Is It All Bad News Regarding Individual Giving?

2012-Proof-Penny-obv_200What a rush of apparent bad news we’ve seen lately in the realm of recorded or anticipated donations to nonprofits:

Gack. What is going on? Is charitable fatigue actually an infectious virus?

The YMCA puts it down to a sense that the country hasn’t pulled out of the Recession as quickly as anticipated, and thus people are throwing up their hands and figuring it’s up to governments and larger groups to take the lead.

Stacy Palmer, editor of the Chronicle of Philanthropy, told Pender that, “The rich were more affected by the stock market crash than other income groups, and that might be why they were slow to step up giving as a percent of income.” 

But I wonder also whether the barrage of donation requests that we get via email and social media is introducing a new type of fatigue. Admittedly, I’m basing this on a sample of one: me. But every morning, I receive such a long list of email solicitations that I have to delete them without opening if I’m going to get to work before everyone leaves for lunch. All those Bay Area folks on their smartphones are pretty quick to hit the delete button, too.

It takes something exciting and different to make someone navigating the online world — an increasingly important forum for charitable solicitation — pay attention. Something like, perhaps, that ALS ice bucket challenge, which raised about $115 million before finally winding down.

Don’t Let Tax Rules Intimidate When Writing Nonprofit Thank-You’s to Donors

hamsterReading Roger Craver (author of Retention Fundraising: The New Art and Science of Keeping Your Donors for Life) should put a jolt into any fundraiser’s Monday morning, with his analysis of why the nonprofit sector is “hemorrhaging donors and losing millions monthly.”

He’s not just engaging in hyperbole: Apparently, studies by the Association of Fundraising Professionals (AFP) have found that for every $100 brought in from new donors, nonprofits lose another — wait for it — $100, due to donor attrition. Talk about a hamster wheel. 

Number one on Roger’s list of likely reasons is “Failure to properly thank and involve donors.” Really? After all this time? It’s not that I don’t believe him, it’s just that anyone who’s ever written about nonprofit fundraising, me included, has emphasized the crucial importance of thanking donors.

Perhaps this is just another problem that can be chalked up to organizational inexperience, lack of time, or the fact that the entire development department just quit to take a job that pays better. But I wonder also whether nonprofits worry that they might get it “wrong” when writing a thank-you letter, and fail to comply with IRS regulations about thanking donors. (In fact, some nonprofits DO get it wrong, as discussed in my earlier blog, “Fundraising Oops: Thank-You Letter With Backwards Tax Info.”)

There are a few rules worth following — as much for the donors’ sake as the organization’s — but they’re really quite simple. Stephen Fishman discusses them  in his article, “Tax Deductions for Charitable Giving – The Nonprofit’s Responsibilities.” (Also see his book, Every Nonprofit’s Tax Guide.)

But when it comes right down to it, a thank-you letter for a straightforward cash donation can take practically whatever form you like: A letter, a postcard, an email. Just say how much the gift was, and then forget the IRS and get to the heartfelt part of it: gratitude that this person made a gift to help a cause that you all care about.

The Message of the ALS Ice Bucket Challenge for Other Nonprofits

earth iceCould anyone have predicted that this would be the next big fundraising  strategy to go viral and bring in big bucks? You’ve by now no doubt heard about the ALS (amyotrophic lateral sclerosis) Association‘s challenge, in which social media participants dare friends to either videotape themselves being doused by a bucket of ice water or donate $100 to ALS research. (Doing both is fine, too.)

Who wants ice over their head, after all? (Brrrr.) And how many people have been personally affected by ALS, a disease that — while awful — affects only about two in 100,000 people, which isn’t exactly a recipe for fundraising success?

But this one somehow caught on. The likes of Bill Gates, Jennifer Lopez, Mark Zuckerberg, Lena Dunham, George Takei, LeBron James, Oprah Winfrey, and Justin Bieber have all taken the challenge. As of this morning, it had brought in nearly $23 million — enough to have Forbes magazine writing about what the organization will do with all the money.

Why did it work — and how can other organizations replicate it? My analysis = Embrace people’s narcissism. Critics of the challenge complain that it produces “slacktivism,” in which people advertise their interest in a good cause but don’t actually do anything about it. But that’s turning out to be not such a bad thing, if some people do do something about it, namely donate and spread the word.

Facebook, Twitter, and other social media outlets are essentially places where people try to make their friends think that they’re doing interesting and exciting things all the time. (No one is convinced, but never mind.)

Yet now that we’ve all Facebooked and Tweeted the contents our latest travel photos and breakfast images a million times over, everyone from ordinary mortals to celebrities, is looking for new content. Preferably content that shows the person in a good light. So back to the ALS challenge: A video that’s easy and cheap to produce and that depitcs someone as humorous, slightly daring, and ready to support a worthy cause, fits the bill on many levels.

Now we just need to replicate that formula for the next big thing. Hmmm.

For Fundraising Auction, Parties Can Be Scaled to Any Size and Age

CAKEAn auction to raise money for a school or other nonprofit may, over the years, develop its own, unique culture and tradition. That’s what has occurred in the Piedmont school district of California, where parties, put on by parents, have become a favorite item.

Whether it’s the “Monster Bash,” held in a warehouse, with tickets going for around $200, or the more modest moms’ hike and brunch party, with tickets going for around $40, there’s a party for everyone’s interest and pocketbook. For the little ones, there’s a cupcake-making party. Or, at least there was last year — who knows what next year will bring?

These parties are a great way to tap into parents’ creativity and foster further community. And (in a small town with a small commercial area), it’s helpful to be able to create money-makers without relying primarily on donations from local businesses.

Looking for more ideas? Nolo’s got lots of information on fundraising auctions and other special events, and a simple Google search for “party ideas” will bring up more than you ever imagined existed.

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?