Tagged: fundraising

SHIFT: Meeting Corporate Philanthropy Where It’s Headed- Corporate Social Responsibility

What is Corporate Social Responsibility?

And more importantly, why is it an important part of our conversation in discussing our relationship with corporate partners in philanthropy?

The reality is that Corporate Social Responsibility is an emerging field. It is a very broad and evolving area of development for corporations and not for profits alike, a new terrain for which maps are much needed, but often are imprecise.

It has a complexity that is only seen in the emergence of new ideas and systems , a nucleus of thoughts, practices and evidenced based studies that are lending to the defining structure that it is becoming, following along the lines of chaos theory.   To a corporation, Corporate Social Responsibility (CSR)  has a multitude of components, too many to review in this one small post.  Its concept and its practice is complex,  often disjointed and, currently, most often reactive.  Divergent views and information overload is nowhere more apparent than in the field of corporate social responsibility. Each company is different, each with its own challenges, corporate culture, unique set of stakeholders and management systems. Each with its own view and opinion and strategy.

But amid this swirling pool of CSR anti-matter, certain agreed upon norms and standards are being established. The World Business Council on Sustainable Development makes this statement on defining Corporate Social Responsibility:

Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large

And this from an MBA textbook on defining corporate social responsibility:

Corporate Social Responsibility  is the decision-making and implementation process that guides all company activities in the protection and promotion of international human rights, labor and environmental standards and compliance with legal requirements within its operations and in its relations to the societies and communities where it operates. (Lehigh University, College of Business and Economics)

Two very nearly similar definitions. We are getting close to a commonality of expected beliefs and outcomes, among everyone involved in defining CSR.

Despite its complexity most corporations practicing a CSR culture, administer and measure their CSR programs along these three areas:

External Business Practices: How the corporation does business.  Who they compete with, who they partner with, their supply chain, their products, their distribution lines  and the impact their business has on society.

Internal Business Practices: Their corporate governance, their corporate policies, investments, ethical balance structure and the impact their business has on their employees

Impact Partnerships:  How they respond to societal issues that specifically impact their business practices, both internal and external and who they partner with in doing so.

Secondly, most corporations will agree that the measurement of these are based on three bottom lines:  Financial bottom line outcomes, Environmental bottom line outcomes and Social bottom line outcomes. This is called the triple bottom line.

Defining 3BL

For our role, as nonprofits seeking to shift our approach in securing corporate funding, it is essential to know and understand the core concept, terms and definitions on CSR as outlined here. Our ability to engage in an educated dialogue about our partners corporate social responsibility is critical to our successfully defining a partnership that meets both our and their needs.

CSR HISTORY

Let me take you through a quick history on corporate social responsibility. Some may think it’s a new idea, a fad or a recent breakthrough in thinking. But it goes as far back as the late 1800’s. Evidence of corporate socially responsible practices among industrialized corporations can be found in some of our most familiar company names. For instance, take the Sears Roebuck Company, a company that was near bankruptcy when Julius Rosenwald, joined the company in 1895.

During his tenure as vice president, treasurer and then president, Rosenwald grew the company from a failing $750,000 a year corporation to over $50 million.  As part of his growth plan, Rosenwald invested a lot of Sears’ money into society, specifically agriculture. Rosenwald understood that the growth of Sears Roebuck was wholey dependent on the growth and wellbeing of the company’s customer- the American Farmer and its field hands. And so he invested in his company by investing in his customer, through their societal, educational and family needs.

Why Rosenwald did this was not ‘termed’ corporate social responsibility until 1953 with the publication of  the book ‘Social Responsibility of Businessmen’ by economist and college president Howard R. Bowen.

But still the term languished, without much fanfare for about a decade, until the phrase was reinvigorated in the 60’s and 70’s around the time when big international companies faced anti-corporate sentiments because of environmental and human rights issues. In fact, companies faced large scale boycotts of their goods and services to force change among corporate practices affecting society and the environment.

Through the 80’s discussion of the concept of CSR grew. During that time, most socially responsible behavior was positioned as a philanthropic activity based on a company’s fixed budget that was allocated to support nonprofit organizations – mostly doing so to “look good”. These funds were sometimes allocated to many organizations  with the idea that to satisfy as many interest groups and to gain as much visibility as possible was a beneficial goal. The commitment was usually short term and restricted to making donations that were heavily influenced by the wishes of the senior management of the organization, and mostly to bring about a marketing position through brand awareness at nonprofit events.

