It's commonplace in dot-org land to hear professionals quote as unquestioned fact things about charitable giving in this country that are either completely wrong, or wildly outdated. This seems like one more example of the immaturity of this sector -- do lifers in other lines of enterprise walk around believing basic objective facts about their sectors which are dead wrong? Doesn't seem likely.
Anyway, inspired by one such comment I recently pulled out the authoritative annual reports by Giving USA on charitable donations in the United States. The subject in mind was where the current ongoing boom in charitable giving is going (that is, to which causes or types of organizations?). I wanted to look at the last 20 years or so which is the real boom period, and wanted to see the overall trends rather than the single-year blips which always end up being the dumb newspaper headlines. So I plotted the annual totals from the years 1985, 1990, 1995, 2000 and 2005 (2006 data is not yet published), as percentages of change.
The overall context is that after adjusting for inflation, charitable contributions in the U.S. for 2005 totaled about 2.5 times as many dollars as in 1985. So total amounts given to every type of non-profit have risen, a lot. Individuals remain by far the major source though slowly declining as a fraction (from being more than 80 percent of the total in 1985 to around 75 percent of it now); the shares contributed by corporations and by foundations are somewhat higher now than 20 years ago.
Giving USA breaks all contributions down into several useful categories by organizational mission. Easily the biggest loser of this particular market share has been religious non-profits: from 53 percent of all donations in 1985 they dropped to 34 percent in 2000, ticking back up to 36 percent in 2005. (Or put another way: the share of all contributions that goes to religious groups has fallen by about one-third over the past 20 years.)
Three other major types of non-profits saw their shares of all giving decline a bit between 1985 and 2005: health care (from 11 percent to 9 percent), human services (from 11 percent to just under 9 percent), and arts/culture (from 7 percent to 5 percent).
So who have been the biggest relative gainers? (Keeping in mind that all types of non-profit have been gaining in absolute terms because the total contributions have risen so much across the board.) Education-focused non-profits have seen their market share rise from 11 percent in 1985 to almost 15 percent in 2005, and giving to foundations rose from under 7 percent then to more than 8 percent now (and the 2006 figures will likely boost this one even more).
What Giving USA calls "public/society benefit" non-profits (meaning groups which collect donations and pass them on such as the United Way) went from 3 percent of all 1985 donations to more than 5 percent in 2005. Other gainers have been by categories which in 1985 weren't even big enough to be counted by Giving USA: environment/animals (3.4 percent of all 2005 giving) and international affairs (2.5 percent). And there are more new types of non-profit entering the picture steadily: the "other" category received 6 percent of all 2005 contributions.
So the overall picture is that charitable giving while rising has also been spreading out, largely at the expense of religious groups.
Showing posts with label donors. Show all posts
Showing posts with label donors. Show all posts
Saturday, April 21, 2007
Friday, April 13, 2007
The joy of giving
The great charitable-giving boom we're in nowadays has caught the attention of neurological researchers. Several studies have concluded that the act of giving (either in money or in volunteerism) makes people feel good at a really primal level.
Logical questions include both why and how that would be the case. Taking the broad evolutionary view, some researchers have argued that altruistic behavior is a positive for natural selection at a group level as distinct from Darwinian individualism. But homo sapiens is the only species which practices altruism outside its own genetic relatives -- is that a cultural adaptation or does it have a long-term natural-selection payoff? Creationists have taken to arguing that widespread human charity cannot be explained in Darwinian terms and hence represents a flaw in the science that they hate so much. Researchers more interested in the scientific method are actively exploring several hypotheses on the issue.
On the second part (how exactly are we wired to enjoy being charitable?), some researchers have concluded that it stimulates the same part of our gray matter which drives our gut-level interest in things like food, drugs and sex. (The joy of giving, indeed...say sweetheart is that a charitable remainder trust in your pocket or are you just glad to see me?) This reminds me of a development director I once worked with who grumbled when another staffer referred to a particular individual-donor solicitation idea as "sexy"; turns out he was just accurately "following the donors"!
Logical questions include both why and how that would be the case. Taking the broad evolutionary view, some researchers have argued that altruistic behavior is a positive for natural selection at a group level as distinct from Darwinian individualism. But homo sapiens is the only species which practices altruism outside its own genetic relatives -- is that a cultural adaptation or does it have a long-term natural-selection payoff? Creationists have taken to arguing that widespread human charity cannot be explained in Darwinian terms and hence represents a flaw in the science that they hate so much. Researchers more interested in the scientific method are actively exploring several hypotheses on the issue.
On the second part (how exactly are we wired to enjoy being charitable?), some researchers have concluded that it stimulates the same part of our gray matter which drives our gut-level interest in things like food, drugs and sex. (The joy of giving, indeed...say sweetheart is that a charitable remainder trust in your pocket or are you just glad to see me?) This reminds me of a development director I once worked with who grumbled when another staffer referred to a particular individual-donor solicitation idea as "sexy"; turns out he was just accurately "following the donors"!
