Forbes Publishes List of U.S. Nonprofits With Most Individual Donations in 2013

cash_handsIf you’re with a small or struggling nonprofit, get ready for some pangs of jealousy: Alth0ugh Forbes calls them the “largest” U.S. charities, its top-50 list for 2013 actually uses “private donations received” as its “main metric” for inclusion.

Together, the listed nonprofits pulled in $30 billion worth of donations this past year.

Not surprisingly, you will have heard of many of these: United Way, Salvation Army, and . . . Task Force for Global Health?

Okay, I hadn’t actually heard of them. But as a newcomer to the list, they’re clearly a group to watch. What are they doing right, to have rocketed to the third spot on the list? It looks like most of their giving (to the tune of $1.7 billion) was not in the form of cash, but donated medicines.

Still, one has to admire a couple of fundraising-related aspects of the Task Force’s website: They post their annual report quite visibly (thus emphasizing financial transparency); and when you click the “Donate” tab on the home page, you’re given interesting background information on where your dollars go before being presented with the form to fill out.

For tips on achieving results with your group’s own website, see Nolo’s article, “Your Nonprofit’s Website as a Fundraising Tool.”

Is Public Speaking Part of Your Job at a Nonprofit?

radio_mikeAmong the many skills required of nonprofit executive directors, development directors, and board members, public speaking is one that doesn’t receive much discussion.

It is, however, a skill that people in the above roles may have to call on for various reasons: to give a welcoming or fundraising speech at a gala dinner or other event, to address a group of decision-makers at a foundation, to represent your nonprofit at a community fair or other public event, to speak with a radio or television reporter on air, and so on.

So, does public speaking make you nervous? (Or, I should ask, do you suffer from “glossophobia?”) Around three quarters of Americans reportedly do.

If you’re among them, you’ll find no lack of advice on dealing with the topic — everything from breathing exercises to picturing your audience in their underwear. For a simple, straightforward message, however, check out marketing guru Seth Godin’s blog today, titled, “Speaking in public: two errors that lead to fear.”

Godin doesn’t single out nonprofits, but his points couldn’t be more relevant to them. When you focus on the cause, not yourself, and “realize that you have a chance to be generous in this moment, to teach and to lead,” your fears will recede into the background.

Shoutout to All the Nonprofits Providing Thanksgiving Services

CAKEThe degree to which nonprofits have become a backbone of American society is never clearer than on holidays such as Thanksgiving — for those who realize what a nonprofit is, at least.

Many people forget how many organizations are run based purely on love, donations, and volunteer labor. Such organizations may not get to fold up their tents while others enjoy a vacation. In fact, their services may be more important than ever, as they provide:

  • medical treatment to people in need
  • Thanksgiving meals to the hungry and the incarcerated
  • shelter for those needing a break from the ever-colder weather or from domestic violence
  • care for animals awaiting adoption
  • hotlines and support groups for people in difficult straits, and
  • much more.

They’re during it during a tough year economically, too, with donations down, and headlines announcing things like, “Nonprofits face turkey-free Thanksgiving.

I’m taking a moment to be truly thankful for the open hearts and determined spirits of the people who join together on such projects. (And I’ll be putting in a couple of hours at my local animal shelter, too.) Happy Thanksgiving!

Congrats to 2013 “Purpose Prize” Winners!

golfing womanThe best — or the most meaningful — may be yet to come for any of us.

Don’t believe it? Check out the stories of this year’s winners of Encore’s Purpose Prize. They’re all over 60, in the so-called “leftover years” of their life, when they’re supposed to be playing golf and poring over glossy brochures for round-the-world cruises.

Yet they’ve all drawn on their significant experience, professional and otherwise, to throw themself into a cause in an innovative way.

What struck me about the winners’ stories was that each seemed to have identified a truly unique need or approach. Just when you think the U.S. contains every type of nonprofit or charitable program imaginable, you hear about someone like winner Carol Fennelly, who saw how difficult it was for family members to keep in contact with their incarcarated relatives, and created Hope House. It offers programs that arrange video teleconferences between school-age children and their fathers in prison, helps inmates make recordings of themselves reading books aloud for their children, and operates a series of summer camps for children ages 9 to 14 that allows then to spend a week visiting their incarcerated fathers. Wow.

