Nonprofits and donors: Doing more good means making some changes

downloadHow to Be Great at Doing Good author Nick Cooney argues that none of us has been taught what it means to truly succeed at doing good in the world. What’s more, we have never been prompted to give charity the seriousness and rigor it deserves.

“Although it may feel counterintuitive or even cold-hearted to take a numbers-based approach to charity, Cooney reveals that making calculated decisions isn’t just possible, it’s absolutely necessary if we want to succeed at helping others.”

Through a series of enlightening studies in human behavior, compelling interviews with philanthropy professionals, and applied personal experiences from founding and managing top-rated nonprofits, Cooney presents an eye-opening examination of our traditional approach to succeeding at charitable leadership and philanthropy.

The author’s challenge to you

It’s a challenge to get serious about charity. His challenge rests on two premises: “1) The first premise is that the goal of charity is to make the world a better place. It is to help those who are suffering and to increase well-being. 2) The second premise is that in whatever capacity you carry out charity—as a donor, a volunteer, or a nonprofit worker—you want to succeed as much as possible.”charitycoverdalefury_com

At the time this book was published, Americans donated only three percent of their income to charity and participated in an average of 15 hours a year volunteering. If every dollar and minute should be maximized to its fullest potential, donors, volunteers and nonprofit leaders must overcome their dependency on assumptions rather than facts, which are primal barriers to smart decision making, and avoid navigating choices based on emotional tendencies, among other things.

A tall order but one that Cooney asserts is worth pursuing if we genuinely want our charitable leadership and philanthropy to be truly great. What that means for nonprofits is a new language used with donors that empowers and informs. What that means for donors is applying rigor to giving so the dollars do the most good.

Doing good or doing great? A tale of two charitiesthephilannews_com

Cooney gives the example of the Theatre Communications Group versus the Seva Foundation. The theater group’s mission involves improving communications between theaters and workers so they can learn from each other. The Seva Foundation works to reverse blindness in India caused by cataracts. It sends surgeons to India to remove cataracts through a simple and inexpensive procedure. It combats blindness in over 100,000 people each year.

The author discusses which charity makes the world a better place by “reducing suffering and increasing well-being.” When we confront the brutal fact that not all charities do the same amount of good, the Seva Foundation is more successful in making the world a better place. It reduces more suffering and increases the well-being of hundreds of thousands of people for their lifetimes. It also does it inexpensively.

Therefore, contributing to a theater organization can certainly be a personal passion and can consume some of the 97 percent of Americans’ income that is not dedicated to charity. But to actually help people and reduce their suffering, the Seva Foundation deserves your charitable dollars.

Three steps toward making the most impact 

An excerpt from our Page to Practice book summarynick_cooney_com

CausePlanet: You stress that people need to go against their natural, emotional instincts to support charities that make an efficient impact. Awareness is the first step, you say, but what other concrete steps can people take and how can they create a support system so a mass of people can move in this direction?

Nick Cooney: As I say in the book, empathy and compassion should be the fuel that we put in our tank, the things that motivate us to give. But they should not be the hands on the steering wheel that decide where to give. Instead, we should try to think logically and dispassionately about the very best places to give.

Some concrete steps to help make that happen are first, realize that the reason we donate is to do good–namely, to reduce the suffering or increase the happiness of others. If we really care, we should donate where it will do the most good–decrease the most suffering, increase the most happiness.

And that means not necessarily focusing on the causes that we feel most interested in at the moment, or that are the most relevant to us, or that are local to where we happen to be living. Rather, it means trying to find the causes where our dollars will do the most good, even if it’s not a cause or a charity we’ve thought a lot about before. So realizing that and internalizing it is step one.

Step two is look for what info is out there already, for example sites like Animal Charity Evaluators and Givewell. I also recommend browsing the site of the Open Philanthropy Project, which has tried to do some of this same sort of analysis.

Third, connect with others who are already trying to think about and carry out charity in this way. Places like The Center for Effective Altruism have some helpful resources for connecting with others who want to do the most good with their money (or time).

See book summaries on related topics:

Charity Case: How the Nonprofit Community Can Stand Up for Itself and Really Change the World

With Charity for All: Why Charities Are Failing and a Better Way to Give

Do More Than Give: The Six Practices of Donors Who Change the World

Small Change: Why Business Won’t Save the World

Charity On Trial: What You Need to Know Before You Give

Image credits: wiley.com, charitycoverdalefury.com, thephilanews.com, nickcooney.com

Share/Bookmark

Leave a reply



How one donor achieved impact beyond check-writing

“Philanthropy is neither a solitary effort by the donor nor even a dialectical effort between the donor and the grantee. Social change involves many different players from all sectors of society. It is through the engagement and alignment of these multiple players that catalytic donors achieve their impact.”

A best practice worth repeating

I recently taught a philanthropy class where we discussed the merits of this sentiment published in Crutchfield, Kania and Kramer’s book, Do More Than Give: The Six Practices of Donors Who Change the World. While this book has been widely discussed since it was published in 2011, revisiting it with my class reminded me that the principles are as relevant today as they were four years ago. I have a renewed appreciation for some of the case stories that illustrate what it means to be a catalytic donor so I’d like to return to one of the authors’ great profiles about a donor by the name of Emily Jackson Tow.

