By Melanie Cecarelli
When I’m in a social setting and people learn I’m with a nonprofit consulting firm, it’s like being a CPA being asked a tax question or a physician being asked, “Does this look infected to you?” I usually get questions or comments about how nonprofits are missing an important feature when it comes to their donors, and that is the relationship.
A colleague shared their recent experience with me. They contacted a nonprofit three times within a three month period regarding a restricted gift they wanted to make to the organization. Now one would think the organization would jump at a non-solicited gift coming across their desk. There was no ask, no cultivation or stewardship involved. It was theirs for the taking. Then why would they let the offer stand idle? Is it because the nonprofit didn’t understand the need and the importance of a good donor relationship?
As nonprofit leaders, you know it takes time and energy to cultivate and build a relationship with a donor, especially one that you hope will grow into a major gift. Little stumbles like this have a lasting impression. Remember the saying it takes years to build a good reputation and only takes a minute to ruin it? Think about that when you ignore your donor or just see them as a means to an end to help you get achieve your philanthropy goals.
So, how do you think this story ends? Was the donor persistent in trying to make their gift? Did the organization finally contact them? And what did the organization do after the gift was received? Sounds a bit like a cliffhanger for a TV serial. At the end of the day, it’s up to nonprofits to embrace donors for their value and your worth…but that’s a topic for another day.
Ask yourself these questions.
How do you view your donors? Are you treating them as a one collective group? What are you doing to cultivate your repeat donors from a transactional into the translational relationship, especially when comes knocking at your door? Do you know the art and science behind the cultivation process?
It’s much more than frequent communications and the request for a gift. It’s about connecting the donor to your organization, and not to what you think is important to you but what is important to them and being sure it aligns with your overall goals. A donor suggested a “buy a brick” concept for a walkway at an art gallery and the program director ran with it. The few donations they received were outweighed by the actual cost of the materials and labor to install, and didn’t align with the gallery’s overall development initiative. Yes they had donors, but at what cost? And were these opportunities that could have been cultivated for something else?
How do you know what’s important to your donor? By listening and connecting with them, and not just once but multiple times. It’s not about coming out of the gate and asking for their gift, but understanding what motivates them to give to your organization. Are they interested in the outcomes or more interested in how the program operates? Do they want their dollars going to a program or are they more interested in capital improvements or longevity through an endowment or planned gift? It’s all about helping the donor grow alongside your organization. Cultivation.
And most of all, be responsive to your donors. Don’t keep them waiting especially when they come to you with a gift. Opportunity may knock more than once, but it’s not going to keep on knocking until you are ready to answer.
By Melanie Cecarelli
With the holiday season upon us, how many emails, text alerts, and Facebook ads did you receive for Black Friday and Cyber Monday sales? And now there’s “Give Back Tuesday”, a way for nonprofits to maximize year end giving with donors.
On “Give Back Tuesday”, I’m struck by the number of appeals that are flooding my inbox and social media pages. I think I received as many requests on “Give Back Tuesday” as I did for all the store and online sales. Many are from friends or colleagues who perhaps sit on a particular nonprofit board or maybe have given to the organization in the past.
Does it work? Some of the organizations are brave enough to post their progress toward a goal, and there’s little to no movement for donations. One organization tried “Give Back Tuesday” when it was first introduced as a concept. Out of the hundreds of emails and posting sent to their donor and membership base, only one gift was received. Why? Because organizations are reaching out to their donors who in turn are reaching out to individuals who have little or no knowledge of them. And a short 140 byte message isn’t going to move someone to give ‘sight unseen’ to your cause.
So ask yourself, “Is the squeeze worth the juice?” Are you putting time and resources toward an appeal that isn’t yielding results?
Like most things, one organization may have tremendous success with crowdsourcing and everyone jumps into the game. As a friend once said to me, “You need to know how deep the pool is before you jump in with cement shoes”. And that goes for “Give Back Tuesday”. How big is your social media footprint? Are these individuals who are connected to your work and mission or are you just jumping into the pool without knowing your audience? And what is your strategy for keeping the one or two new donors connected to your mission.
Many organizations see “Give Back Tuesday” as a way to close the gap for their overall development fund. While it may work for some, more attention needs to be given to creating a culture of philanthropy that engages donors and prospects throughout the year. Loyal donors are going to respond to your annual appeal and the cultivation you work on throughout the year. You don’t want to wait to year end to close gaps. The time to plan for next year is now.
So, how did Give Back Tuesday work for you?
I was lacking motivation for this weeks blog post, as I tapped away on my keyboard under the weight of research reports, feasibility interviews, resume reviews, re-branding our website, launching the tech start up Donorfull….. I needed something to fire me up.
And then it hit me.
