5 of a Number of Takeaways from Blackbaud’s 2013 Next Generation Giving Study - NPQ - Nonprofit Quarterly

5 of a Number of Takeaways from Blackbaud’s 2013 Next Generation Giving Study - NPQ - Nonprofit Quarterly

Debating the Realities of Ranking Charities - NPQ - Nonprofit Quarterly

Debating the Realities of Ranking Charities - NPQ - Nonprofit Quarterly

Executive Service Corps of Houston

Executive Service Corps of Houston Wordle

The Good Life

Philanthropy, Not Fundraising: I Have a Dream

Philanthropy, Not Fundraising: I Have a Dream

I have a dream…

 I have a dream for 2013 – and beyond. I have a dream that this is the year your organization will move beyond defining yourself by what you’re not (nonprofit) and will begin to define yourself by what you are (social benefit). I have a dream that this is the year your people will move from an attitude of taking and hitting people up (aka “fundraising”) to a mindset of giving and lifting people up (aka “philanthropy”). I have a dream this is the year your staff and volunteers will move from enacting transactions to enabling transformation.

I have a dream you will push yourself and your organization towards transformative change. You will take the bull by the horns, adapt to the digital revolution and open yourself to the possibilities that change brings. You will give up on the static donor pyramid, ladder and funnel theory of engagement and put your donor at the center of a new, active engagement model that reflects the myriad ways people connect with organizations and causes today.

I have a dream you will learn who your best influencers are and you will embrace them.  You will recognize you are no longer your best messenger. You will understand that many forces beyond you influence your donor’s decision to invest with you, and you will expand your thinking and operations from a one-dimensional to a multi-dimensional model.  You will allow your constituents to engage with you at multiple points of entry, and to move freely between these points during the lifecycle of their engagement.

… the sun will rise…

I have a dream you will ask not what your donors can do for you, but what you can do for your donors.  You will recognize that they don’t serve you; you serve them. You will embrace the true meaning of philanthropy as love of humankind.  You will remember that your donors are humankind; you must love them if you want to be a part of philanthropy.  Otherwise, you’re just transacting business.

I have a dream you will reevaluate your raison d’etre.  You will ask yourself whether you’re in the business of selling, and you won’t answer cavalierly. You will not pat yourself on the back for being different than your for profit brethren.  You will not tell yourself that nonprofits are about mission and values and doing good deeds; whereas for profits are about greed and sales.  You will reevaluate why people compare ‘making the ask’ to ‘making the sale.’

I have a dream you will embrace your role as a salesperson, understanding how fundamentally human this is. You will understand that selling (the very definition of which is to exchange or deliver for money or its equivalent) is something that we’re constantly doing. And you will have an “ah ha” moment that this is also what fundraising is about — a value-for-value exchange.  A donor gives something of value (money or an in-kind good or service) and the charity returns something of value to the donor.  As Daniel Pink writes in his new book To Sell Is Human “the ability to move others to exchange what they have for what we have is crucial to our survival and our happiness. It has helped our species evolve, lifted our living standards, and enhanced our daily lives. The capacity to sell isn’t some unnatural adaption to the merciless world of commerce.  It is part of who we are.”

… the clouds will part…

  I have a dream you will come from a place of love, not need. When interacting with your supporters you will do more than tell folks how much money you require. You will consider how your supporters benefit and what’s in it for them if they invest with you. You will help people to value your accomplishments by assuring they understand your impact.  You will recognize that if you don’t demonstrate impact, then you can’t expect folks to worry what might happen were you to be unable to grow or, even worse, cease to exist.

I have a dream you will speak to peoples’ hearts; not just their heads. You will become aware that if the bulk of your communication with supporters is about numbers, finances and pie charts rather than stories of real people being helped, it will become increasingly difficult to expect anyone to care enough about your mission to invest in your success.

I have a dream your leaders will embrace a culture of philanthropy that engulfs your entire organization.  You will eliminate silos and include everyone in the transformative power of your mission. You will make sure that everyone associated with your organization is clear about the values you enact and has stories they can tell about the ways you help to repair our world. Philanthropy will become the glue that binds everyone together – every department and every volunteer – working towards a common goal.

