Tagged: charity

Patience and Trust

BEST FRIENDS ANIMAL SOCIETY

Twenty-two of the dogs most in need of care after being rescued from Michael Vick’s horrifying dogfighting ring were sent to Best Friends Animal Society for rehabilitation. Each of those dogs was special, but from the start there was a standout: Lance. The best dog trainers in the world worked with the 22 dogs, and over time, each passed the court-ordered Canine Good Citizen test and was placed in a loving home. Except for Lance. Even though a wonderful family was interested in adopting him, he was not allowed to leave until he passed his test, and he had so much anxiety that every time he took the test, he would freeze….

Best Friends Animal Society 

SHIFT: Meeting Corporate Philanthropy Where It’s Headed- Influencers

THE INFLUENCE OF CORPORATE THOUGHT LEADERS ON CORPORATE GIVING

Corporate philanthropy has seen some radical shifts in the last twenty years. We may just now be drawing concern about what is happening, where it is headed and how do we stay engaged as these changes evolve?

To understand the shifts as they appear, we need to look at some key factors, one being influences on the corporate sector.

Let’s take a look at thought leaders in business and how their rockstar status and larger than life influences have impacted the patterns we are experiencing with corporations as they support causes and charitable efforts.

No conversation about corporate giving could be complete without a reflection on the impact of Milton Friedman.

Milton was a Nobel Prize winner in economics. He was a distinguished professor at the University of Chicago. He was the author of the classic best-seller Capitalism and Freedom and a long-time Newsweek columnist.

Milton Friedman was one of the greatest and most influential economists in the 20th century. This certainly qualifies him to be considered a business rockstar. He was also an unapologetic curmudgeon, an outspoken and controversial thought leader on all things business.

He was vehemently against corporate social responsibility as an obligation of business. He held that giving by a publicly held corporation in the name of “social responsibility” was a form of theft.

But Friedman was not against all corporate giving. Corporate philanthropy could be justified if it served a business objective—improving employee teamwork and motivation, strengthening the marketing of a company’s brand, enhancing financial outcomes. He also had a less emphatic position on giving by privately held companies. He thought that was a decision best based on the individual or family owning the company, as it was their money to give away.

Milton was a multi-dimensional man. Besides being a powerful voice in the business sector, he was also a great philanthropist and a tremendous advocate of philanthropy.  He was not alone

Alfred P. Sloane, another uber-chief of corporate discipline, he was born in New Haven Connecticut, educated at MIT and graduated from there in just three years, as the youngest member of his class. Alfred was a long time President and CEO of General Motors, resigning to remain as their board chair until the late 1950’s.  He steered the corporation through some tenuous and deadly years of bad business, Nazi allegations, and revenue slumps.

He was not as eloquent a man as Milton, but he too felt philanthropy had no business being tied to business. He simply stated “The business of business is business.” And like Milton he was a prolific philanthropist. Because of his personal generosity, his name today is on buildings and foundations across the nation, from Sloan Kettering in New York City to the Alfred P Sloan Foundation, whose assets currently reach about 1.8 billion dollars.

Why is it important to have knowledge of these two giants of industry? Why should we abandon our cynicism and try to comprehend their position on corporations and giving? Because every MBA student leading or preparing to lead companies today, have at their hearts, minds and training, the words, vision and example of Milton and Alfred. And it is with this training today, that they are approaching the development of corporate giving strategies.

The apparent disunion in the perspectives of these two gentlemen, when it came to business and philanthropy, is at first perhaps perplexing. But it is not unusual. Their beliefs still hold true today.  Whether you agree or disagree with their perspectives, these men continue to have tremendous influence on the culture of business through their legacy.

SHIFT: Meeting Corporate Philanthropy Where It’s Headed- An Introduction

This is the start of a four week series on corporate philanthropy, based on research, best practices and personal experience from the field. We’ll keep it entertaining and packed with good useful information that will help you develop your own Corporate Giving program. To follow along, bookmark and check back daily, or subscribe to the blog using the button at the bottom of this page (left side).  But don’t just follow along.  Ask questions, challenge observations, make recommendations, share your own experience, invite friends to participate.

Many of us have been in the philanthropy industry for years….maybe even decades…and we have much to lean on when we think about corporate giving. We know it is changing, it’s evident around us, and we know it has evolved over time, through some pretty hairy and weird years, to some truly meaningful examples. I’m going to ask us to set all of that aside for the next few weeks.

Let me start with a short, true, story to help us understand perspective and prepare our frame of mind. This story came to me from a friend.
“Years back a group of scientists in New Guinea visited a tribe who believed their world ended at the river. After several months, one of the scientists had to leave, which involved crossing the river. Safely across the river, he turned and waved at the tribesman he had left behind. They did not respond, because they said they did not see him. Their entrenched beliefs about their world had distorted their perception of reality.”

