Archive for January, 2017

Nonprofit fundraising: True generosity is rooted in relatedness

generosity_network_cover_largeOne of our most recent additions to the CausePlanet summary library is The Generosity Network by Jennifer McCrea, Jeffrey C. Walker and Karl Weber. We liked their approach to fundraising because it’s not another book about how to be a more persuasive salesperson, how to leverage tactics and strategies, or how to find and leverage your donors’ interests.

Their message is a new one: “True generosity is rooted in relatedness.” The coauthors add that fundraising is a form of connection; it’s the greatest gift you can offer your partners. You’re giving them the chance to join a community that is sharing and applying unique gifts to meet specific challenges.

Surpass traditional fundraising with three common elements

To engage in connectedness and build a community that enjoys sharing its unique talents, the coauthors explain you need three common elements. These three elements are the basis of a transformational, rather than transactional, style of fundraising.cp_bookchoice_2016_green

1) Know yourself. You’ll explore questions such as: What is money’s role in my life? Am I comfortable talking openly about it? Why or why not? Do I view money as a scorecard, or as a resource to be used for things I care about?

2) Know others (especially those whose partnership you seek). Fundraising is often considered difficult or intimidating because you may believe that asking for money makes you vulnerable. You may fear rejection or dependence. These emotions prevent you from seeing your potential partners as human beings. The goal of this book is to help you get past these potential obstacles and look at your prospective donors with trust and friendship.

3) Know how to ask. For some, asking for money creates feelings of enormous anxiety. However, if you see yourself and others as a potential team in solving complex challenges, then you can get beyond the feelings that hold you back. Viewing yourself and potential donors as a team makes asking feel good. “Asking for money (or any other resource) when you are standing up, not on bended knee, is a joy—an invitation for people to relate to their resources in a new way.”donors

Ask yourself if you possess these three common elements for transformational fundraising. Learn more about this book in our summary featuring an exclusive interview with consultant and Fundraising the SMART Way author, Ellen Bristol, or visit the authors’ website at http://www.thegenerositynetwork.com/books/the-generosity-network/.

See related book summaries:

Fundraising the SMART Way™: Predictable, Consistent Income Growth for Your Charity + Website

Cause for Change: The Why and How of Nonprofit Millennial Engagement

Retention Fundraising: The New Art and Science of Keeping Donors for Life

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Charity auctions: Are they a fit for your nonprofit?

roguewinterfest-org
This article was first published by our friends at CharityChannel and kindly shared by CEO, Stephen Nill. The article is by consultant, Abra Annes, and her bio follows the post.

In the realm of event-based fundraising for nonprofits, there are a lot of ways to raise funds. At the invitation of Stephen Nill, CEO at CharityChannel, I’ve been invited to talk honestly about the pros and cons of charity auctions.

As a professional charity auctioneer for six years, how could I resist such an invitation? In my view, when they’re done right, there’s no better way to engage donors in just one night than a fundraising auction.

My goal is to share what I have learned while also setting aside, at least for the “con” part, my natural predisposition in favor of this form of event fundraising. So, with that disclosure, let me dive in!

The Pros of Charity Auctions

Inspire Others to Give by Example

The number one reason for an auction is to inspire others to give. Public displays of philanthropy typically inspire others who have similar capacity to help.

When the formula of a charity event is just right, the energy and the feeling in the room can be contagious. You can’t recreate that energy outside of a fundraising event. The energy will draw out priceless new donors and champions of your cause.iacac-org

Build Valuable Connections with Existing Donors

Charity events are a great way to connect with your existing donors. Personal interactions with your donor base are incredibly valuable. Most organizations focus on their major donors and don’t get to connect with mid-sized donors. Events are the opportunity to connect with them face to face. These are the biggest advocates and champions of your cause.

Think of your charity event as the ultimate first date. Craft every detail so that potential donors fall in love with you and existing donors fall in love with you all over again.

A charity auction can be viewed, and in my view should be viewed, as a key opportunity to cultivate relationships with prospective donors that will lead to a later solicitation of significant individual charitable contributions far greater than what was contributed at the auction itself.

The Numbers Make Sense

Only have an event if you’re committed to covering the cost from ticket sales. That way, all fundraising activities that occur the day of your event go towards the charity directly, rather than paying for the event. Communicate this in the invitation by printing an asterisk next to the ticket price and clearly stating that the ticket price goes toward event costs only. Make it very clear on the invitation that the event is for fundraising.

A Great Way to Share Your Organization’s Vision

Visions are inspiring, and a charity auction is a powerful platform for sharing your organization’s vision. Most charities talk about their mission instead of their vision. Your vision is what impact your organization will have had in three, ten, or more years. These are bigger ideas, fantastical goals, and grand solutions that you hope to obtain.