… and it will be because of the light you shine.

I have a dream you will engage in philanthropy; not fundraising. You will embrace the fact that just as business has changed fundamentally, so must fundraising change fundamentally. You will accept that we’re all social businesses now; merely “transacting” no longer cuts it. You will agree that for too long fundraising has been approached as transactional – as being primarily about money – and that this approach results in fundraising being seen at best as an onerous chore; a necessary evil.  You will see that philanthropy is fundamentally social; it’s about love — and nothing could be more transformational.                        

Don’t Be a Fundraising Dinosaur: 5 Big Ideas to Adopt Right Now

Don’t Be a Fundraising Dinosaur: 5 Big Ideas to Adopt Right Now

Happy Holidays!

Thanks to an invitation proffered by Stoller Foundation, Executive Service Corps of Houston enjoyed learning about Capacity Building at the Houston Grantmakers Forum yesterday. Capacity building is a term frequently bandied about that the group agreed can mean anything from building the capacity of individual donors to group capacity building to community capacity building (i.e. how is the agency meeting community needs). Kudos for the subject matter!

It was helpful to hear how the nonprofit consulting industry is faring at year-end from veteran agency representatives, Cynthia Nunn, President and CEO, Center for Nonprofit Management, Dallas, Matt Kouri, President and Executive Director, Greenlights for Nonprofit Success, Austin, and Dr. Will Brown, Associate Professor and Director, Bush School of Government and Public Service, Texas A&M University, as well as hostess, Ronnie Hagerty, VP, Community Relations, United Way Houston.  Times are difficult for nonprofits as has been reported throughout the year by Chronicle of Philanthropy and Nonprofit Times.  Funding has remained steady or increased only slightly with little hope of change. The fiscal cliff debate will affect how donations will be deducted and the thought strikes fear in charities who are reliant on donations for survival.

The sector is composed of optimists, and we frequently put the best face out to keep morale and income up. It is time for further assistance, however, according to these specialists and their peer, ESCH, from grant makers to help fund the education and training needed to make the nonprofits more self-sufficient and sustainable. Without vocal leadership from the funders, agencies will continue the same "bad" habits that keep them coming back for funding that might be avoided.  Grantors need to follow-up on requests to assure board diversification, strategic planning and funding diversification. Budget reductions and creative collaborations are embraced by leading nonprofits to strengthen the organization's core and keep the body healthy. Grantmakers have an opportunity to offer guidance to and assistance through these various resources and locally, we would add University of Houston David Underwood Nonprofit Leadership Alliance and Rice University's Center for Philanthropy & Nonprofit Leadership, as well as Association for Fundraising Professionals, as educational resources.

This will take creativity, dedication and hard work from both sides to be ready to find ways to evaluate mission achievement and improve reporting so that funding justifications can be more easily made. We run the risk of losing some of the more needed charities, often too mission-focused, that do not take the time to plan and adequately review.

ESCH applauds and respects those funders who help keep nonprofit boards "feet to the fire" and focused on best management practices. We, like all of you, are striving to improve our bottom line of mission success. It is our challenge to help you become more successful and report on those of you who are as a result of working with our professionals. In doing so, we must become more relevant, flexible, responsive, consistent and educated about our own nonprofit community. If you have suggestions, please do not hesitate to share them. We are listening.

September 6, 2012

Chase Community Giving Kicks Off Voting for 2012 Program

196 Charities Will Receive a Share in $5 Million in Grants

New York, September 6, 2012 - Chase announced today the launch of the voting period for the 2012 Chase Community Giving program, which will determine the allocation of $5 million in Chase grants to 196 charities selected by Facebook users and Chase online customers.

