PhilanTopic

The Power of Sharing: Why VNA Foundation Joined the Reporting Commitment

(Rob DiLeonardi is executive director of the Chicago-based VNA Foundation and co-founder and former chair of the Association of Small Foundations, a national organization of grantmaking foundations holding over $60 billion in assets. In addition to his responsibilities as a grantmaker, DiLeonardi has a longstanding interest in foundation transparency and outcome sharing; VNA's Web site and annual reports have received eight Wilmer Shields Rich Awards for Excellence in Communications from the Council on Foundations. This post originally appeared on the Foundation Center's Transparency Talk blog.)

During the two decades I've worked for and with small grantmaking foundations, I've addressed problems ranging from healthcare access to domestic violence to homelessness. One of the most vexing problems I've faced over the years, however, relates not to the subject matter of my grantmaking, but rather to the results of it. Time and again, I've helped develop a grantmaking program to address a particular problem, only to find out after the fact that another foundation was funding the identical issue, often with a remarkably similar approach, in the same or a nearby area. We were addressing the same need, often via the same method, but doing so in blissful isolation. In short, we were reinventing the wheel, sometimes only a few miles apart.

Similarly, our foundation's board and staff have often wondered about latest funding trends. With only a limited number of dollars in our coffers, we want to spend them in the most effective possible way. It would be helpful for us to know exactly where other philanthropic dollars were being directed, both geographically and programmatically, as this knowledge would aid us in filling a gap or funding a complimentary niche -- a favorite strategy to maximize the impact of our grantmaking.

For these reasons, over the years I've tried many different approaches to ensure that the staff of the VNA Foundation is aware of other funders' work and that they are aware of ours. We subscribe to many electronic and hard-copy newsletters, periodicals, and reports. We attend local, regional, and national conferences and networking groups. We convene grantmakers and grantees around common challenges, and encourage dialogues about successes -- and failures -- in addressing them. And we work hard to make our Web site an interactive, timely, and appealing resource. Yet, despite these various efforts, both the grantmaking data we share and that which we receive is often either stale (months or sometimes even years old by the time it reaches end users) or lacking the key details to make it useful.

My interest, therefore, was quickly piqued when I learned of the Foundation Center-supported Reporting Commitment, and the opportunity for the VNA Foundation to become a participant in it. The Reporting Commitment finally allows foundations the opportunity, and the mechanism, to release grant information in a consistent, open, and frequent manner. Although the commitment's founding participants were large foundations, as soon as I became aware of the initiative I knew there would be value in participation by foundations of VNA's size. Small to medium-sized foundations are far more common in number, size, and grantmaking level than their larger brethren. In fact, small foundations account for approximately half of America's total foundation grant dollars, and often provide the kind of essential local support that impacts lives on a daily basis.

In addition, most observers judge foundations by their effectiveness, efficiency, and transparency, not their asset size. Participation by smaller foundations like VNA (foundation philanthropy being one of the few settings in which a $50 million bank account is considered "small") is key, in my opinion, to making the Reporting Commitment's impact felt in more than a handful of sectors.

I am delighted to say that the VNA board of directors immediately saw the value in our participation in the Reporting Commitment, and my colleagues at peer foundations are seeing the light as well. All across the country, every day, foundations large and small are working to bring about small miracles or serve as catalysts for systemic innovation. With the help of the Reporting Commitment, perhaps our field finally has a mechanism by which that work can effectively be shared with colleagues and the public alike.

-- Rob DiLeonardi

The Benefits of Multiyear Grantmaking: A Funder's Perspective

(Sandy Edwards is associate director of the Jim Joseph Foundation, which seeks to foster compelling, effective Jewish learning experiences for young Jews in the United States.)

Cultivating a collaborative funder-grantee relationship built on trust, transparency, and shared knowledge requires a concerted effort on the part of both parties. In twenty-five years of grantmaking, I've also seen how multiyear grantmaking serves as a catalyst in cultivating this type of relationship, which in turn can be a key element in helping a funder achieve its strategic priorities and in helping grantees achieve success.

When it was founded in 2006, the Jim Joseph Foundation made a deliberate decision to focus on multiyear grants. Now, there is no right or wrong way to do grantmaking, but for the foundation multiyear grantmaking seemed like the most effective way to achieve our strategic goals. It encourages a relational approach to philanthropy that defines our foundation and, we believe, is critical to our ability to leverage our financial and human capital. Today, as the foundation approaches its seventh anniversary, we can begin to assess the effectiveness of that strategy beyond anecdotal outcomes.

First, a few statistics: 92 percent of the $270 million in grants awarded by the Jim Joseph Foundation since its creation have been multiyear grants; 84 percent were awarded for a period of three years or more. Moreover, our own experience with the positive outcomes of this approach has been supported by the Center for Effective Philanthropy, which in 2006 conducted a survey that documented the impact of such a strategy. Among other things, the report based on the survey suggested

that foundations ought to provide operating support grants that are larger and longer term than the vast majority of foundation grants today. Moreover, these grants must be provided by foundations -- and individual program officers -- [so as to align with] the dimensions most valued by grantees: high-quality interactions; clear communications of goals and strategy; and demonstrated expertise and external orientation.

Despite CEP's compelling analysis, multiyear grantmaking appears to be declining as a foundation strategy. A 2012 analysis by the National Committee for Responsive Philanthropy of Foundation Center data found that multiyear grantmaking declined some 21 percent in 2009, to $5.5 billion from its $6.9 billion peak in 2008. When the nation's largest grantmaker, the Bill and Melinda Gates Foundation, is excluded from the analysis, reported multiyear grantmaking declined by more than a third. The June 2012 Foundation Center report Foundation Growth and Giving Estimates likewise found that approximately 20 percent of the more than one thousand foundations that responded to a center survey indicated they planned to give less in multiyear grants in 2012 than in 2011.

We believe it is important to reverse this trend. At the Jim Joseph Foundation, we believe multiyear grantmaking is a critical component of grantee sustainability and is vital to achieving the ultimate objective of a grant. Indeed, we have seen the tangible benefits of this strategy:

Regular communication between funder and grantee improves implementation and performance. Cultivating a relationship between foundation program professionals and grantees that includes regularly scheduled phone calls, site visits, and communication via e-mail helps to build trust, which leads to improved project implementation and performance by all involved. If nothing else, the foundation program officer gains a deeper understanding of the project and, when a problem arises, is better positioned to recommend strategies to address the problem and/or a reallocation of resources.

