Once in a while, an idea is good simply because it is easy to carry out, direct and needs no explanation. This is one of those ideas.
Earth Hour 2011: 8.30pm, Saturday 26 March, celebrate your action for the planet…
In a recent discussion on a group in LinkedIn, the topic of commissions for fundraisers was a hotly debated point of disagreement, and often fierce agreement, among posters.
After 50 posts, the group began to consider another question: If not commission, then is there an ethical way to offer compensation as a bonus for work well done by fundraisers?
I posted my response, outlining my successful experience and ethical structure for providing bonus compensation to staff. The response for a copy of the outline was overwhelming and after responding to a few by email, I decided to post it to my website for free download (PDF). You can go there and if you have further questions, feel free to contact me.
A few more thoughts on bonus compensation, and then would love to hear your thoughts on this subject.
Bonuses work. It’s a studied fact. But they don’t work in isolation and should be combined with non-tangible compensation as well. People want to be acknowledged and validated for their value, in ways additional to monetary compensation.
Establishing and working toward bonus goals should never be done in a vacuum. The goals-
- Must be drawn from an organizational strategic plan, and relate directly to how the employee can help the org reach their departmental goals.
- Must include more than just financial goals, and ideally only reflects financial goal achievement of the TEAM.
- Must be developed in a collaborative fashion between the employee and supervising staff.
- Must be built on the capacity for the fundraiser and the organization to achieve the goals realistically (“Can we get there from here?” is always a number one consideration in building bonus goals.)
- Must be a PART of an overall performance management assessment tool and not the only factor.
- Must be tracked monthly. Its only fair that the fundraiser knows where he stands on a regular basis, so that he can improve his performance or making changes to his approach. No surprises.
- Must be calculated with a balanced, but benevolent approach and must include supervisory staff as well as Executive Leadership in determining final calculations. For smaller NPO’s that may mean ED and a Board member.
- Must leave room for discussion. Don’t deliver it in an email or paycheck envelope, please!
Its starting to be clear….the concept of measuring outcomes of your nonprofit organizations’ social media efforts, and the measurable relevance of their presence….it’s the emperors new clothes- Just. Not. There.
Measuring quantifiable results from social media is like testing the hypothesis that the sun rises because you wake up. What you see will always allow you to justify your theory.
I think the better perspective to social media is to think of it as what it is: socializing in a virtual environment. Its unlike other marketing approaches in just this way. For instance, your company would not have a marketing plan that includes: go to happy hour and measure how many people ask you about your product? Or hang out at subway station and count how many people smile at your company logo’d hat. How about stand at corner with megaphone and yell out random 140 word phrases, comments and directives? What could possibly be measured by that- how many people stop to listen?
No, this is social media. Social. Like making friends and acquaintances. Good to do, but not something that is measurably strategic. To try to develop metrics for testing results is a tail chasing exercise. Better to focus your energies on more productive analysis.
Not everything that counts can be counted, and not everything counted counts.
**Props to my social media friend Jon Hardie, for making the term Emperors New Clothes…viral. 😉
March 3rd, marked yet another decision made by a large, global nonprofit, to identify an acquisition partner to provide relief and sustainability of its mission.
After months of scrutiny and turmoil, AED announced in a press release on its site on March 10th, 2011, “The organization continues to be financially solvent and stable despite having endured financial strain in recent months due to its inability to conduct business as usual…We believe this is the best choice to ensure the continuity of our programs and projects.”
The recent and seemingly ongoing spate of acquisition, mergers, and closings of NPO’s globally, raises so many relevant and necessary questions for academic discussion. The largest one in my mind is- is this a part of a natural evolutionary process, gleaning the wheat from the chaffe?
What say you?
I recently read a study that indicated of the 180,000 “Causes” on Facebook, the avg funds raised through this online method for each charity, over the course of a year, was only $1000.
This seems slightly outrageous given the hype and passion circulating about using Facebook by NPO’s for online fundraising. It seems everywhere you turn we have charities urging us to “like” them, to support their efforts. Daily my news feed blows up with requests from friends to give to the –> insert cause here<– organization to help them cure, fight, win, save, grow or change.
Before I get angry posts here by those who might find these comments slightly adverserial, I am NOT disparaging the NPO’s for trying. Good things do come from visibility and advocacy in this way.
It just doesn’t look like any of those good things include $$$$$$, and I wanted to know why.