Jackson Tow is an example of what the authors call an adaptive leader or someone who fully evaluates the issue and hand and determines how she can facilitate transformative change beyond funding. These adaptive donors “are not content to merely give a man a fish, or even teach him to fish; these entrepreneurs won’t stop until they’ve revolutionized the entire fishing industry,” says Ashoka founder Bill Drayton. In this particular case, Jackson Tow demonstrates the first of the six highlighted best practices in the book: advocate for change.

How Emily Jackson Tow advocated for change

The authors highlight the Tow Foundation’s advocacy efforts to demonstrate the power of a donor’s influence beyond financial impact. The Tow Foundation maintains a portfolio approach to giving, but its greatest impact comes from its nonfinancial contributions, such as sweat equity, knowledge of best practices, national and local networks, relationships and perseverance to reform the state’s juvenile justice system.

Emily Tow Jackson became aware of a class action lawsuit filed on behalf of adolescents who were jailed for minor offenses, such as graffiti, in the same facility as serious offenders and confined to small, poorly ventilated cells for up to 21-hour stretches with two inmates and no toilet. Beyond the horrible conditions, the larger issue was Connecticut’s escalating youth imprisonment rates. Many of the juvenile offenders did not require high-security prison facilities; rather they needed counseling, safe and stable homes, and other basics.

Tow Jackson immediately set to work by enlisting three nonprofit organizations to establish the Connecticut Juvenile Justice Alliance with a start-up grant of $25,000. Additionally, the foundation engaged in advocacy activities that included the following:

–        funding and participating in collaborations,

–        educating legislators with forums at the state capitol,

–        participating on local and state government committees,

–        raising public awareness through media,

–        and giving general operating support to nonprofits focused on this issue.

By 2009, referrals to juvenile court dropped by more than one third and the number of youth convictions dropped by almost two thirds. At the time the Do More Than Give was published, Connecticut was recognized nationally as an innovative leader in handling juvenile cases, rather than as a leading incarcerator of minors.

Nuances of advocacy

The authors explain an important piece about this best practice: Some funders avoid lobbying because of a fear or misunderstanding of how much lobbying is allowed, so the authors define advocacy and related terms as:

–       Advocacy refers to activism around an issue such as climate change, free trade or youth justice. Examples of activities range from educating and mobilizing voters to pitching media stories and raising awareness to directly influencing public officials.

–       Policy advocacy (a.k.a. lobbying) refers to specific efforts to change public policy or obtain government funding for a social program.

–       Lobbying versus advocacy: Most of the confusion lies with advocacy. Lobbying is prohibited by foundations in the U.S. and advocacy is an all-encompassing term for a whole range of activities.

Private foundations, which include most family foundations, cannot fund or engage in direct lobbying, but they can make general operating grants to nonprofits that lobby. Large private foundations have a long political history because they generally have a larger staff of trained professionals who have a deep understanding of the issues and social sector.

Conversely, public foundations, such as community foundations are allowed both to engage in lobbying themselves and to fund nonprofits that lobby. Because community foundations find themselves at the center of many different stakeholders, most shy away from lobbying. However, the authors explore a case study about The New Hampshire Charitable Foundation and how it successfully positioned its lobbying activities so its constituents would embrace them.

–       Corporate foundation lobbying: Good corporate foundations reconcile lobbying activities that benefit their company with those that lend strength to the social causes they support for a win-win. Corporations can leverage vast brand recognition and marketing channels to broadcast policy messages and they can mobilize entire industries. In contrast, some companies still support legislation that directly contradicts their socially responsible images. For example, Toyota, maker of the eco-friendly Prius, lobbied with other carmakers against tougher fuel economy standards.

Working together for maximum impact

To create systemic change, nonprofits today need catalytic donors in their court to leverage the full participation of every sector in society. According to the authors, the number of billionaires has tripled since 2000 and nearly half of the 75,000 private foundations established in the U.S. were created in the last decade. We’re also seeing growth in private enterprise where new corporate entities are created to blend profit with social purpose, as well as in government’s willingness to partner in nonconventional ways.

Within the context of these societal trends, there is no question that donors are positioned like never before to help orchestrate an integrated approach to problems and embrace catalytic philanthropy. Visit the Do More Than Give website for more stories about donors who create catalytic change in their communities.

See also:

Fail Better: Design Smart Mistakes and Succeed Sooner

Mission-Based Management: Leading Your Not-for-Profit in the 21st Century, 3rd Ed.

The Ask: How to Ask for Support for Your Nonprofit Cause, Creative Project or Business Venture

Image credits: ask.com, towfoundation.org, stlucianewsonline.com, parksandrecreation.com

Share/Bookmark

Leave a reply



Before you can get buy-in, people need to feel the problem

Picture this: you’re in the middle of presenting your proposal and a person at the far end of the table raises her hand. “I’m not even sure the ‘problem’ you’re describing exists, or is a big deal at all!” How do you deal with that?

From reading your responses to my previous posts, I find that many people aren’t able to even reach the point where they can debate the merits of their proposal. Many get bogged down in the quagmire of trying to effectively communicate the nature and extent of the problem. If you can’t do that, it doesn’t much matter what your proposal is. People aren’t going to consider anything until they are convinced there is a problem that truly needs to be addressed.

Have you made the problem feel real?