But changing  beliefs can be hard, right?

Let me give you an example.

Look at this door panel of squares. Now stare at the X in the center and think circles. What happens?

The circles that appeared when you thought ‘circles’, are an example of a shift in your perception of reality.
When you change the way you look at things, the things you look at change.

That’s why, in this series on corporate philanthropy, I’m asking you to abandon your old beliefs, your old perceptions about what you think you know about corporate giving, and become open to new understandings. In the words of our old friend Stephen Covey: Seek first to understand.

This month of posts on meeting corporate philanthropy where it’s headed, will help us to understand the influences on corporations as they strategize their giving efforts. We’ll identify influences on the sector. We’ll connect with company  goals and needs, and explore key behaviors in winning partnerships.  Not winning in the Charlie Sheen way, but in the way that provides outcomes and benefits for both the corporation AND the nonprofit partners.

A busy few weeks, but worth the investment if you want to create sustainable, efficient and effective corporate philanthropy revenue streams.

So join in, ask questions, engage, share, learn, enjoy.

Raising money online: Fact or Fiction?

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.

Really?

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:

  1. Causevox.com (Beta)
  2. Changingthe present.org
  3. Connecttocharities.com
  4. crowdrise.com
  5. Donorschoose.org
  6. firstgiving.com
  7. Fundrzr.com
  8. give2gether.com
  9. giveo.com (Beta)
  10. Globalgiving.com
  11. Independentcharities.org (givedirect.org)
  12. Jolkona.org
  13. Jumo.com (Beta)
  14. justgive.org
  15. mtdn.com (MakeTheDifferenceNetwork)
  16. networkforgood.org
  17. Pledgie.com
  18. Razoo.com
  19. sixdegrees.org
  20. tuttidare.com (Beta)
  21. yourcause.com
In addition to these, I discovered four more sites currently in beta to be launched this year (2011), including one called ‘Supporter Wall’ – I presume to model itself after Facebook’s Causes (which we now know works so well, lol)
This list is in no way exhaustive, nor as I said scientific, so all you data wonks, don’t go all geeky on me 🙂

Some observations.

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.

Slow Money…Salvaged Soul

Go here

Slow Money

Amazing concept and yet so…..organic? familiar? basic?

Principles of the Slow Money Alliance include:

In order to enhance food safety and food security; promote cultural and ecological health and diversity; and, accelerate the transition from an economy based on extraction and consumption to an economy based on preservation and restoration, we do hereby affirm the following Principles:
I. We must bring money back down to earth.

II. There is such a thing as money that is too fast, companies that are too big, finance that is too complex. Therefore, we must slow our money down — not all of it, of course, but enough to matter.

III. The 20th Century was the era of Buy Low/Sell High and Wealth Now/Philanthropy Later—what one venture capitalist called “the largest legal accumulation of wealth in history.” The 21st Century will be the era of nurture capital, built around principles of carrying capacity, care of the commons, sense of place and non-violence.

IV. We must learn to invest as if food, farms and fertility mattered. We must connect investors to the places where they live, creating vital relationships and new sources of capital for small food enterprises.

V. Let us celebrate the new generation of entrepreneurs, consumers and investors who are showing the way from Making A Killing to Making a Living.

VI. Paul Newman said, “I just happen to think that in life we need to be a little like the farmer who puts back into the soil what he takes out.” Recognizing the wisdom of these words, let us begin rebuilding our economy from the ground up, asking:

* What would the world be like if we invested 50% of our assets within 50 miles of where we live?
* What if there were a new generation of companies that gave away 50% of their profits?
* What if there were 50% more organic matter in our soil 50 years from now?

Wow. Finally, a better way to measure our success as a society.


Philanthropy as business

Too often we are drawn to think about philanthropy and charities in terms of a softer, kinder model, less business focused. Because the product is not widgets, financial gains or consumables, but human caring, it is tempting to believe the business of philanthropy is just as soft and touchy/feelie.
Don’t get me wrong. I’m not being snarky about the work of charities. My heart is where they operate. I can think of no greater calling than to be working to help mankind. Truly. And I also believe that working to help mankind is not solely relegated to charities. Many businesses in the course of their work can, and have, effectively positioned their business model to acheive gains in their financial standing AND help mankind.
And so I believe charities can balance that concept as well. By this I mean, charities can help mankind and acheive significant financial gains. To do so, we need to think like a business. Just as business needs to think like charity to acheive their mutual ends.
A melding of concepts, could this be an evolution for two very seperate frames of thought in the MBA world?