I’m reading idealist.org’s latest report on jobs. According to their recent Job Seeker Report for 2012 , 68% percent of nonprofits are seeking Program staff while only 36% of nonprofits are seeking Fundraising staff.
And there it was. Really? Program staff gain twice as much height on the needs scale for nonprofits filling positions as fundraisers? So explains the current financial state of the nonprofit sector.
When fundraising is relegated to the ‘nice to have, but first focus is that we help people‘ position within the organization and not the ‘essential revenue stream for our ongoing survival and growth, show me the MONEY!‘ position it should be, then the whistle you hear is not the finish line of success, but the train of demolition.
Now, possibly, it could be that the nonprofits who were interviewed as part of this study, are fully booked and have the BEST fundraising teams imaginable. Maybe their philanthropic coffers are over-flowing and they have to turn donors away to sister organizations down the road, just because they don’t want to eat all the cookies.
Possible, but unlikely.
In our experience, the number one issue we hear from our clients is “we need good fundraising staff and we need more of them”!
And I have to imagine that our clients are not the only ones. I always respond the same. Fire More, Hire More.
It’s a simple equation, that moves you beyond the agony of wrestling with under-performing, poorly experienced or overworked development people.
So my question is, how long do you suffer, doing the same thing, operating the same way, before you see the light? What has to happen to bring the solution to focus- that better and more fundraisers equals more money equals more programs and clients served?
Innovate your organization by flipping your staffing on its head. Hire more fundraisers than program staff and email me the results. I want to know.
“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.
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.
Ever try to coordinate a meeting between yourself and another person? Between you and two other people? How about between you and five to ten others?
What a flippin, nightmare!! Everyone’s schedule is fixed and no one can bend.
What makes me crazy about times like that, is the obliviousness to missed opportunities it represents. People who are rigid with their schedules, are rigid in other areas as well. Strategy and Relationships among them.
If we hold too TIGHT to our documented plans, so much valuable stuff is allowed to float by like flotsam and jetsam. And you lose.
Let go and grab the great treasures. They won’t float by again!
I was twittered about a direct mail letter someone received from St Jude’s Hospital, asking them for a renewal donation. This mass produced letter had a return tear off, preprinted with three separate boxes, in which the recipient was to mark off which donation they would like to make. We all get them. Usually they say $25, $50,$100 or some such combination.
In this case, the tear off read $0, $0, $0. The twittee indicated the letter made the same mistake, asking for a $0 donation like last year.
Clearly this is a mass produced request. Nonprofits like St Judes are the Big Box Store of the nonprofit world. Processing and manufacturing donors in mass production. Quantity over quality. They have to, to feed their gianormous budgets for personnel and S+E costs.
We all use mass mailing companies. What was most objectionable, in this case, is when the twitee called St Judes and questioned the mistake, the hospital said yes it was an error, the mail house did right by them by rebating some money for the production, but the hospital had no intention to follow up with the donors who received the incorrect request, there were just too many.
I dont know about you, but I would NOT want to feel like I was one of so many that a phone call or follow up letter could not be sent. If my dollars are so small to be insignificant enough to justify correction, then I’m not giving to the right organization.
I would bet among those who received the incorrect letter, and were NOT contacted in follow up, were some who would have and could have been life long and major donors potentially sharing millions, if given the attention and respect a letter or phone call would have cost St Judes.
We have come too far from what npo’s were- local, personal, compassionate, respectful companies, helping people with money and intention connect with need.
Never, EVER let your size dictate your stewardship. Find a way or go local.
Don’t you hate that? That’s my current state. No internet access from my home network.
So that’s a predicament. The problem is how to stay connected.
“Focus on identifying and solving the problems, not the predicaments, for problems can be mastered.”
Too often in life, we lose sight of what we are dealing with- a predicament or a problem.
A predicament is something over which you have no control and for which you can have no affect on changing. Internet down. Rainstorms. A spouse that is an early riser when you are not.
We lose sleep over predicaments. We worry and grow irritated over predicaments. We can’t fix a predicament.
But with each predicament comes associated problems. That we can fix! The problem I’m dealing with right now, over the internet down predicament, is how to stay connected. Many answers exist: library access, Blackberry, phone calls. Focusing on solving the problems surrounding the predicament, gives us more to work with, and in working with, maintains our sense of strength, empowerment and control. Calming us down considerably and giving us positive feedback on our competency and confidence.
I had dinner last night with a recently widowed friend who shared remarkable stories about her late husband, a man of conviction and gentle encouragement. He had a ‘can do’ attitude and would not allow anyone he knew to have the ability to succeed, to slack. Her memories included his often used phrase “yes, you can”. And he meant it.
And so I am blogging from my Blackberry. Its certainly not pretty nor easy- fat fingers and poor editing abilities will make the visual of this blog interesting. But I’m doing it and overcoming the problem that the predicament brought on.