To be more clear on this subject I recently undertook a (very unscientific) research project of online fundraising by US NPO’s. I researched Web 2.0 portals designed to help nonprofits raise funds online. Here is a list of those I identified and used in this study:
- Causevox.com (Beta)
- Changingthe present.org
- giveo.com (Beta)
- Independentcharities.org (givedirect.org)
- Jumo.com (Beta)
- mtdn.com (MakeTheDifferenceNetwork)
- tuttidare.com (Beta)
Most of these vendor developed online fundraising sites have a short life history, from 2000 to the present. One site started and closed within a few years (Make the difference network). Firstgiving.org, which also has a U.K. version called justgiving.org, and Network For Good have the longest history with the years 2000 and 2001 claimed as launch dates on their sites.
When a gift is made through one of these fundraising portal sites to your charity, the gift is held in a donor advised fund owned by the company. Despite the web address extension of .com on some of them, most of these vendors have a 501C3 status organization as an affiliate, which handles the donations, for tax relief purposes. When a gift is made to your charity, the tax receipt is from the vendors 501C3 organization, not from your charity. Of course you are encouraged to send a thank you, but the receipt is not from you to your donor, it is from Network for Good. This might mean something to some donors who want to be ‘counted’ as having given to your cause, but for most they may not notice. The distribution of your gift from this donor advised fund is not instantaneous- most are scheduled as a once or twice per month distribution. These donor advised funds are presumably managed by investment firms. No information could be found on where the interest from these temporarily held funds goes. I would imagine they might be part of the revenue stream for the portal vendor. In one interesting case, the corporate officers of a certain portal vendor, were found to also be the principals of the investment firm that manages that particular portals donor advised fund. Hm?
The big gorilla, based on longevity and reach with NPO’s is Network for Good. They have an interesting B2B model that probably helps with their revenue stream for operations. Many of the newer and beta sites listed above, indicate that they use Network For Good to process and manage their donations (as the 501C3 donor advised fund), for which a “grant” of 4.75% is paid to Network For Good, presumably by the charity receiving the donation. It raised the question, “Then how are these particular portal vendors earning money?”. Probably through Data Analytics, like Facebook, and through ad sales. If you are not paying for a service, you are not the customer, you are the product.
One interesting site is the Independent Charities of America (ICA) site at givedirect.org, which offers individuals the ability to create a personal foundation, to which they can invest an initial low amount of $250, all contributions being tax deductible and distributions can be made at the donors convenience with only 5% of the foundation $$ needing to be distributed annually. It does not have any social networking capacity or connections with charities, although it links to an outside source for charity information. Beside ICA, the other vendors reviewed are set up to offer multi-cause, multi-organizational opportunities, most of whom (but not all) require a charity to be a registered IRS entity, with a position on Guidestar or BBB. Only two that I reviewed allowed anyone to raise money for anything – personal causes (a new boat??), medical bills, weddings, etc.
I then reviewed the number of nonprofits each fundraising portal vendor had as ‘registered’ on their site or the number of charities which they had distributed funds to last year, as well as the total amt of money raised through their portal. As expected those vendors who were .org or had listed the .org affiliate who managed their funds, were easier find data on, getting it directly from their 990’s off of Guidestar. The few corporate sites had limited data available for review. Of those portals where data on number’s of charities served and amount raised could be found, the avg raised per year / per charity through their online portal revealed the highest amt was just about $30K per charity on avg. and the lowest was $470. In going back a few years, spikes can be seen that I can only assume correlated with global disaster fundraising, for which online giving seems the go to measure.
Let’s pause for a moment here.
If the Network for Good is eleven years old, has a breadth of experience and professional technicians leading its efforts, has a global reach, and it cannot help the NPO to raise more than $30K per year on avg……whats wrong with this picture? A good annual appeal direct mail campaign would be more successful.
Ruminate on this for a minute and we will review the fees charged to charities for this privilege.
In the list reviewed, fees range from a low of 3% per transaction to a high of 15%. One site took no fees but required a $9.oo per project fee from the charity. Some sites also required credit card processing fees on top of transaction fees. Some sites asked the donor to consider covering these costs for the charity. All told, the fees charged are, as with everything, buyer beware for charities when it comes to choosing to engage in online fundraising using these portals.
