muzzled, especially in an election year where much is at stake.

Robert Egger, Founder and President of the DC Central Kitchen, points out that “The stakes for America are too high for nonprofit leaders to allow themselves to be bullied into silence by the perceived or often overt threat that any talk about politics will cause a charity to lose its tax-exempt status. It is time for charities not just to get involved in this historic race, but also to urge candidates for the White House to make it a priority, once elected, to rethink how nonprofit groups are regarded and regulated. Furthermore, nonprofit leaders must also stimulate a discussion about changing the rules that prohibit charitable organizations from getting involved in partisan politics.”

I like the tack the Pennsylvania Association of Nonprofit Organizations is taking. PANO is a 501 (c) 3 statewide membership organization representing over 700 charities to advance the charitable nonprofit sector through leadership, education and advocacy in order to improve the quality of life in my former home state. Advocacy is a central part of PANO’s charitable mission.

PANO has taken a front row seat in criticizing proposed rulemaking for their state’s Lobbying Disclosure Act. While PANO supports transparency and accountability through lobbying disclosure, they believe proposed regulations have created an obstacle to public participation in advocacy that is fundamentally contrary to the public interest and, thus, they have offered constructive recommendations and comments to change the proposed rulemaking and are urging further public comment.

In June of this year PANO and the United Way of PA were instrumental in getting members of the Pennsylvania General Assembly to launch the Pennsylvania Charitable Nonprofit Caucus, a bipartisan, bicameral forum for state lawmakers to collaborate on legislative and regulatory issues impacting charity and philanthropy in their state. The goal of the caucus is to enhance the ability of nonprofits to achieve their missions on behalf of the Commonwealth. Over 30 statewide charities and foundations representing arts and culture, education, religion, health care, human services, and other nonprofit subsectors will serve as a resource to the Caucus for information, education, vision and advocacy.

Way to go Keystone State!