The voting period will begin today, September 6 and last through September 19 and is open to the public at Facebook.com/ChaseCommunityGiving and for Chase customers at Chase.com/ChaseGiving. Chase will donate the $5 million to the 196 charities who receive the most votes, with awards as follows:

• $250,000 to the charity receiving the most votes;
• $100,000 to each of the next ten runner-up charities;
• $50,000 to each of the next thirty-five runner-up charities;
• $20,000 to each of the next fifty runner-up charities;
• $10,000 to each of the next one hundred runner-up charities;

In June, Chase customers and employees came together to nominate the nearly 30,000 charities who make up the pool of participants for the 2012 program. All eligible nominated charities had the opportunity to receive an equal share in an additional $2.5 million grant by accepting their nomination by August 30th. Eligible nominated charities that did not accept their nomination by August 30th can still participate in the voting period.

To be eligible for the 2012 program, nominated charities must be a registered 501^©(3) public charity with annual operating expenses below $10 million and meet other requirements as described in the program's rules. The $7.5 million in grants is in addition to the firm's regular philanthropic giving. JPMorgan Chase donates more than $150 million annually to charitable causes.

"Voting with Chase Community Giving helps to energize the vast number of supporters of so many great causes," said Kimberly B. Davis, president of the JPMorgan Chase Foundation. "At Chase, we are excited to lead local and national causes in finding a voice and raising awareness and critical funding for their work in communities."

For more information on the program, please visit Facebook.com/ChaseCommunityGiving.

About Chase
Chase is the U.S. consumer and commercial banking business of JPMorgan Chase & Co. (NYSE: JPM), a leading global financial services firm with assets of $2.3 trillion and operations in more than 60 countries. Chase serves more than 50 million consumers and small businesses through more than 5,500 bank branches, 17,500 ATMs, credit cards, mortgage offices, and online and mobile banking as well as through relationships with auto dealerships. More information about Chase is available at www.chase.com.

About Chase Community Giving
Chase Community Giving was introduced in 2009 as a new way forward for giving. It's a program that lets fans of Chase Community Giving, and now Chase customers, vote to help determine where Chase donates millions of dollars. Since the program's inception, nearly 3.5 million Facebook users have "liked" Chase Community Giving. In total, millions of people have helped Chase donate over $20 million to over 500 charities in 41 states, Washington D.C. and Puerto Rico. Chase Community Giving is part of JPMorgan Chase's annual giving, which totaled more than $200 million last year.

Next Big Generation of Donors

Now entering the fundraising arena: the next big generation of donors. In the US, they will be ages 55-75.   
by Tom Ahern from Texas Nonprofits.

------

It was a simple question.

"What do you think is the average age of a U.S. donor?" I asked Jeff Brooks.

Jeff's job is to write successful fundraising packages for brand-name charities. He works at a national direct mail house, as one of two creative directors. He has access to lots of data. He has decades of high-level experience. If anyone would know about age, it would be Jeff. 

"I think saying 65 and up," he answered, "is about as accurate as possible for an across-the-board number."

There's a professional reason you want to know your typical donor's average age, when you're creating donor communications such as appeals, newsletters, and websites. And that reason is.... 

To write persuasive copy, you need to see the person you're writing to ... in your head.

As the late, very great George Smith advised, every communication with donors should sound like conversation. Not a speech. Not an essay.Not a sales brochure. Just a talk, between two friendly people concerned about something important.

Well, as it happens, I can easily envision what someone 65 looks like. All I need is a mirror. I am 64.

And you know who else is just beginning to turn 65?

The baby boom generation: people born between 1946 and 1964, during the procreative orgy that exploded after World War Two. In that conflict, 60 million died. The subsequent baby boom produced 76 million new humans in the United States alone.

Now those same newborns are aging into their prime charitable years.

"Involuntary lapsing" ... a.k.a., death

Successful marketing communications - donor or otherwise - all begin with an analysis of the interests and psychological triggers likely to be present in the target audience. That's how you sell. You speak to the interests and psychological needs of your audience. 

You're not thinking, "What do I want to say?"

You're thinking, "What does my target audience want and need to hear?"

Which means, as a copywriter, I need to know your age.

Age definitely matters. You as a 20-something ... are different than you as a 40-something ... are different than you as a 60-something ... are different than you as an 80-something. 

Jeff Brooks did allow that average donor age "varies by organization and sector." But this was for sure: "One thing we've seen is that charitable giving as a sustained lifestyle-type activity is not meaningfully found until around age 55." I quickly checked my own behavior as a donor. He was right, at least about me. 