I don’t know about you, but if I had to pay $199 per month for my charity to be listed and an additional 3% per donation, plus credit card transaction fees, not to mention the back office costs of staffing for management, gift processing, stewardship etc. I would want evidence of a significant return on my investment. *Side note- nowhere on these portals did I find any pitch to support the financial value proposition of charities using such a site for fundraising.
Back to our review. Given the advent of Facebook, Myspace, Friendster, LinkedIn and other social networking sites into our culture, I expected to see a lot of these vendors offering a social networking aspect to their services. And they did not fail me, although they are not as advanced as I would expect, nor as would be beneficial. While 1/3 have no social networking aspects, 1/3 have what I would term a simple or basic social networking component to their sites, while 1/3 use existing Facebook linkages and – yes – Causes, exclusively. Some include a game of collecting or placing badges on current social networking sites like Facebook, twitter etc.
All of those vendors reviewed offer or require a pitch page that charities use to highlight their organization or their project or, in two cases, requests for funding for very, very specific needs: pencils, books, etc. This allows the donor to get most of the info right on the vendors portal without having to bounce off to the charities site, although most offer the option of placing a link to your organizations homepage on your pitch page.
Donorcentric? Many of the sites offer intent options to the donor during gift processing, but not the majority. This is, in my humble opinion, a great defect in these portals. It undermines what we in the industry know about donor giving- that it is specific to the interest of the donor, NOT the need of the organization. I guess they rationalize this, by considering the potential for massive volume of possible donors- like throwing **** against a wall and knowing some of it will stick. Some limit the gift intention choice for the donor by project as defined by the charity. The newest contender Jumo.com (by Chris Hughes the co founder of Facebook) does not currently offer donor intention option, but it is in beta and soon could.
One other *missed* opportunity by these portals in being donorcentric, is in offering to the donor (or requiring of the charity) gift use reports for each donation. Very few offer this option, although some do require charities to show evidence of their project completion as defined on their pitch page. Donor intent is a very hot topic and something that quite often will keep donors from contributing, out of fear that their gift wont be used as intended. Currently, there is no system to screen for that through the checks and balances surrounding NPO’s in the US. The annual tax audit NPO’s are required to have only ensure that accounting methods are followed accurately and that the gift intention was followed when depositing and allocating the money, not necessarily that the gift was then used to purchase the product or build the building. Would the benefit and value of required gift reports bring more donors to the online system of giving?
Conclusions? These vendors mean well and I applaud them for trying. Most of these portals are built on direction from nonprofit industry experts, but they fall short of being technologically cutting edge. Others are developed by Techstars, who have no inside knowledge of how a donor thinks, feels or acts, or what best practices exist in raising money from individuals for a charitable group. All portals are directed toward the relationship between the vendor and the charity – and all but ignore the needs of the donor!
Online fundraising needs to continue to be examined and manipulated. How are we currently using social media and to what end results? How can online fundraising better mimic and support our real world relationship building efforts with our donors? Is there a niche for online fundraising that we haven’t uncovered yet? I personally don’t believe we are there yet with any of this stuff- online giving results we are currently seeing are abysmal. We need to keep shaking it up, reformulating and evolving to determine what ‘IT’ is that might make this a productive and supportive tool in our arsenal.
Too many nonprofits make the mistake of thinking social media is only about fundraising or sharing information, like a newspaper or monthly newsletter.
But studies have shown that the more your social media activities act like a relationship, the better your “action rate”. And in social media benchmarking, action rate is king.
No one ever had a long term relationship via Twitter. Or facebook. Or texting. Not one that was meaningful anyway. It’s the same for your organizations relationships with its community of supporters. Social media is just one of many ways to engage and build. The action rate of your fans or followers is where the relationship builds and takes off.
NTEN released a report in 2009 that revealed a monthly fan growth rate of 3.75 percent, for organizations with a facebook Page or Group.
That’s more than the growth rate for email lists.
At the same time, these orgs also showed a churn rate of 2 percent. And a click through of even less. And when texting was focused on fundraising, the unsubscribe rate was at its highest.
We are using this media wrong.
While we are doing a great job of getting people to ‘like’ us, we drop the ball when it comes to keeping them or motivating them to go to the next level in building a relationship with our organizations.
We need to see our fans and followers individually, just like we would our friends, and address them as such. We need to do more than share news, vids and pics, or worse only ask for money. We need to provide a reason to call to action and get them working on our behalf. How that is done will be different for everyone of us, but it should be the goal of all of our social media strategies.