The grantee's organizational capacity is bolstered by a longer grant period. JJF awarded $15 million over a five-to-six-year period to Hebrew Union College – Jewish Institute of Religion, the Jewish Theological Seminary, and Yeshiva University to boost the number of highly qualified educators who work with Jewish youth and young adults. At the inception of the grant period, we invited the Parthenon Group to work with us to ensure efficient implementation of the grant and help strengthen the foundation-grantee relationship over the course of the grant period. Three years into the grant period, our grantees continue to acknowledge that the ongoing relationship with the foundation's board and staff has enabled them to work more effectively.

Ongoing grant review improves grant management by both the grantee and the foundation. Our grant awards are approved as "up to" amounts. What may seem like a detail actually is an important qualifier regarding how the grant budget and expenses are managed to achieve outcomes. As part of the review process, both the grantee and the foundation can make changes based on actual events and the learning that inevitably occurs over the course of a multiyear grant period.

Formative evaluation supports grantee success and summative evaluation of longer-term initiatives adds to learning in the field. Not only do multiyear grants allow for longer-term evaluations, they are important to our efforts to learn in that they enable ongoing conversations with evaluators and grantees. For example, the initial evaluation of a five-year grant to the Foundation for Jewish Camp to provide financial incentives for three thousand children to attend Jewish summer camp provided data on why the initiative was not achieving its enrollment benchmarks. Among other things, the evaluation found that the program only provided incentives to families willing to enroll their kids in a three-week session, whereas the targeted families were more likely to enroll their children in two-week sessions. As a result, the following summer the program extended incentives to families opting for a two-week session and exceeded its enrollment targets. This learning and its application to other FJC programs simply could not have occurred in the context of a single-year grant.

Longer grant durations provide opportunities to work with other funders to support the long-term sustainability of proven initiatives. One of our key strategies is to support our grantees' ability to secure sufficient financial resources to sustain an initiative/project, as well as to scale and/or replicate the initiative/project when appropriate. This requires identifying and cultivating other funders, which can be impractical, at a minimum, if the grant term is just a year or two. For example, the foundation awarded a five-year grant to another Foundation for Jewish Camp initiative to launch five new Jewish residential specialty camps -- camps that are well on their way to achieving financial sustainability. Because the term of the grant gave us and our grantee plenty of opportunity to inform the field of the program's emerging success, FJC was able to secure additional funding from the AVI CHAI Foundation to help fund a second cohort of specialty camps.

For the Jim Joseph Foundation, the decision to focus on multiyear grantmaking has been crucial to the evolution of our grantmaking strategy. And our grantees report that our approach enables them to respond to and overcome challenges with the assurance that they will have the time, resources, and support needed to do so. We have also learned significant lessons from our partners and have shared those lessons with the field. As we look forward to many more years of grantmaking, this knowledge will continue to inform our efforts to create effective and meaningful Jewish learning experiences that shape the lives of Jewish youth on their journey through life.

-- Sandy Edwards

Weekend Link Roundup (January 26-27, 2013)

Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Diversity

On the Tides Foundation's What's Possible blog, Toby Thompkins asks some thought-provoking questions about African Americans and U.S. history to remind us that "Martin Luther King, Jr. Day is not just a day for or about black Americans; it is a day for and about all Americans."

Governance

On her Social Velocity blog, Nell Edgington shares five questions to get your board "moving." They include: Why do you serve? What do you bring to our organization? And what do you want to contribute financially?

Impact/Effectiveness

Are we on the threshold of a new economic movement "that will result in all investors -- individual and institutional -- committing at least some portion of their investable assets to social impact"? Lisa Hall, president and CEO of the Calvert Foundation, believes we are, and in an essay in GreenMoney she explains how impact investing is driving that paradigm shift.

In a guest post on the Forbes blog, Kayleigh O'Keefe, associate director at the Corporate Executive Board, shares a "three-step method for "converting passive support into lasting partners":

1. For each of your key stakeholder groups, define a specific desired behavior.
2. If a certain stakeholder group is not doing what you’d like them to, determine why.
3. Focus your efforts o n removing the barrier to the desired behavior change.

Philanthropy

In a deeply thoughtful piece on the Nonprofit Quarterly site, longtime Public Welfare Foundation board member Thomas Scanlon reflects on the benefits and pitfalls of "strategic" philanthropy. A must-read for anyone who works in the sector.

In a similar vein, Center for Effective Philanthropy president Phil Buchanan, writing on the Harvard Business Review blog, argues that capitalism, while good at lots of things, is pretty bad at many other things -- which is precisely why an advanced capitalistic society like the United States has a nonprofit sector. Another must-read for all who work in the social sector.

On FSG's Social Impact blog, FSG board member and Global Philanthropy Forum president Jane Wales takes a closer look at philanthropy in Asia and sees a sector that, while experiencing some growing pains, has unlimited potential.

On its Philanthropy Potluck blog, the Minnesota Council on Foundations shares highlights of an open letter released by the Minneapolis-based McKnight Foundation in which the foundation announced that it plans to distribute $79 million in grants in the coming year and will finalize an additional $25 million in grants -- part of a larger $100 million commitment -- in support of organizations working to address climate change and encourage the development of renewable energy.

Social Media

Following up on her post about twenty-nine nonprofit bloggers to follow on Twitter, Social Media for Social Good author Heather Mansfield shares a list of twenty-nine nonprofit resources to follow on the microblogging site.

Transparency

At the Foundation Center's Transparency Talk blog, Rob DiLeonardi, executive director of the Chicago-based VNA Foundation, explains why there is value in small foundations like VNA signing on to the center's Reporting Commitment initiative. Writes DiLeonardi:

Small to medium-sized foundations are far more common in number, size and grantmaking level than their larger brethren. In fact, small foundations account for approximately half of America's total foundation grant dollars, and often provide the kind of essential local support that impacts lives on a daily basis.

In addition, most observers judge foundations by their effectiveness, efficiency, and transparency, not their asset size. Participation by smaller foundations like VNA (foundation philanthropy being one of the few settings in which a $50 million bank account is considered "small") is key, in my opinion, to making the Reporting Commitment's impact felt in more than a handful of sectors....

Women

Forty years after the Supreme Court protected a woman's right to an abortion in its landmark Roe v. Wade decision, "a quick look at the recent past demonstrates the tenuous status of a woman's right to choose, in spite of the fact that a majority of our population supports the Court's decision," writes Niki Jagpal on the National Committee for Responsive Philanthropy's Keeping a Close Eye blog. Philanthropy can help protect a woman's right to choose, adds Jagpal, by stepping in "when groups such as Planned Parenthood come under attack from right-wing politicians or by supporting state groups like Reproductive Services.

