395 posts categorized "Fundraising"

The sustainable nonprofit: Amplifying and validating your message and mission

October 21, 2021

Keyboard_red_donate_button_GettyImagesGivingTuesday, together

In the face of global uncertainty and turmoil during the last eighteen months, many of us came together to find strength and solace in various forms of "community." Around the world, people wrote, logged in, and marched, connecting in new ways to old friends and finding new partners in a common cause. This drive to find and support a community has helped bolster the nonprofit sector, with U.S. charitable giving reaching new heights in 2020. It is this drive that nonprofits must connect with on GivingTuesday — the drive to create partnerships and build engagements. 

Giving days are always about securing buy-in from prospective donors — buy-in of not only the cause itself but of the day's fundraising goals. As prospects see organizations' campaigns and progress toward their goals unfold in real time, they realize that the day's outcome hinges on their sense of community: Do they care enough about the cause to give? Are they engaged enough to share this ask on social media? Do they feel a sense of pride when a milestone is reached or a match is achieved? While the goalpost in fundraising often is seen as the gift itself, on a giving day — especially GivingTuesday, when the nonprofit arena is loud and chaotic — the goal has to be more than the gift. The goal has to be advocacy on your behalf — that is, amplifying and validating your organization's message and mission. 

Achieving that goal requires careful preparation and extensive planning by development staff in the leadup to GivingTuesday. Here are a few steps nonprofits can take to advocate for themselves, expand their communities, and strengthen donor engagement....

Read the full column article by Amanda Lichtenstein, digital content manager at Operation Smile.

(Photo credit: GettyImages)

'The ability to connect more deeply': A Q&A with Eric Pannese

October 19, 2021

Headshot_Eric_Pannese _ClassyEric Pannese, senior vice president of product management and design for the giving platform Classy, has more than twenty years of experience in the technology sector. He joined Classy after two years at Medallia, a SaaS-based customer experience management platform, and in his role leading product development, he will work to ensure the delivery of products that meet the needs of nonprofits to drive increased funding and greater impact.  

PND asked Pannese about the benefits of nonprofits prioritizing digital practices and user experience, the shift toward mobile giving, the impact of Bitcoin and other cryptocurrency giving, and the future of AI use in the nonprofit sector.

Philanthropy News Digest: Nonprofits can be slow tech adopters, given the limited staff time and budget they can dedicate to tech. What are the benefits for nonprofits in prioritizing digital practices such as management platforms, CRM systems, cloud data storage, online dashboards, and digital reporting?

Eric Pannese: The benefits of technology are the same for nonprofits as any other company, which starts with the ability to connect more deeply with customers, or in this case, donors. Modern fundraising platforms, together with CRMs, can collect many data points about the donor and use these to create more personalized experiences, ultimately resulting in more donation revenue for the organization.

Technology can also create internal efficiency as many processes can be automated that were previously manual or nonexistent. Of course, any new platform is going to require an upfront investment in terms of resources to implement. The great news is that modern SaaS (software as a service) platforms are designed to reduce the initial time and cost to implement significantly, putting technology within reach for resource-constrained nonprofits.

With that kind of technology, nonprofits can create intuitive, engaging giving experiences for their donors, which can mean higher conversion rates and more funding. Our platform provides nonprofits with the formats and flexibility to activate donors when and how they need to by creating more relevant connections to their causes. And it allows them to reinforce those connections over time through powerful data and purposeful tools.

Read the full Q&A with Eric Pannese.

'The best way to assist families with dignity and grace is to give them direct financial assistance': A Q&A with Allison Lutnick, Director of Disaster Relief Operations, Cantor Fitzgerald Relief Fund

September 13, 2021

Headshot_Allison_Lutnick_Cantor_Fitzgerald_Relief_Fund_2_croppedOn September 11, 2001, 658 Cantor Fitzgerald and sixty-one Eurobrokers employees lost their lives in the terrorist attacks on the World Trade Center. The Cantor Fitzgerald Relief Fund was founded on September 14 with a $1 million personal donation from Cantor Fitzgerald chairman and CEO Howard W. Lutnick, whose brother, Gary, was among those killed. The fund raised and distributed over $180 million for more than eight hundred families — including 932 children — of the victims of that tragedy; the fund has since expanded its focus and distributed $357 million to date in support of families impacted by acts of terrorism, emergencies, and natural disasters, as well as direct service charities and wounded service members.

Allison Lutnick, Howard Lutnick's wife, set up the Cantor Fitzgerald Crisis Center and ran support groups for the thirty-six Cantor women who were pregnant on 9/11 and the fiancées of employees who were killed. PND asked Lutnick, now the director of relief operations for the Cantor Fitzgerald Relief Fund, about the lessons of 9/11, the fund's evolution over the last two decades, its annual Charity Day event, and corporate partnerships. Here is an excerpt:

Philanthropy News Digest: What were the goals of the Cantor Fitzgerald Relief Fund at the time of its inception, and how has it changed over time? 

Allison Lutnick: The Cantor Fitzgerald Relief Fund (CFRF) was created within three days of 9/11 solely to help take care of the 658 Cantor families who had lost loved ones in the attack. We provided financial, emotional, and legal support to our families. Howard gave the families ten years of health insurance and 25 percent of the firm's profits for five years.

As time passed, the CFRF expanded its mission to include, among other things, providing direct financial assistance to military families and victims of natural disasters.  

We learned that the best way to assist other families with dignity and grace is to give them direct financial assistance. We also witnessed the resilience of young moms — we learned that in the face of tragedy, they have no choice but to raise themselves up and carry on for the sake of their children, to bring happiness into their lives despite loss and pain. So, we focus our resources on families with young children that are financially struggling as a result of a trauma in their life....

Read the full Q&A with Allison Lutnick.

The Sustainable Nonprofit: 'Transforming philanthropic events with digital platforms'

August 02, 2021

Keyboard_red_donate_button_GettyImagesWhile many of us were hunkered down at home during the last eighteen months, the pandemic did not put an end to philanthropic activity. When organizations could not fundraise through their traditional channels like charitable walks and runs, dance competitions, casino nights, and other in-person events, they pivoted to digital platforms, where they were not only able to carry on their work but also learned first-hand about the opportunities and efficiencies that a digital component can offer.

Just as people have become more comfortable with video conferencing and conducting financial transactions via mobile apps, they are now more willing to participate in fundraising events through a digital platform. Recognizing that this is not a short-lived trend, smart institutions are layering a digital piece into their fundraising and event planning, embracing a hybrid approach that combines digital with traditional efforts....

Read the full column article by Cliff Feldstein, CEO of CrowdChange.

Strategies for nonprofit success in a post-pandemic landscape

May 11, 2021

News_keyboard_donate2A recent survey by the Nonprofit Finance Fund found that 60 percent of nonprofits experienced conditions in 2020 that threatened their long-term financial stability. As a result, most nonprofits had to reimagine how they engage with donors and the beneficiaries of their programs and services. Looking ahead, there are several strategies nonprofits can leverage to ensure their success in a post-pandemic world.

The power of storytelling

COVID-19 has underscored the importance of organizations staying connected to their mission and core values. Creativity and innovation are essential to engaging donors effectively, not only in terms of telling the "right story" but also in selecting the best virtual platforms to engage donors, who want to believe their contributions will have a direct impact on the causes they believe in.

Take the Downtown Women's Center (DWC) in Los Angeles. After the pandemic forced most things to shut down, the organization established a series of virtual community meetings to stay in touch with its clients; began to send regular email updates to donors, volunteers, and community stakeholders; and converted its largest fundraising event of the year — its annual in-person gala — into a virtual event. But its best move might have been the decision to adopt a peer-to-peer fundraising strategy. The resulting three-week campaign, Together Housed, encouraged donors and volunteers to leverage their own personal and professional networks on behalf of the organization, with DWC providing step-by-step instructions on how to set up a fundraising page, as well as email templates and social media content. Sure enough, at the end of three weeks the organization had exceeded its fundraising goal for the campaign by 35 percent and had secured support from eight hundred new donors.

Although grants from foundations tend to be top-of-mind for many organizations, the majority of giving to nonprofits comes from individual gifts and donations (Giving USA). No surprise, then, that building successful, long-term relationships with individuals is an important development strategy — and that donor retention strategies, including peer-to-peer fundraising and the use of third-party auction platforms, are critical.

Adaptive leadership is crucial

The pandemic also highlighted the importance of creativity and innovation for every organization. In the months and years ahead, nonprofits need to allocate time for experimentation and learning if they hope to adapt their programs and revenue-generating efforts to changing needs and opportunities. According to an article in the Stanford Social Innovation Review by Community Wealth Partners, the organizations that thrive during challenging times tend to have strong and decisive leadership able to make quick decisions in response to evolving challenges.

Nonprofits should also evaluate their boards to ensure that the composition of the board is appropriate for where the organization is in its lifecycle. As BoardSource notes, "High-performing nonprofit boards are both thoughtful and intentional in creating a strategically composed board of directors […] Every board's ideal composition should be considered in the terms of the specific needs, strategies and lifecycle of the organization as the board looks forward several years."

