Ken Goldstein, MPPA

Ken Goldstein has been working in nonprofits and local government agencies from Santa Cruz, to Sacramento, and back to Silicon Valley, since 1989. He's been staff, volunteer, board member, executive director, and, since 2003, a consultant to local nonprofit organizations. For more on Ken's background, click here. If you are interested in retaining Ken's services, you may contact him at ken at

Thursday, October 26, 2006

Pressing our buttons...

Stewart James, of Inside Collin County Business, writes that:
American's trust and confidence in nonprofits is alarmingly low. Confidence in charitable organizations stands roughly 10 to 15 percent lower today than it did in the summer of 2001.
Today, nonprofits need to operate like a business. Budgeting funds is a must, along with executing careful and appropriate fund raising with outcome measures in place to asses its use of funds and success. Measuring outcomes is more than just good management. Having accessible outcomes data also improves the organizations' capacity to fund raise and advocate on behalf of its mission and clients.
I'm not quite sure what Mr. James' agenda is, but it's obviously not support of the nonprofit sector, and he obviously doesn't have much experience in the sector either.

First off, his comparison of confidence ratings is to "the summer of 2001" - before 9/11, and before the resulting Red Cross scandals. That would also precede the Enron scandal as well. How far have confidence rates in the "business" sector dropped in the same period?

As "a fundraiser" at the Don't Tell the Donor blog points out, confidence in the nonprofit sector - while a problem - is still higher than confidence in the "business" sector. "A fundraiser" goes on:
Nonprofits weren't the ones that forced the government to pass Sarbanes-Oxley reform, yet we now spend the time and money to do our national duty and restore trust after corporate businesses destroyed public trust.
Beyond Mr. James' use of the tired old admonition to "be more businesslike" is his assumption that nonprofits need a lesson from him on the importance of budgeting and measuring outcomes. We know how to budget, and our budgets are often far more detailed than the budgets of similarly sized for-profit businesses, with the tight managing of restricted funds.

Our budgets are reviewed by our funders in the foundation and corporate worlds, and those funders are not shy about asking questions about those budgets, and making us justify every expenditure. Likewise, those funders have already let us know about the importance of outcomes measurement, and we have included our evaluation plans in our funding proposals.

Mr. James really should learn more about nonprofits. He might be surprised to learn how professional and efficient the nonprofit sector really is. Then he might be able to write a business column about nonprofits that is actually informative, educational, and of benefit to the community.

Yes, we know that we have to work hard to earn and maintain the public's trust in nonprofit charitable organizations. It does not help, however, when columnists perpetuate misunderstandings and false assumptions about our sector. When you see these in your local paper, be sure to write a reply, and let people know what you're doing to make the community stronger.

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Wednesday, October 25, 2006

Good news for your donors

Here's a real benefit that you can sell your donors when explaining what they get for supporting your organization: A good feeling!

Researchers, writing in the Proceedings of the National Academy of Sciences, have scientifically proven that charitable giving activates the brain's reward center. Known as the mesolimbic pathway, the reward center is responsible for the euphoria associated with sex, money, food, and drugs.

Joanne Fritz, at About Nonprofit Charitable Orgs, asks, "Now, how can we write a donor solicitation that promises actual physiological well-being just as good as sex and romance?"

How will you use this information in your agency?

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Monday, October 23, 2006

Goodbye Miriam

I just got word that the nonprofit world has lost a great friend, co-worker, and champion. On the 17th of this month, Miriam Engelberg lost her long battle with cancer.

I first met Miriam during my time with HandsNet and knew she was somebody special. I got to know her much better once I joined the CompassPoint Nonprofit Services staff, where she was a technology consultant, teacher, and the artist/writer behind CompassPoint's in-house comic strip Planet 501c3.

Miriam's positive attitude and great sense of humor is what made her a pleasure to know and to work with. Even after her first bouts with cancer she returned to work with a smile and a joke about her condition. I remember that one time her return coincided with an all-staff meeting. In preparation for that event, we all (about 35 of us) purchased crazy colored wigs so that she would not be the only one wearing one. This was Miriam's type of humor, and wig day was a fitting and appreciated welcome back and tribute.

In addition to her Planet 501c3 comics, Miriam soon turned her creative talents to dealing with her cancer. She self-published several comics detailing her struggle with the disease, and her ability to laugh at it. The comics received national attention and were re-published by Harper Collins as "Cancer Made Me a Shallower Person."

Although I'm fighting back the tears now, I don't think that's what Miriam would want. She'd want us to remember her laughing and fighting back against the odds. I think I'll go to the garage and find my purple wig and put it on again, just for the hell of it. Just for Miriam.

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Tuesday, October 17, 2006

Posting annual reports online and donor poachers

I heard an interesting comment from another consultant this afternoon that I'm not sure I agree with. The topic was nonprofit annual reports, and whether or not yours should be posted on your web site.

For a long time we were all recommending this. Digital annual reports were a part of the paperless society all this technology was supposed to be working towards. As more and more nonprofits got their web site up and learned to make them informative and interactive, more and more took the advice of having their reports available for all to read. In some circles, it even became a matter of pride.