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a great week!

-- The Editors

[Infographic] WINGS Network Profile 2012

This week's infographic provides some basic facts about the Worldwide Initiatives for Grantmaker Support, better known as WINGS, a network of 147 organizations in 53 countries working to encourage and strengthen philanthropy and a culture of giving globally.

The graphic, which is based on responses from fifty-two WINGS member organizations (and was produced in partnership with the Foundation Center), shows, among other things, that the growth in organizations supporting philanthropy globally is accelerating and that the longer an organization has been around, the more likely it is to participate in advocacy and research activities related to philanthropy.

With the global economy generating wealth at an accelerating rate, philanthropy will be expected to play an ever-larger role in addressing and mitigating urgent environmental, social, and security challenges. For its part, WINGS has set itself the goal of determining, over the next five years, whether the philanthropic sector will continue to grow globally, or whether it has reached a saturation point. We look forward to reporting on those efforts.

U.S. Foundation Archives: An Endangered Species (Part 2)

(John E. Craig, Jr. is executive vice president and COO of the Commonwealth Fund. Read the first post in this two-part series here.)

In an earlier post, I reported on the findings of a December 2012 survey by the Commonwealth Fund of foundations' current archiving practices. It is of considerable concern that no more than 20 percent of even large foundations (those with assets of $240 million or more) maintain archives, given the importance of historical records to researchers and helping to assure accountability and good management in the sector.

A review of the literature, the survey findings, and conversations with leading archivists and foundation officers suggest ways in which the state of archiving in the foundation sector could be improved. Here are a dozen for your consideration.

1. The number of foundations currently maintaining archives is far fewer than it should be, and foundation boards and executives should give more attention to the issue than they do now. Audit and compliance committees of foundation boards should ensure that at least the short-term records-retentions policy required by Sarbanes-Oxley is developed and enforced and should take an active role in seeing that the question of archiving important records is addressed at the board level.

2. Chief executive officers of foundations should see one of their responsibilities as assessing the foundation's need for archives and, if the decision is affirmative, delegating clear responsibility for their development and maintenance.

3. Boards and managements should see that resources are set aside as needed to achieve archiving objectives. The 2012 survey reveals that most foundations will find that maintaining archives, if done efficiently, is not a major expense.

4. Every foundation should have a stated archiving policy -- even if it is "none" -- to ensure that the question has been addressed. Policies should specify which records are to be preserved, archiving model to be pursued (in-house vs. outsourced), access guidelines and restrictions, and guidelines for paper and electronic preservation. Archiving policies should ensure that the intensity of the archiving effort varies with the potential value of materials to users. The policy should be reviewed every five years to ensure that it keeps up with advances in information storage technology.

5. Archives are a "glasspockets" issue, and the Council on Foundations should be encouraged to include maintenance of archives among its best-practice guidelines for foundations above some minimum endowment size.

6. Outsourcing the archiving function to an external archive center is a viable option that many foundations, including multi-billion dollar ones, should consider. The choice of external center, however, must be made with care and performance monitored regularly. Important questions include the following: Do the foundations or other organizations that are currently donating archival records to the external center share similar objectives and expectations? Does the external center have other significant collections that provide a valuable context for the foundation's archive? Can the center meet the foundation's expectations regarding the speed with which records are processed, provided with online finding aids, and opened to researchers? Does the archival institution have the capacity to manage the long-term preservation of digital records and to provide access to them?

7. Many foundations, especially small and newer ones, may find that their archiving objectives going forward can be met with cloud-based content management systems that can be adapted in various ways for use by external researchers.

8. Two-thirds of larger foundations were established after 1989, but youth should be no excuse for postponing the question of whether to archive or not. Indeed, young foundations are in the enviable position of being on the ground floor with respect to technology and often start out with state-of-the art information systems in which virtually all their records are kept digitally. Under these circumstances, archives are almost a natural byproduct of a good information system and entail minimal marginal cost.

9. Spend-down foundations are prone to establish archives, but they often confront the issue only as the date of their sunset becomes imminent. Ideally, the question should be addressed early in a foundation's life.

10. Information technology staff of foundations should have as one of their major responsibilities the development of systems within the foundation that advance archiving objectives. They should work closely with the external archive center, when the foundation uses one, to coordinate and promote IT initiatives.

11. An affinity group of foundation officers with responsibility for archives (in-house or outsourced) would greatly advance the spread of best practices in the sector. Foundations without archives reported in the 2012 survey that if there were a foundation-led group developing archiving standards and guidelines and providing information on consultants and experienced-based advice on technical issues, they would be better equipped to activate nascent plans for establishing archives.

12. Most importantly, consideration should be given to development of archive cooperatives by a consortia of foundations with common interests and archiving objectives. It is doubtful that existing archive centers have the capacity to take on large numbers of new foundation clients. Given the enormous number of foundations, inter-regional differences, and frequent commonality of interests at the regional level, multiple foundation archive coops might well be easier to launch and operate than a single national one. If the concept were to be judged promising, it could be piloted and capitalized by a few very large foundations in an "early adopter region" -- with replication of the model in other regions justified by the experience of the pilot.

In giving inadequate attention to the preservation of its historical records, the foundation sector is shortchanging historians and researchers of public policy, social movements, and important institutions and individuals who made a difference in their time. Above all, foundations are shortchanging themselves, by not ensuring that records exist for learning from experience and demonstrating their worth to society. It's time for the sector to address these shortcomings.

-- John E. Craig, Jr.

The Archives of U.S. Foundations: An Endangered Species (Part 1)

(John E. Craig, Jr. is executive vice president and COO of the New York City-based Commonwealth Fund, a private foundation that works to "promote a high performing health care system." A version of this post originally appeared on the Foundation Center's Transparency Talk blog).

A foundation's archives preserve records of the programs, activities, products, governance, people, and history of the organization that may have enduring cultural, historical, research, or institutional value. Yet despite the important role archives play in a field that focuses on investing in ideas, a recently released survey about foundation record management practices reveals that only a small minority maintain foundation archives. Clearly, there is a need to make a case for why foundations should devote resources to archive development and management. And there are at least six compelling reasons for why foundations should give their inactive files and historical records serious attention.