A recent article by sgENGAGE echoes the importance of investing in leadership. Organizations should invest in diverse talent and provide opportunities for employees at all levels to grow and develop.

Modernize to engage donors

Innovative virtual programming is the key to creating new revenue streams. Not only is such programming a good bet to generate additional funds, it also is a wonderful opportunity to reach audiences beyond an organization's traditional geography.

A great example of how it should be done is the Petersen Automotive Museum, which last year launched its first-ever virtual museum and vault tour. The tour, along with a number of other innovative programs designed to keep virtual visitors returning for more, enabled the museum not only to reach a wider audience but to raise much-needed funds from people who had never heard of it.

Do not delay digital transformation

In its most recent Nonprofit Trends Report, Salesforce highlighted the correlation between organizations with high levels of "digital maturity" and those with the most innovative and confident responses to change. According to the report, 85 percent of nonprofits say technology is important to their long-term success, yet only 23 percent have a long-term strategy or vision for how to use it.

In a digital-first environment, nonprofits must be able to leverage data to inform decision making, reach new audiences, personalize communications, and make accurate fundraising forecasts. And with a reasonable investment in a virtual platform, there's no reason to restrict outreach and programming to an organization's local geography.

The thing to remember is that what worked in the past is less likely to work today or in the future, so establishing and tracking key performance metrics and trends across key functions is essential. According to the latest Charitable Giving Report from the Blackbaud Institute, the share of giving done online has grown steadily over the last three years. If they hope to maintain and improve their donor retention rates, nonprofits need to be on board with online giving and other important trends in giving. And if those retention rates are not improving, or are falling, it's probably a sign that the organization is not directing enough resources to its donor engagement efforts.

Seize the day

The pandemic brought much of the world to a standstill, but things are beginning to open up. For nonprofits that took a hit last year, investing in technology to improve program service delivery and impact measurement is a good place to start. Organizations should also evaluate their internal processes to ensure they are as efficient as possible and that their strategic plan is still aligned with their programs and mission. And they should have regular conversations with key funders — not only to keep them engaged, but also to make sure that appropriate actions can be rolled out quickly if a funder decides to shift priorities or cut back on its support.

Community Wealth Partners agrees: "First and foremost, make time to revisit your vision for social impact — the impact you are trying to create and how you plan to create it. This helps ensure that your work remains relevant."

Whether the end to the pandemic comes in two months or two years, the need for the kinds of services provided by nonprofits is not going away. Nonprofits with forward-thinking leadership and staff that can keep up and innovate in an ever-changing digital world are most likely to thrive and create the greatest impact. No one says it's going to be easy, but the alternative isn't really an option.

Wilson_Donella_philantopicDonella Wilson, CPA, leads GHJ's Nonprofit Practice and serves as president and chief philanthropy officer at the GHJ Foundation. She was recognized in 2018 as a "Women Executive of the Year" and in 2017-20 as one of the "Most Influential Women in Accounting" by the Los Angeles Business Journal.

A case for self-support: serving ourselves in a time of great stress

April 30, 2021

Man_on_cliff_David Lusvardi_unsplash"How are you doing?" I asked a donor on a phone call last summer. Her response stayed with me. "I'm doing pandemic fine," she said, before explaining that that was the kind of response one gives during a public health emergency instead of something like: "I'm doing okay. I have my job, and it's stressful, but at least I have work. And the family is fine. No one is sick. Virtual homeschooling is a struggle, but we're fine."

Her response was both amusing and perplexing, because when I ask someone how they're doing, I'm the type of person who wants and expects to hear all the details. In fact, I believe it helps explain why I enjoy working in philanthropy as much as I do, and is one of the main reasons so many of my meetings run longer than scheduled.

Organizational experts Paul Davis and Larry Spears would call my exchange with the donor a "fortuitous encounter — "[t]hose moments where a person, place, or thing causes our lives to change in a more positive direction." While I did not feel all that positive after the exchange, in the months since it has contributed to a transformation in the way I think about taking care of myself, my colleagues, and our philanthropic partners.

Of course, the donor's reply was informed by the unprecedented events of the past year — events for which our sector as a whole was largely unprepared. I live in Houston, where hurricanes and flooding events are commonplace, but once the water recedes, we jump back in our cars and check on our friends, neighbors, and even our donors. The coronavirus pandemic, by contrast, has been a "silent" storm during which we've been encouraged to care for others by literally keeping our distance from others.

What fundraising professionals are doing well…and not so well

From a fundraiser's perspective, the sector's collective response to the pandemic has been something of a mishmash. With respect to day-to-day operations, we're seeing good content related to engaging our supporters, innovating in our programming, and staying the course. I can't say enough about the creativity and resilience of the sector and the people who work in it. And without their advice and knowledge, I know I would have been less effective over the last twelve months in mapping out my own organization's fundraising strategies.

That said, nearly everything I've read over the last year has been focused on practical problems and challenges, things like how to strengthen a pandemic case for support, when to schedule a Zoom meeting with a new prospect, and retaining your supporters after you've made the decision to move your next fundraising event online. Yes, it's important to develop and strengthen our practice in normal times, and even more so during times of uncertainty. But what I'm not seeing are stories about self-care during one of the most challenging periods in recent memory, stories that remind us that if we want to do our best work, we need to make sure we’re well enough to fire on all cylinders. "[J]ust as they tell you on airplanes when the oxygen masks come down,” says Chris Mosunic, chief clinical officer at Vida Health, "we can't help others if we don’t take care of ourselves first."

I’m a realist who knows that a big part of my role as a fundraiser is to deliver maximum net revenue for my organization. I also know that many of us worry about cultivating donor relationships and meeting ambitious goals, but that we are not always honest about how we ourselves are holding up. Sure, I've found a reasonable groove during the pandemic and I'm doing the best I can. But let's face it, the current fundraising environment is different than the one many of us are used to. And, truth be told, it's different for our donors as well.

A practical reason for self-care

You may not know this, but the work of fundraisers is never "done." Between programs, events, and annual reports, the effort to steward and engage donors and prospects is a year-round affair, and at times it can feel like we’re laboring on our own little island, disconnected from the day-to-day work of the organization and with no sign of help on the horizon.

From a purely practical perspective, this has an impact on our work. Leadership guru Kevin Krause suggests that "[e]ngaged employees lead to better business outcomes." And a survey of more than five hundred business leaders by the Harvard Business Review found that 71 percent "rank employee engagement as very important to achieving overall organizational success."

Also relevant in this context is what Virgin Group founder Richard Branson has to say about an employee-first mentality: "If the person who works at your company is 100 percent proud of the job they're doing…they're gonna be happy and therefore the customer will have a nice experience."

But how can we expect our donors and supporters to have a "nice experience" if those tasked with engaging them in the work of the organization are struggling?

Doing the work of self-care

The events of the past year are likely to resonate for years to come, and work will continue to be challenging for many frontline and back-end fundraising staff. But there are things we can do for ourselves, and our team members, that will result in a happier, healthier workplace.

First, be mindful of your time. For many, working from home has morphed into living at work. Don't be that person. Instead, set real start and finish times for your workday — and stick to them. It'll be easier to do that if you make the effort to wear work clothes during the work day. And because your day-to-day tasks aren’t going anywhere, unless there's an emergency, don't check your email before 9:00 a.m. or after 5:00 p.m. (Managers, you can help by refraining from the super early/late email messages.) In addition, try to create a schedule for your meals and stick to it. Limiting food consumption to mealtimes can be great for your well-being, and equally beneficial to your waistline.

Second, be mindful of technology. These days, our big, medium, and little screens are where we spend a big chunk of our time. Indeed, Americans spend an average of 2.3 hours a day on social media — the equivalent of roughly thirty-one days a year. To combat screen-induced burnout, try to establish "no glow breaks" throughout the day — on a run, in the bathroom, while out doing errands — where you put the technology in your life on pause. Also, make an effort to incorporate some analog technology like paper into your life. For what it’s worth, Scientific American suggests that our screens "[p]revent people from navigating long texts in an intuitive and satisfying way. In turn, such navigational difficulties may subtly inhibit reading comprehension."

Finally, be mindful of your state of mind. One in six Americans sought counseling in 2020, joining the one-third of Americans who were already receiving some kind of counseling. Perhaps more than at any other time in recent history, we are willing to acknowledge the need for self-care. For those who are feeling stressed, reducing some of the distractions in your life, like  notifications on your phone/tablet, will go a long way to calming an overly busy mind. Similarly, when lodged in your home "spaceship," try to organize your space into discrete areas — a corner of one room for exercise, a certain chair for reading or chatting on the phone — and don’t use your sleep space for other tasks like work or social media.

The last year has been difficult for many. If you find yourself struggling with something more serious than time management or the distractions that come with being plugged in all the time, give yourself permission to talk to a professional or, at the least, a friend. And remember, you may have challenges; but you are not your challenges.

Our colleagues and donors rely on us, but more than anything we are responsible for ourselves.With that in mind, don’t be afraid to take the leading role in your own self-care.