Then in 1989, Ben and Jerry’s distributed the first ever Social Responsibility Annual Report. People took notice, because it authentically calculated Ben and Jerry’s  business practices and policies that lead to meaningful outcomes for society and the environment and to bottom line financial benefits to the company and the communities it supported.

Academic exploration, corporate research and charitable interest in CSR began to escalate at a rapid rate. In 1992 the Earth Summit in Rio was a key moment in the evolution of CSR. At this Summit, it was reported that “the level of corporate involvement in the summit was unprecedented, unlike anything ever seen before, with a coalition of 48 companies coming together to establish a new coalition, the Business Council for Sustainable Development (BCSD)”. This coalition placed the academic and financial exploration of  CSR culture on the map in a way now other group or company had been able to do before. The BCSD would later become the World Business Council on Sustainable Development (WBCSD) which continues to be an authority in CSR and have tremendous influence on the corporate social responsibility stage.

Since that time, corporate social responsibility as an essential and important business practice has moved from discussion in the cubicles of most corporations, to a presence in the board room and a position on the balance sheet of almost all company’s large and small.

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

INFLUENCES ON THE NOT FOR PROFIT SECTOR

The recession was a wake up call.

Many nonprofits were left high and dry when their sole funding stream, gov’t line items, grants or contracts, began to disappear. Many scrambled to pressure the feds, others sought funding elsewhere. Some sadly closed up or, if they were lucky, merged with a similar organization.

Relying too heavily on one form of funding is a death knell. Diversifying funding is essential to nonprofit sustainability. In the recently released 2010 Nonprofit Fundraising study by the Foundation Center, organizations raising over $3MM annually did so because of their diversified funding streams. Over seven different funding vehicles were used by over 73% of those in the $3MM plus group. How many funding streams are you accessing right now? Corporate giving is an important part of those streams.

Another influence on nonprofits, peeking their interest and attention toward new corporate philanthropy, is the overwhelming BUZZ on corporate social responsibility, which has not been missed by these organizations. This is making them question their approach and strategy and reformulating to meet the new corporate perspectives. Additionally, many nonprofits are now finding themselves being denied funding from previous corporate partners, many of whom they relied on for significant help, because the companies in question are realigning their giving in a more unified and strategic fashion with their CSR model.

Finally,  bad information being disseminated and lack of research on corporate giving among the nonprofit sector has a negative influence on our thinking and planning.  Corporate giving is not about marketing.  Neither is it influenced by an ‘obligation’ the company feels to society.  And if we went off and approached our corporate partners with this in mind we would be dead in the water before we got to the closing statement.

It is an investment, not an obligation; a partnership, not a market approach. And it is directly tied to their business goals.

Up tomorrow: Defining Corporate Social Responsibility to understand process, policy and approach

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

THE INFLUENCE OF CORPORATE SOCIAL RESPONSIBILITY ON CORPORATE GIVING

You’ve heard me use the term Corporate Social Responsibility (CSR).  It is the increase in the number of corporations attemping to define and implement their CSR that is also influencing corporate philanthropy.

Corporate Social Responsibility is not a new concept. It actually has been an ‘activity’ of corporations for over 100 years. We’ll explore its roots a little further into this series.

But it is the phenomenal growth of CSR over the last twenty years, both in number of companies embracing its tenets as well as companies creating a more deeply integrated CSR strategy in their business model, which has been a driving force in the way corporations are defining and implementing their philanthropic activities. Essentially, CSR is a strategic shift away from ‘giving to’ charities, toward  ‘investing in’ opportunities with charities, opportunities that align with their business goals.

What used to look like this: A corporation giving in a variety of ways to a variety of causes that were defined primarily by societal and community pressures…



Begins to look more like this: a turning inward to investigate the corporations basic social, brand and financial benefits and then identifying a unified cause that aligns and supports beneficial outcomes to those measures.

Does this mean there is less for us?

Absolutely not, the amount of corporate giving is increasing, its just the segments in which we will be viable partners are different.

Hear from Jerry Lee, co-founder of Newton Running, talk about his desire to express social responsibility through the vision and mission of his companys philanthropy.

Up tomorrow: Influences on Nonprofit Organizations in seeking more sustainable corporate funding.

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

THE INFLUENCE OF BUSINESS CRISIS ON CORPORATE GIVING

You may recall that BP nearly wiped out the Louisiana and Florida coasts last year following the Deepwater Horizon oil disaster. Over the course of weeks over 200 million gallons of oil spewed into the Gulf of Mexico. The disaster may have been one of the worse ecological assaults in history.



Ultimately, BP was assailed but not defeated by the oil spill. Their stocks plummeted, protests and boycotts ensued, heads of divisions lost their posts.  But BP weathered through, their stocks rebounded and their reputation is slowly and delicately on the mend.