1. Historical Research on Social and Economic Developments and Influential Institutions and Individuals.
The late Paul Ylvisaker described philanthropy as "America's passing gear," and foundations serve this purpose in numerous ways: by helping to launch movements (such as civil rights, environmental protection, or health care reform); by developing new institutions and strengthening existing ones; by making society more inclusive through support of programs to improve the lot of vulnerable populations; by building up the knowledge base for social improvements and scientific advancement and, through the support of individual researchers, contributing to the nation’s intellectual capital; and by strengthening the social fabric and physical capital of the communities in which foundations operate. In the hands of good researchers, the records of foundations can provide guidance for future generations in tackling new and continuing social problems. For example, no history of the civil rights movement would be complete without access to the permanent records of the Ford Foundation; no history of the development of the "miracle" rice strains that sparked the Green Revolution, which helped transform Southeast Asian societies in the 1960s and 1970s, would be complete without the records of the Rockefeller and Ford foundations; and no history of the healthcare reform legislation of 2010 would be complete without the records of the Commonwealth Fund, the Kaiser Family Foundation, the Robert Wood Johnson Foundation, and other national and regional healthcare philanthropies.

2. Promoting Accountability in the Foundation Sector
The permanent records of foundations help foster accountability among this very privileged group of institutions. Foundations, given their exemption from most federal and state taxes, owe it to the public to provide clear and accessible records of how they have conducted their business and what they have accomplished -- records that enable rigorous independent assessments of the impact of foundations’ strategies and programmatic investments.

3. Protecting the Foundation Sector and Defending Institutions from Misinformed Attacks
Individual foundations and the sector as a whole periodically come under attack -- by regulators, elected officials, the media, or academics. In the absence of good historical records, foundations are at risk of not being able to make their case for being tax-exempt convincingly, or they may simply be caught flatfooted in being able to produce records of their accomplishments and actual behavior.

4. Facilitating Strategic Planning and Fostering a Learning-from-Experience Culture
Archival records enrich the research base for consideration of foundations' future directions and help ensure program continuity. The lessons from earlier experience that they hold can help prevent strategic and tactical mistakes by current and future foundation managers.

5. Ensuring Institutional Memory and Sense of Accomplishment
Permanent archives are also a primary source for the institutional memory that is vital to learning organizations, as well as for the institutional pride that ensures the strong staff morale needed to achieve high performance.

6. Good Management and Administrative Efficiency
Finally, the care given to archives is a beneficial operational discipline, with orderly archives being a reflection of efficient office practices and good management. Inactive records are not allowed to pile up and get in the way of current files and information from inactive files can be retrieved quickly when needed.

2012 Survey of Foundation Archives

As important as archives are for good foundation management, a confidential December 2012 survey of the three hundred largest foundations conducted for the Commonwealth Fund by Mathew Greenwald & Associates found that, even among very large foundations, no more than 20 percent maintain archives. (The survey findings are reported on the Commonwealth Fund Web site.) The surveyed institutions account for approximately 52 percent of the foundation sector's endowment assets, including private, community, corporate, and operating foundations. Among the responding foundations, those with larger endowments and staffs, as well as those that are older, were found to be more likely to maintain archives.

The survey revealed that only 37 percent of the non-archiving large foundations have formal short-term records-retention policies, as required for nonprofits under the 2002 federal Sarbanes-Oxley legislation -- suggesting worrisome laxness or informality with respect to institutional record-keeping within the sector.

The survey also found that most large foundations without archives warehouse their historical records, at least for a time (48 percent), and that many simply allow files to accumulate in their offices (Exhibit 1). While 20 percent of this group chose "doubt the importance of historical records" as a major reason for not maintaining archives, neither cost, privacy, nor confidentiality was identified as a major reason for not maintaining an archive. A sizable number of foundations cited their relatively young age as contributing to their failure to set up archives, explaining that the issue is either something they have not gotten around to or have not needed to address thus far.

For large foundations that do have archives, the survey found that two-thirds manage them in-house; 17 percent place their historical records with independent nonprofit archive centers; 9 percent place records with a historical society, museum, or research library; and 7 percent place them with a university or college archive (Exhibit 2). An example of a very large foundation that historically managed its archives internally but recently switched to the outsourced model is the Ford Foundation. In 2012, Ford selected as its repository the Rockefeller Archive Center, the independent archive organization most often used by large foundations, including, since 1985, the Commonwealth Fund.

In addition, many foundations that maintain archives indicated that they put all important records in them. Foundations generally follow traditional archiving practices in preserving program files, foundation publications, public relations documents, organizational records (for example, board and committee minutes), key administrative records, and, if they have them, photographs, documentaries, and videos. Most institutions do not archive declined proposals and no longer attempt to keep traditional archival material such as officers' calendars. External archive centers typically do not accept financial or human resources records, owing to lack of space and to processing priorities. Most foundations with archives (80 percent) are not preserving important e-mail correspondence, and over half are not archiving Web site information.

Most foundations restrict researchers' access to their archives, but nearly half will permit access if the research objective is deemed worthwhile (Exhibit 3). About a third (31 percent) routinely open their archives to researchers. The most common restriction is on access to administrative records.

The survey also found that the cost of archives varied with foundation size, age, and the nature of the foundation's work. For a 94-year-old, $650 million foundation with extensive intramural program operations and publications like Commonwealth, the annual cost of maintaining an archive is about $100,000. The mean annual cost reported in the survey was $60,000.

Like other institutions, foundations see their archiving system at risk of being overwhelmed by an influx of materials. Even so, foundations with archives seem to be keeping up with the paper flow relatively well: two-thirds say that at least 75 percent of records sent to archives have been processed. And many foundations with archives are using their own information technology systems to advance their archiving objectives, with some quite advanced in doing so. That said, over half of survey respondents say that IT system improvements could improve their archiving performance, while half expect that, over time, their archives will be primarily electronic (Exhibit 4).

Finally, most foundations with assets under several billion dollars find that outsourcing their archives to an external center is more efficient than attempting to build a professional internal archives unit. The survey found that half of foundations using external archives centers find the services, overall, to be "very good" to "excellent," while another 35 percent rate the services "satisfactory." Echoing challenges facing the archiving profession, the chief areas of concern among foundation officers are the timeliness of such centers in processing materials and their ability to use information technology to maximum advantage.

Clearly, the state of foundation archives is a neglected "glasspockets" issue in the sector. In a follow-up post, I will present some recommendations for improving the archiving practices of foundations.

-- John E. Craig, Jr.

Weekend Link Roundup (January 19-20, 2013)

Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Advocacy

Writing on the Chronicle of Philanthropy's Government and Politics Watch blog, Cody Switzer shares a video in which the NAACP's Benjamin Jealous explains how his century-old organization engages young activists: "Listen to them first, find out what they are really angry about, and then say, 'This is how we turn it outward, and we actually overcome that issue.'"