Monday, April 09, 2007
Donor cultivation conversation, part II
Albert Ruesga, proprietor of the excellent White Courtesy Telephone, posted a thoughtful response to Saturday's little rant here about donor-cultivation practices. (Today someone else has also left a comment which is specious, and anyway I don't debate with folks who aren't willing to put their names behind their ideas.) The subject seems worth some continuing examination as opposed to simply dueling comments.
Albert makes several good points, including that we should distinguish between opt-in and opt-out followup practices by organizations. Read his comment in full for more. I think though that our differing perspectives are more at a macro level.
It's probably worth noting that as a non-profit careerist I am reasonably well-versed in modern standards and practices of donor cultivation. At the Nature Conservancy in the late 1990s I had a stretch getting trained in it (attended some AFP conferences and trainings) and for a year I supervised a team of annual-fund staffers and major-gift officers. Then as executive director of a growing performing-arts organization I personally instituted the basics of professional donor management, under the expert guidance of a board vice-chair who had been an experienced successful director of development at a larger organization. I am certainly not as knowledgeable in that subject as Albert or his colleagues, but the point is simply that I do have hands-on familiarity with the theory and practice.
The sense I have today, which I did not have in 2002 or 1997, is that some core assumptions in the non-profit development field (reflected in that NonProfit Times essay) are rooted in a dated understanding of what donors know, want and expect of us. I'm quite sure that Albert is right that a majority of AFP members would agree with the article, and that is exactly my concern. It feels increasingly as if a rapid shift in donor tastes and donor behavior is underway right now and that donor-cultivation best practices are not keeping up.
For example: clearly anyone like me who regularly makes contributions to a variety of non-profits is interested in staying up to date on what those groups are doing. A decade or two ago the only practical way for that to happen was to receive periodic missives from those organizations, and any reasonable adult would accept continuing solicitation or cultivation as the overhead cost of thusly staying informed about the group's work. Today though, the cost in time and effort to seek that knowledge on our own is orders of magnitude lower, and we happily do that because we get to do it on our time and schedule. Put another way: two whole generations of American adults have grown up expecting a sort of control of their own time and information flow which is fundamentally different than was true for my peers or my parents.
Several other examples come to mind. Now of course I know that AFP conferences today are full of discussion of how to adapt donor-contact and -cultivation best practices to the online world; so are any number of well-written blogs, and so forth. The concern I have, or the button which that NonProfit Times columnist pushed I guess, is that discussing how to adapt the existing paradigm seems to really miss the forest for the trees as far as what charitably-minded Americans of today expect and will tolerate, and how they will respond.
Albert makes several good points, including that we should distinguish between opt-in and opt-out followup practices by organizations. Read his comment in full for more. I think though that our differing perspectives are more at a macro level.
It's probably worth noting that as a non-profit careerist I am reasonably well-versed in modern standards and practices of donor cultivation. At the Nature Conservancy in the late 1990s I had a stretch getting trained in it (attended some AFP conferences and trainings) and for a year I supervised a team of annual-fund staffers and major-gift officers. Then as executive director of a growing performing-arts organization I personally instituted the basics of professional donor management, under the expert guidance of a board vice-chair who had been an experienced successful director of development at a larger organization. I am certainly not as knowledgeable in that subject as Albert or his colleagues, but the point is simply that I do have hands-on familiarity with the theory and practice.
The sense I have today, which I did not have in 2002 or 1997, is that some core assumptions in the non-profit development field (reflected in that NonProfit Times essay) are rooted in a dated understanding of what donors know, want and expect of us. I'm quite sure that Albert is right that a majority of AFP members would agree with the article, and that is exactly my concern. It feels increasingly as if a rapid shift in donor tastes and donor behavior is underway right now and that donor-cultivation best practices are not keeping up.
For example: clearly anyone like me who regularly makes contributions to a variety of non-profits is interested in staying up to date on what those groups are doing. A decade or two ago the only practical way for that to happen was to receive periodic missives from those organizations, and any reasonable adult would accept continuing solicitation or cultivation as the overhead cost of thusly staying informed about the group's work. Today though, the cost in time and effort to seek that knowledge on our own is orders of magnitude lower, and we happily do that because we get to do it on our time and schedule. Put another way: two whole generations of American adults have grown up expecting a sort of control of their own time and information flow which is fundamentally different than was true for my peers or my parents.
Several other examples come to mind. Now of course I know that AFP conferences today are full of discussion of how to adapt donor-contact and -cultivation best practices to the online world; so are any number of well-written blogs, and so forth. The concern I have, or the button which that NonProfit Times columnist pushed I guess, is that discussing how to adapt the existing paradigm seems to really miss the forest for the trees as far as what charitably-minded Americans of today expect and will tolerate, and how they will respond.
