Category Archives: Recession Strategies

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.”

Do Donation “Discounts” Devalue Nonprofit Brand?

stormThere’s a winter storm coming in, and I’m not talking about the weather. It’s the relentless flurry of emails from both commercial and nonprofit marketers, all wanting to get my attention and hopefully the last of my end-of-year dollars for either gifts to people or gifts to charity.

They’re all starting to sound bizarrely similar, especially when it comes to “discounts.”  Taglines like “Adopt a wild animal for 50% off!” or “Membership half price through 2013!” are not uncommon.

I get it that, in some cases, you’re literally getting something for less, like a regular newsletter reporting on the nonprofit’s doings. But in others, the nonprofit is actually promising to provide the same service for less money. And that’s disturbing, when our whole notion of nonprofits is that when they ask for something, or tell us, “It takes $x to save a wild animal,” they didn’t build in a profit margin. They’re a nonprofit, after all.

I assume that someone out there is testing these supposed discounts, and that they work to get email readers’ attention. But what are the long-term implications of convincing donors that, like a for-profit company, your original “price” was just puffery, and you’re actually willing to do the job for less? I predict some rough sailing ahead.

It’s PTA Collection Time as the School Year Begins!

Can you feel the excitement in the air? Kids are finding out who their teachers are, buying their back-to-school wardrobes, and signing up for activities.

Parents, however, may be a little less excited. Whether the kids are attending public or private schools, this is the time when many are asked to write a big check — knowing that without parental support, the school will literally go without an arts or music program, a librarian, after-school tutors, and so on. The “suggested donation” levels can run into the thousands of dollars.

This raises the annual conundrum: Should the PTA or other volunteers organizing these fundraising efforts ask for the full, needed lump-sum up front, or plan to spread out their requests for funding over the school year, sometimes packaged up as special events or fundraising sales?

Two mothers I recently spoke with debated this very point. One said, “I helped with school fundraising last year, and noticed that some people just won’t write a check unless they get something in return — they hold out for the silent auctions and other sales.” The other said, “But I get so sick of having to attend events like that, and I’m sure things like wrapping paper sales don’t net the school more than a few bucks — I’d rather just add that to my check at the beginning of the year. Yes, it hurts to write that big a check, but at least I get it over with.”

FLIBThere’s probably no final answer, though if you’re a PTA fundraiser, it’s worth keeping an eye on whether parents are developing a “mass sentiment” toward fundraising. Here’s an excerpt from my book, The Volunteers’ Guide to Fundraising, that will help illustrate:

[D]onor sentiment has cycled at South Mountain Elementary School in South Orange, New Jersey. PTA copresident Laura Reichgut describes, “We sent out a survey last year to get a sense of how the school community was feeling about fundraising, programming, and so forth. A lot of the feedback suggested that parents had had their fill of the various smaller fundraisers, such as giftwrap sales or walkathons. So the PTA decided to eliminate some of those this year—or at least take a break from them—and replace them with what we call the ‘No Frills Campaign.’ We sent out a simple letter asking
for donations and including a reply envelope. Our pitch was that this is an opportunity to support all the great work of the school with 100% tax-deductible donations. . . . [A] mere week into the campaign, the South Mountain PTA had already reached its minimum monetary goal for the No Frills Campaign, and the donations continued to come in during the following weeks.”

Setbacks and Emergencies? Turn to Crowdfunding

One of the issues that established nonprofits sometimes have in taking advantage of crowdfunding sites such as Kickstarter, Fundraise.comRazoo, or indiegogo is that most of their projects are ongoing. They lack the time-delimited, snazzy, “Hey, with your help, look what we can achieve!” allure of, say, an artist who’s trying to raise money for a film, or even a small group trying to raise enough to buy its first piece of equipment.

That doesn’t mean, of course, that you can’t be creative in thinking up bite-size portions of your work or projects that your social networks might support, as described in, “Using Crowdfunding to Raise Money for Your Nonprofit.” But there’s one type of occasion in which hardly any creativity is required: when your group has suffered some sort of setback, or has an identifiable, emergency need for a quick cash infusion.

dachsundThe Berkeley East Bay Humane Society (BEBHS)’s recent Razoo campaign to replace its stolen van provides a perfect example. This isn’t a case of a nonprofit that just ran out of money and thought Razoo could plug the leaks — the organization had a perfectly lovely, working van, which it regularly used to drive to local municipal shelters and reduce their animal populations by picking up dogs and cats for adoption via BEBHS.

That van was stolen, thus leaving the agency unable to implement a key part of its operations. The $25,000 needed to replace it is no small change for a small nonprofit already in the middle of a capital campaign to rebuild its fire-damaged structure — but a sum that could realistically be raised by enough contributions from concerned supporters. As of today, they’ve brought in $8,525 . . . not there yet, but a good start.