Communications/Marketing

On the Huffington Post's Impact blog, Katya Andresen shares an infographic from the Georgetown Center for Social Impact Communication that illustrates four different categories of potential cause influencers: Mainstreeter, Minimalist, Moderate, and Maximizer.

Nonprofits

On the Center for Effective Philanthropy blog, CEP president Phil Buchanan suggests that nonprofits have a "dependency" problem -- and that's not necessarily a bad thing.

Philanthropy

Philanthrocapitalism authors Matthew Bishop and Michael Green discuss a recent Wall Street Journal review of Robert Dalzell's The Good Rich. In the review, Journal contributor Amity Shlaes argues that "Charity is a sideshow: What matters about the rich, if we are considering the public good, isn't their charity but their investments -- their ideas about what to do with 'slimey petroleum' and microchips -- and the jobs and activity they create." Bishop and Green disagree:

We are, on the whole, enthusiastic champions of the role that business plays as a creator of value in the world. (With the caveats that not all profit is socially valuable -- think of the profits that Lehman Brothers earned before it crashed, which at the time seemed to indicate that the investment bank was well managed, rather than the reality that it was gambling recklessly -- and that not all billionaires are equal, as how they have earned their money and whether they have paid their fair whack of taxes are important questions in judging whether someone is a 'good billionaire' or, perhaps, a tax dodging monopolist.) Indeed, we would even accept that, in some or even many cases, a dynamic entrepreneur may have more to add to the world through business than through philanthropy. But the judgement on whether any particular billionaire's philanthropy is worthwhile or a waste must be based on an analysis both of what he contributes through business and what he contributes through philanthropy. It cannot be assumed a priori, as the Journal seems to do, that business is always, necessarily better....

Social Good

Writing for the Harvard Business Review blog network, Charity Case author Dan Pallotta argues that nonprofits need to embrace a capitalistic mindset and methods if they truly want to solve the world's problems. "Our social problems are gigantic in scale," writes Pallotta. "We need gigantic responses to them. And if we freed the humanitarian sector to use the tools of capitalism, we could bring private ingenuity to bear on those problems, and we wouldn't have to depend on the government to fill the gaps."

Social Media

In a post on his LinkedIn blog, Likeable Local chief executive Dave Kerpen offers five tips for social media success:

• listen first and never stop listening;
• don't tell your customers to like you and follow you, tell them why and how they should;
• ask questions;
• share pictures and videos; and
• spend at least thirty minutes a day on social media.

Kerpen adds, "if you stop thinking like a marketer and start thinking like a customer, you'll understand that the secret to social media is in the 'social' more than in the 'media' -- it's in being human -- being the sort of person at a cocktail party who listens attentively, tells great stories, shows interest in others, and is authentic and honest."

Technology

Philanthropy 2173's Lucy Bernholz reflects on the death of 26-year-old technologist Aaron Swartz, an "Internet folk hero" who, faced with the possibility of thirty-five years in prison for illegally downloading nearly five million documents from JSTOR, a subscription-based online service that scans and distributes articles from scholarly journals, committed suicide on January 11. "[Our] rules about information are clearly, clearly broken," writes Bernholz. "For acts done to further a cause, we have now seen overzealous prosecution result in death." She continues:

Our rules about information have been rules about ownership. How we use information, give it, charge for it, share it. These rules are changing, due to the efforts of people such as Aaron. They must change more. How that happens will not be easy or simple. Big institutions will lose lots of power when we make the changes we need, but we can all hope it doesn't involve any more death....

Elsewhere, Holden Karnofsky shares some additional thoughts about his friend Aaron in a post on the GiveWell blog.

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a great week!

-- The Editors

[Infographic] Gender and Salary Inequity in the Nonprofit Sector

This week's infographic, courtesy of the TCC Group, looks at the troubling disparity in pay for men and women in the nonprofit sector.

Based on an analysis of data from a thousand nonprofits in a combined Core Capacity Assessment Tool (CCAT) and 990 dataset, the infographic shows that women in the sector make .75 for every $1 made by men; that women leaders tend to be more effective than their male counterparts; and that, in order to be paid equally, women have to perform better than men in a range of areas, including problem solving, creating organizational culture, and supporting the professional development of staff.

How is your nonprofit doing when it comes to equal pay for equal work? How is it doing on key indicators of organizational effectiveness? To find out, check out the CCAT on the TCC Web site.

Here Today, Not Gone Tomorrow

(Lisa Brooks is a co-founder of IssueLab and director of knowledge management systems at the Foundation Center. In her last post, she wrote about the importance of archiving old research.)

About a month ago, IssueLab received an e-mail from a man in Jackson, Michigan, who runs an organization focused on mentoring high-risk youth. He found a report on the IssueLab site he wanted to share at a meeting he was about to host, and he wanted to know how he could obtain twenty-five hard copies. The report, The Promise and Challenge of Mentoring High-Risk Youth: Findings From the National Faith-Based Initiative, was published in 2004 by Public/Private Ventures (P/PV). The fact that the report was published nine years ago by P/PV made his e-mail especially interesting.

As many of you know, P/PV, after thirty-five years in operation, closed its doors in the summer of 2012. About six months later, the Public Education Network (PEN), which had been doing good work for twenty-years, closed its doors. One of the last tasks both organizations completed was to partner with IssueLab to preserve their respective publications. So while neither organization is around today, anyone can browse P/PV's research reports, case studies, and evaluations or PEN's white papers, case studies, testimonies, opinion polls, and survey results through the special P/PV and PEN collections on the IssueLab site. And that's a good thing, because as our friend from Michigan can attest, these publications continue to provide data, insights, and case studies that can inform the efforts of those working in the fields of education and children, youth and families.

What would have happened to P/PV or PEN's publications had they decided not to turn over stewardship of their published collections to IssueLab?

In a recently released report from the Commonwealth Fund titled The Archives of U.S. Foundations: An Endangered Species, author John E. Craig, Jr. wrestles with exactly this question and provides the sector with a thorough accounting of why foundations need to take seriously the archiving of their own publications. Among other things, Craig argues that foundations play a key role in social change through their efforts to build "the knowledge base for social improvements and scientific advancement and, through the support of individual researchers, contributing to the nation's intellectual capital." What's more (and directly to the point of this post), Craig notes that "foundation records are also frequently one of the few sources for historical research on small, relatively short-lived organizations (and their leaders) that had significant impact in their day."

Neither PEN nor P/PV were short-lived organizations, and in this case IssueLab rather than a foundation has assumed responsibility for archiving their research and publications going forward, but Craig's point is no less valid: organizations close their doors, and it is up to other organizations and individuals to preserve their legacies and learnings. IssueLab continues to ensure that the work of P/PV and PEN will remain a part of the historic record and that their documentation of specific social problems and solutions designed to address those problems will continue to be shared.