"The behavior picks up steam in the following years," said Jeff, "gets truly meaningful around 65, keeps growing, then starts to drop some time after 75.

"The drop-off at the upper end is caused by 'involuntary lapsing.'"

I.e., death.

Ages 55-75: that's a 20-year window of high returns. Focus on baby boomers now.  

There are younger donors ... just not in America

Jeff had a postscript: "The smart thing to do is to increase your 55-65 donors. They have higher average gifts and long life expectancy, which gives them the best long-term value. If we could get all the misguided energy for finding 'young donors' aimed at this group, it would be a very good thing."

Amen, brother. At least in America.

Outside America, there are LOADS of younger donors giving to charity ... in Australia, the UK, Germany; pretty much globally. But not so much in the United States, for one obvious reason. We haven't embraced street fundraising.

It works like this: the donor, acquired in a street encounter with a bonded representative of a charity, agrees to make an automatic gift every month, from her credit card or bank account.

"Street" fundraising - or "face to face" fundraising, as it is known outside the US - has cracked one of the fundraising industry's toughest barriers.

It's acquired  the elusive "younger donor."

Street fundraising only attracts the young. Pedestrians in their 40s and above shun it. Street fundraising is peer-to-peer fundraising, practiced on an especially dewy demographic. In fact, the young and attractive professional crews who raise money on the streets are trained to ignore older walkers. (Trust me: we don't mind.) 

Younger donors are flighty, though.

"One thing I learned about street fundraising that was fascinating," Jeff Brooks remarked. "They keep the donors longer if they don't cultivate them at all. Any kind of feedback - thank-you messages, newsletters, whatever - just remind these fickle donors to cancel the revolving credit card charge."

News reporters deride street fundraising as "chugging," short for "charity mugging." Catcall all you want: in expert hands, it's extraordinarily effective at bringing in big bucks for brand-name charities.

In Australia, more than a third of the charity collected each year comes from what's called Down Under "regular giving," otherwise known as monthly giving or sustainer giving.

And much of that regular/monthly/sustainer giving begins on the streets of a city when a personable young chugger smiles and intercepts an equally young passerby, to ask, "Would you be willing to help a child in need?"

Nonprofit Harnesses Older Professionals Willing to Share Experience

From NonProfit Quarterly, June 5, 2012; Source: BusinessWeek

Armed with the desire to make the world a better place, many people who are approaching retirement are looking for ways to feel good about their work, and get paid for it, too. The nonprofit ReServe pairs professionals 55 and older with nonprofit groups or public agencies that can use their skills—at a discount. Over the past seven years, nearly 1,500 “ReServists” have been placed in a broad range of positions, including college mentors, bookkeepers, writers, teachers, paralegals, administrative assistants, doctors and nurses.

ReServists are saving nonprofits dollars. According to Janice Chu, the coordinator of the ReServe program for 17 New York City agencies, “We could never afford these social workers, these retired accountants. They’re such an asset with their years and years of experience.” New York City hosts the original and largest ReServe operation, but the nonprofit has branches in Westchester County, N.Y.; Newark, N.J.; Balitmore, Md., Miami, Fla. and southeast Wisconsin. On average, individuals who work with ReServe work about 15 hours a week at a $10 wage with no health benefits. According to Linda Breton, ReServe’s director of affiliate relations, “The stipend means everybody has skin in the game. A volunteer can say, ‘It’s a crummy day, I don’t think I’ll go in.’ A professional doesn’t do that.”

Breton says ReServe has more people than it can place. “Recruiting retired professionals has proven to be very easy. They’re passionate about something and they want to give back.” However, getting nonprofits to post positions is a bit more difficult. “Lots of them can’t afford people even at $10 an hour,” says Breton.

Reminiscent of AmeriCorps, VISTA and other types of service organizations, ReServe is providing a market for older individuals who would like to continue working as well as nonprofits that need highly experienced and skilled people but cannot afford the price tags associated with such labor. This “match matching” is an innovative strategy to bridge the talent gap. However, questions remain as to whether nonprofits are ready (structurally), willing (culturally) or able (financially) to host such employees.