It’s not that I’m so smart, it’s just that I stay with problems longer. ~Albert Einstein
Nonprofit fundraising has become known to the common masses for its ‘fundraising’ events and its sale activities. Talk to any layperson about being in ‘fundraising’ and they respond “Oh, you must be good at planning events!” or “I was never good at selling cookies”.
Events are commonly misunderstood. Possibly the misunderstanding comes from the saturation affect: the daily arrival of invites, ads and press releases on what black tie gala, or hayride and cookout is being hosted for which group, how much they raised or plan to raise, and who attended. The misunderstanding is that events are hosted to raise funds.
Too often the reality is, the money raised is minimal compared to the expense, the attendees learn little about the organization as beneficiary, and the event is seen as a burden on the supporter- an obligation that must be born to show support and that most donors would just as happily support the nonprofit in other ways, ways more lucrative and efficient to the nonprofits mission.
Disagree? See, as evidence, the recent results of the cancellation of such ‘fundraising’ events due to economic stress. One nonprofit board member, Nancy Jarecki, speaking in an article in the Nonprofit Times, observes “It’s kind of strange, when people are almost not required or obligated to get that event invitation in the mail, that expectation that they feel like they’ve got to do it, they still write the check,” Jarecki said. “They tended to still give, but on their own. They didn’t have the pressure of buying a $1,000 ticket”
In the same article, Carol Kurzig executive Director of the Avon Foundation notes “In general, in our experience, individual donations are holding very well and have increased significantly this year”
And in a study conducted in 2007, the nonprofit watchdog group, Charity Navigator concluded “…special events are inefficient in comparison to overall fundraising activities” and “Many health charities would benefit from shifting their fundraising focus away from special events.” Most disturbingly, the report went on to discover “A large percent of charities are reporting their special events data incorrectly, with no recourse from state or federal regulators.” But that’s a topic for another post, I digress.
So, the question then becomes- Why? Why are nonprofit leaders across the nation continuing to perpetrate this crime on the donating public? Why do they continue to reel head long onto the path of wasted money and large headaches in pursuit of raising funds, if the results are poor return on investment, bad donor feelings and a weak economic model in a stressful economy?
Unlike our corporate sisters, nonprofits have been indoctrinated into believing that they must perform to the expectation of the masses, allowing the public to lead the development and performance of the NPO, rather than driving performance and perception from their core product line. Public opinion sways management more than outcomes when it comes to fundraising. Maybe it’s because many fundraisers come from the service delivery field, where public need and opinion rightly DOES drive program. Maybe it’s because our Board of Directors often do not have sufficient experience in philanthropy to be governing such decisions. Maybe we just don’t know how to stop.
2. It’s easy
Okay, hosting events is not really easy. They’re a heck of a lot of work- volunteer coordination, set up, break down, mailings, registration tracking, and more mailings. And all of those decisions. Hours and hours of time and resources, for months on end, to produce a three hour event. But what makes them easy and attractive is the group nature of the solicitation. No one is on the end of the limb. No one is in the spotlight asking for the gift. The ‘ask’ is not from a philanthropic place, it’s from a sales place. And a sale is an academic activity, it’s understandable, it’s American. I give you this, you give me that. It seems fair. But compared to cultivating and building a relationship with a real person – mano a mano – to ask them for money, well bring on the flower choices and dinner menus. Let’s have a party.
3. It draws daily attention
Show me the society page that has picture upon picture of Mrs. Jenna Moneybags and the Executive Director of the We Need Your Help nonprofit organization with the head line “Years of Cultivation and Stewardship Pays Off: Large ask gifts WNYH organization with $100,000 for their children’s ward.” Valuable philanthropy just doesn’t get that kind of everyday publicity or pictures and smiles. It doesn’t market.
4. It feels good
Volunteers want to help. Planning events gives them something to do.
All of which, while being valid and understandable, still doesn’t answer the question why do we continue.
I propose we place a moratorium on all new ‘fundraising’ events, all expansion of ‘fundraising’ events, or even, the continuation of dying ‘fundraising’ events. The economy seems to be helping us do just that.
I next propose we educate our boards in a way that helps them become more effective in governing philanthropic decision. Let’s start with the wasteful nature of events as fundraisers.
In tandem, we need to provide academic educational opportunities and tracks of learning and growth for fundraising professionals. More academics on developing relationships, cultivating constituents, stewarding donors and less of the ‘how to host an event’ training is needed. And it needs to be qualified in a tiered way that allows the development of professionals along lines of experience, from entry level to experienced professional.
Finally, let’s develop a mental picture of what events can actually do for us: engage volunteers, bring awareness, and satisfy public perception. But they don’t raise money and so therefore are not ‘Fund Raisers’. If we build our events using these three core beliefs, I reason that waste will be reduced, donor market share will increase and philanthropic profits will rise.