The story of P/PV, PEN, and IssueLab is a hopeful one, and the attention that groups like the Commonwealth Fund are giving the issue of knowledge preservation is encouraging. But the question remains: How can the social sector shift from "knowledge preservation by chance" to a more sustainable approach that encompasses the complete cycle of knowledge generation, distribution, and preservation in perpetuity? At IssueLab, we're looking for answers and for thought partners. Use the comments section below to post your thoughts and ideas, and let's get this much-needed conversation started!

-- Lisa Brooks

Foundations and the Freedom Not to Forget

(Bradford K. Smith, president of the Foundation Center, wrote about Lucy Bernholz's annual look at trends in the social economy in his last post.)

Recently I had a front-row seat for two profoundly moving presentations that highlighted philanthropic freedom in action. Both involved groups of forgotten people -- the victims of Agent Orange in Vietnam and rural Americans without Internet access -- and one foundation, the Ford Foundation.

First, Charles Bailey, the former representative of the Ford Foundation in Vietnam, spoke to staff here at the Foundation Center about the "Make Agent Orange History" campaign. During the Vietnam War, the United States dumped 12 million gallons of a herbicide known as Agent Orange on South Vietnam, exposing in the process some 4.5 million Vietnamese and hundreds of thousands soldiers from America and other nations. Agent Orange contains the chemical dioxin, which remains toxic to living things for hundreds of years and is concentrated in contaminated soil, or "hot spots," throughout the Vietnamese countryside. The Ford Foundation quietly began working on the issue of dioxin remediation at a time when there was no official dialogue between the American and Vietnamese governments and none of the sixteen corporations that had produced Agent Orange would accept any liability for its devastating side effects.

Subsequently, in 2000, Ford announced its Special Initiative on Agent Orange/Dioxin, which was transferred to the Aspen Institute in 2011. Over time, other foundations like the Bill and Melinda Gates Foundation and Atlantic Philanthropies began to contribute to the effort and Congress started to act. Today, while lives have been restored and hot spots have been cleaned up, legal action has yielded almost nothing and millions of people remain at risk. The effort lives on, however, spearheaded by Bailey and the Aspen Institute, in partnership with the U.S.-Vietnam Dialogue Group on Agent Orange/Dioxin.

Later in the evening, I stopped in at the Ford Foundation to hear Susan Crawford talk about another group of forgotten people: the millions of Americans without Internet access. Crawford opened her remarks by painting a vivid picture of a mother and daughter sitting in a car outside the local library after dark. Why? So the child could piggy-back on the library's wireless connection to do her homework.

Crawford, a dynamic professor of law at Yeshiva University's Cardozo School of Law here in New York City, is the author of the just-released Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age, which chronicles how a combination of bad policy and corporate power have turned the U.S., once the undisputed leader in all things Internet, into a nation that pays higher prices for slower download speeds than virtually any industrialized country in the world and where Internet access is anything but universal.

That Ford was sponsoring such an event should come as no surprise. Crawford's work and that of other scholars and activists inform the foundation's Advancing Media Rights and Access initiative -- which has supported a number of high-profile public events under the banner "Wired for Change," as well as grants to organizations around the world working on these issues. (Many of those organizations also can count on the Open Society Foundations for support.) Tackling issues like "net neutrality" (which is anything but neutral) and supporting research that often runs counter to the "facts" and analysis provided by industry giants such as Comcast can be controversial. But Ford has been a leader in this space.

Indeed, issues like Agent Orange remediation and the digital divide receive relatively little foundation support compared to more traditional causes. The fact that a handful of foundations like Ford choose to take them on tells us something important about philanthropic freedom. More than just a tax code-enabled right, private foundations' freedom to work on issues of their choosing is also a unique asset, one that must be used responsibly and, at times, courageously.

What an inspiring day that was. It reminded me of the many ways in which private foundations -- free from the bottom-line pressure of markets, the partisanship of electoral politics, and the demands of fundraising -- can use their independence to do remarkable things, whether it's taking on issues that no one wants to touch, sticking with an issue for decades if required, or keeping the rest of us from forgetting the millions of people who, through no fault of their own, continue to be harmed and/or excluded by war, economic injustice, disease, and discrimination.

-- Brad Smith

Let's Think Smarter About the Charitable Tax Deduction

Jan Masaoka is CEO of the California Association of Nonprofits (CalNonprofits), publisher of Blue Avocado, and author of The Best of the Board Café, Nonprofit Sustainability (with Jeanne Bell and Steve Zimmerman) and The Nonprofit's Guide to Human Resources.

On New Year's Day, lawmakers in Washington finally agreed to disagree and passed a bill to avert the so-called fiscal cliff. But with the federal government looking at another trillion-dollar deficit and record levels of debt, no idea for balancing federal expenditures and revenue will be off the table for long.

For many nonprofits, keeping the charitable tax deduction off the table is the issue. But while the issue itself may seem straightfoward, there are more nuances and choices to it than meet the eye. There are many ways, for example, to increase taxes that would not have a directly negative impact on nonprofits -- which, after all, are a huge part of the safety net for the poor, the elderly, the unemployed, and many others.

The deal made to avoid the fiscal cliff left the charitable tax deduction untouched for the most part -- and for the time being. To be clear: neither eliminating the deduction nor reducing the deductibility rate was discussed; the administration's proposal would have lowered the current cap on the deductibility of charitable gifts from 35 percent to 28 percent of one's income. The one tiny change passed was the reinstatement of the Clinton-era Pease Amendment, which will raise taxes on some of the wealthiest donors by perhaps $2,000 each.

However, the intensity of the debate served to highlight some thought-provoking issues for those of us in the nonprofit and philanthropic communities, especially as the potential for revisiting the charitable deduction (and other tax breaks) looms large.

Some nonprofits are conflicted about the charitable deduction: on the one hand, nonprofits benefit from donations that often are influenced by their tax-deductible status; on the other, many of these same nonprofits support higher taxes for the wealthiest in our society. Indeed, a reduction in the charitable deduction does two contradictory things for nonprofits: it reduces the financial incentive for people to give, and it also brings in more tax revenue -- revenue that could be used to fund nonprofit services.

Of note, the current deduction formula affords greater tax relief to higher-income individuals than to lower-income individuals, for three reasons:

• Higher-income individuals are more likely to itemize;
• Because it's applied to taxable income, the deduction helps higher-income individuals more since their marginal tax rates are higher; and
• The cap only affects individuals who donate a third or more of their taxable income. (Lower-income individuals are unlikely to be able to give away such a large percentage of their income.)