(Photo credit: David Lusvardi via Unsplash)

Evan_Wildstein_PhilanTopicEvan Wildstein has served on the fundraising team at the Kinder Institute for Urban Research at Rice University since 2017.

Social issues are getting personal

April 21, 2021

I’ve talked in this space about how social issue engagement builds from what interests and engages us: we educate ourselves, get motivated to act, then look for like-minded people to join in pushing for change. In the recent past, research conducted by the Cause and Social Influence research team I lead has revealed that young Americans (ages 18-30) are concerned about social issues that impact others, including racial equity, climate change, hunger, and animal rights. But a third of the way into 2021, we're seeing a new twist.

Findings from the first Cause and Social Influence survey in 2021 reveal that the issues of most interest to young Americans right now are those that directly and personally affect them.

Empathy is a normal human trait

Being concerned about the well-being of others is the definition of empathy. Learning that countless number of our fellow Americans go to bed hungry each night motivates some of us to do what we can to address the immediate need and prompts others to do something to eliminate the root causes of hunger in America. Both reactions are normal and a necessary component of action for change.

Having empathy means we put ourselves in the place of another and try to share the feelings he or she is experiencing. But when an issue is relevant to our own situation — when we're the ones sharing, feeling, and experiencing the issue as our own — our empathy deepens to another level. We begin to understand what someone else is feeling because we've been or are in the same situation.

This is where many young people find themselves today. Previous research has shown that millennials and Gen Z are especially empathetic, and that their empathy leads them to be socially aware and active. In 2020, they (like many of us) took action on a range of social issues, including racial injustice, social isolation, and voting rights. Now, in 2021, they are finding that some of those issues have more personal relevance than others and have entered the stage of engagement where an issue's relevance to one's own situation is driving their engagement.

Empathy is directed inward

The biggest indicator of the shift? According to Influencing Young America to Act, Spring 2021, healthcare premiums now rank among the top three issues of interest to millennials and members of Gen Z. Given the pandemic's effect on healthcare systems, joblessness, and most every other aspect of life, that makes sense. And it certainly makes sense that it has raised concerns among young Americans about their own ability to be and stay healthy while financially supporting themselves.

Given that young people were already dealing with high levels of student debt and job insecurity, the pandemic and the health concerns it poses has underscored the precarity of their personal situations. And while healthcare premiums may not be a burning social issue, it is a very personal issue.

Fig.1.1_Cause and Influence_1Q201

Indeed, while healthcare reform as a general concept was of concern to young Americans in 2020, healthcare premiums only showed up in the top tier of issues for the first time in March 2021. Two weeks after President Biden expanded health insurance premium subsidies as part of the American Rescue Plan Act, 60 percent of our survey respondents said they believed the country was on track/totally on track -- though they were less hopeful about where things would be a year from now.

Fig.1.2_Cause and Influence_1Q201

Fig.1.3_Cause and Influence_1Q201

As young Americans look to a post-COVID economy, their own well-being and that of others appears to be top of mind. And while they are still deeply engaged in helping others, especially when it comes to racial equity and animal rights, their own changing health and economic situation cannot be ignored.

Causes must recognize how other issues affect them

Causes always have had to pay attention to how their issue can be made relevant to target audiences. Typically, they do this with campaigns featuring compelling images, videos, and stories crafted to help supporters and potential supporters feel what people most impacted by the issue are going through. So what does a cause do when its target audiences and people impacted by the issue are one and the same?

For starters, their campaigns need to encourage those who are impacted by the issue to talk to their peers about their own experiences while also standing up in support of the issue. This goes beyond people impacted or interested in an issue looking to recruit like-minded people to the cause. It means getting individuals with the same lived experience to join forces as a collective and share their hard-earned insights to bring about change.

It also means causes must intimately understand how they relate to the young people they’re trying to reach. The best way to do this is to interact with them and help them understand the interconnectedness of your particular issue with the issues young people are dealing with at the moment.

Finally, causes need to encourage supporters to elevate their voices in a way that directly and personally communicates the relevance of their individual experience. For example, while petitions continue to be popular, causes should start to think about augmenting them with personal stories. Rather than simply asking members of your target audience to sign a petition, package it with a story of someone impacted by the issue that potential signers of the petition can relate to.

The shift in how empathy is being channeled as the pandemic begins to wind down is something we all need to pay attention to. COVID impacted all of us, one way or another, and issues that once may have been seen as only involving certain groups or populations have changed and, in many cases, broadened out. As nonprofit leaders, we need to recognize that yesterday's supporter may also be today’s beneficiary.

Heashot_derrick_feldmannDerrick Feldmann (@derrickfeldmann) is the founder of the Millennial Impact Project, lead researcher at Cause and Social Influence, and the author of The Corporate Social Mind. For more by Derrick, click here.

Are you inspiring action for change with both a short- and long-term approach?

March 05, 2021

Protestors_holding_hands_Halfpoint_GettyImagesWhen I talk with organizations about what they are doing to inspire action for change, they often tell me how they use stories about impact to keep their most loyal donors and supporters motivated. Typically, this involves a communication plan that uses storytelling to help donors and supporters understand how their support for the organization positively impacts the lives of the organization's constituents.

But is it the kind of impact that every donor is looking to make with his or her dollars?

When I look at the kind of change that an organization or cause is trying to create, I tend to take a more expansive view informed by two simple questions:

  1. Does the work serve those in need of assistance in the short term? or
  2. Does it support an agenda or series of action that will create longer-term change in the lives of those being served?

In other words, is the organization reacting to a problem or issue or driving an agenda and being proactive with respect to the underlying causes of the issue or problem? The reactive approach is mostly focused on the here and now; the proactive approach is focused on driving progress over the longer term.

To do or not to do (now)

So much of the social issue work happening today is driven by real-world short-term concerns — and for good reason. But the fact of their existence doesn't necessarily mean that addressing them is going to be everyone's first priority — especially when one takes into account the differences in interests, age, and income of your donors and supporters.

The one thing most of your donors and supporters share is a vision of a better future for the people served by your organization, whether that comes to pass today, tomorrow, or both. That said, not every person you are trying to engage (or have already engaged) is as interested in what your organization is doing today as in what it is doing (or hopes to do) to create longer-term solutions to the problem. For this kind of donor and supporter, enthusiasm — and engagement — often is inversely correlated to an organization's focus on short-term needs. At the same time, while the focus on root causes historically has relied on significant investments in advocacy efforts and infrastructure, those kinds of activities often are pretty far removed from the immediate engagement sought by eager marketing and fundraising teams.

The simple fact is that both approaches are necessary.

Without a major investment in donor research and prospecting, who is to say which of your donors and supporters are interested in making a difference today and which will want to see their contributions create more sustainable social change over the longer term? It's a difference in perspective that we, as marketers and fundraisers, often overlook. Instead of segmenting donors and supporters by age or income, we need to pay more attention to their motivations and views with respect to short- and long-term change.

Again, it's no surprise that research — our own as well as research conducted by others — often finds that the campaigns which generate the highest engagement do so by clearly establishing a top-level agenda for a cause or issue while leaving plenty of room for donors, supporters, and the public to determine their own action steps. And by "top level," I mean four or five goals that are relevant and achievable, along with the core beliefs that underlie action in service to the cause or issue.

Black Lives Matter is a great example. The three entities under the BLM umbrella, the BLM Global Network Foundation, BLM PAC, and BLM Grassroots, use both approaches to engage constituents in real social change. Efforts by all three to mobilize protests, register voters, and mount educational campaigns are designed to engage supporters in addressing critical immediate needs and injustices. At the same time, BLM is working hard to advance legislation, policy reforms, and changes at the corporate governance level with an eye to permanently reshaping the political and economic landscape in the United States for Black people.

This isn't an "either/or" choice; it's a "both/and" approach. We need to serve constituents today and drive a longer-term agenda — an agenda that speaks to the current moment while keeping an eye on the bigger prize.

As someone leading a cause or issue, it's your job to define and articulate how your organization can use both approaches to achieve impact. And your planning and decisions should involve both the marketing and communications team as well as program staff in identifying and targeting the motivations of existing as well as potential donors and supporters.

The bottom line: not everyone will be interested in supporting your day-to-day work on behalf of constituents. Instead of increasing your pressure on them and/or writing them off, try to get them involved in your longer-term agenda by giving them opportunities focused on eliminating some of the root causes responsible for the challenges your organizations works hard to address on a daily basis.

And remember, as you tell the stories of what you and your donors and supporters are doing to change lives today, be sure to create an inspiring vision of a future in which your efforts will no longer be needed. You may be surprised at the response.

(Photo credit: Halfpoint/GettyImages)

Headshot_derrick_feldmann_2015Derrick Feldmann (@derrickfeldmann) is the founder of the Millennial Impact Project, lead researcher at Cause and Social Influence, and the author of The Corporate Social Mind. For more by Derrick, click here.