Why Your Nonprofit’s Next Fundraising Auction Should Set Earnings Records

boxesCorporate giving is up, according to the 2012 Giving in Numbers report from the Committee Encouraging Corporate Philanthropy.

It’s up across the board, to the tune of 42% or $4.48 billion between 2007 and 2012. That’s good when you want straight cash. But it’s even better when you want a non-cash contribution from a business, such as  a gift basket, hotel stay, case of wine, or other tempting item for your next charity auction.

Non-cash corporate contributions accounted for 69% of the 2012 corporate giving totals, up from 57% in 2007. We seem to be at a curious point in the U.S.’s economic recovery: Business profits are up just enough that owners feel comfortable increasing their donations to charity — but with sales on the sluggish side, they’re still ending up with excess inventory, which can go toward a nonprofit in need.

Of course, need alone isn’t enough to convince a business to hand over its goods. The savvy nonprofit will make professional requests that stress the attractive manner in which potential auction items will be displayed as well as how the corporate donor will be recognized.

For more on how to hold a great auction, see the article, “Twelve Steps to Preparing a Successful Fundraising Auction.” And while we’re talking about auctions, make sure your nonprofit isn’t making the common mistake of giving bidders an exaggerated idea of how high a tax deduction they’ll receive, as discussed in, “Is Your Nonprofit Overpromising Tax Deductions?

Real People Trying Crowdfunding Discover What Nonprofits Already Knew

coinThe field of artists, nonprofits, entrepreneurs, dreamers, freelancers, travel buffs, scientists, and folks in need who are trying out crowdfunding as a way to raise cash is getting a bit, well, crowded. Distinguishing one’s pitch from all the others takes all the creativity and marketing skills that one can muster, as seen in the article “Generation ASK,” by Lauren Smiley, in the May, 2013 issue of San Francisco magazine.

Experienced fundraisers will nod knowingly at the marketing lesson arrived at by one such seeker — Michele Turner, on her way to raising $14,000 to cover basic costs (rent, gas) associated with her time spent in chemo. In order to tap into people’s passions rather than mere guilt, Smiley explains that Turner needed to “sell[] benefactors on the experience of being part of her recovery, not just on alleviating her poverty.”

Sound familiar? In fact, the various crowdfunding sites advise people seeking funds to post updates and thank-yous, “keeping [donors] abreast of every morsel of good news.” As Smiley explains, “All this can be exhausting for someone fighting a serious illness.”  But the good part of this is that “With so many people invested in her recovery, [Turner] can’t shake the feeling that she’s on the hook to heal . . . .”

The parallels aren’t entirely surprising, but notice that, even when the first people who will be viewing the pitch for cash are your own friends and family, sheer neediness and desperation remain a turnoff. Hope sells, as does the chance to be part of the solution.

For more information on nonprofit uses of crowdfunding, see Nolo’s new article, “Using Crowdfunding to Raise Money for Your Nonprofit.”

How Nonprofits Increased Charitable Donations in 2012

Kitts1_025Hopeful news for nonprofits just came out in the Nonprofit Fundraising Study: Covering Charitable Receipts at U.S. and Canadian Nonprofit Organizations in 2012.  According to the study, 58% of the nearly 1,2oo organizations surveyed said their fundraising receipts had gone up in 2012. That’s an improvement over the 53% who saw a rise in 2011 and a paltry 43% in 2010.

The increase was relatively uniform across the four regions of the United States and among different types of organizations (covering issues such as arts, culture, humanities, and religion).

We could attribute the rise to improvements in the economy — but given that this rising tide still didn’t manage to lift 42% of nonprofits, it’s worth taking a closer look at the successful ones. How did they do it?

Most explained their fundraising success in 2012 to such factors as:

  • the addition of new staff (10%)
  • a jump in receipts from bequests (6%), and
  • a successful event (3%).

It’s worth noting that all three of those factors require advance planning and investment, of a sort that’s all too easy to jettison when an organization is underfunded, understaffed, and feeling insecure. Thus it’s not too surprising that larger organizations saw more growth in charitable receipts than smaller ones.

Nevertheless, the overall message is a positive one. In the words of Nancy Raybin, with the Giving USA Foundation, “With a better economy, charities generated results by looking again to the future, not just for meeting day-to-day needs.”

Happy National (Underfunded) Library Week!

books-188x300From April 14 through 20, the U.S. is celebrating books and the role that libraries play in people’s lives. Libraries have become many communities’ go-to place to rent a movie, do homework, search for a job, and more. Of course, many remain shuttered or on a reduced schedule, with libraries across the U.S. having become, in the last few years, victims of city and county budget cuts.

As if librarians didn’t wear enough hats already, these budget difficulties have led many librarians to assume a new role: fundraiser. I talked to a number of them for my book, The Volunteers’ Guide to Fundraising: Raise Money for Your School, Team, Library, or Community Group. Many were involved in contacting prospective donors, organizing special events, rounding up donations for an auction or raffle, and so on.