Other proposals, such as establishing a "floor" for the charitable deduction (a minimum percentage of adjusted gross income by which charitable contributions could qualify for deduction), could be more equitable and arguably could raise more tax revenue while having little or no impact on charitable giving. We should also look at ideas for extending the charitable tax deduction to non-itemizers, changing the formulas on deductions for donated stock, and making the estate tax more of an incentive for bequests. 

All of us at the California Association of Nonprofits encourage our colleagues in the nonprofit sector to advance the longer-term conversation about the charitable deduction as it relates to the balance between sector sustainability, equitable taxation, and fiscal responsibility.

But while we all must work to protect the deduction, we cannot allow the main message from the nonprofit sector to be only about tax breaks. We feel strongly that the Bush tax cuts of 2001 and 2003 have been harmful to our economy and our communities, while benefiting very few Americans. In the fiscal cliff deal, current marginal tax rates were extended indefinitely for individuals earning less than $400,000 and couples earning less than $450,000 -- approximately 98 percent of all U.S. taxpayers. While the revenue that will be realized by raising rates on the highest-earning 2 percent of taxpayers is less than what President Obama originally proposed, it's a step in the right direction for equitably increasing tax revenue as part of a longer process to bring the federal budget into balance.

We believe the responsible position is to support the charitable deduction and to support policies that result in increased revenue. In order to do that, we all will need to consider additional options as a new Congress begins to craft policy around these important issues.

-- Jan Masaoka

Weekend Link Roundup (January 13-14, 2013)

Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Disaster Relief/Recovery

It's been three years since Haiti, the poorest country in the Western hemisphere, was devastated by a magnitude 7.0 earthquake. In the weeks and months following the disaster, individuals and the international donor community stepped up with more than $5 billion in cash and commitments for relief and recovery efforts. So where do things stand today? Mark Leon Goldberg, managing editor of UN Dispatch, provides some basic facts and figures.

Nonprofits

Marie Deatherage, director of communications and learning at the Meyer Memorial Trust, curates a nice list of 2013 predictions for nonprofits, social entrepreneurs, and the social economy. Her list includes Lucy Bernholz's Philanthropy and the New Social Economy: Blueprint 2013, which is available as a free download from the Foundation Center's GrantCraft site; Pantheon president Mark Tobias ((@PanthTech) on "Ten Technology Trends to Watch in 2013"; and Nonprofit Revolution Now's "missing" predictions.

Philanthropy

Writing in Democracy: A Journal of Ideas, Nick Penniman and Ian Simmons take philanthropy to task for its "chronic" underinvestment in political reform at a time when the "special interests that finance and influence the political process have amassed unprecedented power." What would be an appropriate amount? ask Penniman and Simmons. Their answer? One percent, or as they write:

Some $300 billion is donated annually to charitable causes. So, $3 billion for reform. Yes, $3 billion sounds like a lot of money. But 1 percent of philanthropy is not excessive -- especially not for a purpose as important as maintaining a government of, by, and for the people. We spend magnitudes more than that funding the arts and humanities, fighting infectious diseases, providing the poor and needy with the services they need, and trying to improve our educational institutions. Committing a sliver of philanthropy to making sure Washington and the state capitals are free of corruption -- both legal and illegal -- seems like a smart investment. Doing so should not be seen as merely advancing an abstract concept of “good government,” but as a concrete and necessary step in advancing solutions to the great challenges of our time -- solutions that the philanthropic sector often invests in but never sees actualized....

Risa Lavizzo-Mourey, CEO and president of the Robert Wood Johnson Foundation, the nation's largest healthcare philanthropy, is named one of New Jersey's most fascinating people and is profiled in depth by the New Jersey Star-Ledger.

On the Center for Effective Philanthropy blog, Chris McCrum, chief operating officer at the Gordon and Betty Moore Foundation, argues that employee satisfaction is inextricably linked to feelings of empowerment and offers three lessons for foundation leaders looking to boost the sense of empowerment among staff.

And speaking of CEP, Nell Edgington has a nice Q&A with Phil Buchanan, the organization's president, on her Social Velocity blog.

Web Analytics

For those who are tired of (or don't trust) Google and Google Analytics, the search giant's ubiquitous Web analytics package, Sharon Hurley Hall, a professional writer and blogger, looks at a number of alternatives. In addition to good overviews (including screenshots) of Clicky, GoSquared, Woopra, KissMetrics, and Crazy Egg, Hurley Hall also lists nearly a dozen other packages in less detail.

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And Best Wishes for a very Happy and Productive New Year!

-- The Editors

[Infographic] The Importance of Donor Retention

This week's infographic was put together by Jay Love and his team at Bloomerang, developers of a CRM product focused on donor retention and management, and was featured in a good post on Katya Andresen's Non-Profit Marketing Blog.

According to Love, nonprofits do a poor job of retaining donors compared to organizations in the for-profit sector -- in part, because they tend not to have clearly defined donor-retention goals or devote adequate resources to tracking donor retention rates. (Note: The 94 percent customer retention rate mentioned in the top left square of the infographic was derived from 10K filings for "large publicly held tech companies" -- think Apple, Amazon, Google, and so on -- and is probably not representive of the for-profit economy as a whole.)

In the post on Katya's blog, Love shares six donor retention KPIs that most (if not all) nonprofits should be tracking:

• First-Year Donor Retention Rate by Dollars
• First-Year Donor Retention Rate by Number of Donors
• Repeat Donor Retention Rate by Dollars
• Repeat Donor Retention Rate by Number of Donors
• Overall Donor Retention Rate by Dollars
• Overall Donor Retention Rate by Number of Donors

Back in November, Derrick Feldmann, CEO of Indianapolis-based Achieve, wrote a good post on this subject here at PhilanTopic. The Bloomerang blog is also a good source of information for those who want to learn more.

So, how is your nonprofit doing when it comes to donor retention? Does it track donor retention rates? Is it spending more or less on donor retention activities than it did five years ago? And what would you tell other nonprofits looking to improve their performance in the donor retention area? Share your thoughts/advice in the comments section below....

Better Ways to Bring Social Programs to Scale

(Chris Walker is director of research and assessment for the Local Initiative Support Corporation. A longer version of this post was published online in the Stanford Social Innovation Review in December.)