Fundraising learnings from social media

January 21, 2021

Social_Media_Platforms_PhilanTopicHanging out on social media can be a remarkable way to spend time, though I acknowledge the word remarkable has more than one definition. In fact, given the unprecedentedly disruptive nature of the past year, I’ve often found myself turning to social media either to brainstorm about fundraising with others or simply to see what other nonprofit fundraising professionals are up to. While there is a lot of clutter out there, there's also a good deal of wisdom to learn from and experience to share.

Here are a few things I've learned over these long months that may be useful for others involved in doing the good work of philanthropy. Please feel free to share lessons and tips of your own in the comments section below.

The meaning of $18 donations

An online fundraising community I follow recently was expressing confusion over a sudden barrage of $36 donations. If you've ever spent time going through your organization's giving history data, you may have come across donations of $18, $36, or other multiples of $18. In Judaism, the number eighteen stands for "chai" ("life"). The word "chai" is spelled with the eighth and tenth letters of the Hebrew alphabet, which of course equals eighteen, while thirty-six is "double chai." So people for whom Judaism is important often will make gifts in increments of eighteen. But organizations that don't provide services with or for the Jewish community may be unfamiliar with the practice. At an organization where I worked several years ago, we received an online donation of $18 from a donor who had never given before and apparently was not made in response to a recent direct-mail letter, email, or other communication. (Ours was also an organization whose mission was very broad and not centered around a particular religion or cultural identity.) When our database manager sent around a note asking if anyone knew anything about the donor, or why they had opted to donate that amount, I made a chancy assumption about the donor's surname and called to thank the donor personally for making a gift honoring life; suffice to say, the donor was not expecting such a response and, over time, increased their support from a one-time $18 donation to recurring, four-figure gifts — a lovely surprise.

When gratitude gets too tactical

Some readers may know of the anonymous, sometimes-hilarious Twitter personality The Whiny Donor. All we really know about Whiny is that she "used to chair the development committees at a couple of nonprofits" and has some serious opinions about the way philanthropy should, and shouldn't, work. As a fundraiser, I wince at some of her tweets, especially the ones that call out bad or arcane practices in our industry. Recently, for example, she tweeted about nonprofits including too much "mechanical" information in the body of their donor thank-you communications. Acknowledgements, she tweeted, "that include the date when they received my donation in the very first line of the letter stop the flow of gratitude cold. Can't you put that detail in the fine print at the bottom?"

Now, admittedly, this is something we do (or did) at our nonprofit, largely because the tax receipting is handled by a different department, and we always want our letters to be polite yet functional. So I wanted to call Whiny on it. But after a few moments I realized she had a point. If a donor, any donor, is put off by what is supposed to be a thoughtful note of appreciation being interrupted by bureaucratic tax-related information, then we do ourselves a service by moving those details to another, more appropriate part of the letter. Needless to say, the next day we updated our thank-you letter template to better reflect and improve the flow of our gratitude.

Outcomes over outputs

For many of us whose fiscal years don't align with the calendar year, there are always a few conversations with leadership, accountants, and corporate-minded board volunteers that stumble over a question like, "Wait, are we talking about calendar year-end or fiscalyear-end?" On Twitter, the satirical account NonprofitsSay had some fun with the problem, posting: "These are our calendar year accomplishments, not to be confused with the fiscal year accomplishments in our annual report." I had to chuckle, because our organization is finalizing our 2020 (calendar year) annual report while at the same time thinking ahead to our 2020-21 (fiscal year) impact report.

When crafting our 2019-20 impact report, our team struggled with what we should call the document. For years the organization had gone back and forth between "Year in Review" and "Impacts and Benefits," both of which were always met with a mildly positive response from our donors. But given where we were in the middle of 2020 — with much of our work centered on pandemic response, equity, and resilience — we wanted to tip our hats to the donors whose generosity helped make those efforts possible.

Over on Joan Garry's "Your Thriving Nonprofit" Facebook group, I posed my question to the more than thirty-three thousand members of the group and was truly inspired by the responses. Many people suggested thinking less in terms of a catchy title and more about the vision behind the document. After some internal debate, we landed on "How You Helped Build a Better City" in bold letters. The response from our supporters was overwhelmingly positive.

I'll say it again: hanging out on social media can be a remarkable way to spend time. And with so many of us endlessly scrolling through our channels looking for information that can be used to refine our practices, respond to questions, or offer suggestions, there is indeed much to learn and share. Just remember to be patient and open to the views of your virtual colleagues.

Evan_Wildstein_PhilanTopicEvan Wildstein has served on the fundraising team at the Kinder Institute for Urban Research at Rice University since 2017.

3 ways to decolonize philanthropy right now

December 23, 2020

News_globe_africaThe events of 2020 reinforce how desperately a paradigm shift is needed in philanthropy if it hopes to create more durable solutions to the world's most complex challenges. The COVID-19 pandemic revealed how important it is to have agile, innovative organizations capable of responding quickly to shifting local contexts. At the same time, the reawakening of the social justice movement in the United States crystallized what happens when people are chronically underrepresented and left out of decisions that affect their lives.

While addressing these challenges can seem overwhelming, it's clear that one of the most effective ways funders can contribute is to support organizations built around community-driven solutions. Why? Because solutions for the people created by the people have the greatest chance of successfully changing the status quo.

While this may seem obvious, it entails a major shift in the way donors currently approach their giving — indeed, nothing less than a desire to "decolonize philanthropy." Decolonizing philanthropy, a term introduced by writer and activist Edgar Villanueva, requires philanthropists to assess to whom they choose to give as well as how their giving perpetuates the very problems they aim to solve.

Whether in the U.S. or in Kenya, where our organization, RefuSHE, operates, we see countless examples of well-intentioned donors pouring money into solutions they think should solve a problem — without checking whether the solution was created with input from the community most impacted by the problem. In the global development space, this often manifests as NGOs working in the Global South being led by leadership that sits in the Global North, far from the realities of the work and with only an anecdotal understanding of the local context. Too often, this modus operandi funnels money into short-lived solutions that feed an organizational culture of dependency rather than one of sustainability.

The approach itself is rooted in the imperialistic origins of "international development." Following World War II, the U.S. launched the Marshall Plan, introducing the building blocks for the international and humanitarian aid structure we see today. During the long decades of the Cold War, the U.S. awarded aid to other countries with the understanding that those countries would play by our rules and that the aid itself would be used in ways we approved of. At the other end of the spectrum, private philanthropic giving was driven, in part, by a "savior" mentality and the need to "lift up" poor people in other countries. In both cases, financial assistance was "given" from a place of control by people who thought they knew what was best for the communities they were trying to help. Solutions were parachuted in, communities were forced to adopt new ways, and, in many cases, the improved quality of life that was promised often failed to materialize.

To ensure greater progress toward a shared prosperity, decolonizing philanthropy presents an opportunity to make every dollar go further by centering investment in community-driven solutions. Here are three ways funders can ensure their investments are more efficient, effective, and equitable.

Invest in local leadership and programs co-designed with the communities served

Time and again, we've seen that lasting change arrives when communities have ownership of the solutions to the challenges they face. Interventions that feel forced not only tend to have a short life span but often yield less impact. The stories of PlayPumps and READ Global illustrate the difference well. The PlayPump system, a merry-go-round-like wheel that pumps water from wells as it is turned, was heavily endorsed by the international aid community and quickly scaled to more than fifteen hundred pumps in Zambia without much research or surveying of communities in advance. Not unpredictably, within two years a quarter of the installed pumps were in need of repairs. PlayPumps, it turned out, were fragile and cost four times what a traditional pump costs. What's more, many local women where the pumps had been installed reported feeling embarrassed every time they had to get water for their families, while a report by the Guardian found that children would have to "play" on the pumps twenty-seven hours a day to meet the per-pump target of delivering water to twenty-five hundred people. In short, the pumps failed to improve clean water availability in communities across Zambia, and much money and time was invested with little to show for it.

By contrast, READ Global embraced a community-driven approach that has stood the test of time. For more than twenty-five years, the organization has partnered with rural villages in Nepal, India, and Bhutan to establish community-driven libraries, resource centers, and social enterprises known as READ Centers that are owned and operated by the local community. There are now more than a hundred self-sustaining centers spread across the three countries, and not one center has closed since the first one opened in 1991.

Locally driven solutions are most effective when an organization's leadership team understands the local context first-hand and is strongly connected to the local community. Local leaders have a better understanding of how to create culturally relevant programs, how to optimize operations for the local context, and how to build trusting relationships with and beyond the community. All of which creates more opportunity for partnerships between those providing the service and those using the service.

At RefuSHE, we witnessed this first-hand when we invested in bringing on Geoffrey Thige to lead our Kenya operations as executive director. When COVID hit, having that executive presence in Kenya enabled us to navigate the public health crisis much more quickly and effectively. In fact, we were the first organization serving refugees in Kenya to move to virtual learning. And despite initial concerns that some donors might balk, seeing the tangible benefits of Geoffrey's presence in Nairobi gave us the courage to restructure our leadership and shift the majority of our executive functions to Kenya.