When you share your vision with donors and invite them to help you achieve it, you create excitement. Excitement and momentum can catapult your event to the next level of attendance and donations.

The Cons of Charity Auctionsyoucaring-com

Charity auctions are not the right fundraising method for many nonprofits. Typically, they are expensive and always have some hidden costs.

They are also time intensive. Charity auctions, like most event fundraising, take an exorbitant amount of time to plan and are taxing on your team.

If you have a small development team that is already maxed out, a charity auction could put some members them over the edge. A common time for staff to quit is after a fundraising event.

They Are Expensive

Charity events take time, money, and energy, so make sure it’s worth before doing one. You want them to be impressive and memorable to the people that have donated and new potential donors. For many of the donors, this is a night out on the town, so make it awesome!

Details, Details

You’ll need a venue, a top AV system, invitations, centerpieces, and a kick-ass auctioneer. And that’s all before you even feed your guests.

Failure to account for staff time is the biggest mistake most development directors make when they create a budget. Most forget to create a line item for number of hours worked for each staff member, including admin, marketing staff, and the executive team.

The Space Is Crowded with Competition

Charity Auctions have become increasingly trendy. Schools, hospitals, churches, synagogues, and other nonprofits of all sizes are holding charity auctions. Due to their increased popularity, they’ve become trendy and there’s a lot of competition.

Face-to-Face Solicitations Have a Better ROI

Direct solicitation of individual donors for large gifts, assuming optimal cultivation over time, will raise considerably more for a nonprofit organization than will any event, including charity auctions.

The risk with a charity auction, as is typical of all events-based fundraising, is that the focus will be on the event itself to raise funds, while missing the important opportunity to cultivate the right individuals.

A Charity Auction Will Not Magically Solve All Your Fundraising Problemscollegebound-org

If you think that a charity auction will be the panacea for your organization’s issues, it won’t.

Charity auctions require a lot of behind the scenes prep work to be successful. You’ll need to fill the room with the right people, who have the capacity to give and the capacity to care. Getting the right people in the seats can be a full-time job.

To have a truly stellar charity auction, you will need to block your calendar for the entire week prior. After the auction, you will need at least one week to process all gifts and logistics.

Another large problem I see are organizations believing that hiring me or another auctioneer will just magically raise tons of cash. I wish this were true, but the only way to get donations at a charity auction is with a fully prepared event and audience. People who have come to dance, get dressed up, party, or just have dinner, usually will not donate.

Sure, part of my job as a consultant is to make the ask, but my real job is to inspire those in the room to dig deeper and care. To inspire people who came thinking they were going to donate $10,000, and get them to give $20,000. The true power of a skilled auctioneer is to not leave a dime on the table.

See also:

Major Gift Fundraising for Small Shops: How to Leverage Your Annual Fund in Only Five Hours per Week

Fundraising the SMART Way™: Predictable, Consistent Income Growth for Your Charity + Website

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

Image credits: iacac.org, roguewinterfest.org, youcaring.com, collegebound.org

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On the cusp of major change for nonprofits

generationgap2015

Special thanks to Thomas A. McLaughlin for this article. McLaughlin is the founder of the nonprofit-oriented consulting firm McLaughlin & Associates. He is the author of Streetsmart Financial Basics for Nonprofit Managers, 4th Edition (Wiley).  His email address is tamclaughlin@comcast.net. This article first appeared in The Nonprofit Times.

Lately when we have been facilitating a group at a conference we have made a point of asking the following two seemingly unrelated questions:

How old are you?

At what age do you expect to retire?

Before we move on, answer the two questions above for yourself (in an actual session, responders are asked not to print their names).  Think about the answers your parents’ and your grandparents’ generations would have given to the questions.  If we were able to go back in time it would be a virtual certainty that your answers would look very different from those of your parents and grandparents had they grown up in the United States.

While we do not yet have enough responses to claim a statistically valid group, the outcomes to date are worth examining.  Here are the averages of the responses we’ve received:

How old are you? 56

At what age do you expect to retire? 70

If these results remain consistent, it confirms that we are nearing the cusp of a major change in nonprofit organizations (not to mention the rest of the economy).   playbuzzIt won’t be business as usual as we near 2030, which seems to be the projected ‘average’ retirement year of our current 56 year olds.

Because the numbers of Baby Boomers born each year began to drop significantly in the early 60’s, the Gen X and Millennial generations will not come close to the Baby Boomers’ higher birth rates.   In fact, we are already hearing about an unusual level of shortages of management candidates, not to mention a shortage of qualified Gen Xer CEOs.  Even entry-level candidates seem scarcer now than ever before.

