Plus Side of Not Receiving Huge Donations: No Need to Return Huge Donations!

cash_handsIt seems there’s been an epidemic recently of nonprofits either having to, or deciding to, return money to disgraced donors.

On the “having to” list, just this week the Wall Street Journal reported that the College of St. Benedict in Minnesota had agreed to give up one-fifth of a $3 million gift that businessman Tom Petters made way back in 2003. Petters was later convicted of operating a Ponzi scheme that brought him billions of ill-gotten dollars. 

After more than a decade, the college had probably found plenty of uses for that money, and might have been happy to ignore Petters’s later troubles. Enter, however, the bankruptcy court that’s overseeing the collapse of the Petters empire. The court decided to collect any and all stolen funds in order to turn them over to creditors, and the College of St. Benedict was apparently a recipient of such money. (Figuring out which money is tainted and which isn’t sounds like an accounting nightmare, by the way.)

On the “deciding to” give up tainted money list, several groups are reportedly saying “Ptooey” to money that came from “disgraced Clippers owner Donald Sterling.” (It seems that Sterling will never be referred to any other way — sort of like, “Military Strongman Idi Amin” or “Pop Star Madonna.”) The list includes Goodwill Southern California (bye-bye $100,000) and A Place Called Home.

Hmm, maybe A Place Called Home didn’t actually return any money. Its public letter said, “I must decline further funding from your foundation and ask you to immediately remove A Place Called Home and my photo and name from your ads.”

If true, that’s a clever public relations move – denounce the donation loudly and publicly, but keep the cash. I’m not unsympathetic: The money was probably well-spent by now.

But if the Internet and public fascination with infotainment is going to keep producing high-profile scandals like this, more and more nonprofits are going to have to do ethical deep-think around funds that came from the latest “Disgraced So-And-So.”

Meanwhile, grassroots groups whose average donations are $25 checks from local families can hopefully sit back and feel grateful that they’ll rarely have to deal with such huge amounts coming in — and then going back out.

 

 

 

 

 

Nonprofit Email Subject Line Fails

IMG_3340Ping, ping, ping. New messages keep popping up in my email box, many of them from various nonprofits. (Silly me, I can’t resist signing all those petitions; an apparently effective way for nonprofits to capture names and email addresses.)

No way am I going to read all of these.  I’m usually looking for a reason to delete them unopened. No problem! Few of their subject lines offer any real temptation, typically because they’re either too boring or too strident.

At the boredom end, I received one today titled, “Watch this video!” To which I can only answer, “Why should I?” My Facebook friends already offer heaps of videos to watch. (Did you see the one with the cat that . . . never mind.) Anyway, a video is not the novelty it may have once been. (More specifics might have helped. At least tell me whether there’s a cat in it.)

At the stridency end, one organization whose list I remain on only out of a morbid curiosity to see when its desperate, demanding messages will sink it, uses subject lines like, “The Good Donors Have Signed Up. Who Are You?” and “I Am Really Tired of All This Fundraising Every Month” and “Our Worst Day of Fundraising Ever.” (Need I say more?)

Being on a nonprofit’s list means that I see its email messages not in isolation, but as an ongoing indication of its personality. Having a personality can be a good thing for a nonprofit. But I wonder whether they always intend the personality that’s coming across in the incessant drumbeat of email pings?

On a more positive note, here’s my earlier blog on “Best Email Subject Lines From Nonprofits.” And an article on “Nonprofit Fundraising Emails: How to Make Them Profitable.”

Why Billionaires Sign on to Warren Buffett’s Giving Pledge

rain of dollarsA total of 127 people have now added their names to the “Giving Pledge” list  started by Bill Gates and Warren Buffett. It’s no token commitment: The billionaires on this list have agreed to give over half of their wealth to charitable causes. 

Why do they do it? We don’t have to wonder too hard, because each accompanies their pledge with a written statement.

Not surprisingly, many of these statements read like they were written by a marketing person. There’s all the usual language about helping others, giving back, values learned from parents, and so forth.

Still, it’s worth perusing them, to look for clues beyond the obvious. There’s an interesting one right at the top of the list, from Bill and Karen Ackman.

William Ackman’s letter says that he not only gains happiness and optimism from helping others, but that “I am quite sure that I have earned financial returns from giving money away. Not directly by any means, but rather as a result of the people I have met, the ideas I have been exposed to, and the experiences I have had as a result of giving money away. A number of my closest friends, partners, and advisors I met through charitable giving. Their advice, judgment, and partnership have been invaluable in my business and in my life.”