Increased demand for social programs that are simultaneously threatened with budget cuts creates a need to not only ramp up proven innovations, but also to be smarter and more effective in doing so. In 2011, the Local Initiatives Support Corporation (LISC), a national community development intermediary dedicated to the comprehensive revitalization of low-income neighborhoods, leveraged an investment from the Social Innovation Fund to further expand its Financial Opportunity Center (FOC) program. LISC recently undertook a thorough study of its expansion of the FOC model to identify which elements and strategies made it work, and how they might help similar organizations.

Financial Opportunity Centers help low-income families by offering a suite of counseling services, including financial coaching to support basic budgeting and credit repair; advice about how to get and keep a good job; and assistance in identifying and applying for public benefits. Early results have been promising -- the program has gone from four original sites in Chicago to sixty-six centers nationwide.

The study revealed some important takeaways.

First, successful scaling of the program requires a certain amount of standardization. While granting some flexibility, LISC works hard to maintain the integrity of the core FOC model.

Second, infrastructure is critical and requires conscious investment and development. LISC has continued to invest in program-delivery processes, protocols, and standards; performance measurement; direct technical assistance and peer-to-peer learning approaches; and resource generation.

Third, scaling can only happen through a deliberate and strategic rollout. The SIF funding enabled LISC to formalize its program expansion and build the national structure needed to ensure a disciplined process.

That said, certain aspects of our scaling process are unique. The FOC model demands client participation and changes in behavior, meaning some customization is necessary. It also varies from community to community, and thus entails constant monitoring and adjustment. Few organizations can go this alone, which is why LISC's local and national infrastructure is so critical.

Successful scaling ultimately requires sustainability; the current fiscal crisis underscores that need. As the FOC model will always rely on some subsidies, we also measure success in how well the legal and administrative structure of the mainstream workforce system incorporates our approach. Only when our model becomes part of the policy mainstream can we claim to have fully gone to scale.

-- Chris Walker

 

Hey, Nonprofits, 'Usability' Is More Than a Tech Term

(Derrick Feldmann is CEO of Achieve, an Indianapolis-based creative fundraising agency. In his last post, he urged nonprofit development professionals to join the donor revolution.)

My mother isn't a techie. And because I'm a so-called "digital native," I tend to serve as her tech support, troubleshooting problems with her iPhone and laptop. Let me put this as politely as possible: serving as Mom's tech support requires a certain level of patience.

Recently, over the Thanksgiving holiday, she asked me to go online with her to look at some Christmas gifts she was thinking about buying for my wife. After watching her inch the cursor across the screen and type a Web address into the browser that led us to a "page not found" message, I jumped in and suggested it might be faster if we used Google. So we went to the Google home page, typed "cute personalized Mac travel case" into the search box, clicked on the "I'm Feeling Lucky" button, and voila! -- link after link to sites offering cute personalized Mac travel cases.

Good comparison shoppers that we are, we decided to click on a link accompanied by a great short description and the promise of a steep discount. When we clicked on the link, however, it took us to a site that looked about ten years old. As I scanned the page, Mom said, "Derrick, we aren't going to buy it from here, are we?" I had already decided we weren't, but I wanted to hear her reasoning. When I asked her, she said, "Well, it looks like it's a scam. I mean, we should buy from a site that looks like the people behind it have been in business a while, right?"

Then I asked her to explain something that led me to write this article: "Tell me specifically what you don't like about this site." To which Mom replied, "Other sites just look nicer. They have easy-to-click buttons, and I feel like I can trust them with my credit card."

My mom is like millions of other ordinary consumers who have been exposed to a variety of e-commerce experiences. She has been trained to expect simple user interfaces and straightforward navigation schemes that allow her to easily find and purchase the item(s) she's looking for. What my mom doesn't realize is that someone, a developer or programmer, designed the Web page or site that enables her to do just that: to easily find what she's looking for, learn more about the item, and, should she choose, purchase it with a minimal amount of fuss and bother.

In the Web development/design business, this is known as usability, and it typically comprises five components:

Learnability: How easy is it for users to accomplish basic tasks the first time they visit a site?

Efficiency: Once users have become familiar with a site, how quickly can they find what they need?

Memorability: When users return to a site after having not visited it for a while, how easily are they able to reestablish their proficiency in navigating the site?

Errors: How many "wrong turns" do visitors to the site make? How deflating are these mistakes and dead ends and how easily are visitors able to recover from them and find what they were looking for?

Satisfaction: How pleasant is the user experience?

Companies and organizations that have mastered usability with respect to their Web sites are able to get customers like Mom coming back to purchase more of their products or services. Straightforward navigation and simple transaction mechanisms help to establish a level of trust with the individual customer/visitor and make it easier for her to learn about additional products and services. In short, sites that offer a good usability experience make it easy for folks like my mom to move quickly from being a potential consumer to becoming an informed buyer.

And that's exactly the kind of experience that every nonprofit should provide to  prospective online donors. Organizations need to think about the online donation experience in terms of usability. This includes taking the five critical components of usability noted above and applying them to your online donor cultivation, solicitation, and stewardship pages.

Learnability: How easy is it for a prospective donor to understand the mission and purpose of your organization? Is it clear why your organization is asking for money and the ways in which donated funds are used to assist your organization's constituents? Are donors able to actively engage with your organization the first time they visit the site?

Efficiency: Once a prospective donor understands the reasons your organization requires additional funding, how easy is it for him or her to make a donation? Is the process quick and painless, allowing the donor to act on impulse? Is the experience one that instills trust? And, most importantly, does it build on the knowledge the donor gained during the cultivation process?

Memorability: When a donor returns to your site after a period of time, is it easy for her to reestablish the connection she made with your organization the last time she visited? Was her previous experience on the site memorable enough to inspire her to return, learn more, and perhaps make another gift for a larger amount?

Errors: How many "wrong turns" do potential donors make during the donation process and do they affect their willingness to donate? Could donors' navigation mistakes and dead ends be avoided if your organization provided better tools, easier options, and/or additional support during the donation process?

Satisfaction: Do donors leave the site feeling satisfied? Are they satisfied with the additional knowledge they gained, the efficient donation process, and the overall user experience?

As I hope the above makes clear, usability is not just a "techie" term. It's a way of thinking and a way to ensure that current and future donors' experience with your organization online is educational, efficient, and satisfying. Indeed, nonprofits that are busy acquiring new donors tend to be ones that have solved the usability puzzle. And their donors tend to return year after year -- and sometimes more frequently -- to support the important work the organization is doing.

So ask yourself: Does your organization's Web site pass "the Mom test"? Or is it more like the ten-year-old site that no one really trusts and wants to spend time on?

-- Derrick Feldmann