Saturday, April 07, 2007
Are we going to drive donors crazy online, too?
NonProfit Times recently ran an article on how non-profits deal with online small donors. A columnist donated $15 each online to 62 different groups and then kept track of how they responded. The conclusion offered as obvious -- and echoed in this leading philanthropy blog -- is that non-profits should respond to online donations just as intensively as they are now expected to respond to check-writing donors.
aarrrg...I don't think I'm the only charitable donor for whom that idea inspires clenched teeth and a desire to reach into the monitor to smack somebody upside the head.
Literally everyone I know who regularly donates to non-profits absolutely loathes the sort of fawning, repetitive cultivation contact that development pros institute. Follow-up phone calls are simply intolerable (I remain outraged that non-profits were exempted from the "Do Not Call" legislation and list); in my household we follow an ironclad rule now that any non-profit to which we have donated never again receives anything if they ever call us. Friends and family members who know that I'm a lifer in the sector are constantly asking me why making a donation has to result in so much blankety-blank mail and phone calls and invitations to the next fundraiser and so forth. The news that bulk-postage rates for non-profits are about to go up gets a big cheer from here, in the hope that it might make direct mail just a little bit less attractive.
At every place I've worked, when these concerns are voiced the staff and board members think that what annoys people is the visible costs: how many trees were consumed to print that newsletter, etc. Hence they always think that online culivation activity is all to the good in terms of donor goodwill.
That's increasingly wrong in my experience. What makes more and more charitably-minded people nuts is that non-profits spend so much time and energy pestering people who have already donated! That is the thing my friends and family members always lament to me. That is what makes them roll their eyes or swear never to "make that mistake (of donating) again!"
So when NonProfit Times columnist tut-tuts about the fact that 34 of 62 organizations responded to an online donation with nothing but simple acknowledgement of receipt, my reaction is to ask if I can have the list of 34 so I can move them to the top of my family's charitable-giving list. And I am quite certain that my reaction is far more common now than the reverse, and is growing. What people who invest in non-profits with their wallets want is for the organizations to do what they do -- not for them to behave like timeshare-condo salespeople on the excuse that it's for a good cause.
aarrrg...I don't think I'm the only charitable donor for whom that idea inspires clenched teeth and a desire to reach into the monitor to smack somebody upside the head.
Literally everyone I know who regularly donates to non-profits absolutely loathes the sort of fawning, repetitive cultivation contact that development pros institute. Follow-up phone calls are simply intolerable (I remain outraged that non-profits were exempted from the "Do Not Call" legislation and list); in my household we follow an ironclad rule now that any non-profit to which we have donated never again receives anything if they ever call us. Friends and family members who know that I'm a lifer in the sector are constantly asking me why making a donation has to result in so much blankety-blank mail and phone calls and invitations to the next fundraiser and so forth. The news that bulk-postage rates for non-profits are about to go up gets a big cheer from here, in the hope that it might make direct mail just a little bit less attractive.
At every place I've worked, when these concerns are voiced the staff and board members think that what annoys people is the visible costs: how many trees were consumed to print that newsletter, etc. Hence they always think that online culivation activity is all to the good in terms of donor goodwill.
That's increasingly wrong in my experience. What makes more and more charitably-minded people nuts is that non-profits spend so much time and energy pestering people who have already donated! That is the thing my friends and family members always lament to me. That is what makes them roll their eyes or swear never to "make that mistake (of donating) again!"
So when NonProfit Times columnist tut-tuts about the fact that 34 of 62 organizations responded to an online donation with nothing but simple acknowledgement of receipt, my reaction is to ask if I can have the list of 34 so I can move them to the top of my family's charitable-giving list. And I am quite certain that my reaction is far more common now than the reverse, and is growing. What people who invest in non-profits with their wallets want is for the organizations to do what they do -- not for them to behave like timeshare-condo salespeople on the excuse that it's for a good cause.
Thursday, March 22, 2007
Updates: Red Cross, Robertson v. Princeton, symphonies
Quick updates tonight on some subjects previously covered here:
The American Red Cross, it turns out, has to get formal permission from the U.S. Congress in order to reorganize themselves into a normal non-profit structure. That's because of the organization's special disaster-response status granted by Congress decades ago. It sounds like the legislators are receptive to the basic premise that the organization's outdated governance structure is the root of its recent troubles including losing three CEOs since 1999. The current board chair told a House committee that the proposed changes have helped lured some strong candidates for the job.
Princeton University has quietly (at least they wanted it to be quietly) reimbursed the Robertson Foundation almost $800,000 which the university can't bring itself to admit was used contrary to donor intent. (Rather, they say its because university officials failed to properly disclose the use of those funds.) This move has not taken any steam out of the huge lawsuit being pursued by the Robertson heirs; in the court of public opinion, Princeton just continues to shoot itself in the foot.