And there are six other winners, all with inspiring stories of their own. After reading them, you’ll be asking yourself the same question as presented on the Encore website: “What’s your encore?”

So, Should Donors Check Charities’ Financial Percentages or Not?

brainReading the recent New York Times “Giving” section, I wasn’t sure whether I was watching change in the making or an example of cognitive dissonance. The subject in question was how much weight donors should give a charity’s financial percentages — that supposedly key ratio of expenses spent on programs and services versus overhead (admin and fundraising) — when deciding whether the charity is effectively carrying out its mission.

On the one hand, David Wallis devotes an entire article to Dan Pallotta, founder of the Charity Defense Council, and his argument that nonprofit organizations “worry too much about keeping overhead low and pay too little to attract the most talented executives.” Pallotta describes the dramatic turn of events when “the Better Business Bureau, Charity Navigator and Guidestar issued a joint news release called The Overhead Myth. It’s an aggressive campaign to really backtrack on this history of teaching the general public to ask about overhead. And now they are saying, ‘Charities don’t need low overhead; they need high performance.'”

On the other hand, the title of this article is, “Gadfly Urges a Corporate Model for Charity,” and Wallis takes pains to point out that Pallotta is a controversial figure with some major failures in his fundraising past.

And then there was an article called, “How to Choose a Charity Wisely,” by John Wasik. It lists the various organizations that evaluate charities (mostly using the standard financial ratios), quotes a Charity Navigator spokesperson saying, “a good benchmark for a worthwhile charity is having at least 75 percent of income spent on programs, or the nonprofit’s mission,” and in the section on “Getting Granular,” advises that charities whose accounting practices include “lumping in fund-raising or solicitation with the charity’s program expenses” are “muddy[ing] the waters” when it comes to “gauging how much is really being spent on the charity’s mission.”

Oh, but the article also warns that: “Like GuideStar and Charity Navigator, the [BBB Wise Giving Alliance] cautions against paying too much attention to the percentage spent on nonprogram expenses, also known as the ‘overhead ratio.’”

Okay, so are we supposed to pay attention to these percentages or not? According to Merriam-Webster, the definition of cognitive dissonance is “psychological conflict resulting from incongruous beliefs and attitudes held simultaneously.” I think we’re seeing some of that here.

A few years from now, perhaps everyone will laugh at how attached we once were to those magical fundraising versus overhead percentages. In the meantime, for the sake of clearheadedness, it might help if everyone took a closer look at the assumption that you can divide program expenses and overhead expenses in the first place. Where’s the bright line when a development director meets with a major donor, gets that person excited about the organization’s mission, and invites him or her to participate in the organization’s work more deeply? Or when the Executive Director goes out to speak at a public event, increasing awareness of the issue the organization is concerned with?

The people and tasks that are commonly called “overhead” are, in many cases, integral to the nonprofit’s mission. This isn’t “muddying the waters,” it’s practical reality.

How to End a Nonprofit Event on Time (Donors Need to Get Home!)

cmsamerica_nightThere’s nothing like the good feeling at a party where no one wants to leave. At an ordinary party, however, the departure time is voluntary.

At a nonprofit annual dinner or similar fundraising event, you hope and assume that everyone who can will stay put right up until the last honoree is honored and the last speaker heard from. (Especially the speaker who’s asking for donations . . . . )

Yet far too many nonprofit events drag on far into the night. This can lead to a flood out the door as attendees realize, “I promised the babysitter I’d be home by now,” or “If I don’t get to sleep soon, tomorrow is going to be Hell.” They run from their chairs feeling half guilty and half resentful. (And guess what they remember next year . . . .)

This time drag is not for lack of good intentions. Recently, I intended an event where the program itself included the exact time at which everything would take place: “7:35, Announcement by E.D.,” “8:00 Choral Presentation,” and so forth. How nice to know exactly what to expect! But keeping to such a schedule is always (and was) a challenge.