Social media is more than a presence. It’s an organism, living and pulsing with interactive life.
It is about engaging, collaborating, empowering, authorizing, motivating, stimulating, challenging, supporting, validating, bonding, communicating, sharing, inspiring and gathering. It’s a relationship between you and “one user” at a time. Stay invested and keep the flow of interaction swirling.
This great website site project, Care2 , helps you to be active in your desire to make a difference in your home, your community or global society. It’s uniquely structured a lot like a Moroccan bazaar: A little bit of everything for everybody.
You could focus on promoting a cause that you are passionate about to your friends, your soon to be friends or other members. Members and others can search causes categorically or you can customize your causes specific to your interests, creating a ‘home page’ of causes or requesting a newsletter to be designed for you with information on just those causes you follow.
Members can also take a more personalized approach, finding valuable information on their health issues, ways to live a greener lifestyle, parenting, spirituality and conscious consumerism.
My favorite part of the website is the petition page. Members can set up fundraising, advocacy or cause promotion pages that activate members and friends to support their movement. Here one can also post news stories about their cause, write blog entries specific to their causes mission, or join/start groups supporting their efforts.
Care2 also has a social networking page devoted to friends, status feeds, e-cards, and other group minded activities.
And if that wasn’t enough, Care2 also has a special “deals” page, taking advantage of Groupon, Living Social and other marketing networks, offering socially conscious deals on products, and services.
And all of this is wrapped up in something called Butterfly rewards, which members can earn through their site interaction activities and redeem (give to) good causes online.
There’s a lot going on here.
Care2 is also proud to declare their status as a B Corporation. According to the B Corporation organization website, Certified B Corporations are a new type of corporation which uses the power of business to solve social and environmental problems. B Corps are unlike traditional businesses because they:
- Meet comprehensive and transparent social and environmental performance standards;
- Meet higher legal accountability standards;
- Build business constituency for good business
1. Take and pass the B Impact Ratings System (Found on their website). This sets a benchmark for social and environmental impact for good companies.
2. Adopt the B Corporation Legal Framework to bake the mission of the company into its legal DNA.
3. Sign a Term Sheet that makes your certification official.
For more information on how to become a B Corp go to http://www.bcorporation.net/become
Kind of like the “Good Housekeeping Seal of Approval” Or the UL Certification, the B Corp organization is hoping to create a select rating and approval system to help consumers decide which companies are focusing on social good. According to the B Corp website, only one company in Connecticut has sought or received certification.
Care2 become a B Corp?
Most nonprofits experience a significant lull in donations and donor activity in the months of January and February. The post year end doldrums.
Donors are slow to give, having distributed their 2010 charitable contributions during the ebullience of the holiday season.
Consumers are recovering from gift purchases.
The weather makes for hermits, with snow, ice and early nightfall urging more indoor, stay at home activities.
And snow birds have fled for warmer climates, leaving their local neighbors and friends to fend until spring.
This is the perfect time to grow your philanthropy program!
No other time in the calendar year do you have the potential to capture your audience’s undivided attention.
With all of the inactivity your donor and prospective donor is engaged in, you can offer a variety of options to help keep them entertained and informed, from the comfort of their warm living rooms.
- Give them good reading for a cold winters night. January and February are the perfect time to send out newsy information on your group, your past success, your future plans. Make sure your communication is meaty and news worthy, capturing the weather dulled eye of your constituency.
- And to make sure those e-newsletters get to the right place, this is a perfect time to clean up your database. With the reduced number of donations being processed and less visits to be made, your staff should spend time tidying up. Use an email verification software provider or staff can correspond and validate emails themselves. Capture address and phone while you are at it.
- While you’re assessing, audit your grant programs, ensuring that you are on track with grantors expectations. Send love notes to all your grantors, with New Year greetings and a true note of appreciation for what their funding has provided to your clients/mission.
- Spruce up your website, e-newsletters and social marketing plans for the coming year. Increase the frequency with which you are sending e-notices on your organizations marketing efforts, driving traffic to your newly spiffed up site.
- Your staff has unique insight and talent, let others know! Identify media outlets and negotiate opportunities for your staff to contribute articles or podcasts on activities of interest, connected to your mission. A schools newsletter might appreciate a guest blogger or author writing about the importance of home support in education. A local grocer might find an article from an expert in the field of nutrition, valuable in their marketing to their customers. Nows the time to get those pieces written and published. And don’t dismiss national journals. They need good writing too.