And the John S. and James L. Knight Foundation has summarized its hard-earned knowledge about the state of symphony orchestras into a short "issue brief" which should be required reading for everyone involved in classical music today. They do not pull any punches, and their core messages continue to remind me of some of the existing thinking and practices in other fields such as non-profit theater and dance. "Classical music lovers are everywhere, but most of them are not in the local concert halls....Interest in the art form looks healthy. Yet orchestras are struggling to remain relevant in a rapidly-evolving cultural landscape...."
The American Red Cross, it turns out, has to get formal permission from the U.S. Congress in order to reorganize themselves into a normal non-profit structure. That's because of the organization's special disaster-response status granted by Congress decades ago. It sounds like the legislators are receptive to the basic premise that the organization's outdated governance structure is the root of its recent troubles including losing three CEOs since 1999. The current board chair told a House committee that the proposed changes have helped lured some strong candidates for the job.
Princeton University has quietly (at least they wanted it to be quietly) reimbursed the Robertson Foundation almost $800,000 which the university can't bring itself to admit was used contrary to donor intent. (Rather, they say its because university officials failed to properly disclose the use of those funds.) This move has not taken any steam out of the huge lawsuit being pursued by the Robertson heirs; in the court of public opinion, Princeton just continues to shoot itself in the foot.
And the John S. and James L. Knight Foundation has summarized its hard-earned knowledge about the state of symphony orchestras into a short "issue brief" which should be required reading for everyone involved in classical music today. They do not pull any punches, and their core messages continue to remind me of some of the existing thinking and practices in other fields such as non-profit theater and dance. "Classical music lovers are everywhere, but most of them are not in the local concert halls....Interest in the art form looks healthy. Yet orchestras are struggling to remain relevant in a rapidly-evolving cultural landscape...."
Wednesday, February 21, 2007
Updates on the Smithsonian, non-profit hospitals, web-based philanthropy
Some updates today on non-profit sector stuff that you've read about here....
The Smithsonian Institution's unpopular deal with Showtime was back in the news thanks to, of all people, Oliver North. After North published a fiery op-ed column about his particular complaint, it got resolved. Whether or not the museum's foot-dragging on what seemed to be a perfectly innocuous filming request was due to the Showtime contract isn't clear. At a minimum it reminded people of the smelly commercial arrangement, presumably including people in Congress which must authorize a large fraction of the Smithsonian annual budget.
Illinois is ground zero in the debate about how much free medical care for the indigent a non-profit hospital should have to provide, thanks to the state's ambitious young Attorney General Lisa Madigan. In 2006 Madigan proposed a state law to drastically increase that obligation, but then withdrew it while negotiating with the Illinois Hospital Association. Those negotiations have now apparently broken down (as also reported in Crain's Chicago Business but their text is not available online). That would seem to be rather bad news for the hospitals, since Madigan's father happens to be the longtime top dog of the Illinois House!
Some additional items recently crossed my field of view regarding the rapidly-growing field of web-based donor services. A Slate columnist, it turns out, was an early board member of DonorsChoose and wrote about it this week -- he thinks it represents "the future of American philanthropy." And two business-school professors analyzed some data from eBay's "Giving Works", they conclude that American consumers are typically willing to add about 5% to their purchase of something like an iPod as a "charity premium."
The Smithsonian Institution's unpopular deal with Showtime was back in the news thanks to, of all people, Oliver North. After North published a fiery op-ed column about his particular complaint, it got resolved. Whether or not the museum's foot-dragging on what seemed to be a perfectly innocuous filming request was due to the Showtime contract isn't clear. At a minimum it reminded people of the smelly commercial arrangement, presumably including people in Congress which must authorize a large fraction of the Smithsonian annual budget.
Illinois is ground zero in the debate about how much free medical care for the indigent a non-profit hospital should have to provide, thanks to the state's ambitious young Attorney General Lisa Madigan. In 2006 Madigan proposed a state law to drastically increase that obligation, but then withdrew it while negotiating with the Illinois Hospital Association. Those negotiations have now apparently broken down (as also reported in Crain's Chicago Business but their text is not available online). That would seem to be rather bad news for the hospitals, since Madigan's father happens to be the longtime top dog of the Illinois House!
Some additional items recently crossed my field of view regarding the rapidly-growing field of web-based donor services. A Slate columnist, it turns out, was an early board member of DonorsChoose and wrote about it this week -- he thinks it represents "the future of American philanthropy." And two business-school professors analyzed some data from eBay's "Giving Works", they conclude that American consumers are typically willing to add about 5% to their purchase of something like an iPod as a "charity premium."
Wednesday, February 14, 2007
Non-profit dirty laundry airing in courtrooms
Updates today on two previously-mentioned pieces of non-profit sector ugliness, plus a new one. (Much of this comes courtesy of The Charity Governance Blog which despite its annoying logrolling for the proprietor and his book, is worthwhile for the relevant news provided with legally-experienced comments.)