So, what can a well-intentioned nonprofit do? Here are some strategies:

  • Don’t try to pack too much into one evening. The more variables you’ve got, with speakers and participants from outside your organization who might revel in their moment in front of the microphone, the higher the possibilities for time to slip away.
  • Set an end time for festivities that’s earlier than when you want everyone to leave. Remember, people will need time for some final chitchat, and your volunteers or event staff will need time to clean up.
  • Give guest speakers strict instructions on how much time they’ll have. A casual, “Oh, we’d love it if you could say a few words” won’t do it. Tell them (graciously, of course) not only what their time limit is, but that you’ll have a timekeeper in the audience holding up signs as the cutoff approaches.
  • Plan for crowd control. There’s nothing that can throw your time calculations off faster than a large group of people who can’t be persuaded to move. How, for instance, will you get people from the silent auction tables to the dinner table? This may take more than just an announcement from the podium. You may need to have volunteers deputized to approach groups of people and invite them to sit down.
  • Enforce the timekeeping rules. It should go without saying, but if you tell speakers they have time limits, you have to make sure they stick to them. Some speakers will ignore the rules, or even ignore the person holding up the sign. Dragging them offstage with a hook is generally considered to be in poor taste, but designating someone to approach the podium clapping can work when all else has failed.

Other strategies tend to depend on the exact nature of the event. At an auction, for instance, you’ll want to focus on developing a seamless procedure for having the winning bidders pick up their items, so that they don’t face a long line before they can get out the door.

Succeeding in having an event end on time isn’t something that will bring in loads of compliments — but you should see the payoff in ticket sales next time around.



Nonprofits Shouldn’t Give Up Too Soon on Grant Funding

waterFor too many nonprofits, fundraising feels like exercising in one of those “swim-in-place” pools. You huff, puff, and struggle, yet never move forward – while a single pause for breath can send you back to the starting wall.

Receiving a “no” answer to a grant proposal can be one of those moments that make you feel like you’ve lost ground. All the time you spent planning, preparing, and even dreaming about the outcome, for zip, zero, nada. But according to Diana Compoamor, President of Hispanics in Philanthropy (which works to support and strengthen Latino organizations and leaders), this is also a moment of opportunity.

“As discouraging as a rejection from a funder can be,” says Diana, “I see too many nonprofits viewing this as a door that has closed forever. The nonprofit’s list of possible funding sources thus gets shorter and shorter with each ‘No’ answer.”

What should nonprofits do instead? “Contact the funder after a rejection,” says Diana. “I know it’s hard, but all you have to do is politely say, ‘I understand that you had many proposals to choose among, and am sorry we didn’t meet your criteria this year; could you share with me your thoughts on what we could do to improve our chances of success next time?’”

The answer might surprise you. Perhaps the funder liked everything about your proposal, but your program was too similar to one from another nonprofit that it had already committed to funding. Then again, perhaps an embarrassing, fatal flaw emerged in your proposal – in which case, wouldn’t you want to know about it before sending a similar proposal to another funder? By adjusting to the responses you receive, you increase the odds that the next answer you receive from a funder will be a “Yes.”

But does this really happen? Do foundations ever change their minds about a group that they’ve rejected? Jim Lynch of TechSoup Global tells the following story (excerpted from my book, Effective Fundraising for Nonprofits): “I had developed a phone contact with an officer at the Crocker Foundation. Every year, I called to ask what they had going, and every year, the officer told me that it wasn’t a good fit. Finally, one year I called, and something did fit—and we got the grant! I think the officer was partly relieved to be able to give me some good news for once.”

Finance Directors: The Forgotten Nonprofit Professional

cash_handsThe recent Blue Avocado study of finance professionals at nonprofit organizations serves as a great reminder of how important and yet overlooked this role is. As the study report notes, the “tenures and experiences of executive directors (CEOs) and development directors” get most of the attention.

Meanwhile, toiling in the background are a group of professionals that are, the study shows, typically highly trained and inclined to stay with the nonprofit longer than either its CEO or development director. They’re getting a bit of short shrift in return, it appears: Their biggest stressors include when other nonprofit staff don’t comply with basic financial procedures (like turning in timesheets) or when they don’t have enough time to do everything on their plate (other job duties having often been heaped there).