In scenarios like this, I’ve found that it’s effective to highlight the problem and the people affected by it in a way that makes the problem feel real. What’s less effective — and far more common — is to make a dry business case that, even if correct, is usually less persuasive and less memorable than it needs to be.

424 gloves drive the message home

On this topic, one story I’ve always liked (from my book The Heart of Change) I affectionately call “Gloves on the Boardroom Table.” A large organization had an inefficient purchasing process, and one mid-level executive believed that money was constantly being wasted with each of the organization’s factories handling their own purchases. He thought there could be tremendous savings from consolidating the procurement effort. He put together a “business case” for change but it went nowhere. His boss said that senior executives didn’t feel it was truly a big problem, especially with so many other daily challenges taking up their time.

So the manager had an idea: he collected the 424 different kinds of work gloves the factories collectively purchased and tagged each one with its different price and supplier. He carted the gloves in and dumped them on the boardroom table before a senior
executive team meeting. He first showed the pile to his boss, who was taken aback by this powerful visual display of the waste inherent in having dozens of different factories negotiate different deals for the items they needed!

The boss showed the CEO, who scrapped the meeting agenda to talk about procurement because what he was looking at was so memorable, so compelling, and so real. It galvanized the executives to action. Ultimately, they overhauled their procurement process and saved a great deal of money.

See, feel, change

I’ve called the process used here See, Feel, and Change, as opposed to Analyze, Think, and Change. The latter is all head, no heart, and often fails to motivate people to recognize the importance of a given problem. It’s too easily forgotten or ignored if it doesn’t feel real.

Highlight the personal, real consequences of the problem you want people to see

So what is my everyday advice if you can’t always collect, catalogue, and cart around 424 pairs of gloves? One way is to highlight the real, personal consequences of the problem you want people to see, and to highlight the real people who suffer because of it.

My newer book, Buy-In: Saving Your Good Ideas From Getting Shot Down, features a story of someone presenting a plan to provide new computers for a local library. When dissenters don’t listen because they don’t think there is a problem with the current computers, the presenter has two options. He could use PowerPoint slides to compare the library’s computers to current computer models sold in stores, showing the difference in processing power, memory capacity, and modem speed. Or he could relate the true story of a local fourth-grader from a poor family who relies on the library’s computers for homework — computers that are too slow and outdated to allow her to finish her assignments, leaving her underprepared for school.

Which case would you find more compelling? Which case makes the problem feel real?

See also:

Buy-In: Saving Your Good Ideas From Getting Shot Down

Influential Fundraiser: Using the Psychology of Persuasion to Achieve Outstanding Results

To Sell is Human: The Surprising Truth About Moving Others

Image credits: Harvard Business Review, harborfreight, channelview

Share/Bookmark

Leave a reply



7 ways companies will change how they invest in you

According to Credit Suisse’s latest Global Wealth report, Americans’ median net worth is just $44,900 per adult, placing the U.S. in 19th place behind Japan, Canada, Australia and much of Western Europe. An interesting statistic when you consider the level of individual philanthropy in the U.S. as compared with other countries. While individual giving is king in most funding mixes, it still pays to keep an eye on the donations coming in from businesses to your organization—especially in light of recent developments.

As corporate social responsibility evolves, businesses are questioning if traditional philanthropic giving is an antiquated expense line. Today, stakeholders and investors expect more integrated methods for tying social impact to core business activities. While this Executives have started to ask how their companies can stop giving money away and getting nothing in return is a worthwhile endeavor, many companies are finding the reality of cutting ties with charitable giving easier said than done.

According to Paul Klein, founder and president of Impakt, “Executives have started to ask how their companies can stop giving money away and getting nothing in return, but putting an end to corporate philanthropy isn’t easy. The reputational risk of leaving worthy charitable organizations out in the cold is considerable, making leaders reluctant to take decisive action. However, new approaches are possible, since the end of giving for nothing may not be far away.”

It’s also worth noting the latest data from The National Philanthropic Trust: giving among U.S. corporations accounted for only five percent of total giving to charities in 2011. This underwhelming statistic seems to support the lack of enthusiasm Klein has observed in his work with corporations.

In contrast, what continues to capture the hearts, minds and bottom lines of companies are partnerships that directly connect to the business’s existing business model. What’s more, according to the 2010 Cone Cause Evolution Study, 90 percent of consumers want companies to tell them the ways they are supporting causes. Eighty-three percent of Americans wish more of the products, services and retailers they use would support causes. While the end of philanthropy may be coming, businesses recognize consumer opinion and the need to do a better job of blending profit with purpose.

Klein has developed seven strategies at Impakt to help businesses phase out philanthropy and begin to embed social impact in their core business strategies. I’ve listed Klein’s recommendations here:

1. Develop a five-year exit strategy. Almost every large corporation supports at least one large charity in a significant way. In these cases, it’s important to identify a social objective that can be achieved over five years and allocate financial and other resources towards that objective on a diminishing basis. When the social objective has been achieved, the charity will no longer require support.

2. Begin investing in social change in other ways. “Charitable organizations don’t have a monopoly on social change, and sometimes social enterprises and other businesses can achieve better results.” If social change is important to your business, you should understand the strengths and weaknesses of all the players and start to reallocate charitable dollars toward organizations that deliver the most value, regardless of their sectors.