In Wisconsin the sad case of the prosecution of the former chief financial officer of a major museum is slogging its way through the courts with still no sign of anybody else being held accountable for what was clearly a mess with multiple authors. Charity Governance sees the defendant as clearly a fall guy: "We hope he decides to force the DA's hand and fight to preserve his reputation. Although the press and others have noted that there is plenty of shared blame in the financial collapse of the Milwaukee Public Museum, to this point, others who had oversight authority over the museum simply haven’t been held accountable in any meaningful way."
Over in the Ivy League, Princeton University appears to have become at least dimly aware that whether or not they win the Robertson donor-intent lawsuit in court they have been getting their butts kicked in the media. I dunno that letters to the editor are really going to change that fact any, even if having read a couple of the pieces that the letters respond to I'd agree that the university isn't being treated entirely fairly by editorial writers. The case itself is inching along with no end in sight. Still looks from here like the university is guilty of being at least cavalier with the donor's funds over the years, and ought to settle the thing before its good name gets tarnished further.
Now this month comes the Salvation Army trying to use what is obviously a technicality to ace Greenpeace out of $33 million left in a will. The sordid details with some comments can be found here, and here, and here. Yecchh -- I'm guessing that Salvation Army staffers, volunteers and donors are not feeling all warm and fuzzy about the organization at the moment.
In Wisconsin the sad case of the prosecution of the former chief financial officer of a major museum is slogging its way through the courts with still no sign of anybody else being held accountable for what was clearly a mess with multiple authors. Charity Governance sees the defendant as clearly a fall guy: "We hope he decides to force the DA's hand and fight to preserve his reputation. Although the press and others have noted that there is plenty of shared blame in the financial collapse of the Milwaukee Public Museum, to this point, others who had oversight authority over the museum simply haven’t been held accountable in any meaningful way."
Over in the Ivy League, Princeton University appears to have become at least dimly aware that whether or not they win the Robertson donor-intent lawsuit in court they have been getting their butts kicked in the media. I dunno that letters to the editor are really going to change that fact any, even if having read a couple of the pieces that the letters respond to I'd agree that the university isn't being treated entirely fairly by editorial writers. The case itself is inching along with no end in sight. Still looks from here like the university is guilty of being at least cavalier with the donor's funds over the years, and ought to settle the thing before its good name gets tarnished further.
Now this month comes the Salvation Army trying to use what is obviously a technicality to ace Greenpeace out of $33 million left in a will. The sordid details with some comments can be found here, and here, and here. Yecchh -- I'm guessing that Salvation Army staffers, volunteers and donors are not feeling all warm and fuzzy about the organization at the moment.
Monday, February 12, 2007
Not everybody is down with fundraising in the buff
A month ago, about the volunteers-pose-almost-naked-for-fundraising-calendar thing, I suggested that "For breast-cancer research this idea has perhaps already become a cliche." Apparently not everybody agrees, or else it depends on who the volunteers are, according to this CBC report from British Columbia.
[Admit it, when you read "Exotic Dancers for Cancer" several 7th-grade-caliber responses came to mind didn't they? Yea, I know. Tell you what, the biggest groaner posted in the comments here will win a special booby prize.] [Because the blogger gets one freebie under a standing house rule that I just made up, that's why.]
Anyway...reaction to this seems to fall mostly into the "oh for pete's sake!" category. See for example here, and here, and here, and here complete with editorial cartoon. Don't Tell The Donor, where I learned about this, suggested what a development director who wanted to play hardball would do. (In response to her ending question: nope, that little scheme works for me. If major donors can feel free to throw their weight around then fundraising staff should feel free to politely lean back.)
The storyline in Vancouver appears to be turning out positively as detailed here, after some predictable tangential fallout.
[Admit it, when you read "Exotic Dancers for Cancer" several 7th-grade-caliber responses came to mind didn't they? Yea, I know. Tell you what, the biggest groaner posted in the comments here will win a special booby prize.] [Because the blogger gets one freebie under a standing house rule that I just made up, that's why.]
Anyway...reaction to this seems to fall mostly into the "oh for pete's sake!" category. See for example here, and here, and here, and here complete with editorial cartoon. Don't Tell The Donor, where I learned about this, suggested what a development director who wanted to play hardball would do. (In response to her ending question: nope, that little scheme works for me. If major donors can feel free to throw their weight around then fundraising staff should feel free to politely lean back.)
The storyline in Vancouver appears to be turning out positively as detailed here, after some predictable tangential fallout.
Wednesday, February 07, 2007
Making it easier and easier to be charitable
The second edition of Giving Carnival (which is a periodic roundup of blog posts about a particular topic) added a couple of new entries to the growing list of new and interesting web-based services for would-be donors to non-profits, in addition to DonorsChoose.
