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

Wednesday, January 23, 2008

Donors Versus Nonprofits

My postings on fundraising fees and rates get a lot of hits, and sometimes some heated discussion. My recent posting Yet more on percentage-based fundraising was no exception.

While some people have agreed with me that, "it's about time that donors put the needs of nonprofits ahead of their own," others have taken great exception to that. One such person is Barbara Ruth Saunders, who this morning wrote:
Aren't nonprofit organizations, in fact, supposed to be the vehicle by which DONORS direct their resources to goals which are socially important to the DONORS? The board should be determining how the organization can serve the goals. The staff should be executing the programs that support those strategies. But, I have a huge problem with the notion of nonprofits as being a means for a handful of grandiose people to exercise their social aims with other people's money!

That said, the immediate client of the fundraiser is the organization; the fundraiser helps the organization assure the DONORS that it is aligned with the DONORS' ultimate intentions.
To which I replied:
Thank you, Barbara, for your impassioned post, but I do respectfully disagree with your assertion that "nonprofit organizations [are] supposed to be the vehicle by which DONORS direct their resources to goals which are socially important to the DONORS."

I'd put phrase it more like, "Nonprofit organizations are supposed to be the vehicle by which a COMMUNITY achieves the goals that are socially important to it."

If a donor finds that particular nonprofit is doing work that he/she/they/it believes in, they should support that nonprofit.

But when the donor becomes the focus, nonprofits drift from their missions and only chase the money. Program decisions are made, not based on what is most needed or most effective, but based on the question, "What's fundable?"

Donors need to actually trust the professionals within nonprofits to know how to best achieve their mission. If donors don't trust nonprofits, they should simply invest their money elsewhere.

Your notion that nonprofits are "a handful of grandiose people [exercising] their social aims with other people's money" is simply insulting and only demonstrates your incredible disdain for nonprofit staff.
Was I out of line here? Have concepts of charity and philanthropy become so antiquated that there is no longer even a pretense of the donation being a gift?

Do donors really think that it is their place to mold nonprofits in their image and that the people who've dedicated their careers and their lives to serving their communities require such direction and babysitting from people who've never done such work?

Apparently so. Personally, I've had just about enough.

Thursday, January 17, 2008

The soul of philanthropy: when giving becomes receiving

Michael L. Wyland of Sumption & Wyland consulting has written an op-ed piece on Argus Leader (dot-com) under the unassuming title of "Accountability changes philanthropic landscape" that perfectly expresses what I'm sure so many of us have been thinking for years.

The opening paragraph reads:
"There has been a major change in philanthropy in recent years. Accountability and impact are increasing the demands placed on charities because the purpose of charity from the donor's perspective has changed. It's become acceptable, in the name of accountability, for philanthropy to be about receiving rather than about giving. Hypervigilant and misapplied accountability risks killing the soul of philanthropy upon which charities rely for support."
I will add to that the charge that this hyper-vigilant accountability is killing the ability of small, local, and grassroots nonprofits to operate at all. The costs of compliance are out of line with the costs of providing needed services, leaving these organizations no options but to either merge with a larger organization or close their doors.

As Mr. Wyland states, the IRS, and all the various nonprofit watch-dog groups that analyze our IRS filings, all base their evaluations on data that is "overwhelmingly financial in nature... As long as every transaction is documented and as long as no one's enriching themselves at the charity's expense, the IRS and the watchdogs are satisfied."

But what happens to the small nonprofit whose administrative expenses seem too high only because of an effort to comply with all the data collection, analysis, and reporting requirements of their funders? The same funders who will then use that nonprofits' high administrative expenses as a reason to discontinue funding them.

In another recent post here, I called out Paulette V. Maehara (president and CEO of AFP) for admonishing nonprofits to "put the needs of donors first." I believe that we've coddled and begged and babied the donor foundation long enough. We need to educate them about the needs of our clients, and how they are best served by locally provided community-based nonprofits, and, perhaps, on the true definition of the word "charity."

Thursday, January 10, 2008

Why Web 2.0 is important to small local nonprofits

There's lots of talk about how nonprofits should be using "Web 2.0" - interactive applications, two-way online communications, user generated content, "social media," etc. - perhaps so much so that it can be bewildering to smaller, grassroots organizations who are just struggling to get the word out locally and are wondering what they need with a World Wide Web.

The key for these organizations to remember is to ask how each of these applications relate to their on-the-ground strategy, and how to tie it in with what they are already doing.

Using video as an example, having a video on YouTube can be wonderful exposure, and you may actually inspire a donation or two from somebody in a different part of the country, but the real reason why you should be producing a video is to update your communications with your existing constituents.

Think of how much more powerful your board members will be in asking their networks for donations when they're always carrying around a DVD with your four minute video in their purses and briefcases. Much more effective than a few wrinkled brochures and far more appealing than your tired old PowerPoint presentation.

And, yes, that video should be posted on a public site, such as YouTube, but not because YouTube alone is going to attract donors to your cause, but because having YouTube host your video for free, and then using their embedding code to place it on your own web site, will both save you on your hosting costs and make your site more interesting and compelling to visitors and potential donors.

Blogging is important, not because it's the new hip trend (and frankly, it ain't that new anymore), but because it gets you in the habit of communicating regularly with your constituency - far more frequently than you ever could with newsletters and appeal letters - and is, again, far more cost effective than paper and postage.

It doesn't matter that your blog can be read around the world; target your message to your community and your key audience. They'll appreciate the immediacy and the transparency of these communications and reward you with more loyalty than ever before.

RSS feeds of your blogs, videos, etc., allow the people who care about your organization and your issues to receive, read, and act upon your communications in the manner that works best for them.

In each of these examples, the idea is not how Web 2.0 and new media can suddenly make a local grassroots nonprofit into a global powerhouse, it's about how these tools can be used to better communicate with, and expand, the base that you already have.