3. Focus on opportunities that can deliver return on investment. Pure philanthropy has virtually no business value. It’s altruistic and intended to help charities in ways that can’t be measured. Corporations can start shifting philanthropic spending toward social investments that have the potential of creating ROI. That might mean, for example, making a loan to someone with little or no credit to help start a business.

4. Stop funding charitable initiatives that don’t get results. Even without conducting a formal evaluation, you likely already know which organizations aren’t performing. Stop supporting those groups in 2015. Then take a year to reduce or eliminate funding for other organizations that may be of more value but aren’t the right partners for your business. During the transition, provide funding for capacity building to help organizations become more sustainable without your support.

5. Move CSR to finance or operations. Doing so is anathema to CSR managers (most of whom report to marketing or H.R.), but it will increase accountability, ensure business programs that have social value are resourced properly, and support the strategy for exiting out of donations. The transition will be difficult but the results will be better.

6. Focus on value. Start asking how you can give or invest less while bringing about greater social change. This is a standard question for businesses but it’s rarely posed to charities. Organizations that can help you answer it will be worthy of continued support.

7. Embed social change in your business. Financial institutions should find new ways to give vulnerable people access to capital. Companies in extractive industries such as mining or oil and gas should put a high priority on adding more indigenous suppliers and employees. Car companies should focus on sustainable transportation. Pharmaceutical companies need to create new revenue models that focus on preventing illness.

Klein’s recommendations may be alarming if you’re a nonprofit that has a large focus on traditional corporate giving; however, his thoughts are a sound warning that your strategies must attain new levels of ROI. Joe Waters, author of Fundraising with Businesses, says asking companies to simply write a check is tired. Nonprofits need to get creative and look for ways to engage employees and customers while impacting the business’s bottom line. These partnerships will always be easy to justify and renew in the finance department where Klein recommends they be managed.

At Execute Now!, we advise clients on a myriad of financial areas relating to corporate social responsibility. We create financial scenarios for nonprofit clients interested in weighing their options among potential partnerships. We also provide forecasting for various types of funding based on their dependability. Finally, we shed light on what a business partner will be looking for in the finance/operations departments to optimize reporting.

Personally, I found Klein’s use of the phrase, “giving for nothing,” a disappointing representation of the corporate perspective he’s working with today. On the other hand, nonprofits looking for the positive note in his seven strategies should focus on how each tactic informs how charities must aspire to work with companies if they choose to keep them in the funding mix.

See also:

Fundraising with Businesses

Cash Flow Strategies

Zilch: The Power of Zero in Business

Image credits: gooddaysfromcdf.org, thegiftofgiving.com, volunteerhub.com

Share/Bookmark

Leave a reply



3 practices leaders should adopt from Bono

This article originally appeared on the Fox Business website.

One of the great success stories of our time is the rock band U2.  When the band began in 1976, its musical skills left much to be desired. More than three decades later, U2 has received a remarkable 22 Grammy awards, more than any band in history. In addition, the band surpassed the Rolling Stones’ record for the highest revenue grossing concert tour. How did this transformation happen?

Like all great groups, leadership makes the difference. Bono is U2’s leader, lead singer and lyricist. His leadership approach can be described in one sentence: Bono communicates an inspiring vision and lives it, values people, and gives them a voice. CEOs would be wise to follow Bono’s example.

1. Communicate an inspiring vision and live it

U2’s vision is to improve the world through its music and influence. Bono calls it “the spark” and he feels it sets U2 apart from many other bands. U2’s songs address themes the band members believe are important to promote such as human rights and social justice. Bono has described himself as a traveling salesman of ideas within songs.

He lives the vision, too. Bono and his wife Ali are philanthropists who help the poor, particularly in Africa.

2. Value people

Bono values people. He encourages and affirms his fellow band members. He expresses appreciation for their talents and describes them as being essential to U2’s success.

Ask his fellow band members and they’ll tell you Bono has had their back during times of trial. When drummer Larry Mullen, Jr., lost his mom in a car accident a short time after the band was formed, Bono was there to support him. Having lost his own mother, Bono shared Larry’s pain. Later, when U2 was offered its first recording contract with the condition that it replace Larry with a more conventional drummer, Bono told the record company executive to “shove it.”

When lead guitar player “the Edge” went through divorce, Bono and the guys were there to support him. When bass player Adam Clayton showed up to one concert so stoned he couldn’t perform, Bono and the other members were likely tempted to throw him overboard for letting them down. Instead, they had someone step in to cover for him and they went on to help Adam overcome the drug and alcohol addiction he had developed.

Unlike many bands where the megastar takes most of the economic profits, Bono splits profits equally among the four band members and their long-time manager. This also shows that Bono values his fellow band members and manager. I’m not saying CEOs should split their company’s economic profits equally with others. Just recognize that taking too much of the profits works against motivating the people you lead.

3. Give people a voice

Bono gives his fellow band members a voice in decision-making. The members of U2 argue relentlessly over their music, which reflects their passion for excellence. Bono has stated this approach is frustrating at times and it takes longer to make decisions but that he believes it is necessary to achieve excellence.

Connection, community and unity

The result of Bono’s leadership is the band members feel a strong sense of connection, community and unity. Bono describes U2 as a tight-knit family. He has said, “People with a strong sense of family and community…are always very strong people.”  The commitment to support one another extends beyond the four members of the band. The members of U2 are part of a larger community that includes their families, crew members and collaborators. Many of them have known each other for decades.