For instance Changing the Present is working on several clever features aimed at encouraging charitable contributions in lieu of holiday or birthday gift-buying, such as a personal registry like a bridal registry. Network for Good is the leading "charity portal" online, where individuals can search for non-profits by keyword or name or type. Global Giving performs the same service, targeted at matching American donors with overseas causes.
iGive is I believe the oldest catalogue site that directs a portion of purchases to non-profits; they are a for-profit enterprise which collects commissions from the participating merchants. Their competition includes Greater Good and, in the United Kingdom, Shop2Give.
Give Meaning attempts to make it easy for individuals to band together, sort of create online giving circles around a specific cause or recipient non-profit. (An essay by the founder describing how he arrived at that notion is here.)
I'm curious what impact professional development directors are perceiving from all this. Are existing checkwriting donors going online, or is it bringing new ones -- has anyone done any hard datagathering yet around questions like that? For that matter does this sort of thing in the long term reduce the market value of salaried fundraising staffers (because it gets easier to fundraise without them) or increase it (because charitable impulses are more and more enabled thereby enlarging the pool of regular small givers from which to try to find future major donors)?
For instance Changing the Present is working on several clever features aimed at encouraging charitable contributions in lieu of holiday or birthday gift-buying, such as a personal registry like a bridal registry. Network for Good is the leading "charity portal" online, where individuals can search for non-profits by keyword or name or type. Global Giving performs the same service, targeted at matching American donors with overseas causes.
iGive is I believe the oldest catalogue site that directs a portion of purchases to non-profits; they are a for-profit enterprise which collects commissions from the participating merchants. Their competition includes Greater Good and, in the United Kingdom, Shop2Give.
Give Meaning attempts to make it easy for individuals to band together, sort of create online giving circles around a specific cause or recipient non-profit. (An essay by the founder describing how he arrived at that notion is here.)
I'm curious what impact professional development directors are perceiving from all this. Are existing checkwriting donors going online, or is it bringing new ones -- has anyone done any hard datagathering yet around questions like that? For that matter does this sort of thing in the long term reduce the market value of salaried fundraising staffers (because it gets easier to fundraise without them) or increase it (because charitable impulses are more and more enabled thereby enlarging the pool of regular small givers from which to try to find future major donors)?
Friday, February 02, 2007
A familiar looking story
The other day someone asked me if I would comment here on the announced closure of a particular non-profit. It wouldn't be appropriate for me to do that by name given that I work for a prominent foundation in the same region.
It was not a group that I knew or have had any professional dealings with, meaning I have no more information to go on than their public statements, website, and annual tax returns posted on Guidestar. That's obviously limited data, in particular it offers no meaningful information about the impact of their programs. But then that limited public information seemed to paint such an obvious and familiar outline that I did write the following by email:
I see annual revenues veering wildly up and down the last few years [literally doubling and halving from year to year], which added to their public comments about loss of foundation funding strongly suggests they were still (more than a decade after their founding) largely reliant on foundation grants to exist. I see little evidence of any organization-building -- the mission and lists of accomplishments are all over the map, no evidence of any coherent strategic or business plan, etc.
It's the non-profit equivalent of looking at a 20-year-old restaurant and realizing that the owners were still running it like a 2-year-old one. I'm sure any program officer at any foundation would agree with that sad assessment, and hence I suspect that the foundations that had been incubating them finally gave up on it. A non-profit enterprise which after 15 years still hasn't done anything about diversifying its revenue stream has no more likelihood of succeeding than a 15-year-old law firm that still gets all its revenue from three repeat clients. Had I been asked a couple years ago for advice on this group it would have been basically, "You're failing because you're running the business into the ground, and the foundations will give up on you any day now."
Note I said "incubating", because that is what foundations do -- we are not a permanent revenue source and anyone who thinks we are is very new to this sector. Foundation grants are only an eighth of all charitable support in this country and corporate is only a bit more. Individual donors are where the long-term sustainable money is, and individual giving to nonreligious non-profits in this country is now close to $200 billion a year and still rising steadily -- so any non-profit with a reasonable track record of mission product can build an individual donor base, and doing so ain't rocket science. I can't tell why they failed to do that but it sure looks like they did....If more-detailed financials revealed sizeable individual-giving support and no more than half the annual budget coming from foundations then I'd have to change my diagnosis, but I'd happily bet you a nice dinner that they wouldn't.
I could have added that in addition to now analyzing non-profits regularly as a foundation officer, I know exactly whereof I speak on the above issues from direct sad experience. None of which is to suggest that I think the above analysis is anything but a quick gut reaction, it's certainly not based on anything close to the level of information that I'd collect in my professional capacity.
Now with the disclaimers out of the way, I believe some experienced folks read this blog a bit, so what do you think? Does it sound like I'm jumping too quickly to a conclusion, or does that off-the-cuff autopsy ring true?