In their favor was over 25 YEARS of brand management through Corporate Social Responsibility. At a Corporate Social Responsibility Conference at Boston College Center for Corporate Citizenship in the early 2000’s, BP was a highlighted  speaker and won awards for their ecological philanthropy programs. We might laugh now, but that investment saved them from collapse.

The need to build emotional trust, a bank account of goodwill with society, is an important strategy in corporate governance and a significant influencer on a corporations philanthropic efforts. This bank of trust will allow the company who has been the cause of, or has exacerbated, a crisis, to make withdrawals and weather it through.

Bad business will happen, and that knowledge drives corporate giving.

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

THE INFLUENCE OF GOVERNANCE ON CORPORATE GIVING

In addition to the shifts and perspectives being discussed and implemented in the business academic world, we see advancement in environment surrounding business governance as well.

ISO 26000 was implemented September 14 2010. For those not familiar, The ISO –a network of the national standards institutes of some 160 countries that develops and coordinates standards of operations for business lines. The standards govern management of Quality, Risk Environmental and now Social Responsibility. Simply put, these standards are applied to a company’s business practices, who actively engage in pursuing compliance. When they do so, they are awarded an ISO brand of approval for achieving and maintaining these standards. These are highly coveted and companies who achieve them make them visible.

In the words of the ISO itself “The world demands social responsibility. ISO 26000, the first internationally approved standard to provide guidance on social responsibility, is a global response to this global challenge.”

The ISO 26000 is intended to outline for companies:

  • concepts, terms and definitions related to social responsibility;
  • the background, trends and characteristics of social responsibility;
  • principles and practices relating to social responsibility;
  • the core subjects and issues of social responsibility;
  • integrating, implementing and promoting socially responsible behavior throughout the organization and, through its policies and practices, within its sphere of influence;
  • identifying and engaging with stakeholders; and
  • communicating commitments, performance and other information related to social responsibility.

This is the first time an organized set of standards has been produced and disseminated for companies to follow. Thought leaders believe this will be game changing for companies in strategizing and developing their social responsibility.

ISO 26000 is a response and a governance influence on corporations. IN part it may stem from the multitude of influencer’s outside the corporate circle. When JP Morgan Chase investors assemble to vote on a “Genocide Free” investing policy for the company, the pressure to conform and perform to standards is undeniable.  Loss of trust by the consumer, civil society activism and Institutional investor pressures, all bear significant influence on corporations today.

VIDEO: Highlights on ISO 26000 from inside sources            

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.

Kill me with just one click….

“Hi, thanks for following. Please support us”, read the direct message recently from a new twitter friend.
I dutifully clicked on the link, which transported me to the online fundraising portal Justgive, where I was presented with a picture of a sick infant, a hoped for amount to be raised ($500,000) and a donate button. Nothing more. No mission statement, vision statement, no list of projects. No paragraph on what the org does, where they reside, where they operate. Nothing to stimulate my interest or inspire my passion. Nothing but a Just Drop Your Money In The Box On The Sidewalk appeal.
What have charities been driven to? Who told them this type of Fundraising was a good idea?? Someone needs to be held responsible for the demise of the charitable solicitation.

We hear much about the indecency and greed of the American corporation. It is characterized as a company’s lack of soul, its depersonalization of its customer, its demoralized expectations of its sales staff in pushing its products on the consumer. The evil empire of corporate greed, where money is more important than the moral fiber of its relationship with its market.
I think our nonprofit industry needs to check itself here.

When asking for my money is the first thing an organization does when meeting me, we’ve lost our center. And that organization has lost its ONLY chance to win me as a supporter. I’ll never look at them again as more than a beggar on the street. Their programs, should I ever learn what they are, will be tainted with the belief that, “hey they just want my money anyway.” I’ll never pass their work on, ask a friend to help or volunteer to advance their mission. Because as far as I am concerned their mission is to get my money.

Please, stop the madness. The internet is an amazing and fantastic tool. When used as an extension of the cultivation and solicitation and stewardship we practice everyday, the relationship building that is essential to our sustainability, it can be incredible. However, as with all powerful tools when used incorrectly or recklessly, when wielded with disregard for others, when seen as nothing more than a means to an end, it can kill our efforts with just one click.

Ethical Bonus Structure for Fundraisers

Image: jscreationzs / FreeDigitalPhotos.net

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!
If managed correctly, with sensitivity, a fierce determination to goal achievement and ongoing support- it can only be an ethical approach.

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.