Nonprofit employee trends aren’t the only ones due for some changes. Nonprofit entities themselves are another area where long-time patterns seem to be changing.  The number of active nonprofit public charities steadily grew from the 80s until 2010, when the upward trajectory abruptly decreased to about 2003 levels.

The pattern is probably not arbitrary.  In all likelihood, the recession that began in 2008 right after the Wall Street crash of 2007 had a tempering effect on the numbers of new nonprofits each year.  Organization creators that had already finished the application process and turned in their request for IRS approval may well have lengthened their intense startup phase, while other potential post-recession applicants for nonprofit status may have deliberately slowed their process in order to begin providing services once the economic conditions improved.  The recession may also have caused some to give up altogether.  Fortunately the upward trend appears to have resumed, although perhaps with less velocity.

Putting the Baby Boom into context reveals some hard-to-see advantages.  The biggest one is that the Boomers were the healthiest generation to reach retirement age.  Most of the Boomers reached full employment age at just about the time that hard physical labor began to decline as a major part of most jobs.  As a result, the Baby Boomers were the first
generation that didn’t have to work largely in the factories.   By the time that the first Boomers were ready to find permanent work, the factories had already begun migrating overseas.

As a result, the Boomers were the first generation in history to be able to work in non-physically stressful environments.   Improvements in health care, communications, education, and widespread motorized travel all contributed to far less physical decline than at any time in the previous two hundred years.

Overall Impactresearchimpactnetwork

Nothing brings as much pressure on a nonprofit organization as the lack of staff.   At the moment we infer from economic reports – and the firsthand observations of CEO’s and others – that the Boomers’ exits are already being felt on both ends of the generational spectrum.   Naturally the first shortage is likely to be felt in the executive ranks as those individuals either reach their preferred retirement age, or move on, but there are also staff shortages in direct care.

Fortunately there are a few sources of labor (and optimism), many of which relate to immigration.  For example, the Pew Charitable Trusts report that the foreign-born U.S. population grew 109% between 1990 and 2012 (the overall impact of immigration varies significantly in different parts of the United States).   Moreover, the Pew Charitable Trusts quote Census Bureau projections that net international immigration will be the major driver behind US population growth between 2027 and 2038.

What Can be Done

If the shortage of available employees follows the predicted trend lines above, it could affect virtually all nonprofits in the country.  A major part of the pressure will come from the fact that the birthrates of bothdhmh-maryland-gov the latter part of the Gen Xers’ generation and all of the Millennials’ generation are half that of the Boomers’, so today’s status quo will eventually feel more like the status squeezed.

If we are right about our analysis, this situation will evolve relatively slowly over a period of time, which should make it easier to accommodate but harder to recognize.  Start your strategy planning now so that it fits the circumstances before you feel the squeeze.  Here are some suggestions:

Re-Work Your Staffing Patterns slantimage

If you are feeling the pressure at the bottom of your workforce as well as at the top, it’s time to re-think your staffing patterns.  While we have no way of proving this, it would not be a surprise if your underlying assumptions about direct care workers are still embedded in the 1980 to 2000 era.   And while you’re doing this, be sure to apply the same scrutiny to your assumptions about your senior-most executives.  Do you really need a CIO and his full staff now that you have that 24-hour technology company on call?

Re-Think Your Service Models seedshakers

If you don’t already know the year your nonprofit was founded, pull out your most recent IRS Form 990 and look exactly three inches below the word ‘income’ as in ‘Return of Organization Exempt  From Income Tax’.  You’ll find a box labeled ‘L’ and the words Year of Formation followed by the four digit year of your corporation’s founding.  If your organization was founded in the two or so decades since 1970 there is a chance that the organization is still at least partially grounded in that era.  That could mean that some of your service models are similarly aged.    

Consider a Merger

One way to accommodate the realities of the 21st century is to grow your scale.  The combination of declining birth rates (labor) and steady needs for service (aging clients with longer lifespans) will put pressure on many nonprofits.   Lately we have detected less instinctive opposition to mergers than had been true in the past, suggesting that this opposition might lessen.  The advantage of larger scale operations run correctly is that the resulting efficiencies – one ‘back room’, one Human Resources department, etc. – can strengthen the entire organization.

Today’s U.S. economy has never had aging baby boomers like we see today, nor a 50% drop in birthrates.   Navigating the next two or three decades will force many nonprofits to change their models and to try different approaches.   Being wanted will be just part of the terrain.

See book summaries related to this topic:

Nonprofit Mergers and Alliances by Thomas McLaughlin

Fundraising and the Next Generation: Tools for Engaging the Next Generation of Philanthropists

Working Across Generations: Defining the Future of Nonprofit Leadership

Cause for Change: The Why and How of Nonprofit Millennial Engagement

Image credits: researchimpactnetwork, dhmh.maryland.gov, slantimage, seedshakers, and playbuzz

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