Funding is the biggest hurdle facing NGOs looking to similarly restructure. Donors need to trust local leadership and stop supporting organizational infrastructures that are built to cater to them more than the beneficiary communities they are intended to serve. Having an organization's CEO and "top brass" in the West is a relic of a twentieth-century donor model that has lost much of its relevance. Good intentions do not necessarily lead to good solutions. If they truly want to support effective, long-lasting solutions, donors need to move away from creating cultures of dependency that too often are perpetuated and reinforced by a "white guilt" mentality.

Fund collaboration rather than competition

The current donor incentive structure is rooted in competition. Organizations in the same field are constantly competing with one another to secure funds they need to survive. Competition for funding among NGOs working in similar spaces also stifles their ability to share information, data, and learnings. This scarcity model disincentivizes transparency and pushes organizations to keep lessons learned to themselves in order to stand out in the quest for funding.

Real, tangible impact requires collaboration. Our NGO, for instance, equips girl and women refugees with housing, education, counseling, and the vocational skills they need to reestablish some semblance of stability in their lives. While our services are rooted in a holistic approach to the plight of refugees, we don't work on resettlement cases (where refugees are formally resettled to a country like the U.S.); instead, we partner with organizations like HIAS and Refuge Point that specialize in refugee resettlement cases. When funding streams disincentivize an ecosystem of NGOs from collaborating, it is a disservice to the very communities we aim to serve.

Funding — and rewarding — organizations that work together to address the root causes of multifaceted issues enables communities to walk through all the doors of opportunity at once, rather than one door at time. Collaboration also fosters a culture where service providers share learnings and don't waste precious resources repeating mistakes. Above all, it means the people we aim to serve can more easily navigate the various services they need to establish productive, fulfilling lives.

Award unrestricted grants

All too often, funding comes with restrictions on how, when, and where it can be used. This assumes the donor knows best just because they have the money, rather than acknowledging the hard-earned insights of organizations working on the ground every day. Unrestricted funding requires trust in the organizations in which you invest. Unfortunately, this kind of trust too often is awarded to organizations led by leaders in the Global North with whom donors feel most comfortable. While many have good track records, the practice cuts out organizations that may be smaller in scale but that have more depth and experience collaborating with the communities they serve.

It's an open secret in Kenya that if you set up a nonprofit and are hoping for funding from the West, you'll have much better luck if your leaders are white and/or of Western origin. Whether in the U.S. or other developed countries, data backs up the observation that Black and African leaders are not awarded the same kind of trust. This leads to nonprofits where white, often well-connected Western leaders earn the top salaries, sucking up resources that could otherwise be used to attract top local talent that is much better suited for the job but too often undervalued.

Unrestricted funding also has the power to build more durable institutions. It allows organizations to balance how much is invested in program implementation and how much is invested in competitive salaries, technology infrastructure, and/or new facilities that can enhance the organization's operations over the long term. (We should all toast Mackenzie Scott for shattering the philanthropic establishment glass ceiling with her unprecedented giving in the form of large unrestricted grants.)

The time for change is now

As with any change, there will be those who resist it, those who say there isn't enough local talent to fill the available leadership positions, and those who say local leadership team won't get enough face time with donors if those donors are based in far-off countries. We ask those naysayers to take a critical look at how that critique is rooted in an imperialist mindset that blames communities in need for their problems rather than seeing them as the solution to those problems.

The movement to decolonize philanthropy is a big step forward in terms of making the most of every dollar invested in social good and creating inclusive, durable solutions to economic prosperity. We can make the choice to stop wasting money on short-sighted solutions. The time for change is now.

Thige_adly_refuSHE_philantopicGeoffrey Thige is the current executive director and incoming CEO of RefuSHE. Jailan Adly is the organization's outgoing CEO and incoming managing director.

The 'stay interview': how an HR practice can help nonprofits engage their supporters

December 08, 2020

Allen-interviewMy primary responsibility at the nonprofit where I work is to raise philanthropic dollars for our work, though I've also become deeply interested in the concept of organizational development — what we can do as an organization to foster the professional growth of the people who lead our programs (and not just the programs themselves).

One of the techniques I've learned from my colleagues in human resources is the "stay interview," a sometimes transformative practice for staff that also works well when adapted to interactions with donors.

If you've ever left a job, you've probably been asked by HR to agree to an exit interview. The questions you're asked are familiar and expected: What did you like about working here? Which of the projects you were involved in were most impactful? What could we have done better as an organization? They're all fine questions but they share a fundamental problem: they're backward-looking. And when the interview is over, you — and your feedback — are gone.

Stay interviews, on the other hand, are active, present-tense dialogues that give employees a chance to talk about the things that keep them at the organization and that, when done well, can elicit valuable feedback with respect to systems, processes, and personnel — certainly not a novel or profound approach but far more useful, I would argue, than an exit interview.

Stay interviews and donors

Stay interviews are a great way to boost the morale of staff and improve organizational effectiveness, and for those of us in the business of managing relationships with external stakeholders, they can also be used to great effect with donors and funders. You can find several examples online, including interviews used by the Society for Human Resource Management, the University of Nebraska-Lincoln, Balance Careers, ALTRES simplicityHR, and TLNT.

If you've been involved with a capital or other large-scale campaign, you may have heard these types of inquiries referred to as "discovery" questions. Below, I've distilled a few examples that I've found to be useful in my own conversations. Feel free to build on them or look for others that better suit your organization's specific needs.

Why do you support our organization? This is an important question to ask early in the relationship — and equally important to continue asking. If it helps, think of your conversations with donors and potential donors as a developing relationship (friendly, romantic) in which the spark from your first few interactions/dates may be different (and better!) months or years down the road. People — and donors — change, as do their interests. Over time, their wealth and propensity to support may also deepen.

What do you like most about engaging with our organization? It's a positive frame, non-guiding, and I'm often surprised by what the answers reveal. One year, I learned that several donors loved calling the organization and interacting with our receptionist because he was so wonderfully helpful and kind. We knew this as a staff, but we had no idea of his impact on our supporters.

What might you suggest we enhance at our organization? I've found this to be more useful than asking "What can we do better?" because it's open and comes from a perspective of enhancing rather than fixing. Once, a donor made a suggestion that simply hadn't occurred to me — that we make our email signature text bigger and include our direct phone numbers, because as an older person she had a difficult time reading them and hated fishing around the website for contact information when she needed to reach us. The fundraising team shared an exasperated "Oh, my gosh..." because it was such a simple, useful, and logical thing for us to have done — but hadn't.

What might make the time you spend with our organization more meaningful? I can't tell you the number of times I've learned that a donor was a great fit to serve as a volunteer or board member after asking this question. While you might hear "Nothing, it's all great," often the responses can be surprising and even powerful. One important caveat: make sure you have a response ready for donors who say, "I love writing you all a check once a year, but is there a way I might be more useful?" Some of them might be a good volunteer or board prospect, while others might enjoy serving as an organizational ambassador and sharing news and program highlights with others.

How do you prefer to be recognized? For organizations that are in the habit of raising up supporters, this is a really important question. Donors (people, companies, foundations, other institutions) give for myriad reasons, and while some are perfectly fine simply making a gift, others are grateful to have their name, logo, or likeness shared with the public. But please, if you do ask this question, be prepared to take careful note of the response. I once worked with an organization that was recognizing a husband and wife in print materials as "Mr. and Mrs. Smith" — only to realize later that the couple had different last names. As soon as the couple became aware of the mistake, they stopped giving, and that was that. The organization never followed up, and its silence spoke loudly.

Who do you see as our biggest competitor(s) and/or potential collaborator/partner? This is a great question, though it should be asked of the right donor at the right time. By asking it, you can learn who your donors have on their radar when they survey the field and can also tell you where their support might go if, or when, they stop supporting your organization. You can then use that information to do an audit of your programs or other offerings to see how they compare and might be improved.

You may not be able to explore every one of these questions in your conversations with donors, but if you can ask a few, I'm confident that it, and having a stay interview mindset, will help encourage your funders and supporters to stick with you for the long haul.

(Photo credit: Christina @ wocintechchat.com via Unsplash)

Evan_Wildstein_PhilanTopicEvan Wildstein has served on the fundraising team at the Kinder Institute for Urban Research at Rice University since 2017.

For organizational resilience and impact, focus on business model not overhead

October 21, 2020

Conflict dynamics brainstormIt has always been a source of angst for ambitious not-for-profit organizations: how to ensure they can sustain and scale up impact while also building resilience to weather financial or other shocks. Often the focus is on increasing core or unrestricted funding and covering general operating costs through grant overhead.

The COVID-19 pandemic and national responses to it have exacerbated this challenge and, in doing so, have brought into stark relief important structural problems within the not-for-profit sector. What have been perennial issues for many not-for-profits — sustaining impact, financial resilience — are now existential ones.

In recent years, even prior to the pandemic, governments, private foundations, and other donors have openly recognized the need to cover a greater portion of not-for-profit organizations' general operating costs through grant funding. That in itself is a good thing. But I do not believe this approach, on its own, will lead to the long-term resilience of ambitious not-for-profits, nor will it enable them to effectively scale impact.

