Category Archives: Fundraising

Changing Pies

David Coffaro
Dave Coffaro

As nonprofit development professionals know, there are many factors that influence charitable donations. Emotional connection to an organization’s mission, commitment to creating a better community, giving back to a charity that made a difference in someone’s life or tax deductions can all be influencers. Add to these internal motivations the external reality of economic conditions and you have an ever-changing environment informing development strategies.

Strategy as a Process, not an Event

Successful leaders know that their ability to adapt strategy as environments change is fundamental to sustaining a thriving organization. Reading the environment, interpreting temporary and longer-term structural changes and proactively adjusting approach are critical determinants of success.

Today, nonprofit leaders face an environmental shift in terms of fundraising. New preliminary IRS information, reported by MarketWatch this week (https://www.marketwatch.com/story/americans-slashed-their-charitable-deductions-by-54-billion-after-trumps-tax-overhaul-2019-07-09) indicates that as a result of the 2017 Tax Cuts and Jobs Act, taxpayers have itemized $54 billion less in charitable contributions so far this tax season compared to the previous year. These numbers could change as the IRS receives more tax returns (the agency expects a record 14.6 million tax return extension requests this year), but the headline corroborates what many nonprofits have been feeling over the past year of fundraising.

At first blush, this news suggests that nonprofits must now compete for a smaller pie of charitable giving. However, when we dig a little deeper, it may be that there are other pies available to get a bigger slice. Here are three specific ideas to contemplate as your organization considers refining and adapting its’ strategy:

  • Market the mission – Step into the shoes of the donor and ask “why would I contribute to your organization”. Tax benefits are one reason, but for most of your donors, there is some kind of emotional connection to your mission. The work your organization does every day resonates with the donor at some level, or they wouldn’t be one of your donors. This is a perfect time to revisit your mission, how you articulate it, your organization’s value proposition and how you message all of this through every medium to make sure the story is communicated the way it needs to be delivered.
  • Increase focus on corporations and foundations – Concurrent with the 1/1% decline in the dollar amount of donations from individuals, funds from corporations and foundations actually  increased (+5.4% from corporations and +7.3% from foundations). Translation – there’s still a lot of pie available; you just may have to look in different places to get what your organization needs. This is where the role of leaders comes into play in terms of refining strategy based on a changing environment.
  • Explore non-financial gifts – Beyond the 2017 tax law changes, one theory suggests that equity market volatility over the past year may be playing a role in individual giving. This behavioral finance explanation suggests that when capital markets are volatile, investors feel less confident, therefore more cautious about donating from their investment portfolios to charities. As an alternative, developing or expanding your organization’s focus on non-financial gifts – real estate, automobiles, oil, gas or mineral rights, specialty assets or artwork may be a way to enable your donors to support the mission in a manner that is more comfortable in the current market cycle.

Effective nonprofit strategy is on ongoing, dynamic process that continually recalibrates to its environment. This is a perfect time to revisit your organization’s strategy to see how it aligns with current reality, and the pies that are available to you.

Author: David Coffaro, Executive Coaches of Orange County, www.ECofOC.org

Can Your Data Tell a Story?

Adrianne Geiger Dumond

 

 

 

How many of us input data, and never see it again, lacking an effective way to use it? What if the data could tell a compelling story that might inspire others to support the mission? An article on the Stanford Social Innovation Review website provides some recommendations for helping your data tell a story/[1]

 

1. Data storytellers answer a question – “so what”. I recently had a client whose services had added 20 customers for the quarter. That number had no significance until he asked some questions:

  • What percentage is 20 of our customer base?
  • How does this effect our operation?
  • Who needs to know these numbers?

Analysis of the data leads to clarity and to more questions.

2.  The data should inspire us to ask more questions.

Back to the example:

  • What factors contribute to this increase?
  • How does it effect staffing?
  • What external factors are contributing to the increase?
  • How can we portray this information graphically for social media purposes?

3.  The use of rigorous analysis is better than numbers on a page. A concise Executive Summary of the findings from the analysis is a first step.The author, Jake Porway, favors visualization of the data over raw numbers – a graph or pie chart to crystallize understanding for an audience. Porway has several websites in his article for learning more about data visualization. This may be difficult for some IT personnel. But the goal may be worth the investment in order to impress upon donors and volunteers, viewing the media source, that their service and contributions are needed and welcomed.