The members of U2 feel connected to their leader and they have his back as well. The most vivid example of this came when U2 campaigned during the 1980s for the observance of a Martin Luther King, Jr., Day in America. Bono received a death threat that warned him not to sing the song “Pride (In the Name of Love),” a song about the Reverend Martin Luther King, Jr., at an upcoming concert. Bono described in an interview that as he sang the song, he closed his eyes. At the end of a verse when he opened his eyes, Bono discovered Adam Clayton literally standing in front of him to shield him from potential harm.

Now don’t get carried away and expect the people you lead will take a bullet for you. That said, just imagine what an organization of loyal, committed and connected employees could accomplish.

By following Bono’s leadership practices, CEOs can unite their organizations and motivate their members. Doing so will increase the trust, cooperation and esprit de corps necessary to produce sustainable superior performance.

See also:

Fired Up or Burned Out: How to Reignite Your Team’s Passion, Creativity and Productivity

Smarter, Faster, Better: Strategies for Effective, Enduring, and Fulfilled Leadership

Leaders Make the Future: Ten New Leadership Skills for an Uncertain World

Image credits: frontpagemag.com, tekstovi-pesama.com, webfoundation.org

Share/Bookmark

Leave a reply



Waters’ new book gives you license to steal

“To be successful in anything you need inspiration. It’s what drives us to keep pushing and excelling. Without it you just hit a dead end. You stop learning and exploring,” explains cause marketing author Joe Waters.

Joe Waters recently inspired us with his new book Fundraising with Businesses: 40 New and Improved Strategies for Nonprofits, which tells a great success story in each of his 40 chapters dedicated to a revenue strategy with companies. I’ve excerpted one of his stories to give you inspiration and glimpse of Waters’ numerous featured partnerships:

Hashtag fundraiser

Over the holidays in 2012, global supermarket chain Lidl offered to donate five four-course Christmas dinners to food banks in Belgium for each tweet with the hashtag #luxevooriedereen, which is Dutch for “luxury for everyone.” The campaign went viral and spread rapidly on Twitter. While Lidl had privately committed to only 1,000 meals, they graciously increased their donation to 10,000 meals.

License to steal!

Waters advises you that when your nonprofit uses hashtag fundraisers and social media in general, you have to plan for the unexpected and be clear on your donation. After Waters explores the case story, some of the meaty sections that follow are “How it Works in 1-2-3,” “Things to Remember,” and “Steal These Ideas!” Who wouldn’t want to read a section called “Steal These Ideas!”? Brilliant.

Too big, too small or just right?

Despite the fact that cause marketing has been in existence since the early 1980s, author Joe Waters is still surprised by the amount of confusion surrounding this idea. Additionally, smaller nonprofits that represent the bulk of our sector are misdiagnosing why great cause marketing partnerships are passing them by and going to the bigger nonprofits. Too often, smaller charities approach businesses for cash gifts when they could be leveraging much more if they are willing to get creative.

“Just because you’re small doesn’t mean you have to think small,” says Waters. He asks, “What if the business is new or struggling?” Does your strategy account for the other assets the business may bring to the table if it can’t write a check? Or, if the company does have money to give, can you see beyond the check and realize the enormous amount of possible donations from customers and employees through an innovative campaign?

Welcome pieces of advice

Each of Waters’ chapters are further bolstered by advice boxes where Waters shares best practices in areas such as “Three Types of Decision Makers,” “Four Ways to Turn Unwanted Gifts Into Nonprofit Gold,” or “Ten Fundraising Ideas for B2B [Business to Business] Companies.”

I encourage you to indulge in a little guilt-free stealing and experiment with Waters’ Fundraising with Businesses. Your bottom line won’t be sorry.

See also:

The End of Fundraising: Raise More by Selling Your Impact

How to Write Fundraising Materials that Raise More Money

The Influential Fundraiser

Share/Bookmark

Leave a reply



Deciding where to give in the season of giving

This was originally posted on the Corona Insights Radiance Blog.

As the season of giving approaches many of us start to think about what we can do to make the world a better place, to help those less fortunate than ourselves, to give back or pay it forward.  And in addition to undertaking individual acts of kindness, many of us will look to nonprofit organizations for ways to make our individual efforts go farther – either through participating in coordinated volunteering efforts or offering financial support to help an organization carry out its mission throughout the year.

So how do we select organizations to support?  This is not only a question about identifying our deeply held values, but a question of what does it take to trust an organization (literally, to entrust them with our money)?

Limits to financials

A number of groups have developed websites to help answer the question of trust.  Charity Navigator , CharityWatch, and GuideStar, to name a few, provide measures of financial performance, ostensibly to help you know whether the organization will use your money wisely.  However, there has been a rising wave of dissatisfaction with common financial metrics (which tend to focus on low overhead), suggesting that the focus on those measures has unintended consequences that negatively impact the ability of nonprofit organizations to carry out their missions.  For a fantastic presentation of these issues, please watch Dan Pallotta’s TED Talk from earlier this year.