Posted by Kathy Sullivan, CFRE & ESCH Consultant

The Nonprofit Leadership Deficit

The Nonprofit Leadership Deficit: The Case for Nonprofit Training and Retaining

The following is an excerpt from a sobering report from The Bridgespan Group on the coming nonprofit leadership deficit over the next decade.  The bottom line projection is that nearly 80,000 new senior managers will be needed in the nonprofit sector by 2016. 

If raising funds for programs in these tough economic times is not challenge enough, the task of re-educating donors, boards and fundraising professionals on the need to invest more in attracting, retaining and training current and future leadership (a.ka. overhead) is one of the underlying conclusions of this report.

“The leadership deficit looms as the

greatest challenge facing nonprofits

over the next ten years.”

                                              Thomas J. Tierney

Except from the Executive Summary Report “The Bridgespan Group recently carried out an extensive study of the leadership requirements of nonprofits with revenues greater than $250,000 (excluding hospitals and institutions of higher education). We found that:

·         Over the next decade, these organizations will need to attract and develop some 640,000 new senior managers—the equivalent of 2.4 times the number currently employed.

·         If the sector were to experience significant consolidation and lower-than forecast turnover rates, this number might fall as low as 330,000. On the other hand, given historic trends, the total need could well increase to more than one million.

·         By 2016, these organizations will need almost 80,000 new senior managers per year.”

“The projected leadership deficit results from both constrained supply and increasing demand. The key factors include the growing number of nonprofit organizations, the retirement of managers from the vast baby-boomer generation, movement of existing nonprofit managers into different roles within or outside the sector, and the growth in the size of nonprofits.”

“Addressing the leadership deficit requires, first and foremost, that all participants in the nonprofit sector—from boards and current managers to foundations and individual and corporate donors—recognize the enormity of the problem and make it a top priority. Three difficult but critical imperatives will need to be addressed:

• Invest in leadership capacity. Skilled management is the single most important determinant of organizational success. Nonprofits must invest in building skilled management teams—even if that means directing a greater proportion of funding to overhead. Philanthropy must deliver the operating support required, and boards must reinforce the importance of building management capacity and quality.

• Refine management rewards to retain and attract top talent. To recruit more and better leaders, organizations will have to structure more competitive management packages, particularly in light of the push to hold managers to higher performance standards. The greatest rewards of nonprofit careers will always be intangible, but more attractive compensation is critical in times of labor shortages.

• Expand recruiting horizons and foster individual career mobility.

Nonprofits traditionally tend to hire from a small circle of acquaintances. That practice is no longer sustainable. Recruitment efforts will need to expand to new pools of potential leadership talent, including baby-boomers who wish to continue working, mid-life career changers seeking greater social impact, and the young. At the same time, the sector will need to strengthen and expand its mechanisms for attracting and developing managers and enabling talent to flow freely throughout the sector.

The leadership deficit looms as the greatest challenge facing nonprofits over the next ten years. We can use our unprecedented wealth to strengthen the sector’s capacity to meet society’s escalating demands; or we can allow its leadership deficit—with its debilitating consequences—to widen. We are at a crossroads. The choice is ours.”

Commentary from Geoffrey Canada, President and CEO of Harlem Children’s Zone, Inc.

A number of successful nonprofit leaders responded to this wake-up call including Geoffrey Canada, President and CEO of Harlem Children’s Zone, Inc.  Mr. Canada understands what it takes to plan for the future and make difficult decisions to ensure you get there. 

Concerning the leadership deficit he says, “We will have to go out of our way to provide (young talented program people) with opportunities and experiences that they would not organically get in their present positions. We need to expose them to areas such as development, budgeting and working with trustees; and to provide workshops where they can begin to stretch their skill set.”

View the entire report, The Nonprofit Sector's Leadership Deficit, and all commentaries.

Posted by Kathy Sullivan, CFRE, ESCH Consultant

Administrative Costs Can Be the Worst Way to Judge a Charity

Administrative Costs can be the worst way to judge a charity

Though low administrative costs could indicate prudence and sound judgment at a charity, it could just as easily indicate inadequate staffing, insufficient salaries or, shall we say, fudging.