[1] Three Things Great Data Storytellers Do Differently,  Jake Porway, author, Stanford Social Innovation Review, June 8, 2016

Author:  Adrianne DuMond, Executive Coaches of Orange County, www.ECofOC.org

Writing Effective E-mails

Michael Kogutek, nonprofit management coach

Michael Kogutek

 

In this age of increasing technology, e-mail communication has become front and center. I found a terrific mini course on this subject at nonprofitready.org. It is 8 minutes long. The takeaways are: (a) avoid vague subject lines (b) Be personal  (c) Be visual (d) Be structured

(e) No big blocks of text (f) Is there a better way to communicate like phone call or in person meeting. The course advocates the use of the acronym SMART: Specific,Meaningful,Appropriate,Relevant and Thoughtful. I highly recommend the course.

I also want to endorse the website nonprofitready.org. It contains over 300 free courses to take in the NP sector. Many of the courses are from Australia, New Zealand, South Africa and Europe. One gets a global flavor of the NP world.

We at ECofOC are strong advocates of the website. The micro-learning center offers courses less than 10 minutes in duration. It is a strong resource for our coaching clients and ED Forum Members.

Author:  Michael Kogutek, Executive Coaches of Orange County, ECofOC.org

Form 990 Can Be a Public Relations Tool

Adrianne Geiger Dumond

 

Many nonprofits consider the IRS Form 990 to be a dreary necessity at tax time. In the 2008 tax year, major revisions were made to the Form. Nonprofits have been slow to realize the impact the revisions may have for donors and the public.  The diverse information provided in the new Form is now available to the public and can be found online free at at such sites as Guidestar.org, and nccs.urban.org.

In a recent article by Michael Wyland, an author and member of the editorial advisory board for the Nonprofit Quarterly, Wyland points out the advantages to providing accurate and complimentary information on the Form.[1] The Form displays not only financial information (assets and liabilities), but also facts that address governance, programs, and fundraising. His article shows a breakdown of the Form with its schedules and functional area relevance, because not every nonprofit completes the same schedules. However, he points out that most of the 990 parts and schedules still address the multiple categories of governance, programs, and fundraising.

As Wyland notes,”not all organizations complete all parts of the Form, and not all file each and every schedule. For example, while most 501(c)(3) public charities must file Schedule B (Schedule of Contributions), it is considered confidential and not disclosed to the public. Private foundations, on the other hand, must disclose and make it publicly available.”

Never the less, ALL Form 990’s do reveal to the public governance (governing bodies and management, policies, and disclosures), programs, and fundraising. A potential donor may look for efficiencies and financial data, but still seek the charity that meets his/her passion for a particular service or need. A potential volunteer may consider who manages the organization and where they can fit in. It is important for all nonprofit staffs and boards to be aware of the public exposure, but also the opportunity to be more advantageously promoted to the public.

[1] Your 990: What Nonfinancial Matters Does It Reveal to the Media and the Public, Michael Wyland, Nonprofit Quarterly, November 17, 2017

Author:  Adrianne Geiger DuMond, Executive Coaches of Orange County, www.ECofOC.org

No-cost Nonprofit Training Opportunities

Bob Cryer

 

NonprofitReady.org (NPRO) is a website of 43 interactive E-learning curriculums and 385 online classes and videos on a wide variety of nonprofit best practices, all at no cost to any user.  I took one of the curriculums (Management Essentials) and was impressed with the content and interactive presentation. More importantly, sixty thousand people have used the site in the past year, and six thousand new users join each month.

In my opinion, the more people in a nonprofit who know nonprofit best practices, the more effective that nonprofit is likely to be. NPRO best practice trainings can be accessed at no cost, at any time, from anywhere, for as long a session as the user has time for at that moment. It is, by far, one of the most convenient and cost effective methods that I am aware of for acquiring know-how in nonprofit best practices.

Here is a sampling of a few of NPRO’s most popular online courses, videos and curriculums:

  • Managing Expectations This 8-minute micro-learning online course on managing expectations contains a 3 minute video, quiz, summary document and additional short audio clips. Managing expectations is a crucial part of any professional relationship, from your colleagues to your customers.
  • Managing Your Boss This 8-minute micro-learning online course on managing your boss contains a 2 minute video, quiz, summary document and additional short audio clips. Your boss can have a big impact on the way you do your work, but your actions can also influence their management style.
  • Introduction to Proposal Writing This 27 minute video is designed for anyone involved in the proposal writing process. Course Objectives: • Understand the basic components of writing and submitting a project proposal
  • Introduction to Finding Grants This 30 minute video is designed for anyone seeking to better understand the grant-seeking process. Course Objectives: • Identify the 10 most important things you need to know about grant-seeking • Understand the primary misconceptions about grant-seeking
  • Project Management Essentials – Part A This 20-minute online course is designed for anyone responsible for managing projects and/or programs. Objectives for Part A and Part B: Define the life cycle of a project and structure it around milestones, Control your project using flexible tools, Create a plan for day-to-day project management.
  • Grantsmanship Essentials Pack In this 1 hour and 50 minute curriculum from the Foundation Center, you will learn the basics on how to find grant programs and funders as well as how to write a proposal that aligns with the funder’s criteria. Objectives: To understand how to identify funders aligned with your organizational mission and cause, To articulate what is required in receiving and managing grant funds, To identify the best practices for writing a successful grant proposal.