Wow. For anyone who was still thinking about major donors as just regular donors who give a little (okay, a lot) extra, it’s a powerful reminder that truly major giving occupies a whole different universe.

Ackman is talking about up-close, personal contacts with individuals, not just getting a nice thank-you letter and phone call from a development director. I’m willing to bet that many of the people he’s referring to are not the nonprofit staffers themselves and, pardon my cynicism, not the homeless clients, either.

My guess is that he’s talking primarily about fellow people of means with whom he has served on boards, or whom he has met at gala events, conferred with about high-level approaches to problem solving, and so on. And although his letter was one of many on Buffett’s list, Ackman no doubt expresses the (perhaps unspoken) sentiments of others like him.

All of which means that any nonprofit trying to attract the attention of truly major donors needs to give some serious thought to whether it can offer a similar type of return on their investment.

Tips From an Experienced Charity Auctioneer

treasure chestI recently spoke to someone who’s been volunteering at a nonprofit’s live auction for ten years — and in a major role, too. He’s the one who stands up in front of the room and solicit bids from the audience.

He’s not an auction professional, but it’s fair to say he’s learned a thing or two during that time — strategies that he’s noticed the pros sometimes overlook.

His main tips can be broken down, so to speak, into the following:

  • Break costs down. When you’re trying to solicit bids for a big-ticket item — let’s say, a starting bid of $1,000 for a weekend at a local resort — do the math, so that people are not focusing solely on that big total number. You might, for example, say, “Hey, this place sleeps eight people, or four couples. If you get your friends together, that’s only $125 per couple per night, and it comes with tennis privileges and a nearby pool!”
  • Break the flow up. A good auctioneer keeps an eye on the audience, and is ready to respond when there’s a lag in the energy, or when people just need a moment to breathe. Telling a story can help, or bringing in something 0r someone new. One year, a good strategy for this developed spontaneously, when a member of the audience jumped up and said, “I was the winning bidder on this dinner last year, and let me tell you what  a fabulous experience it was . . . .” You could, of course, arrange for such testimonials in advance.
  • Break the audience up. That’s right, humor. Easy to aspire to, hard to carry out. But it doesn’t have to be yuck-it-up jokes. Stories from the experiences of the nonprofit staff and board — those inside anecdotes that you laugh (or cry) about at lunch — can be great to share with the crowd.

Even if your nonprofit hires a professional for the important role of auctioneer, doing some of the background work suggested by the above tips can help keep the bidding fast, furious, and fun. For a comprehensive guide to holding a nonprofit auction, see The Volunteers’ Guide to Fundraising (Nolo).

When Crowdfunding Fails, It Can Fail Big

bees and hiveIf a nonprofit sends out a direct mail appeal for funding and no one answers it, who will ever know? Except for some long faces in the hallway and somber analyses at the next board meeting, the matter may attract little attention.

Not so with online crowdfunding. When you set that financial goal and try to rally community support and some social networking buzz around it, you guarantee that everyone will know — or at least be easily able to find out — whether you ultimately make it.

In fact, with some crowdfunding platforms such as Kickstarter, you have to actually offer donors their money back if you don’t make the goal.

Unfortunately, even the big-name nonprofits are discovering that crowdfunding fails happen.

A recent article by Elizabeth Olson in The New York Times called “Soliciting Funds From the Crowd? Results Will Vary,” highlighted this issue in the context of  museums. The Hirshhorn Museum in Washington, DC, for example, tried to raise $35,000 via Causes.com to support bringing one of Ai Weiwei’s sculptures in for an exhibit of his work.

A mere 14 people ponied up, with donations totaling $555. Ouch. (Funny, I couldn’t find mention of this on the Hirshhorn’s own website.)

Olson’s article offers what must be some of the pithiest quotes ever garnered on the frustrations of crowdfunding, such as, “Everyone wants to do it, but the amount of work involved is enormous, whether it’s to raise $10,000 or $100,000 (Yoonheung Lee, director of digital philanthropy at the Smithsonian) and “It’s not just putting up a page on the Internet and hoping people will come” (Lesley Mansford, chief executive of Razoo).