Let’s take a moment to reflect on the key part the finance director (or CFO) plays in an organization’s fundraising efforts, doing everything from:

  • explaining to staff and board what the cash flow and overall financial situation is
  • helping plan future budgets for projects or grant applications
  • collecting on reimbursement-based grant money
  • keeping track of a myriad of individual donations
  • preparing budget figures for follow-up reports to foundation grantors
  • making sure the nonprofit survives its audit with reputation unscathed, to
  • much more.

Given all that, it might be worth checking in with your CFO to see whether the typical stressors are grinding away at him or her — and try to eliminate at least some of them (turn in those timesheets, folks!) in order to enhance the likelihood of a good long tenure with your organization.

Jewish Culture Laying the Groundwork for Charitable Legacy Giving?

Vintage bronze Siddur cover useful for backgroundOkay, let’s not all start going through donor lists and chasing after everyone with “stein” or “berg” in their name; but nonprofit fundraisers should definitely read the article by Alex Daniels in the recent Chronicle of Philanthropy entitled “Jews Are Twice as Likely to Leave Bequests Than Non-Jews.”

It cites a Connected to Give study called “Jewish Legacies,” which found that 23% of  U.S. Jews age 40 and over with household incomes of at least $100,000 have provided for charities in their wills. If that doesn’t sound impressive, realize that it’s double the number of non-Jews who have done the same. Another impressive percentage is the 74% of U.S. Jews who have prepared wills in the first place; well ahead of the 60% of non-Jews to have done so.

If you’re with an organization that directly serves a Jewish population or cause, the lesson is clear: If you don’t already have a planned or legacy giving program in place, it’s time to start developing one. You’re working with a population that apparently acts with above-average maturity in planning for the end of their life and deciding what mark they will make on the world.

There’s good news in here for non-Jewish organizations, as well; the 23% includes 6% whose legacy gifts were intended for non-Jewish causes. Providing for basic needs, health care, and the environment ranked high on the list.

Don’t Promise Thank-You Gifts Unless You’re Able to Send Them!

Old books Used books donated to the poor and drive their growthI’ve heard too many stories like these lately: The environmental group that failed to send the promised calendar (and instead barraged the new member with additional requests for donations); the community radio station that sent the wrong book to an elderly recipient (and on top of that, sent her an anti-capitalist tract that she found politically suspect); the organization that had a major layoff and failed to send any of the promised thank-you gifts to anyone at all.

Perhaps that last situation is impossible to predict and avoid, but what’s up with the other ones? Surely no nonprofit on the planet thinks its okay to stiff donors of their promised gifts. More likely such lapses happen due to a breakdown in organization — a task gets delegated to someone with little experience, perhaps, or part of the work is handled by outside consultants and then the organization somehow fails or forgets to resume its in-house responsibilities.

While such lapses are understandable, they’re not excusable if the organization wants to maintain halfway decent donor relations. I don’t have statistics to back this up, but it’s probably safe to say that donors who don’t receive the thank-you gifts they thought they’d signed up for will not soon forget this apparent snub. (Why else would they tell me stories about it?)

It will damage their sense of relationship with the nonprofit, make them doubt its ability to organize matters with regard to its mission, and in the future, dull their interest in hearing about the latest cool thank-you gifts on offer in return for their pledge of $X!

If you realize that your nonprofit has made such mistakes in the past, it’s time for some serious damage control. Send a follow-up card and gift, make a phone call, do whatever it takes to assauge the donor’s sense of breached trust. You may not win that donor back, but you’ll at least reduce the degree to which he or she is tempted to badmouth your organization to others.

On the bright side, — and this isn’t much of one — a donor who doesn’t get a thank-you gift can take the full tax deduction for the donation! (In fact, this is a good reminder that donors should be able to opt out of receiving thank-you gifts — and the nonprofit should make sure to abide by the opt-outs and not send the gift.) Attorney Stephen Fishman explains these issues further in “Tax Deductions for Charitable Giving – The Nonprofit’s Responsibilities.”