The consultant today said that the trend is now reversing. Fewer and fewer organizations are posting their annual reports online. The reason? Donor poachers!

Now, I'm well aware of the practice of reviewing other group's donor lists for ideas (whenever we go to a museum my wife has to remind me that the donor wall plaque is not the exhibit we went to see), but I was not aware that this had put a chill on sharing annual reports digitally.

How big a problem could this really be? You should be thanking your large foundation, corporate, and major individual donors publicly and frequently already - this list should not be a secret - so what is so different about the annual report? Are development officers now afraid that other organizations are stealing their smaller donors as well? Who is matching the names in annual reports to phone books to make contact lists? Nobody that I know of.

I'd like to know if this is really true. If you work with an organization that has previously posted your annual report online, or at least considered it, and now will not because of donor poachers, please let me know! What led you to that decision: a real problem with people contacting your donors, or just the perception of a potential problem? Send me an email, or comment here on the blog. Thanks!

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Friday, October 13, 2006

Disaster Fundraising

No, I'm not talking about fundraisers that turned into disasters. I'm talking about fundraising for a disaster. If you haven't run such a campaign for your nonprofit, you are certainly aware of the massive fundraising pitches that go out on the heals of any natural or man-made disaster.

Gorik Ooms, head of MSF-Belgium (Medicines Sans Frontieres, or Doctors Without Borders), claims that such fundraising tactics are wrong, and often do more harm than good:
Emergency donations are too late to be of use, and swiftly turn to poison as they encourage incompetent interventions by NGOs desperate to dispose of earmarked cash, he said during a debate at the London School of Economics.

"If we take this money we end up doing things we shouldn't do," he said. "Many NGOs don't have real disaster relief capacity but they go for an appeal because it is a source of funding. NGOs that have real capacity are crowded out by those that don't."
Ooms called for "education" of the public into giving regularly, out of emergency time instead of emotionally at the time of crisis. But he admitted that this call goes against a powerful public sentiment.
(Read the whole story on Reuters)

I don't think "pre-need" fundraising for emergencies will ever fully replace the emotional pitch that rides alongside media coverage of the latest disaster, but Ooms has made several valid points.

It is up to us, as nonprofit community leaders, to educate the public about the need for building emergency reserves of disaster supplies and cash. When people are forced from their homes by earthquake, flood, or fire, they don't have time to wait while you mail out an appeal and recruit volunteers for phone-banking. You need to educate your supporters about why you need to be ready before disaster strikes.

And then there are those agencies, referenced by Ooms, who send out an appeal after each disaster, whether or not they provide services that are needed for that event. An agency I know of in California raised quite a bit of money to help them assist victims of Hurricane Katrina. True, a few Katrina victims did make their way out west, and were being served by the agency. But, the services they received were reimbursed by government contract. The private money raised "for Katrina victims" went to their general fund.

This type of fundraising is always dishonest, and an embarrassment to the entire nonprofit community. But it is especially cynical and detrimental to defraud your donors (and the public) at a time of emergency. This type of fundraising hurts the entire nonprofit community, as it teaches donors to not trust any of us.

Which brings us to Ooms' third point: Agencies that raise money for a particular disaster, and want to be honest about how they spend the money, may not spend it as wisely as they could. Such agencies try to make the solution fit the budget, rather than budget to fit the solution.

As Ooms says, "Educate." If your nonprofit provides emergency services, raise money for preparedness and pre-need supplies and reserves. Such money is earmarked for "future emergencies" and not any particular emergency. This gives you maximum flexibility, and - when disaster does strike - the ability to focus on services, not fundraising.

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Thursday, October 12, 2006

The economic impact of nonprofit organizations

When you work in the nonprofit sector, you will occasionally speak to people who are a) shocked that you get paid to do "charity work" and b) act as if your work, while well-meaning and good, is an economic drain on the community.

At those times, it's good to have an idea of the true, positive impact our sector has on the community. Not just in terms of the people served in fulfilling our missions, but in the size of our sector as a part of the business community.

A new report from the UCSB Economic Forecast Project has completed that task for San Luis Obispo County. Among the findings:
  • Nonprofits contribute more than $260 million ($242 million plus an additional $20 million impact on construction spending) annually to the county's economy.
  • Nonprofits employ more than 2,700 county residents. In total, about 4,000 jobs were supported because of local nonprofit activity.
  • Taxes totaling at least $23.8 million were generated as a result of nonprofit spending.
  • As well, the 99 nonprofits surveyed - of the more than 1,000 organizations in the county - for the study reported more than 20,300 volunteers.
This is a great resource that should be duplicated for each county and city in the State. For a list of reports completed by the UCSB Economic Forecast Project (some with downloads) see their web site.

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Thursday, October 05, 2006

Staff giving requirements

I subscribe to a number of e-newsletters and discussion lists, including the Consultants Forum at Charity Channel. One conversation currently raging on that list is whether or not nonprofit staff should be (or can be) required to donate back to their organization.

I will try to summarize the main points of the discussion here for you to mull over...