What will ensure more resilience and the ability to scale up not-for-profit organizations is the pursuit of new and creative business models that fit with their missions and activities.

In this article, I draw on my and colleagues' experiences of growing Conflict Dynamics International, a sixteen-year young not-for-profit working to prevent and resolve violent conflict and alleviate human suffering arising from conflicts.

Common not-for-profit business model

A common business model for not-for-profit organizations is that the organization secures contributions from donors to fund its charitable work. This support can be for the core operations of the organization or it can be for particular programs or projects. In either case, it can be restricted or it can be unrestricted in terms of intended use. Let's call this the Contribution-Based Business Model.

With this business model, not-for-profit organizations must fund their non-program expenses through a combination of: (i) contributions for general operating support; (ii) restricted core funding; and/or (iii) institutional overhead applied to program direct costs. [1]

In Conflict Dynamics' experience, the institutional overhead on grants from non-United States governmental sources has been in the range of 7 percent to 13 percent (see below). Many private foundations allow for institutional overhead in this range also, while a few support overhead costs at a higher level (e.g., MacArthur Foundation, up to 29 percent). In our area of practice, for organizations receiving funding from U.S. government agencies, the Negotiated Indirect Cost Rate Agreement (NICRA) can cover overhead, as I understand it, up to 22 percent.

From the not-for-profit's perspective, the core value exchange through the Contribution-Based Business Model goes something like this: "We (not-for-profit) will deliver social impact; you (donor) will provide funding and other resources to support the activities towards that impact."

Challenges with this business model

In our sixteen years of working in some of the most challenging conflict situations in the world, we have learned that the Contribution-Based Business Model is not sufficient to scale the impact of our organization and ensure its resilience. Perhaps it is better suited to not-for-profit organizations working in less-volatile situations, or those that deliver predictable program services, or have reached a higher level of annual revenue.

The types of shocks we have to insulate ourselves from are generally funding shocks. Of course, the COVID-19 pandemic is a unique, seismic shock. We have been able to adapt our program activities, and at the same time we have seen the funding shock from the pandemic. Conflict Dynamics is fortunate to have many wonderful supporting partners; however, even in normal times we have on occasion experienced U-turns on donor pledges, long delays in the disbursement of funds, and non-renewal of grants when the political situation changes unexpectedly (either at source or country of implementation!).

Back to the Contribution-Based Business Model, I see a number of challenges:

  1. In recent years, many governmental donors in particular have been reducing the percentage and scope of coverage of allowable institutional overhead on grants. For the types of grants we secure for our work, the following donors allow these overhead percentages: Sweden Ministry for Foreign Affairs (13 percent); Switzerland Federal Department of Foreign Affairs (10 percent to 13 percent); United Kingdom Foreign, Commonwealth and Development Office (10 percent); European Union (8 percent); Netherlands Ministry for Foreign Affairs (7 percent); etc.
  2. Many institutional donors have pulled back on the amount of general operating support and other core funding they are providing to not-for-profit organizations, preferring instead to fund projects. A colleague recently referred to this as the "projectization" of funding. This has direct tangible impacts on the ability of the organization to grow its infrastructure, as well as impacts in terms of staff retention, professional development opportunities, staff morale, and so on.
  3. When organizations are funding their core operations through heavy reliance on program-related overhead, the organization becomes vulnerable if its programs do not continue or face funding gaps. If experienced program staff and institutional memory are lost, this places additional demands on the organization.
  4. Whether for core- or program-specific funding, this business model requires the organization to proactively pursue new grants on a near continuous basis to ensure its sustainability. The transaction costs for securing a large number of smaller individual contributions are very high, and so that generally requires that the organization first reach a certain level of revenue and capacity.
  5. The fixed overhead on program grants induces dependency on this type of funding, because organizations get stuck in a Catch-22 of having to invest significant time in program fundraising, especially when scaling, which takes away from efforts to secure the resources to sustain the core of the organization.
  6. This business model makes it difficult to break through the small- to middle-size stage of growth. This is the "too small to be big, and too big to be small" range of $2 million to $8 million in annual revenue. At $3 million to $4 million average annual revenue, Conflict Dynamics is in this range. The reason for this difficulty is that economies of scale only kick in when the organization exceeds approximately $8 million to $10 million annual revenue. At $8 million in annual program revenue and 10 percent average overhead rate, the overhead amount would be $727,272 a year.
  7. Scaling impact may require upfront investments in new programs or new geographic areas. When there is high reliance on grant-related overhead, there are generally not a lot of funds available to invest in exploring new opportunities.

Ultimately this business model on its own results in constrained and unreliable funding for not-for-profit organizations. That reality, and the consequences for intended impact have been well recognized. Several institutional donors have made commitments to provide more general operating support or restricted core funding, both prior to and during the pandemic:

Much of these commitments and intended actions focus on what donors can do to help non-profits, and they also generally focus on the same business model. Some of the proposed arrangements for donors to help grantees cover overhead costs include outcome-based funding and all-in-one project pricing.[5]

Moreover, some donors are pursuing an approach based on equity philanthropy, whereby loans and investments are made to fund not-for-profit programs. This seems best suited to organizations offering program services that generate predictable revenue streams.

Conflict Dynamics' experience of donor funding flexibility during the pandemic has been mixed: in general, there has been a marked slowdown of decision-making on new funding; one private foundation partner has provided significant grant flexibility in light of the impact of COVID-19; and most governmental donors have not afforded much flexibility with their existing grants.

A constellation of business models

If the Contribution-Based Business Model is not the way to go, then what is?

I believe that for ambitious not-for-profit organizations to build their resilience and scale impact, they need to operate with a variety of business models. This means going further than the obvious strategy of diversifying sources of funding, to diversifying the actual business model itself.

Conflict Dynamics has been exploring an approach based on a "constellation" of five inter-related business models, all oriented toward realizing greater social impact.

Business model 1: Contribution-based. I am not suggesting "throwing out the baby with the bath water"; a contribution-based business model will continue to be an important model for not-for-profit organizations. But organizations need to push for more realistic overhead percentages on program funding, longer grant periods, more funding for core expenses, and so on. In its last three fiscal years, our grant revenue for programs averaged approximately 98 percent of our total revenue....so we have more work to do here.

Business model 2: Monetization. The second component of the constellation of business models focuses on monetizing something that the organization already does. This is about extracting added value from the organization's expertise, analysis, networks, and so on. For example, Conflict Dynamics has gained a lot of experience in the monitoring and evaluation of peacebuilding programs and is in a position to offer monitoring and evaluation services, for a fee, to other organizations.

Business model 3: Unrelated business income. In certain circumstances, tax exempt not-for-profit organizations can generate revenue from unrelated business income. In the United States, the Internal Revenue Service has stringent criteria for what constitutes unrelated business income, which can be subject to tax.[6]  There are exemptions. One area of interest is rental income. During FY2018–19, Conflict Dynamics had total office lease expenses of $109,429, of which $26,782 was covered out of institutional overhead. With an approximate average overhead rate of 10 percent on program grants, we had to bring in roughly $294,600 in program grants just to cover this single expense. Ownership of a larger office property can reduce or eliminate rental costs and generate income through the subleasing of office space.

I realize the pandemic is not an ideal time to get into commercial real estate; looking to the future, however, there will be opportunities in certain areas and locations to provide other not-for-profits with co-working spaces.

Business model 4: Investments. The fourth business model focuses on investment income. Organizations can approach donors to make an initial short-term investment for the purposes of kick starting an endowment. With a one-year investment of $100 million and a fairly conservative return, the organization could realize revenue of, say, $7 million over twelve months. That would provide the initial funding for an endowment for the organization, which would in turn could provide roughly $490,000 of unrestricted revenue a year. For an organization with an annual  budget of $5 million, that represents nearly 10 percent of its total revenue.

This level of investment is not implausible; recently, the MacArthur Foundation adopted an approach in one of its program areas, the 100&Change initiative, where it makes a very large investment in a single organization over three years. Through the initiative, in year one, it made an award to Sesame Workshop and International Rescue Committee in the amount of $100 million.

Business model 5: For-profit feeder. Not-for-profit organizations can set up separate for-profit ventures with the aim of funneling the profit from the venture into the not-for-profit entity. Many large corporations have charitable foundations, and the approach here is to do the same in reverse. This assumes that the not-for-profit can design and execute a profitable business model.

This business model also affords the opportunity to seek equity investments. In addition, certain types of entities, including public benefit corporations (B Corp) in the U.S., are eligible to receive program-related investments (i.e., low-cost loans) from private foundations.

All these components should be viewed as building blocks that can be combined in different configurations, depending on the needs and capacities of the organization; they are not mutually exclusive. In other sectors, governments and foundations facilitate reduced-risk "sandboxes" to experiment with business/regulatory models. Perhaps it's time for the social sector to test these and other components in a sandbox environment designed for its own unique needs.

Where does this leave us?

