Category Archives: Recession Strategies

Are Leveled-Out Giving Trends Good News?

The 2012 Fundraising Effectiveness Report from the Association of Fundraising Professionals and the Urban Institute shows that while charities saw reduced donation totals in 2010 – with $105 lost due to departed donors and reduced gifts for every $100 gained in new or increased gifts — 2011 saw a return to flat levels of giving. So, the bleeding has stopped — but has the healing begun?

In one sense, no: Organizations are still losing more donors than they’re gaining (107 per 100 last year).  So nonprofits somehow aren’t heeding the old fundraising lesson, which the report reminds us of, that “Taking positive steps to reduce gift and donor losses is the least expensive strategy for increasing net fundraising gains.”

Then again — as if you didn’t have enough to worry about — the numbers do seem to show a surprising amount of energy around new donors. Is it because organizations have been doing more to reach out to new donors, or because a new pool of donors is responding to obvious societal need while others fall? Hard to say, but it looks like groups should continue whatever it is they’re doing right!

Regardless of trends, the key concept that the report tries to convey should be easier for every group to wrap its hands around: Nonprofits should look beyond the final donation numbers to see where they’ve gained ground and where they’ve lost. If your group has been looking only at the bottom line total donation amounts, and hasn’t examined how much of its budget is due to new and increased donations versus lapsed donors or reduced donations, now’s the time to do so. You may spot an instructive trend.

How Much Warning to Give Members Before Closing a Nonprofit?

Another news story came out this week about a nonprofit closing operations for lack of funding; in this case an Oakland charter elementary school called Civicorps. The headline in the Oakland Tribune, seemingly inevitably, said, “Families, teachers stunned by sudden closure of Oakland charter school.”

The members are always stunned, it seems. Just a couple of months back, a friend of mine was reeling at the announcement that a trails organization of which she was a loyal member had run out of money and was closing — and doing so almost immediately.

The decision to close a nonprofit is no doubt made after trying virtually everything, sounding alarm bells about the need for funds — hopefully without turning potential donors off by the persistent note of 0h-so-unattractive desperation — and finally giving up.

And yet. Civicorps parents and teachers told Tribune writer Katy Murphy that  “they could have saved the school if they had been given time to do so. ” My friend expressed something similar.

Where is the line between telling donors “We really need the funds, or else” and “This time we mean it?” Especially given that, once the decision to close is made, a group needs to wrap up operations fairly quickly. It may not have the cash reserves to do anything else, especially while winding down income-generating services and fundraising operations.

The lesson seems to be that, one way or another, key or loyal members need to hear that an ultimate decision on whether to close is being made. Whether they really can mobilize in time to save the ailing nonprofit is, of course, an open question.

But without an opportunity to try, and to assess the situation for themselves, member frustration, bad feeling, and very likely public statements about the incompetence of those running the nonprofit are a predicable result. (In the Oakland school instance, a teacher/parent said, “It’s just negligence, at a minimum”). And who knows, maybe they really will be able to save the nonprofit.


Four Weeks Until the Weakest Fundraising Month: April

According to projections by Atlas of Giving, April of 2012 will be the weakest fundraising month for all types of charities except those working on arts and environmental issues. (See their 2011 U.S. Report.)

Why? The report authors don’t say, but I’d bet my tax deductions it has something to do with April 15th. People’s attention will be elsewhere, and many will be bemoaning having to write a certain large check.

The group’s advice is to reschedule your solicitations and events to March. Which, uh, starts tomorrow. Killing yourself to hurry up your solicitations and events probably isn’t such a good idea. For one thing, (as I discussed in The Volunteers’ Guide to Fundraising‘), planning for an event of any significance should start months in advance.

So, maybe you should just kick back, and push your major plans to September . . . which, according to Atlas of Giving, is supposed to be a banner month for U.S. fundraising.


Church in London Earns Cash by Renting Parking Spots

You know how I’m always on the lookout for ways a nonprofit can boost the positive side of its balance sheet by turning existing assets into cash?

That’s why I was intrigued to read this article by well-known real estate writer Broderick Perkins, describing how the website — already well-established in England — is coming to America.

The tag line on the website’s home page pretty much says it all:  “Have an empty spot in your driveway? You could be making money by renting it out.”

Perkins further explains that founder Anthony Eskinazi,  inspired by his own difficulty finding (or affording) a parking space when he visited AT&T Park in San Francisco to see a Giants game, went back to England and set up what the website calls a “match-making service for property owners and drivers.” The site continues to manage the relationship, having already helped over 40,000 property owners in England gain extra income from renting their unused parking space by the day, hour, or month.

The church I mentioned in the title is near the busy Kings Cross Station in London and has, according to Perkins’ article, earned some $180,000 from the website in the last three years, comprising more than half its annual income. (These are tough times for tithing.)

Of course, not every nonprofit owns its own property, or has space to let.  (And if you rent, or are part of a homeowners’ association, better check with them before you sign up.)  But hey, pass the word on to your most-likely-underpaid staffers. Maybe their driveway could put a few extra dollars into their pockets while they’re spending long hours at work!

Corporate Giving Gets More Issue-Focused

Instead of spreading their gifts widely across multiple program areas, corporations are choosing one or two societal issues to focus on, according to a survey and 2011 “Giving in Numbers” report by the Committee Encouraging Corporate Philanthropy. (The survey included 184 companies, 63 of which were among the top 100 companies in the Fortune 500.)