Program success

Indeed, in response to some of these concerns, Charity Navigator, GuideStar and the BBB Wise Giving Alliance are adopting metrics of program success in addition to financial metrics.  This move has received much press attention (see recent reports in The Chronicle  of Philanthropy and on NPR).  Nonprofit organizations seem both glad to move away from an excessive focus on the percentage of spending on overhead, yet daunted by the task of measuring performance.

These two issues are related – for most nonprofit organizations, evaluating program success will require additional overhead spending.  And for many, to get the expertise and capacity necessary to formulate clear measures and develop creative ways to measure outcomes in challenging populations, they will need to hire a professional evaluator.  While many granting agencies that provide funding to nonprofits both require evaluation as part of the grant activities and provide funding for evaluation within the grant, the charity evaluation sites may need to additionally reform how they rate overhead spent on the evaluation of program success.

What donors want is to be connected to a cause that is important to them.  Focusing on what nonprofit organizations are accomplishing in terms of world betterment is a much more intuitive way of inspiring trust in prospective donors.  It provides a direct connection with shared values, as opposed to the financial metrics that turn the focus on the money being given rather than the reason for giving.

We’re proud of our work helping nonprofit organizations measure their accomplishments, and we look forward to helping others document their success so that they can build trust with other likeminded individuals looking to make a difference – both this season of giving and throughout the year.

See also:

Charity Case

Leap of Reason: Managing to Outcomes in an Era of Scarcity

Charity On Trial: What You need to Know Before You Give

Share/Bookmark

Leave a reply



Busting five myths about Next Gen donors

There are now four generations we need to authentically engage in the philanthropic world that affect everything from communication to leadership to recruitment and retention of donors. We need to look at fundraising from the next generation of donors’perspective because philanthropy’s pipeline is essential for our organizations’sustainability. The essential questions have become: 1) Whom do we tap for funds? and 2) How do we develop Next Gen leaders on our boards and staffs and in our volunteers?

As I travel around the country and talk about Fundraising and the Next Generation, I am consistently confronted with the following five myths about fundraising with the next generation of philanthropists. Tagging and dispelling these myths can help us develop relationships with the next generations that can only enhance our organizations.

Myth #1: Next Gen donors are hard to find.

Next Gen donors are in our organizational backyards. This is not a “Where’s Waldo?” situation where they are mystical and unobtainable. They are our volunteers, staffers and children of our donors. They are young people engaged in professional groups like Young Nonprofit Professionals Network, Emerging Practitioners in Philanthropy, Resource Generation and more.

Many young philanthropists begin engagement with nonprofits through volunteerism. In fact, according to various research, Millennials especially see philanthropy as a contribution of both time and money. The next generation wants hands-on experiences with organizations before giving dollars. Pay extra attention tothe volunteers.

Myth #2: The next generation is too young to make major donations or think about planned giving.

Our organizations’major donors and prospects were not always major donors, at least most of them.They needed time to build their wealth and philanthropy. It’s the same with Generation X and Millennials. We need to cultivate today’s annual donors to be tomorrow’s major donors.

I also know of Next Gen donors that do have the capacity for large gifts and do have wills with allocations for philanthropic contributions. The truth is we never really know where those millionaires are–they may be quiet or understated or they may stand to inherit wealth. It’s our job to develop relationships with individuals with wealth or access to wealth now to create sustainability for our organizations in the future. As I often say, donors are like snowflakes: each one is completely unique. Philanthropists express their contributions in different ways at different times.

Myth #3: Next gen donors’ philanthropy is the same as their parents’ and grandparents’.

Family philanthropy is complicated, whether we are talking about a family foundation, donor-advised fund or kitchen table philanthropy. Combining money, family dynamics and the generational lens makes giving especially delicate. One thing I know is that every generation–every individual–in philanthropic families wants to have its own impact. This impact may include a respect for the legacy of those who led the family’s philanthropy but will also need to encompass additional philanthropic values.

In resource development, we can reach out to the younger generations in family philanthropies to find out what inspires them and how to communicate effectively. Ask questions about how they would like to be engaged and what a successful,impactful philanthropic investment looks like.

We are not carbon copies of our parents and grandparents; neither is our philanthropy.

Myth #4: Next Gen donors don’t have the time, talent or treasure to serve as board members.

Experiences with groups like Young Nonprofit Professionals Network demonstrate there are young people who are anxious to serve in leadership roles. Our job is to make sureany board member, regardless of age, has the tools to serve successfully in those roles. Provide training on fundraising and help individuals set fundraising goals to serve the mission.

A positive leadership experience for emerging leaders transforms them into ambassadors for your mission. We need to avoid tokenizing young people on our boards so we can check a box. Instead, make sure you’ve created a welcoming and engaging culture on your board that makes it possible to both recruit and retain Next Gen board members and donors. Young board members will provide fresh perspectives and diversity on your board, just like any other demographic.

Next Gen philanthropists are interested in giving time, treasure, talent, and ties, as the Next Gen Donors Report highlights. The next generation is well connected and will use those networks to tie the organization to meaningful partnerships whenever possible.

Myth #5: Young donors only use electronic communications.

Today the key to fundraising with any demographic group or individual donor is multichannel communications. Yes, Generation X and Y are technologically savvy and Millennials are considered digital natives, but online interactions will never replace in-person relationships. Don’t assume the only way to communicate with younger donors is by Facebook or Twitter.