When I visited the Palais des Nations — the seat of the United Nations Office in Geneva — in late 2019, I was surprised to see the direct effects of the cash-flow crisis that the UN has been battling. To cite just one small example, some elevator banks were intentionally closed to save money, and some meeting rooms were out of use. The lesson is that when it comes to business model vulnerability, size really doesn't matter.

Covering more core costs through more unrestricted funding may be necessary, but it won't be sufficient to guarantee greater resilience and enable not-for-profit organizations to scale their impact. That requires the adoption of diverse and overlapping business models. The COVID-19 pandemic surely provides added impetus for moving quickly in such a direction.

Headshot_Gerard McHughGerard McHugh is founder and president of Conflict Dynamics International. A serial entrepreneur with more than thirty years' experience in international conflict resolution, humanitarian affairs. and health care, he recently founded a new venture, AidX, to help ordinary people achieve the extraordinary. This post originally appeared on Conflict Dynamics' Medium channel and is reprinted here with permission.

Notes:

1. In this article, the term "general operating support" relates to unrestricted funding for the operations of the organization. The term "core funding" refers to funding for the core activities of the organization and can be restricted or unrestricted.

2. For more information on the Grand Bargain, see https://interagencystandingcommittee.org/about-the-grand-bargain [Accessed October 12, 2020]

3. Maria Di Mento, "Five CEOs of Wealthy Foundations Pledge to Do More to Help Charities Pay Overhead," The Chronicle of Philantrophy, September, 4 2019. Available at: https://www.philanthropy.com/article/5-CEOs-of-Big-Foundations/247063 [Accessed October 12, 2020]

4. James B. Stewart and Nicholas Kulish. "Leading Foundations Pledge to Give More, Hoping to Upend Philanthropy." The New York Times, June 10, 2020. https://www.nytimes.com/2020/06/10/business/ford-foundation-bonds-coronavirus.html [Accessed October 12, 2020]

5. These are some of the approaches identified in the work of the Bridgespan Group’s "Pay What It Takes" initiative. See: https://www.bridgespan.org/insights/library/pay-what-it-takes/pay-what-it-takes-philanthropy [Accessed October 12, 2020]. See also: Jeri Eckhart-Queenan, Michael Etzel, & Sridhar Prasad, "Pay-What-It-Takes Philanthropy," Stanford Social Innovation Review Vol. 14 №3 (Summer 2016).

6. United States Dept. of the Treasury Internal Revenue Service (IRS), Tax on Unrelated Income of Tax Exempt Organizations, IRS Publication 598 (February 2019). Available at: https://www.irs.gov/pub/irs-pdf/p598.pdf [Accessed October 12, 2020]

5 ways to use your donor data for #GivingTuesday

September 04, 2020

Donate-now#GivingTuesday is a global day of generosity that usually takes place the Tuesday after Thanksgiving. In 2019, $1.97 billion was raised on that Tuesday alone. And this year, nonprofits have an opportunity to build on that success and generate even more support for their programs and mission.

As you and your colleagues begin to prepare for this year's event and start to brainstorm strategies to maximize your organization's success, consider how donor data can help. From conducting prospect research before the big day to analyzing the data afterwards, there are many ways that donor data can be used to elevate your #GivingTuesday results specifically and overall fundraising results more generally.

Below, we consider in more detail some of the most effective ways to utilize donor data, including:

  1. keeping your data clean
  2. identifying your best prospects
  3. segmenting your donors
  4. optimizing future outreach
  5. looking for opportunities to match gifts

Let's take a closer look at each of our recommendations for putting donor data to good use this #GivingTuesday.

1. Keep your donor data clean. We've found that it's easier to use donor data when that data is clean. Strategizing and designing a #GivingTuesday campaign with incorrect data can negatively impact relationships with donors you've spent so much effort cultivating. If you're looking for an in-depth explanation about the importance of data hygiene, check out this article from AccuData.

The easiest way to create and maintain clean data is to use a CRM (constituent relationship management) database. A CRM compiles information about each of your constituents in individual profiles, enabling you to easily access any donor's giving history, communications activity, and relationship status.

With a CRM, you can also do the following to clean your data:

  • remove duplicate profiles
  • verify that a donor's contact information is up-to-date
  • remove the profiles of donors who haven't given in many years (although you should send a final appeal to them before removing their profiles from the system)
  • search for donors who have passed away since your last communication
  • egment your donors into relevant groupings

Once you've cleaned the data, analyze it for insights that can help you craft an effective outreach strategy. #GivingTuesday only comes around once a year, so make sure your planning for it is based on the best data you can get your hands on.

2. Identify new prospects. After you've cleaned your donor data, take the time to analyze it. Part of that process is what we call prospect research. Simply put, prospect research is the process of researching your would-be supporters to see which of them is most able and willing to donate to your organization. Some of the prospects you identify through the process will become regular supporters of your organization and a few of them could even have a significant impact by contributing a major gift.

Major donors should always be a priority for your organization. Some fundraising professionals even go so far as to say that 89 percent of a nonprofit's fundraising revenue should come from just 14 percent of its donors. That's why it's important to start cultivating these relationships as soon as you can — major donors tend to give their biggest gifts to organizations that consistently and authentically engage with them.

Determining which of your supporters is most likely to be a major donor before #GivingTuesday gives you the chance to approach them ahead of time and see where they stand.

To conduct prospect research efficiently, start by filtering your donor data using wealth and charitable indicators:

  • Wealth indicators. Things like real estate ownership, stock holdings, business affiliations, and so on will give you an idea of an individual's capacity to give.
  • Charitable indicators. A donor's past giving patterns, his or her relationship to your cause, his or her political contributions history, and so on will give you an idea of his or her willingness to give.

While you can conduct prospect research manually, your best bet is to invest in a tool built for the purpose. To learn more about how all these factors can be brought together to create useful profiles of your donors, check out our Essentials for Prospect Research guide.

3. Segment your donors. You can also use donor data to segment your donors. This is a great marketing strategy and is something you should do both before and after #GivingTuesday. Why?

Donor segmentation helps you better communicate and reach out to supporters in ways that are most likely to catch their attention and encourage their engagement.

You already know that donor data is key to beginning and sustaining valuable relationships. And, as we've noted, a good CRM will store and organize all your data for effective management.

Once your data is organized in your CRM, you can start grouping supporters. Segment your database into different lists based on key metrics and then formulate different communication strategies for each one. You can, for instance, segment donors by:

  • donation frequency
  • preferred method of giving
  • engagement preference or history
  • location
  • age
  • business affiliations
  • volunteer history

All of these factors (and more) should influence how you reach out to supporters before #GivingTuesday (and afterwards). For example, you might find that younger people in your audience prefer to be communicated with via social media, whereas older folks prefer email or even direct mail.

4. Optimize future outreach. One of the best ways to increase response rates, build deeper connections, and improve donor retention is to personalize your outreach. Simply sending a thank-you email with a donor's name and the size of her gift size will help her remember you the next time she decides to make a donation.

And after #GivingTuesday is over, you're likely have a whole batch of new donors, as well as data about them that will come in handy for your future fundraising and stewardship efforts.

You can use that data to retain some of these new supporters and broaden your donor base in the long run by doing the following:

  • sending personal, targeted appeals asking for a specific contribution amount based on your donor analytics;
  • automating personalized gift receipts and acknowledgments, which can be done by using a mail-merge tool in your CRM;
  • using templated donor letters to explain to supporters how their gifts have advanced your mission and how their future gifts will continue to make an impact.

These and other ideas can help you close out the giving season on a positive note and set up additional donor-cultivation efforts in the new year.

5. Look for opportunities to match gifts. The relationship between nonprofits and for-profit businesses is changing as corporate social responsibility (CSR) policies are adopted by more and more corporations and companies step up to match donations that their employees make to nonprofits.

Unfortunately, many gifts go unmatched simply because donors are unaware that their gifts are match-eligible.

It's estimated that the nonprofit sector misses out on $4 billion to $7 billion in matching funds every year.

This #GivingTuesday, don't leave money on the table. The best ways to incorporate matching gifts into your strategy and ensure you leverage your donors' support to the maximum include:

  • embedding a matching gift database on your donation page that allows donors to look up their company and access any information it may have provided about its matching-gift policies.
  • using software that allows you to automatically look up email address domains provided by donors. If an email address is associated with a company that matches gifts, the donor will be notified of his or her eligibility.

Read more about corporate matching-gift programs and learn how you can maximize your fundraising potential by reviewing Double the Donation's corporate matching gift guide.

There are many ways to analyze and use your donor data. Whether that means identifying prospective donors, segmenting donor profiles, or just keeping your data clean, everything you do with the information you collect will have an impact on your fundraising efforts going forward. But don't take our word for it. Maximize your donation revenue this #GivingTuesday by trying out some or all of these techniques!

Sarah Tedesco_DonorSearch_PhilanTopicSarah Tedesco is executive vice president of DonorSearch, a prospect research and wealth screening company.

Leading and succeeding during a crisis

September 02, 2020

Diversity_business_people_hands_pxfuelIn the summer of 1999, Michigan State University launched the Campaign for MSU with the aim of raising $1.12 billion, the most audacious fundraising campaign in its history. A few months in, I was recruited to lead fundraising efforts for the university's Libraries, Computing, and Technology department.