Which issues were most of these companies choosing to target? Basic health and social service programs topped the list, followed by education and community and economic development. Basic human hardship in their communities appears to be their central concern. That’s bad news is you’re with an arts program, but those whose missions match these targets should take note, and revisit their corporate fundraising strategy and prospects. Perhaps there are some corporations who’ve showed no interest in your organization in the past, but have since changed their tune.

The Charitable Deduction: Will It Be Reduced By the Jobs Bill?

We may soon find out exactly how much the tax deduction for charitable giving prompts people to donate to nonprofits, if President Obama’s proposed jobs bill goes through. As explained in Lisa Chiu’s September 12 article in the Chronicle of Philanthropy, the charitable deduction is just one of the many itemized deductions that would be limited to a 28% writeoff in the higher-income brackets.

For an impassioned (to put it mildly) discussion of the pros and cons of limiting this deduction, see the “Tax the Rich More? Or Less?” article by Jan Masaoka in Blue Avocado and the comments that follow. The crux of the debate seems to be between those who believe that tax deductions either aren’t or shouldn’t be a major motivation for giving among the wealthy, and those who think that it is — and that, with all the struggles nonprofits are already going through, picking on this deduction could just make matters worse.

I put myself in the latter camp, largely because of the following statistic, as covered in my December 2010 blog post: More than 20% of all charitable giving for the ENTIRE YEAR occurs on December 30th and 31st.

Maybe the tax deduction isn’t the main motivation for giving, but the deadline clearly gives potential donors a major nudge. Without that deadline, I’m betting (as a seasoned procrastinator) that all those good intentions will be put off month by month by month.

Fundraising Kudos to: Rockridge DVD Project

These are tough times for libraries, businesses, and donors, but the Rockridge DVD Project has come up with some creative solutions that unite all three.

The library was offered a chance to buy, at low cost, the inventory of a DVD rental store that was closing. With a loan from the library, the newly formed DVD Project did so — but then needed to pay the loan back, by an October deadline. The group started soliciting neighborhood donations, through means such as publicity in local publications and setting up an information table in the library.

I confess, I was initially skeptical about the importance of this project. After all, I like books, and questioned whether the library should turn into a DVD rental outfit.

But after talking to a volunteer at their table, I understood the brilliance of their strategy: DVDs bring people into the library — people who then tend to check out books, as well. When library circulation goes up, city funding goes up, and it becomes easier to advocate against, say, library closures (which Oakland has been threatening a lot lately).

It’s more than a fundraising effort, it’s a strategy for library advocacy. The urgency of the upcoming deadline is also a fine way to raise the library’s profile. And if the effort raises questions (like mine) about the ultimate purpose of libraries, all the better — the end conclusion can only be that they’re incredibly important community resources.

How Are Legacy Donors Responding to Recession?

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.

Fundraising Partnerships With Local Real Estate Agents

Since I cover both fundraising and real estate matters at Nolo, I can’t help but notice how often the two intersect.

This week, for example, my local neighborhood newspaper’s real estate section contains a front-page article about the Grubb Company’s recent donation of $5,000 to a local arts center.  DJ Grubb is quoted as saying, “From a personal perspective, I can’t wait to enjoy and participate in upcoming events. From a realtor’s perspective, it represents the spirit and ingenuity of the community . . . .”

On page 5 of the very same section, McGuire Real Estate’s home ads are accompanied by an announcement of its “1st Annual Neighborhood Garage Sale,” to benefit local schools. For every local homeowner who registers to hold a garage sale on September 17, McGuire will make a donation to the schools.

And agents at Pacific Union routinely donate part of their commission to a “Community Fund,” which makes annual awards to local nonprofits.

The pattern here looks pretty clear: Real estate companies have an interest in maintaining the vibrancy of the communities in which they operate, given that it helps them sell houses. And by helping local nonprofits, the get positive press coverage, or can at least draw attention to their own advertising.

Sure, they might have altruistic motives as well, but when it comes to business donations to charity, that altruism almost always gets exercised in a way that simultaneously benefits the business.

So, if you haven’t been watching which local real estate agents are interested in partnering with nonprofits, perhaps now is the time to open your local real estate section.

Or, get proactive. Even without making a cash donation, there are ways that local real estate companies may be able to pitch in with your nonprofit’s efforts — perhaps by lending their offices for a phone-a-thon or event, or suggesting properties for your next fundraising home-and-garden tour.

Bay Area Fundraisers: Wanna See Free Theatre About Fundraising?

Spending a summer’s day in the park seeing the San Francisco Mime Troupe, picnicking, and seeing which old friends you run into: It’s a Bay Area tradition.

No, the Mime Troupe is not silent, as in pantomime — it’s campy political comedy, with rousing music to boot. (To quote their website, “We mean ‘mime’ in the ancient sense: to mimic.”)

The question every year (other than, should I buy a T-shirt or just make a straight donation?) is, what topic will have the politically savvy Bay Area audiences laughing, crying, and clapping along — without saying, “Didn’t we see this last year?” That’s no mean feat, given that they’re in their 52nd season. (Though I still wish they had an excuse to bring back their Dick Cheney character.)

The answer this year: Nonprofits’ desperation for funds, and the pushed-to-the wall question of whether to accept funding from dubious corporate sources. It’s sort of a play within a play, as a scrappy political theatre group faces imminent closure and the temptation of corporate funding from the mysterious (and more than a little pushy) Mrs. Haverlock.

To say any more would be require a spoiler alert, so I’ll just send you to the Mime Troupe’s website for reviews and the performance schedule.