We can use online technologies like social media as one of the tools in our toolbox, creating anentry point to develop deeper relationships. Social media is an outstanding way to steward relationships with existing donors by sharing our organization’s stories and successes and adding value by connecting followers to additional resources.

The truth is that fundraisers have had to evolve their communications strategies as new technologies emerge. We have had to learn how to effectively use direct mail, public service announcements and websites. We now need to add social media to that toolbox and know there will be more tools to come. In fact, it was recently reported thatthe fastest growing demographic on Facebook is women ages 55–65. What does this tell us about our assumptions related to social media and age?

While technology is agreat asset we can use to develop our donor relationships and create newprospects, it will never replace the personal connections that a phone call ora face-to-face meeting offers. Next generation philanthropists are no different than other generations; there are just additional ways to communicate with them.

We know from the research by Convio on the Next Generation of American Giving that lifelong loyalty to any nonprofit organization begins in the thirties, regardless of the generation, so perhaps giving is about life stage rather than age. We need to always check any assumptions we hold in order to explore what individual donors of all ages and giving abilities can contribute to our organization.

You can read more about next generation donors in Fundraisingand the Next Generation and the Next Gen Donors Report.

See also:

Our Page to Practice summary of Fundraising and the Next Generation

Liquid Leadership: From Woodstock to Wikipedia–Multigenerational Management Ideas that are Changing the Way We Run Things

Working Across Generations: Defining the Future of Nonprofit Leadership

Creating Change through Family Philanthropy: The Next Generation

Share/Bookmark

Leave a reply



Donors: Help your causes ask the right questions

Erica McGeachy Crenshaw

“The sector has fallen into a trap we created. By focusing on what we DON’T spend, and not on what has been accomplished, we have completely missed the mark in our messaging. We are part of this problem and it’s up to us to educate our way out of it,” asserted Paulette Maehara, former president of Fundraising Professionals in Dan Pallotta’s groundbreaking book Charity Case (Jossey-Bass 2012).

I recently re-watched Dan Pallotta’s highly popular TED Talk about Charity Case and was energized by such a credible and well-researched argument about the commonly misinterpreted topic of administrative costs and overhead. Unfortunately, we’re working against a flawed philosophy reinforced for decades by donors and nonprofit executives alike. Consequently, this week’s post is a message to nonprofit donors and contains some of Pallotta’s main points worth repeating.

Stop asking the flawed question and get to the heart of what really matters

Donors have to stop asking the question, “What percentage of my donation goes to the cause versus the overhead?” Pallotta argues this question is flawed in several ways:

1) The question makes us think overhead is not part of the cause but it absolutely is.

2) It also promotes the notion that overhead steals from the cause, forcing charities to obsess over keeping short-term overhead low at the expense of long-term solutions.

3) This question ironically gives the donor really bad information. It tells nothing of the charity’s quality of work, shares nothing about how it defines the cause, leads donors to discriminate unknowingly, gives the wrong overhead figure because it’s measuring against the wrong result.

Help your charities advertise, take risks and give reasonable time to build sustainability

Pallotta further argues nonprofits have to operate under a separate and discriminatory rule book from businesses. For example, in the area of advertising and marketing, charities can’t build demand for donations to their causes while businesses advertise until the last dollar no longer produces a penny of value.

On the topic of risk taking in pursuit of new donors, while it’s okay if the movie industry spends $100 million on flops, a $5 million charity walk that doesn’t show a 75 percent profit in the first year is considered suspect. Consequently, nonprofits shy away from large-scale fundraising ideas and cannot benefit from powerful learning curves.

Yet another example relates to time horizon. New companies can go six years without returning any profits to investors in the interest of building market dominance while charities that have long-term goals are expected to yield short-term, direct services. If they don’t deliver, they are pariahs. You can help dismantle some of these rules by leveraging your dollars on projects that raise much-needed awareness, allow for calculated risk and long-term growth toward meaningful goals.

Nonprofits are starving financially

You can help by asking new questions like “What kind of impact are you able to accomplish with your cause?” or “What meaningful progress are you making toward systemic change?” Help charities break the starvation cycle of what feels like mandatory low or no overhead. Leverage your donor investments in new ways to get the community looking at the cause differently or to accommodate long-term systemic change.

by Erica McGeachy Crenshaw, President/CEO of Execute Now!

See also:

Charity Case by Dan Pallotta

CausePlanet blogs about Charity Case

Share/Bookmark

Leave a reply



Leadership development: Learning by listening

This week, Alice Korngold, author of Leveraging Good Will, weighs in on the important topic of listening. Her remarks inspired me to share fellow authors who agree with her about this essential leadership skill. Seven Page to Practice™ book summary excerpts that highlight good listening follow Alice’s remarks.

I read CausePlanet’s book reviews and articles on a regular basis for their wisdom and to follow the conversation. In preparing to write this post, I perused many recent pieces for inspiration.  Brilliant stuff…. if perhaps a bit head-spinning for most nonprofit CEOs when taken in large doses.  Fundraise this way, establish your culture that way, create a sustainable business model this way, connect with social media that way. And change sure is hard, but here’s how to do it (from my personal favorites – the Heath brothers).  Woah!

