Philanthropy

Strangers

I appreciate the post by Seth Godin today who discusses the dangers of relying on strangers to fuel your enterprise.  It reminds me of social sector organizations that are willing to invest significant organizational time and resources chasing grants from foundations and federal enterprises which they have no connection instead of speaking to their committed fans.  It is far easier to pin ones hopes to the unknown since the personal risk is minimal but the greatest reward comes from asking the most committed to increase their contribution.  Typically those who deeply support your cause are willing to think about transformational gifts versus an entity that does not run on emotion but rather measures it progress based on criteria and a mandate.  Where are you spending your time?

Preach what you know. Share when you have more than you need. Give when the opportunity presents itself.

Simon Sinek  
An interesting way to think about engaging your talent, treasure, time, and touch.  How do you decide when and how to share your talents?  What conversations are you having with your fans and supporters about how to engage their best?           

Pledge or Arm-Twist

A colleague of mine received a letter on an outstanding philanthropic pledge payment from a campaign that had wrapped-up over a year ago.  Apparently the advancement office’s records showed the donor still owed funds even though there had been no communication in over two years. 

How do you remind your donors about pledge payments?  Do you send an annual letter with an updated status?  Do you make a call to discuss the donor’s philanthropic budgeting and planning?  Do you visit face-to-face?  What is your leading practice for communicating about pledge payments?

Nine Innings

Baseball is one of the few games that is not predetermined by distance or time.  There is no clock to expire while the ball is in play.  Their is no final yard to keep a faster finisher with all the momentum from sweeping past a fading competitor.  You are guaranteed a final at-bat and if you can mount a rally the game goes on until you have been provided a final chance.

As the social sector sweeps towards its favorite season of solicitation in the form of end-of-the-year giving, it is a reminder that not all decisions about philanthropic engagement need to be driven by a calendar or a deadline.  Sometimes the game needs to play out.  Sometimes you need to let everyone get a last-at-bat before you can call the final score.  A cause’s time line does not mean it needs to be a donor’s countdown to commitment.

Family Foundations

Family foundations are an unique and organic enterprises.  They come in all shapes and sizes.  I have spoken to family foundation directors who share that the grants are awarded based on the board’s assessment of a proposal’s fit with the mission.  I have seen other foundations that agree on the total sum to be distributed and then allow each family member to direct an equal share towards their favorite causes.  Some foundations come very close to the self-dealing threshold where a member of the foundation’s board benefits from a grant by receiving tangible value in recognition of a grant.

Family foundation’s at there best are a shared experience center on achieving a philanthropic intent.  The purpose of the foundation unites the family and the outside directors.

Whatever model you are seeking funding from it is essential to understand the foundation’s (and sometimes family’s) level of functionality.  Grantees need to peek behind the curtain to see if the wizard is real or imagined.  Be willing to ask questions.  Search for information on Guidestar, the Foundation Center, or the Council on Foundations.  Ask past grant recipients about their experience.  Communicate directly with a family member or staff member.  Talk to your local community foundation or nonprofit center to get guidance.  Engage in a dialogue, be informed, and connect.  No two family foundations are the same so enjoy the exploration.

Philanthropic Giving: How much does a tax break really matter?

The Wall Street Journal has an article today discussing the Obama Administration’s budget plans. The proposed plan has a provision that takes the deduction rate for a charitiable gift down to 28% from 35% in 2011 for the wealthiest Americans. The article points to the fact that a $10,000 gift would receive a $2,800 deduction for the highest tax bracket compared to a middle calss family in the 15% tax bracket receiving a $1,500 deduction on the same donation.

Fundraising professionals list ‘a tax advantage/deduction’ at the bottom of the top ten list when looking at the primary motivation of an individual donor. Many nonprofit organizations list information on the tax advantages of making a charitable gift at the end of their fundraising materials. They speak about their programs and services, the people served, their successes. For the most part their is no difference in the tax deduction between qualifiying nonprofit A and B so it does not get discussed at any length.

The proposed deduction change will effect all nonprofit organizations equally, but suddenly the sector is talking about this being a disincentive to donors. The same organizations promote nine other reasons to give to their cause before the issue of deductability is breached. Additionally, the change in tax code is going to effect the larger national organizations more than the local nonprofit enterprise as majority of the largest gifts from the wealthiest individuals are concentrated in organizations that have the capacity and need to accept tens of millions of dollars.

I think those of us in the nonprofit sector need to be clear. If we truely believe that donors are motivated by the needs we meet, the quality and impact of our services, the personal commitment of our staff members, then we need to focus our energies in fullfilling our missions most effectively and efficiently. If we have not been walking our talk and the tax deduction is a major factor in the nonprofit sector’s ability to raise money then we need to take up our lobbying hats and have a say in our nation’s capitol.

WSJ article: http://online.wsj.com/article/SB123595480077405235.html

Lack of Giving


Not surprisingly the NY Times announced that donors are not giving as much to nonprofit organizations as they have in the past. They are holding back. I am working with clients who are experiencing the same downturn in contributions. Donors are recalibrating and making tough decisions.

The new focus in fundraising this year appears to be focused on supporting annual operating needs. The idea is that a $1 given today is worth a $1 (no more or less). The dollar is not going into an investment fund where it may be worth less in a couple months time. A general operating donation will have an immediate impact on a nonprofit organization. The programs and services will continue (at least for today).

With many people concentrating on surviving day-to-day. The mentality of donor’s intentions have shifted. Many nonprofit organizations have already taken the standard steps: salary freezes, vacant positions remaining open, contributions to employee benefit plans being reduced, volunteers filling critical functions. Now true contigency planning is taking place. What if we cannot even hold our special event? What if we run out of operating funds?

So what can nonprofit organizations do to stay in-touch with donors. The most successful strategies I have seen include:

  • Communication: Have board and staff members reach out to donors and supporters. Do not be afraid to call and express your appreciation. One organization recently contacted me four times in ten days using a combination of board and staff members. They were asking for an annual gift but the message was clear that participation and ongoing engagement was critical.
  • Extending benefits: If a donor is not able to give at the same level this year but has a history of donating consistently consider extending benefits that were associated with their historic level of giving. The quicker an organization shows a short-term memory the easier it is to disenfranchise a donor during tough times.
  • Make the donor an insider: I recently received an email that was sent to a select group 48 hours before the same email went to the general membership. This little touch made me feel like the organization had identified me as someone who it wanted to communicate with in advance. The information did not change but the presentation and timing made a difference in my perception of how the charity valued me.
  • Be transparent: Engage your members and supporters. Seek advice. Share the big decisions facing your enterprise. I worry more about the nonprofit organizations who are not communicating and sharing information on their status. Organizations that acknowledge their challenges gain more of my trust.
  • Refine and confirm your identity: A couple of my consulting clients have made a concerted efforts to review their core identity. Being able to speak to why their nonprofit is uniquely positioned to offer the services and programs that are at the core is more valuable than ever. Donors want to invest in organizations that show signs of sustainability.

See the link to the NY Times article: http://www.nytimes.com/2009/02/26/business/businessspecial3/26GIVE.html