The arguments for such a policy are to create a "culture of philanthropy" where all staff are involved in, and fully understand, what it takes to run the organization. Staff giving ensures that they are involved in, and believe in, the mission of the agency, and do not simply consider this "just another job." Moreover, it is impressive when you go to other funders to say that you have 100% staff participation in your annual campaign.

The arguments against the policy range from the personal ("We already give by working for 25-40% less than we'd earn in the corporate sector") to the legal (if giving is mandatory, it could be seen as a kickback, and potentially a rouse to get around minimum wage laws). Even "voluntary" giving can get you into potential legal trouble with employees if the ask is made in a way that creates implied pressure ("Will my next review be poor if I don't give?" "Will I be passed up for promotion?").

Certainly, employees should not be overlooked when building your prospect lists. They should receive the same newsletters and mailings that any other prospect receives. And - like any other prospect - if they ask to be removed from the list, that request should be honored. There should also be a strict policy of not linking an employee's giving habits with his or her personnel file in any way.

I have never worked in, or knowingly consulted to, an organization that required all employees to give. I have worked in, and directed, organizations where all management and supervisors were required to be a part of the development process. That meant they were encouraged to give, and required to find and cultivate other prospects.

I have involved staff at lower pay levels in development through other types of fundraising activities. An example would be the selling of raffle or event tickets. We have had success by offering prizes to the employees who sell the most tickets. In this friendly competition, employees who we would never make a direct ask to - and who would never consider themselves "fundraisers" - wind up raising plenty of money selling tickets to their families and friends, and buying tickets themselves.

So... my take on employee giving... Be extremely careful of even implying that giving is a job requirement, but don't give up on it either. Involve middle managers and supervisors in planning and strategy, and mentor them in prospecting. Involve line staff through voluntary activities and competition.

In this way, you will achieve broad employee participation in your campaign, without any of the ill-will, poor morale, or legal troubles that a more heavy-handed approach can bring.

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Tuesday, October 03, 2006

Using video to enhance your web site

If you've been following this blog, you know that I've written about nonprofits using and DoGooder.TV to promote their causes, and that I'm a believer in keeping up with the technology revolution.

I just visited a site that makes excellent use of embedded videos to demonstrate the power of their programs. The Camp ASCCA Journal includes several short videos about life at the Easter Seals camp for therapeutic recreation.

It's one thing to read about disabled kids going to camp, and how the experience helps them to overcome their difficulties. It's quite another to see the interviews with them and experience it in sound and color. Throw in a "donate now" button and this is a very powerful tool.

Take a look at the site, and see if you can imagine how your organization could use embedded videos on your site to communicate with your supporters and spur them to action.

BTW, the Camps ASCCA Journal and this blog are each members of the Nonprofit Blog Exchange.

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Sunday, October 01, 2006

Fraud, Burnout, and Getting What We Deserve

Pam Ashlund of the "Non-Profit Eye" blog has posted an interesting piece about the trend of fraud committed against nonprofits by their own staff and volunteers. Pam lists a few samples (all from the last month) and asks:
Are non-profits just sitting ducks? Is it easier to steal from a non-profit? or is it a limit of imagination... our hearts are in the right place so much so that we can't conceive of someone setting out to take advantage...
I agree with Pam's analysis so far (we're too trusting, etc.), and will suggest that there is one more factor at work here: Burnout.

The very nature of the sector is to spend long hours solving other people's problems for less money than our skills would earn elsewhere. Each of us has a limit on how much we can take before things start slipping or we start wondering why we're doing this.

I believe that for some of those committing the fraud this burnout turns to thoughts of, "I deserve this money I'm stealing. I've earned it. It's my turn to benefit." Obviously this is faulty thinking, obviously these people need to be prosecuted to the fullest extent of the law, and thankfully it's only a handful of our dedicated staff and volunteers who feel this way.

A handful, compared to the legions of supporters who do the hard work of the nonprofit sector, but a problem never-the-less.

Now let's take a look at the oversight part of the problem. Managers and board members (if they're actively involved) are not immune to nonprofit burnout themselves. Some of the lax oversight that allows these scandals to occur may be from over-worked managers who are already bearing a maximum stress load delivering services to the community.

It's far easier to convince yourself that "nobody would steal from us" than to put more hours in to oversight and fraud prevention. And so, the organization winds up "getting what it deserves" as well.

As "human services professionals" we have to remember to take care of ourselves, and those we work with. Too much selflessness leads to an industry where we open ourselves up to this kind of fraud and theft.

I suggest a new movement today: The Nonprofit Selfishness Movement. We all need to set aside certain times and days to something entirely selfish (and legal). A little "me time" to guiltlessly get away from the stress of constantly being other-focused. Time for our own families, time to take a vacation, and time to recognize our own worth without resorting to embezzling.

Obviously a call for avoiding burnout is not the only step we need to take to prevent the sort of fraud that Pam wrote about. A little more attention to oversight couldn't hurt either. I just wanted to applaud her for bringing the subject up, and add one more point on what should be a long conversation.

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