Category Archives: Donor Pledges

Okay, let’s just all drop our collective jaws at the success of Strike Debt’s recent telethon, which raised money for a project it calls Rolling Jubilee. The group brought in a whopping $293,000 — enough, it figures, to buy $5.9 million in unpaid medical debt obligations off creditors, and thus save a lot of people from bankruptcy. (Around 62% of bankruptcies are caused by medical debts.) The group is calling it a “bailout for the 99 percent.”

Why did the fundraiser work so well? I’m sure much could be said about the organizing, skills, and determination of those running the telethon, but it also sounds like, in the words of the Village Voice, they “struck a nerve.” With the group’s origins in the Occupy movement, it tapped into Americans’ frustration at the crippling nature of debts that arose for reasons beyond their control.

Being able to point donors to the exact way in which their money would be used is an unusual feature of this fundraiser, as well.

Strike Debt is basically acting as the middleman to a person in need — which should be true of many nonprofits, but the link is often harder to demonstrate.

What’s more, donors are getting a “bargain” — their money doesn’t pay off another’s debt dollar for dollar, but is going to buy bad debts on the secondary market, where the creditors are typically willing to sell them off for pennies on the dollar. No wonder this one’s going viral!

The Wall Street Journal article title says it all: “Trust in the Lord . . . But Check Out the Church.”

It starts with a shocking statistic from the Center for the Study of Global Christianity at Gordon-Conwell Theological Seminary in South Hamilton, Massachusetts: “Of the $569 billion that churchgoers and others are expected to donate to Christian causes this year world-wide, about 6%, $35 billion, will end up in the hands of money launderers, embezzlers, tax evaders or unscrupulous ministers living too high on the hog.”

Yikes. For any non-church nonprofits, the very fact that any group could get away with such malfeasance will come as a shock. The degree of scrutiny of nonprofits seems to increase year by year, as both the IRS and the media amp up their oversight and accountability requirements.

But, as the article points out, churches are not required to file the IRS Form 990 that other 501(c)(3) nonprofits are. The 990 gives the public some basic information with which to check out what’s going on financially and develop further questions.

(For details on what types of groups must fill  out Form 990, see “Nonprofits and the Revised IRS Form 990” on Nolo.com.)

The WSJ article offers various bits of advice to donors about checking out church financial matters before making donations. Turned around, what do those mean for churches that have the good sense not to wait for donors to ask questions, and wish to demonstrate their openness about financial matters from the get-go?

• Be ready and willing to answer questions. Defensiveness will get you nowhere, or worse, lead to suspicion.
• Get your financial house in order. Even if your fundraising aims are laudable, bad management practices such as putting all financial control in the hands of one person will lead to problems. Put professional accounting systems into place with regard to collecting, disbursing, and accounting for money.
• Make donors aware of all the ways to give. For example, if volunteering services could offset the churches need for cash, offer this as an option for those donors who might be financially strapped. Remind church members of the possibility of legacy giving, as well.

By inspiring donor confidence, a church may in turn inspire greater donations.

For a foundation that seemed to have so much marketing savvy, the Susan B. Komen foundation can be awfully tone deaf — and send a message that it’s more interested in raising cash than in spending it charitably.

Their current colossal oops, having stopped funding Planned Parenthood despite that agency’s importance in providing mammograms to low-income women, is only the latest example. As I described in January of last year, the Komen Foundation alienated plenty of nonprofit watchers with its hypervigilant efforts to protect its brand: See “Fundraising Oops: The Susan B. Komen Foundation Uses Donor Dollars to Sue Smaller Groups.” (I was going to illustrate this post with something pink, but decided not to take the risk. Did I say “pink?” I meant “that color that is a mix of red and white.”)

And then there was the foundation’s odd choice in 2010 to put its branding on buckets of Kentucky Fried Chicken. Given that junk food and grilled food have been linked to cancer, this inspired plenty of commentary, and one “What the Cluck?” headline by the group Think Before You Pink (“a project of Breast Cancer Action, launched in 2002 in response to the growing concern about the number of pink ribbon products on the market.”)

Clearly there are people who were already shying away from pink products, not to mention supporting anything else but the Komen foundation, before the latest misstep. But at this point — based on all the media attention, not to mention the fact that my Facebook friends seem to be talking of nothing else — I’d say we may start seeing some pink products on the remainder tables. And an increase in donations to Planned Parenthood.

For an excellent summary of the current pink meltdown, analyzed in terms of nonprofit marketing best practices, see Kivi Leroux Miller’s “The Accidental Rebranding of Komen for the Cure.”

A friend of mine recently mentioned that his father, after reading yet another set of headlines about the Dow taking a nosedive, declared that he was going to change his will to remove each and every gift to charity.

It wasn’t so much that the father worried that there would be no money left for his kids but that, looking ahead into the future, he wondered for how long the stormy economy would damage his children’s  financial security.

I haven’t seen any reports of whether this is a trend. But uncertainty is certainly driving a lot of economic decisions these days.

That, and the knowledge that people can change their wills at any time, create added challenges for any nonprofit’s legacy or planned giving program.

What can you do in response? I would advise:

• Don’t let up on your messaging about your group’s importance in fulfilling your donor’s fundamental interests, and your group’s ability to help them create a lasting legacy.
• Never take legacy donors for granted. Find ways to celebrate their commitment and keep them advised about how other legacy gifts are being put to meaningful use.
• Sign up for a planned giving seminar that will update you on the latest estate tax rules, so that you’ll understand when your donors might have a continued financial interest in reducing their estate through charitable giving.

And of course, batten down the hatches for the ride ahead.

A good portion of the population has never known a world without walkathons, and probably wouldn’t be able to imagine it. But I was surprised to learn that this now-ubiquitous type of nonprofit fundraiser didn’t even exist until I was in grade school.

Walking for a cause dates back to 1969, according to a recent article  by Anne Kadet in SmartMoney magazine, “Cashathon: The Rise of Charity Races.” That’s when a group of Christians in Bismarck, North Dakota, had the idea of marching in solidarity with the world’s poor (hey look, an actual mission link!) while raising money for food programs. As Kadet explains, it “was half fund-raiser, half protest.”

They should probably take credit for the gift of prophecy, given how their strategy has since taken off.

Kadet’s article does a great job of both outlining the history of the “thon” and looking at what it has morphed into today — with sky’s-the-limit budgets, increased competition between groups, ever-weirder variations on the theme (walking over glass shards, anyone?), and increasing participant expectations for swag. It’s the kind of scenario that might lead to predictions that the whole enterprise is ultimately doomed. I wouldn’t bet on it, though Kadet does point out that some groups are facing reduced income from their walkathons for the simple reason that so many others are going on — sometimes at the very same time.

Basically, you’ve got to read the article. In fact, if you’re planning or developing the budget for a walkathon or charity race, you might want to pick up the print version, if only to see the expanded version of the “Where The Money Goes” chart (the full version of which is not available online). This breaks down all the major expenses, and helps to answer the question of why only 48% of the net proceeds of these events, on average, go to charity. Who knew that you’d have to spend 6% of your income on participant T-shirts, 2% on toilets, 3% on signage, and 8% on permits and security?