It was not a group that I knew or have had any professional dealings with, meaning I have no more information to go on than their public statements, website, and annual tax returns posted on Guidestar. That's obviously limited data, in particular it offers no meaningful information about the impact of their programs. But then that limited public information seemed to paint such an obvious and familiar outline that I did write the following by email:
I see annual revenues veering wildly up and down the last few years [literally doubling and halving from year to year], which added to their public comments about loss of foundation funding strongly suggests they were still (more than a decade after their founding) largely reliant on foundation grants to exist. I see little evidence of any organization-building -- the mission and lists of accomplishments are all over the map, no evidence of any coherent strategic or business plan, etc.
It's the non-profit equivalent of looking at a 20-year-old restaurant and realizing that the owners were still running it like a 2-year-old one. I'm sure any program officer at any foundation would agree with that sad assessment, and hence I suspect that the foundations that had been incubating them finally gave up on it. A non-profit enterprise which after 15 years still hasn't done anything about diversifying its revenue stream has no more likelihood of succeeding than a 15-year-old law firm that still gets all its revenue from three repeat clients. Had I been asked a couple years ago for advice on this group it would have been basically, "You're failing because you're running the business into the ground, and the foundations will give up on you any day now."
Note I said "incubating", because that is what foundations do -- we are not a permanent revenue source and anyone who thinks we are is very new to this sector. Foundation grants are only an eighth of all charitable support in this country and corporate is only a bit more. Individual donors are where the long-term sustainable money is, and individual giving to nonreligious non-profits in this country is now close to $200 billion a year and still rising steadily -- so any non-profit with a reasonable track record of mission product can build an individual donor base, and doing so ain't rocket science. I can't tell why they failed to do that but it sure looks like they did....If more-detailed financials revealed sizeable individual-giving support and no more than half the annual budget coming from foundations then I'd have to change my diagnosis, but I'd happily bet you a nice dinner that they wouldn't.
I could have added that in addition to now analyzing non-profits regularly as a foundation officer, I know exactly whereof I speak on the above issues from direct sad experience. None of which is to suggest that I think the above analysis is anything but a quick gut reaction, it's certainly not based on anything close to the level of information that I'd collect in my professional capacity.
Now with the disclaimers out of the way, I believe some experienced folks read this blog a bit, so what do you think? Does it sound like I'm jumping too quickly to a conclusion, or does that off-the-cuff autopsy ring true?
Wednesday, January 24, 2007
The long tail of philanthropy is called DonorsChoose.org
My hometown newspaper recently put DonorsChoose.org on its front page, because for no obvious reason Chicago is the young organization's biggest market thus far. It belatedly occurs to me that we may all one day look back and see that DonorsChoose is to the staffed non-profit organizations as Napster was to the record labels: the specific vanguard of technology empowering customer demand that had until now been kept bottled up. In other words, the long tail phenomenon.
DonorsChoose is a service that matches up individual public-school needs (of a student or of a teacher) with individual donors. Charitably-minded individuals browse the site and if a specific need catches their eye they can donate to it right then. Students and teachers and principals post their unmet needs or projects at no cost; DonorsChoose is basically just being a highly-efficient middleman like eBay. That skips the whole vetting and sorting service for donors that is now provided by professional staffs of large non-profits and of foundations.
Whether that is overall a good or bad thing will quickly resemble the debate over whether citizens seeking news are better served with or without the sorting and ranking service provided by newspaper editors. At a minimum technology empowering such direct donor control might represent a new level of competition for the empowered donor's dollar which, frankly, a good number of current non-profits are not prepared for. On balance I'm all for this but anyone who doesn't think it could get real messy along the way might want to go talk to those record labels whose CD sales have crashed, or the Napster guys who they sued from here to eternity rather than figure out how to evolve their companies' business models to meet what their customer actually wanted.
DonorsChoose is a service that matches up individual public-school needs (of a student or of a teacher) with individual donors. Charitably-minded individuals browse the site and if a specific need catches their eye they can donate to it right then. Students and teachers and principals post their unmet needs or projects at no cost; DonorsChoose is basically just being a highly-efficient middleman like eBay. That skips the whole vetting and sorting service for donors that is now provided by professional staffs of large non-profits and of foundations.
Whether that is overall a good or bad thing will quickly resemble the debate over whether citizens seeking news are better served with or without the sorting and ranking service provided by newspaper editors. At a minimum technology empowering such direct donor control might represent a new level of competition for the empowered donor's dollar which, frankly, a good number of current non-profits are not prepared for. On balance I'm all for this but anyone who doesn't think it could get real messy along the way might want to go talk to those record labels whose CD sales have crashed, or the Napster guys who they sued from here to eternity rather than figure out how to evolve their companies' business models to meet what their customer actually wanted.