Making a crowdfunding campaign work seems to require a combination of preparation, cleverness, and luck. No one can control the luck part, but you can work on the others, for example using the guidance in Nolo’s article, “Using Crowdfunding to Raise Money for Your Nonprofit.”

 

“Just seeing the look on the faces of those kids . . . .”

waterA recent article in the East Bay Monthly, called “In the Philanthropic Swim” contained a powerful reminder of how donors’ giving instincts are fueled not just by knowing that they’ve made a difference, but actually seeing that they’ve made a difference.

The article describes an Oakland couple,  John Bliss and Kim Thompson, who wanted to invest in their local community. They created a fund through which they’ll donate $100,000 to the Oakland Park and Recreation Department in order to pay for swim lesson scholarships for local kids; and also created a program offering rec centers grants of up to $2,500 for special programs or needs.

What struck me about the article was Thompson’s description of how she “knew” that the grant money was well invested. It wasn’t based on dollar metrics or painstakingly written reports. She said, in describing a grantee (deFremery Park) that had used its funding to renovate basketball courts,  “Just seeing the look on the faces of those kids when they saw the beautiful courts and the Warriors players at the grand opening made us know that was money well invested.”

Bliss echoed her sentiment, saying, “The joy of seeing the looks on those young boys’ and girls’ faces . . .  is something we will never forget.”

Because they’d spearheaded and funded this effort, they of course got direct access to the results. But wouldn’t it be wonderful if a wider pool of donors and funders could be brought into direct contact with the recipients or results of their generosity?

 

Three’s Not a Crowd After All!

iStock_000006257328XSmall-thumb-184x121I’ve got a great answer if people are asking you why your nonprofit hasn’t tried crowdfunding yet: Tell ‘em you’ve been waiting for others to put in the tough advance work — making the inevitable mistakes and figuring out what’s effective and what isn’t!

But guess what: A lot of that advance work has now been done. Crowdfunding is proving to be an important tool in the fundraiser’s kit, but one that’s best used after reading the instructions. You’ll find numerous useful insights from early adopters and other nonprofit experts in this article by Janna Finch, Managing Editor of Software Advice: “Expert Roundtable: How to Choose the Best Crowdfunding Platform for Your Nonprofit.”

Contributors such as Beth Kanter, Premel Shah, and Rob Wu offer tips on everything from evaluating features on the various crowdfunding sites to how to give donors a sense of participation in the project.

I asked Janna Finch which thoughts from contributors she found the most surprising. She says, “I was very surprised to learn just how much thought and planning needs to go into designing a campaign and choosing a platform. Go to any crowdfunding platform website and the process looks so simple–sign up, create a campaign, launch it, share it, get funded. In reality it’s not so easy. Anyone can create a crowdfunding campaign, but a solid strategy is required to create a successful one.”

Gripes About Direct Mail Appeals

2013-Nickel-Unc-obv_D_2000Has anyone yet come up with a replacement for direct mail solicitation as a funding source? No, I didn’t think so. Individual donors still comprise the bulk of nonprofit funding, and direct mail is a tried and true way of reaching them.

(Email? Just a variation on the mail theme. Crowdfunding? Nah, best for small projects of limited duration.)

The trouble is, the tried and true sometimes becomes the tired and annoying. Or is it just me who groans at receiving yet another thick envelope that I have to open up, tear my name off the various contents of, and check for any U.S. currency before preparing the now-ragged pile for its trip to the recyling bin?

It’s apparently not just me. Or at least, not according to the results of my entirely informal, unscientific survey of friends. I asked what aspects of charity mail appeals most got their goat.

There was no shortage of answers, with most falling into one (or more) of four categories: cost, frequency, freebies, and over-the-top entreaties. Here are some of the actual replies:

Cost:

  • “Using all your money to send you more appeal letters.”
  • “Those that come with a nickel glued on – it shows they don’t need mine.”

Frequency:

  • “When the next appeal comes before the thank-you for the previous donation!”

Freebies:

  • “I don’t like when they send address labels or greeting cards — such a waste of paper.”
  • “I hate the mailing labels or small change (“a nickel will do x!”). Feels manipulative.”