I had been working in Los Angeles for several years in various development roles at the California State University system and saw the position at MSU as a logical next step, one that afforded a number of career development opportunities. As I began to get comfortable in my new role, it became clear that the traditional fundraising playbook was no longer as relevant as it had once been. The department needed an approach that combined equal parts creativity, entrepreneurial risk-taking, and a willingness to experiment. After all, we were competing with other departments and professional schools at the university, each commanding a unique loyalty and importance in the eyes of their alumni. So during football season, we capitalized on our prime location within earshot of Spartan Stadium by inviting alumni and established donors and prospects to a tailgate party. Librarians from the university would be on hand to answer questions, marketing materials and campaign flyers would be distributed, and relationships with new and sustaining donors would be forged and strengthened.

And then September 11 happened. Until then I had never been in a position to lead others during a crisis. It's one thing to come up with a creative campaign and see it through from start to finish, accepting the risks and owning the results. But what had been a competition of sorts with other university departments for scarce dollars changed abruptly after the attacks.

As I worked alongside colleagues in other departments in the days that followed, my mindset shifted from competition to collaboration. Regardless of the task at hand, the question I kept asking myself was: How can I fulfill my duties and help my colleagues be successful?

One of the keys to success in higher education development work is traveling around the country to meet donors in person and earn their trust. But in the weeks and months after 9/11 some at the university were understandably reluctant to get on a plane.

Our solution to the problem was to pursue an approach that emphasized fundraising for the university as a whole, as opposed to fundraising for individual departments. And what quickly became apparent in my in-person visits and phone calls with high-net-worth alumni was their deep, unabashed appreciation for the fact that departments that sometimes competed with each other for precious resources were now collaborating. We were a single team with a single mission: strengthen the university we worked for and loved.

Learning to collaborate during a crisis was a key building block in my leadership development. And taking collective action to achieve a unifying goal while keeping the best interests of one's colleagues in mind has never been more important than it is today.

At the Gary Sinise Foundation, where I serve as chief operating officer, the coronavirus pandemic has forced us to adapt our business model to ensure continuity in our mission — serving the nation's military, veterans, first-responders, and their families. In coordination with the marketing and communications department, we launched a dedicated campaign called Emergency COVID-19 Combat Service. Donations made to the campaign have bolstered our First Responders Outreach program and enabled us to increase the number of grants we award to underfunded fire and police departments. Since we launched the campaign on April 1, we've raised and distributed more than $1.43 million, enabling sixty-one first-responder departments to purchase 5,650 pieces of personal protective equipment and gear. Financial assistance, grocery gift cards, and other forms of support have reached countless individuals and families struggling to make ends meet.

We've also expanded our Serving Heroes initiative, delivering thousands of additional free meals to healthcare workers at hospitals across the country as well as service members and their families at military bases in the U.S. and overseas.

The ongoing success of the campaign is largely attributable to our employees making a seamless transition to working remotely. We decided at the outset of the pandemic to shift staff and resources to departments in need; for example, our events team was called on to support the outreach department, which fields dozens of calls a day and supports an untold number of veterans, Gold Star families, and others seeking various forms of assistance.

In the months since COVID-19 upended our routines, many of our employees, empowered by leadership, their peers, and their own initiative, have developed new skills, revealing unknown talents and interests that benefit not only the organization but their future careers.

As the public health emergency continues to impact communities across the United States, nonprofit organizations are dealing with multiple crises affecting not only their day-to-day operations but their internal and external stakeholders as well.

Although the economy is slowly recovering, millions of Americans remain unemployed and Americans' mental health and well-being remains precarious. And with recent protests reawakening the nation's conscience, some kind of tipping point seems to be near.

Working to address these crises at both the individual and organizational levels has forced me to evolve as a leader — one who grounds her actions in empathy — and has reinforced for me the values of collaboration and personal empowerment. As was the case some twenty years ago, the question I continue to ask myself is: How can I fulfill my duties and help my colleagues be successful?

(Photo credit: pxfuel)

Elizabeth_Fields_PhilanTopic

Elizabeth Fields is COO and Brandon Black is  senior communications writer at the Gary Sinise Foundation.

How to work effectively with an outside consultant

July 13, 2020

Working with a ConsultantAs your nonprofit adapts to new realities created by the COVID-19 pandemic, strategic guidance from expert consultants can provide invaluable insights for refining your strategy planning, revamping your brand, or rethinking your fundraising strategy. There are a few considerations to keep in mind, however, to ensure that any relationship with an outside consultant produces outcomes that meet your needs.

Here are some tips for working with a consultant or consulting firm:

Don't be stingy with information. Hiring a consultant can provide expertise you may not have in-house, but that doesn't mean you can take a hands-off approach to the project. No one knows your organization as well as you do. To ensure that a consultant fully understands your organization, you'll want to share as much information with him or her as is reasonable. While a good consultant will elicit ideas from team members and pull information together in new ways, he or she will want to review lots of organizational documents and talk to lots of people, from frontline staff to board members. Make sure the relevant documents are ready to go, and be sure to ask key stakeholders to set aside time for a sit-down.

Have a clear process in place. Whether developing a strategic plan or a brand revamp, it's important to know what you're aiming for and how you'll get there. A good consultant will be able to provide a plan for engaging your team that includes stakeholders. That plan should include the key activities, milestones, and outcomes for each step in the process. It should be clear, too, who will be involved in each phase, the decisions that need to be made, and what the deliverables are. Your job is to provide appropriate information, context, and ideas to inform the plan; provide feedback on the work presented; and make the decisions needed to keep the project moving forward.

Understand how decisions will be made. Decisiveness is essential to keeping projects moving forward. Put a plan in place that ensures decisions are made in a timely manner. That means deciding in advance who will give feedback and through what mechanism, who makes the final decision, and how that decision will be made (including considerations with respect to the board's engagement). You'll also need to determine whether key decisions can be made if not all stakeholders are able to present at a critical meeting and what a quorum might look like in such a situation.

Presenting to the board. Even if midstream decisions have been delegated to a committee or staff, keeping the board involved as the project moves forward increases buy-in and will help pave the way for final approval. At Red Rooster Group, our clients have found it helpful to have us make a presentation to the board at key points in the project. Getting information from an outside expert can help busy board members focus on the problem or issue at hand.

There's a flipside to this. For some organizations, the better choice is to have members of the project committee, not the consultant, make presentations to the board, the idea being it will help build trust between board members and staff. Having a board member who has bought into the concept present to the board can also be an effective way to demonstrate stakeholder support for a project. You know your organizational culture and board better than anyone, and a good consultant will defer to your recommendations when it comes to building trust and securing buy-in.

Build your project team. For small nonprofits, a project team may be one or two people. For larger organizations, team members should be drawn from different organizational levels and functions (e.g., executive-level staff, board members, frontline staff members). Members of the team should understand and support the overall goals of the project and be willing to express their ideas and listen to those of others. Meetings and material reviews will take up time, so make sure every team member is given the time needed to do the work.

Designate a point person. At the beginning of the project, decide who will be your organization's liaison to the consultant. The point person may be asked to contact people who are to be interviewed, provide background information and documents, arrange meetings, and make sure that information is shared with key stakeholders.

Establish a schedule. A consultant will need to know in advance about events that may affect the availability of team members. Organizational events, board meetings, vacations, maternity leave, and so on can all affect project workflow and timely feedback and approvals. Working out a schedule in advance will go a long way to eliminating delays and reduce stress for both your team and the consultant.

Have a plan for communicating progress. To facilitate a smooth process, determine who will be included on the project and how you'll communicate with your group — email, phone calls, a project management system, Zoom, Skype, etc. — and how you'll exchange documents and comments on the documents (whether PDFs, Google docs, or Word documents). It's also a good idea to schedule a weekly standing call for quick status updates. This can help reduce the kinds of meeting scheduling problems that often delay the completion of a project.

Avoid stumbling blocks that raise costs. Delaying feedback or reversing decisions can stall or even sink a project. And rethinking or revising decisions that have already been made can lead to additional costs and even undermine a project's viability. This often happens when the plan calls for the executive director to make the decisions but, come time for final approval, board members jump in and start to second guess or reverse decisions made earlier in the process. To avoid those kinds of costly delays, provide the board or a committee with regular updates and lots of opportunities to provide feedback. Any serious concerns should be discussed with the consultant and team so a satisfactory resolution can be reached to avoid costly backtracking later.

The consultant is your partner. Defining how that partnership will work can make it — and your project —more successful.

(Photo credit: Red Rooster Group)

Howard_Adam_Levy_Red_Rooster_Group_PhilanTopicHoward Adam Levy is the president of Red Rooster Group, a brand strategy firm that works with nonprofits, governments, and foundations.

Quote of the Week

  • "[L]et me assert my firm belief that the only thing we have to fear is...fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance...."


    — Franklin D. Roosevelt, 32nd president of the United States

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