Fortunately, librarians are also a multi-talented bunch, and they’ve got a great theme to work with: reading and literature. Book sales, book awards, and author events are staples of the library fundraising world. But the fundraiser that gets my vote for creative adaptation of the theme is the Edible Book Festival, which started in 2000 and has now spread around the globe.

The idea is that people create cakes or other food items that represent famous books and in some cases, themes and characters from those books, which are displayed and then consumed at a public event.

Check out some of the pictures here and here. And if you’d like to learn how to hold your own such festival, check out the “Eat your words: Tips for hosting an Edible Books Festival in ProgrammingLibrarian.org webinar,” to be held Wednesday, May 1, 2013 at 2 p.m. CST.

 

Smaller Nonprofits: What the Blackbaud Charitable Giving Report Means for You

flowersSmall is powerful, according to the Blackbaud Charitable Giving Report for 2012. The report found that, while charitable giving went up in 2012, the overall 1.7% rise wasn’t evenly distributed among different-sized nonprofits.

Organizations that raise less than $1 million per year saw their contributions jump by an impressive 7.3% in 2012. Compare that with the 2.7% rise in giving to mid-sized groups (those with annual revenues of $1 million to $10 million) and the tepid 0.3% rise in giving to the largest nonprofits (with revenues of $10 million and more).

What accounts for this differential? According to a report in Barron’s Penta Daily, Steve MacLaughlin, director of Blackbaud’s Idea Lab, says that ever since the recession began, the tendency among donors has been to give locally — for example, to a park, arts council, or hospital.  Donors are better able to see both the need for funding and the potential impact of their gift when the group is basically in their own back yard. Another factor may be that smaller nonprofits receive a relatively high percentage of their funding via the Internet, and online giving is growing.

That’s good news for small groups, but how do you capitalize on this? Or, while we’re at it, how can mid-size or larger groups overcome the perception that they’re too big to need help?

Clearly, every group’s communications and marketing materials should be reviewed with an eye to establishing local presence. Donor lists should be segmented to make use of opportunities to gear communications to particular geographical areas or local interests. If your actual offices are physically located near certain donors, that’s worth highlighting. (Sure, they can look at the address line on the letter, but that doesn’t really drive the point home.)

No matter where your main offices are, if your group is serving clients or working on a cause that’s physically near certain donors, make sure they know that, too. Even larger groups can point to their local branch offices or membership groups and opportunities, and explain the important local needs that they serve.

The study also has implications for finding new donors. Has your group fully considered who its neighbors and nearest potential friends are? What about its literal neighbors? Something as simple as holding an open house, to which you invite people from nearby offices and residences, can yield a new list of names for your database, possibly leading to new donors or volunteers.

Just don’t get so wrapped up in grassroots efforts that you forget to attend to the other important part of the equation — making your website an attractive draw, where potential donors find it easy to give, as described in the article, “Your Nonprofit’s Website as a Fundraising Tool.”

Some People Will NEVER Agree to Recurring Donations

I thought I was a statistical outlier in absolutely, categorically refusing to sign up for regular, monthly donations to my favorite charities. To me, the idea sounds too similar to various times when I’ve gotten a free or low-cost magazine or newspaper subscription, only to find that turning off the tap was nigh on impossible.

Apparently, however, I’m not alone in my approach. Blackbaud’s November, 2012 “Donor Perspectives” survey found that among U.S. donors, 19% said that “nothing would compel them to become a regular donor to charities to which they currently make one-off donations.”

That’s a useful thing to know, given how many charities are pushing the idea of recurring donations. And why wouldn’t they, given the possibility of an ongoing income stream from donors who might not otherwise be able to afford such a large amount?

But let’s not go overboard chasing the possibility of recurring donations; for example, by failing to offer other methods of contributing. “Who would be silly enough to do that?” you ask. In fact, I was approached on the street by a volunteer for a major environmental organization who spent a long time trying to talk me into a recurring donation plan and then, when I said I was willing to make a one-time donation only, said they couldn’t do that! That was a waste of both our time.

The survey also reminds us that talking someone into a recurring donation isn’t the end of your interaction with them. Between 20% and 30% of those surveyed said that they’d stopped making recurring donations to at least one organization in the last three years. The most common reason was personal finances, which of course nonprofits can’t do anything about.

But the second most common reason was “a feeling that the charity was not making the best use of its financial resources.” That’s something the nonprofit can certainly do something about. I’ll bet those donors weren’t doing a careful analysis of the groups’ financials and Forms 990. More likely they were simply underwhelmed by the reports they were getting back from the group — or, dare I say, were upset by getting continued appeals for more money. It’s also possible that their expectations from the group in question were heightened, given their feeling that, “I’m paying the bills for this place.” How about making sure to regularly thank the recurring donors, give them specific information on how their recurring donation helps maintain and improve your group’s efforts, and hold off on the followup appeals?