Donating to charity is a worthy action. But which charity? Would it surprise you to know that the criterion that is most often used to decide that question is also the most unreliable? Would it surprise you more to know that many charities are aware of how flawed the criterion is and play it like a violin?

A few months ago a friend of mine who runs an international relief agency phoned me complaining about another charity.

"Do you know what they're doing?" he fumed. "They're buying medicine in Canada for 10 cents a pill and booking the American retail cost of the medicine as an in-kind contribution. Do you know the retail value? Seven bucks a pill. They're padding their in-kind contributions by millions of dollars."

I hung up a little perplexed at first. It wasn't like the organization was buying pills for a dime and selling them for $7; it was were giving them away. Outside of inflating their donations for bragging rights, I couldn't see the harm. Then it hit me.

I went to the organization's website and there it was, one click off the home page: Nearly 90% of its donations in 2011 went directly to the group's programs. Its administrative costs? Just 5% of the budget. But if the agency was inflating in-kind contributions, it could hike the value of its donations to make its administrative costs seem smaller.

Why would it do that? Because low administrative costs are the holy grail in judging how well a nonprofit does its work. It's not the only thing responsible raters look at, but it's the shorthand. The best of the best in one Top 20 list last year, for example, was a charity that spent nothing, nada — 0.0%, as the list put it — on administration. Too bad that, as a measure of value, low administrative costs are unscientific and meaningless.

Don't get me wrong. Low administrative costs could indicate prudence and sound judgment at a charity, but they could just as easily indicate inadequate staffing, insufficient salaries or, shall we say, fudging. Moreover, administrative costs aren't the primary measurement of for-profit excellence. Are McDonald's admin costs lower than Wendy's? Apple's lower than Microsoft's?

Why then do we continue to buy such a boneheaded yardstick to measure nonprofit organizations?

Daniel Kahneman, the Nobel Prize-winning economist, in his brilliant new book "Thinking Fast and Slow," calls it substitution. Each of us, Kahneman writes, has in effect two systems of thinking — an intuitive system that we rely on for quick answers, hunches and gut reactions, and a rational, statistics-driven intellectual system. As superior as the rational system may seem, it has a flaw: It's lazy, and it will defer to the intuitive system whenever it can, especially if the intuitive answer comes cloaked in seemingly scientific justification.

On top of that, our intuitive thinking system also hates hard work, Kahneman says, and if figuring out the answer to a problem is too difficult or complex, we often simply substitute a different, easier answer for the hard work, and we may not even be aware we are doing so.

It is really hard to judge the merits of most nonprofit organizations programmatically. Are people smarter, healthier, do they drive better, get fewer divorces or smoke less as a direct result of a nonprofit organization's intervention? These are the questions we should be asking, and there are many who are trying to do just that every day, internally in nonprofits and in universities and research centers across the country.

But our intuitive thinking system wants an answer now, and because we are intuitively inclined to believe that the nonprofit sector is filled with soft, amateurish executives, we latch on to the pseudo-science of administrative costs as a measure of excellence. It's hogwash; there is absolutely no way of telling that an organization with 5% administrative costs is superior to one with 20% costs based on that criterion alone. In fact, the exact opposite may be true.

Using administrative overhead as a mark of excellence will be a hard habit to break, however. According to the National Center for Charitable Statistics: "For better or worse, the percentage of total expenses going to program costs is the most common measure of nonprofit organizational efficiency. Focus group research has found that donors expect worthy organizations to have low fundraising and administrative costs. Consequently, nonprofits frequently tout their low overhead ratios in their mailings to the donors." Or on their websites.

There are a lot of great reasons to donate to a charity — competent staff, involved and committed board and volunteers, a well-defined and engaged constituency, and a track record of past success. When you find the right nonprofit, honor it with your time and treasure. But let's bury the substitute easy answer of administrative costs. That's no way to choose a charity.

Jack Shakely, President emeritus of the California Community Foundation 

April 30,2012