- Lay the ground work for your spring appeal. Collectively send out notice to your annual donors, giving them insight and a sneak peak at your case for the spring and summer months.
- Train your board. Your board meets regularly and has clearly defined agendas. Make the January or February agenda one that focuses on philanthropy. A little bit of elbow grease and knowledge sharing by the board, will prepare them for an active and engaged year.
- If you are planning a feasibility study, plan to launch it now. Most study participants can be reached by phone or online, so travel is less necessary. Staff has more time to devote to feasibility study efforts. And the sobering months of January and February will flavor the feedback from your constituents, providing a more realistic and conservative view of your organizations ability to raise those funds through a campaign.
So in my last post we talked a little bit about Passion in your Board being the driving force for Philanthropy. But we are getting ahead of ourselves. Lets bring it back to the beginning.
In order to be open to new ideas, its essential we frame our own perspective on the boards involvement in fundraising.
Whats important to know is why bother? We all know that it is often easier to just do it ourselves. The board asks too many questions, is too resistant. Doesn’t believe, isn’t invested, doesn’t even give themselves. They are too judgemental, demanding and disconnected. They are naive and lack the fundamental education to be effective. They are more interested in the type of potatoes to serve at the next gala, or the color of the napkins. Maybe what time to tee off at the golf tournament, or whether its a scramble or best ball format.
Is this how you see your board?
A board’s legal role is to govern and act as fiduciary authority for the nonprofit organization. By their position, their involvement in fundraising is expected. Additionally, their presence on your board puts them on stage. The community is watching. If the community sees a board not raising money for the organization, then the community sees an organization that matters little with regard to their own donation. If the board isn’t involved, then why should they be. Board involvement in fundraising (not only giving of their money but being involved in raising it) validates the nonprofits mission. Nothing will kill an NPO faster than an invisible board of directors.
Also, no organization is an island. It would be virtually impossible for one Exec Director and a fundraising staffer to go out and raise all the money needed to survive. Its a Sisyphean endeavor. But with the board invested AND involved we have tripled and quadrupled our opportunities to get the job done. The network of your board and their networks network, act as a funnel flipped on its side to share the burden and increase the return.
Legal accountability, organizational validation and increased outreach/expanded return, three solid reasons why getting your board involved is critical to the success of fundraising in your organization.
So if its this important, then why cant they get out there and help?
Well here is the reason. And you’re not going to like it. Maybe I’ll lose my followers at this point, but the reality is:
Most board issues are not about the board, but about us.
There, I said it. And for those of you still reading, here is why.
If asked, here is what board members will say about why they are resistant to getting involved in fundraising. This is not an exhaustive list by any means, but it is a good representation of some of the most commonly heard complaints:
Too embarrassing (no skill)
Not aware what they were signing up for
No money themselves
Fear of rejection
Or fear that they are asking too much of someone, something the other can’t part with.
Lack of confidence in plan, process, person, organization
I had a board member say to me once, she would rather shrivel up and die, than ask for money. That’s hard core resistance.
What they say and what they feel are actually two very separate things, but connected. Most boards resist fundrasing because we have not done our job in leading and administering the fundraising effort. We too often lack concrete goals, lack clarity in board roles, we offer hazy expected objectives/outcomes of their efforts, we develop poor organization of the donor pool, we lack research on prospects, we have ineffective communication of organizational success, and so on and so forth. When they say its overwhelming, we have to ask- Are we being clear and concise in our goals? Is the prospect information simply understood, specific and relevant? Is the process organized and direct, with concrete outcomes, strategy and actions steps? Do we have valid measurements to share? When they say they are embarrassed, have we done our job in bringing the mission into the board room, developing passion, choosing the right board members? I can hazard a guess that the early board members of Susan G. Komen Foundation were not embarrassed about fundraising, as they had the passion for the mission, they were the right people for the job.
Being responsible for our board not fundraising doesn’t make us bad or not worthy of support. It does make us take inventory of our internal operations, our strategy, our board development and our leadership, in developing the best possible framework for the board to fundraise within. And thats were our control comes into play.
In my next post we will talk about some of these controls, starting with developing our board of directors to be an engaged, passionate board.