My bookshelf is stocked (now my iPad) with many such books and there is often much to gain from them. At the same time, I believe that the best leaders learn the most from listening to the people with whom they work. Unless the CEO walks the floors, encourages people to truly say what they think, and has an open ear, no advice from any book will help. This is surely the case with CEOs of NGOs and nonprofits who are the primary readers of this site.

And listening doesn’t mean much unless your organization is successfully engaging and retaining people from a variety of generations, backgrounds and perspectives. While it might seem messy and at times inconvenient to have a blend of personalities – even more so when they are ardent advocates of the cause – the magic and energy of the organization is in that very passion and diversity. Without that, a nonprofit environment would be sterile; it would lose its heart and soul.  It would also miss the variety of stories and sharing of experiences from the people at the organization who make the world a better place.

Yes, by all means, NGOs and nonprofits need to envision and embrace many changes and indeed many do.  These changes include more business-like approaches in establishing new revenue models, capturing and fully engaging young new talent, creating and then leveraging the power of great websites and social media, and doing many of the things that the experts advise on CausePlanet.org’s valuable pages.

The best leaders learn how to listen to the different perspectives, appreciate and engage everyone who brings value to the table, celebrate passion, inspire the team to embrace the greater vision, and lead forward with enthusiasm.  And leaders learn by listening.

Taking a cue from Alice Korngold’s thoughts on listening, I have listed seven different Page to Practice™ book summary excerpts below that feature an emphasis on the importance of active listening:

Do More Than Give: The 6 Practices of Donors Who Change the World by Leslie Crutchfield, John Kania, Mark Kramer

Empower the people

Catalytic donors view individuals as “essential participants” in the process of solving problems for themselves. Listening to stakeholders is a powerful engine for change because of the ideas that emerge and the solutions that result from brainstorming.

Working across Generations by Frances Kunreuther, Helen Kim and Robby Rodriguez

Exercise: Understanding each other

Understanding the differences among generations starts with listening to what each generation has to say about what shaped them. This exercises asks participants to identify important events in their past and assess their accomplishments and disappointments.

Step 1: Review Key Events for each decade (these can be found in the book, or you can add your own).

Step 2: Answer these questions for each decade:

  • What were your or your generation’s accomplishments?
  • Challenges and disappointments?
  • What would be helpful to share with other generations?

Step 3: Discuss these debriefing questions:

  • What key events and experiences that have influenced you stand out?
  • In what ways have they shaped how you view the world and how you approach your work?
  • What would be helpful for others to know to better understand you? How would you share your story?

12: The Elements of Great Managing by Rodd Wagner & James K. Harter, Ph.D.

Seventh element: My opinions seem to count

Small actions by employees can create meaningful differences for an organization. The Gallup research shows that improving the proportion of employees with Seventh Element scores from one to five to one in three substantially impacts customer experience, productivity, employee retention and safety—all of which create, on average, a 6 percent gain in profitability. Listening to and using employee ideas have two benefits: 1) The idea itself is usually a good one; and 2) Because the idea comes directly from the employee and not management, the employee is much more likely to be committed to seeing it through. Incorporating employee ideas also helps employees feel more included.

Forces for Good: The Six Practices of High-Impact Nonprofits by Leslie R. Crutchfield and Heather McLeod Grant

Master the art of adaptation

All the nonprofits in this book have adaptive capacity—or, the ability to perceive changes in the environment and develop new approaches in response. When they perceive a gap between their vision and their results, they aren’t afraid to modify their approach to have more impact. These nonprofits have learned how to balance creative innovation and structured execution. They have mastered what the authors call “the cycle of adaptation.” Specifically, they must be able to effectively listen to the environment, experiment and innovate (either for product or process improvement), evaluate and learn what works and, finally, modify their approaches on the basis of new information.

Listen to the environment. Adaptation begins with listening for external cues in the environment and looking internally for opportunities to increase impact. Organizations that focus on working with and through other sectors of society are more adept at listening and perceiving opportunities for change.

The Nonprofit Marketing Guide by Kivi Leroux Miller

Listen to the world around you

According to Leroux Miller, no matter where you are, your nonprofit doesn’t operate in a silo; it’s essential to formalize your listening so your marketing is relevant. Listening should include in-person and online tools as well as third-party and custom research. There are online tools that allow you to observe and listen to conversations about your issue and specifically, your organization. (See Page to Practice™ section for listening strategies.)

The Networked Nonprofit: Connecting with Social Media to Drive Change by Beth Kanter and Allison Fine

Listening, engaging and building relationships

Effective listening is critical to getting your bearings online, making sense of data, identifying network leaders and leveraging your message appropriately. Listening to large numbers of people can easily be accomplished by using tools such as Google Alerts, Technorati blog mentions, RSS readers, Twitter search, Delicious tags and Boardreader. Kanter and Fine like to think of listening through these tools “as an investment in relationships”—not time taken away from other tasks. Transitioning from listening to actively communicating with people online is the secret to engaging an audience according to the authors.

With your listening tools in play, you can begin to engage the public in the following ways:

  • Share information
  • Enter or initiate a conversation
  • Thank people for their efforts
  • Educate and raise awareness about an issue
  • Occasionally ask people to do something
  • Aggregate information for people
  • Clarify misperceptions

Image credit: elephantjournal.com

 

Share/Bookmark

Leave a reply



Welcome! Please provide your log-in information below.
Forget your password?

Enter your email or user name and your log-in information will be sent to the email on file.