Please visit NonprofitReady.org to learn more.

Author:  Bob Cryer, Executive Coaches of Orange County, www.ECofOC.org

Tips to Engaging a Foundation

Adrianne Geiger Dumond

 

 

It is reported that most foundations are reluctant to accept unsolicited proposals.[1] Rick Cohen, the author, states that “philanthropy is increasingly an insider’s world” – meaning that if a nonprofit is not in the foundation’s circle, or doesn’t socialize with foundation leaders and staff they won’t be heard. Some foundations set aside funding for new nonprofits (see the article for names), but some 60% do not. However, Cohen contends there are ways to vault the wall and here is a shortened version of his recommendations.

  1. Get visible to build relationships. Attend conferences where many foundations show up. Never solicit money there, but try to meet leaders, get their names, and follow up with material they might be interested in. Cohen even suggests a ‘rump’ session led by a nonprofit leader, presented aside from the formal program. He reemphasizes that building relationships is crucial, and means being visible, connecting, and interacting.                                                                                                         .
  2. Research their boards and staff for connections. Doing homework first is probably the most important for success. Foundation websites provide lots of information – missions, key issues they support, board members names (and sometimes their bios and resumes), and staff names. When you find issues, topics and organizational interests that intersect, reach out to those individuals with information and materials.                                                                                              .
  3. Send information, working papers, and thought pieces. Cohen maintains that fresh thinking and new ideas may stimulate an interest in your nonprofit’s needs. He even suggests that one might ask the foundation’s leader to provide feedback and his/her reaction to the information.
  1. Send a letter of interest/information (LOI) anyway. Once the home- work has been done, you can also check with the Foundation Directory Online to verify foundations that align with your objectives. Sending information, and even including a cover letter that is close to an LOI, may stimulate new interest. But, again, NEVER ask for money in these kinds of pursuits. 
  1. Work for philanthropic change. Cohen makes the point that foundations need to be more open to changes in the environment, and seek to embrace more strategic thinking in their grant making.

[1] Scaling the Wall: 5 Ways to Get Unsolicited Proposals Heard, Rick Cohen, Nonprofit Quarterly, Feb. 22, 2017

Author:  Adrianne Geiger DuMond, Executive Coaches of Orange County, www.ECofOC.org

Is ‘Analytics’ Useful for the Nonprofit

Adrianne Geiger Dumond

Adrianne Geiger Dumond

 

Analytics is the tracking of patterns, trends from the analysis of data. Better data analysis in the business community is a major trend for 2016. With all the sources of information now available, it is not difficult to understand the growing need for analytics in the for-profit community. But is it equally important for the nonprofit world to take note?

Most nonprofits collect data, but how useful is it. Is it turning information into knowledge? I know of a data manager who only knows how to enter the data. He has no tools or skills to analyze it. Collecting the right data requires some strategic thinking to ensure that the data is useful.

Quality versus quantity: Is the data we are collecting relevant to our goals and mission? Who benefits from using this data – programs, donors, funders, marketing?

Setting priorities: With the burst of new technologies for data analysis coming on stream, what are the most important targets for the use of our data? Is it to help monitor and evaluate programs – which strengthens the appeal to funders? Is it visual data – graphs, video, pictures, and testimonials – that tell great stories to our donors? Most non-profits will need professional training or outside help to install these capabilities, so it is important to decide what strategy is the most important.

In researching this article I found one website that appeared to be useful for advice and knowledge. The site is for a business model, not for non-profits, but provides an orientation to the data analysis process. It is Tableau Software (tableau.com). I am sure there are others but they sent me an email immediately that explains the process in its free training video.