Monday, December 11, 2006
Glossy magazines about giving
An interesting new blog called Tactical Philanthropy is devoted to "chronicling the second great wave of philanthropy". Blogger Sean Stannard-Stockton, who is a professional money manager and donor advisor, got my attention the other day with the news an entire new genre of glossy magazine is being established, aimed at people who do a lot of charitable giving.
At least five such magazines have either just launched or are about to:
Contribute, Good, Generocity, Benefit, and Giving. (The physical resemblances to Martha Stewart Living are, I assume, intentional.)
A quick perusal of those websites left me feeling that "Generosity" is at least as much aimed at non-profit staffers as donors. "Good" seems to have an interesting business model: send 100% of subscription proceeds to charities and pay the bills with advertisers who are after the high-disposable-income readership that is thereby attracted. "Benefit" subtitles itself "the lifestyle of giving" and appears to be basically focused on the Bay Area at least to start. "Contribute" claims to be the only one that is entirely focused on donors as its audience. "Giving", which hasn't printed an issue yet, appears to be the best-funded of these and looks like its aiming to be the biggest/slickest player in this new magazine genre.
At least five such magazines have either just launched or are about to:
Contribute, Good, Generocity, Benefit, and Giving. (The physical resemblances to Martha Stewart Living are, I assume, intentional.)
A quick perusal of those websites left me feeling that "Generosity" is at least as much aimed at non-profit staffers as donors. "Good" seems to have an interesting business model: send 100% of subscription proceeds to charities and pay the bills with advertisers who are after the high-disposable-income readership that is thereby attracted. "Benefit" subtitles itself "the lifestyle of giving" and appears to be basically focused on the Bay Area at least to start. "Contribute" claims to be the only one that is entirely focused on donors as its audience. "Giving", which hasn't printed an issue yet, appears to be the best-funded of these and looks like its aiming to be the biggest/slickest player in this new magazine genre.
Tuesday, November 07, 2006
How are we doing?
A few days ago I mentioned Charity Navigator, it's a non-profit devoted entirely to tracking and reporting on non-profits. Its primary intended audience is donors but the information they put together, at impressive scale and depth, is of great interest to anyone working in the field.
An important caveat: of course they haven't solved, any more than most of us have, the problem of measuring the results of our efforts towards our missions. If a non-profit's mission is for youth to become deeply engaged in the natural world, how do we truly measure how much or well that is happening? We know that anecdotes aren't evidence and that measuring such change is harder than counting widgets sold, and that's about all we can yet agree on. In our weaker moments we fall back on witless cliches about "lies, damn lies and statistics" or how "you can make numbers say anything"; hopefully that's just honest frustration getting the better of us. It's the top issue for our sector and tends to dominate discussion at every conference I attend these days.
Wow that was quite a lot of throat-clearing wasn't it...it's a touchy subject. Anyway what Charity Navigator can do is provide some consistent measures of the caliber of our efforts, and that is certainly worthwhile regardless of the above. They seem pretty balanced in terms of putting the spotlight on both the good and bad, such as with their "Top Ten" lists. For instance I'm glad to have worked for #7 on this one; very glad never to have contributed to the follies at any of these. (And anybody on staff at one of these needs to be very concerned!)
The "Hot Topics" section is quite nice, where they highlight charities related to a currently-newsworthy subject; so for example for October, Breast Cancer Awareness month, they provide a one-stop list of all groups working on that. There's lots of good info on each non-profit and it appears to be kept quite up-to-date. It's probably worth searching for the place you work for, and I hope it turns out to be operating as well as you thought!
An important caveat: of course they haven't solved, any more than most of us have, the problem of measuring the results of our efforts towards our missions. If a non-profit's mission is for youth to become deeply engaged in the natural world, how do we truly measure how much or well that is happening? We know that anecdotes aren't evidence and that measuring such change is harder than counting widgets sold, and that's about all we can yet agree on. In our weaker moments we fall back on witless cliches about "lies, damn lies and statistics" or how "you can make numbers say anything"; hopefully that's just honest frustration getting the better of us. It's the top issue for our sector and tends to dominate discussion at every conference I attend these days.
Wow that was quite a lot of throat-clearing wasn't it...it's a touchy subject. Anyway what Charity Navigator can do is provide some consistent measures of the caliber of our efforts, and that is certainly worthwhile regardless of the above. They seem pretty balanced in terms of putting the spotlight on both the good and bad, such as with their "Top Ten" lists. For instance I'm glad to have worked for #7 on this one; very glad never to have contributed to the follies at any of these. (And anybody on staff at one of these needs to be very concerned!)
The "Hot Topics" section is quite nice, where they highlight charities related to a currently-newsworthy subject; so for example for October, Breast Cancer Awareness month, they provide a one-stop list of all groups working on that. There's lots of good info on each non-profit and it appears to be kept quite up-to-date. It's probably worth searching for the place you work for, and I hope it turns out to be operating as well as you thought!
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