Over-the-top entreaties:

  • “Dogs with sad eyes.”
  • “Animal charities that target children (sending progress reports on a particular animal) and then use the kids to pressure their parents to make a larger monthly donation (your ‘own’ animal needs more food, a new bed, etc).”
  • “Membership cards that imply you’ve already committed and they are just following up to get the money.”
  • “The . . . ones where you innocently open them and are confronted with a poor kid with a harelip or no arms . . . .”
  • “I hate the ones that are in a blank envelope that look like reports from a credit bureau or something else that matters so you can’t toss them without opening them.”
  • “I know there’s research behind it — but I HATE letters that end with a p.s. & question (Won’t you help TODAY?)”

Of course, there is research behind nearly everything that a nonprofit puts into a direct mail piece. And for everyone who hates the address labels, there’s probably someone who likes them. (Actually, that would be me. I’m running short. Could some group . . . uh, never mind.) But isn’t it a bit disturbing that people can so readily recite a list of the common strategies?

For more on direct mail and other forms of fundraising, see the 2013 edition of Effective Fundraising for Nonprofits, by Ilona Bray (Nolo).

Oh No, Not “Grant Proposal Prose!”

swordPaul Sehgal must have been secretly delighted to realize how little respect he had for the book he was reviewing for the Sunday, December 15, 2013 New York Times Book Review. (The book’s title doesn’t actually matter here, but to assuage any curiousity, it was Art as Therapy, by Alain de Botton and John Armstrong.)

Having found it to be “depressing” and a book that “lays bare the flaws in de Botton’s method, chiefly that, well, he does regard his readers like ants,” Sehgal treats us to a snarkfest of words and phrases like, “dispiriting,” “shtick,” “unhinged,” and “never done it so badly.”

And, for the coup de grace: “The grant proposal prose saps all the fun from the proceedings.”

Uh oh. Did you catch that? “Grant proposal prose” has been elevated to stinging insult.

And the worst thing is, we all know exactly what he means: tired recitals by some nonprofit staffer who resents having to fill in a bunch of repetitive blanks with jargony blather and send it off to a faceless foundation committee that will probably reject it half-unread anyway.

But it doesn’t have to be this way. Art flourishes within constraints, remember? For the nonprofit staffers of the world, a good New-Year’s resolution might be to reexamine one’s approach to proposal writing, and put the fun back into it. The writers will be happier, and heaven knows the folks who have to read million of these things at the other end will be happier. (Fear not, Paul Sehgal will find some other way to shred the next book he’s not pleased with.)

For detailed advice on preparing compelling grant proposals, see Effective Fundraising for Nonprofits; Real-World Strategies That Work, by Ilona Bray (Nolo).

Fundraising Kudos to: PFAW, for Emailed Holiday Wish List

fireWith all the “noise” of incoming emails from nonprofits and retailers alike, it’s a miracle that anything short of a fire alarm (plus smoke) can catch my attention these days.

But a recent email from People for the American Way (PFAW), with the subject line, “Holiday Wish List,” created just enough curiousity in my addled pre-vacation brain to induce me to click and open it.

And that already means they cleared a huge hurdle. The rate at which people open nonprofit emails is low — around 27%, according to a Silverpop survey for 2013.

Inside, I found the following message:

Holiday wish list:

  • A constitutional amendment to overturn Citizens United
  • Good judges confirmed and the end of right-wing dominance of the federal courts
  • Full equality for LGBT Americans and their families
  • Safeguards for voting rights and women’s health
  • TEA PARTY EXTREMISTS DEFEATED AT THE POLLS!!!

Ilona, We’ll be working our tails off to fulfill these wishes in the coming year.

Help us do it by renewing your PFAW membership for 2014 with a generous donation now.

Its a mercifully short message, with some pretty compelling material. Here’s what I think the group did right:

  • Surprise the reader a bit — I was expecting a wish list like, “Please someone send us a new laser printer,” or “Our clients desperately need x-and-such.”
  • A hook to current events. Instead of just repeating their mission, they put it in terms of holiday wishes.
  • A concise, jargon-free reminder of their mission and work. This gets left out of nonprofit email messages more than one might expect.
  • An ask! (Gotta have the ask.)

Contrast this with an email I received from another nonprofit lately, which says only, “Pretty much of a donations disaster at this point, a record bad fundraising day. We need so few of you to contribute to make this work. Who will step up? Now is the time.”

Which group would you support, if you believed in both causes equally? (And I haven’t even named the second group, because I don’t wish to beat up on them.) Most donors would rather give to the group with an upbeat, clever message; which may, in fact, explain the second group’s “donations disaster.”