Author:  Adrianne Geiger DuMond, Executive Coaches of Orange County, www.ECofOC.org

Seeking Pledges vs. Immediate Donations

Adrianne Geiger Dumond

Adrianne Geiger Dumond

 

 

The Wall Street Journal recently posted an interesting article[1] on the benefits of asking donors for pledges rather than immediate donations. The authors had conducted a study to determine the effectiveness of the use of pledges. Their assumption was that donors might pledge today, but not be able to donate right away. They might be able to experience the joy of giving today if they didn’t have to donate immediately.

The article neglects to state the size of the study population, but donors were asked to make binding pledges, nonbinding pledges, and donations on the spot. While the nonbinding participants created a 100% increase in the number of donors, the contributions did not materialize. Allowing the donors to make a binding pledge, increased the number of donors by 30%.

A very interesting outcome came from a third group in the study who were asked for a nonbinding pledge. They were sent a ‘thank you’ immediately after pledging, and another ‘thank you ‘a week before the pledge was due. This strategy produced an increase of 35% over the immediate donors.

Fundraisers know the importance of thank yous, but these findings might say that more are needed – even if it requires more accurate bookkeeping.

WSJ[1] ‘When a ‘Maybe’ beats a ‘Yes’ by Dr. James Andreoni and Dr. Marta Serra-Garcia, University of California, San Diego, Dec. 14. 2015

Author:  Adrianne Geiger DuMond, Executive Coaches of Orange County, www.ECofOC.org

A New Form of Philanthropy

Dave Blankenhorn

Dave Blankenhorn

 

This past week Mark Zuckerberg, the founder of Facebook, and his wife, Priscilla, announced there intention of pledging $45 Billion (99% of their Facebook shares) over their lifetime to help solve the world’s problems. Rather than doing it the old fashion way of gifting through a foundation they have proposed to establish a Limited Liability Company to be called the “Chan Zuckerberg Initiative” after their new son and use this vehicle to invest funds in organizations that advance “human potential and “promote equality”. The “Initiative” will also invest in for profit companies in fields like education and health care which its owners believe will help achieve their philanthropic goals.

What is somewhat unique in his approach is the idea of showing both a financial return in order to be sustainable and a social one in order to obtain additional funding. To meet the latter goal certain metrics will need to be established to show how many lives were saved or how many were educated etc.

By setting up the LLC he can maintain control of his stock, avoid tax issues and continue to capitalize the LLC from the return on his investments. These funds can then be used to reinvest back into worthy recipients. This avoids the traditional giving dilemma of a foundation where monies are only replenished from its investments in stock and bond markets.

For nonprofits this new approach will be a challenge to managements and boards. They will be accountable in a way not seen before and will need to focus more closely on mission results as well as financial viability. If they can reach their goals funding will become more reliable giving everyone more time to achieve the mission and less on fund raising.

Author:  Dave Blankenhorn, Executive Coaches of Orange County, www.ECofOC.org

 

What’s the Difference: Nonprofits vs. For-profits?

Robin Noah

Robin Noah

 

Recently I was asked if there is a difference between operating a nonprofit organization and a for-profit business. I answered with a resounding YES and the following brief overview.

While the aim of for-profit organizations is to maximize profits and forward these profits to their company, the nonprofit organizations’ aim is to provide funding to meet society’s needs.

Nonprofits spend a major portion of their time seeking funding, often without selling a “product”. They need to convince contributors of the value of their mission and how they can spend the contributed money wisely as they move forward meeting the mission of their organization. Additionally they must prove the need to use some of the donated money for administrative costs.

A reality is that nonprofit organizations are often in a struggle to find enough money to survive and to raise funds more effectively.

Unlike for-profit companies that can earn commissions for sales, nonprofits must constantly demonstrate that they use the greater part of their funding for their mission. The Association of Fundraising Professionals (AFP) asserts that a commission on each donation would undermine donor trust by placing self-gain over a nonprofit’s mission.

An interesting fact: According to journalist Tom Chmielewski, The American Institute of Philanthropy suggests that a not-for-profit organization’s unrestricted net assets should total less than three years of its current budget, and that at least 60 percent of its total expenses should be spent on program services rather than on administration and fundraising.

Another interesting fact is that In addition to a balance sheet, a for-profit will prepare an income statement each quarter listing the company’s revenues, gains, expenses and losses. On the other hand, generally speaking, nonprofit organizations do not compile an income statement but instead prepare a statement of activities each quarter. This document simply lists the organization’s revenues minus expenses, plus net assets

To learn more about the differences in the for- profit businesses and nonprofit organizations spend some time on the internet. There is a wealth of information there for interested persons.

Author:  Robin Noah, Executive Coaches of Orange County, www.ECofOC.org