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, December 03, 2009

Money Follows Involvement

All too often, I hear people saying that they're afraid to ask their volunteers for donations, because "they've already given so much" with their time. On the contrary, I have always been a firm believer in the idea that money follows involvement, and the rule of thumb that 90% of volunteers will also become donors. Today comes another study to confirm this vital link between your organization's volunteer and fundraising activities.

The new study, by Fidelity Charitable Gift Fund and VolunteerMatch, found that volunteers give 10 times as much to charity as non-volunteers, and that two thirds of those volunteers contributed to the the same nonprofits where they donated their time. Could that figure have been higher if we were not so shy about asking our volunteers for donations? I believe so.

The pool of volunteers (and potential volunteers) out there is huge:
The study showed that 72% of adult Americans (18 years old and older) have volunteered at some point in their lives, and 43% are currently volunteering or have within the past 12 months. More than a fourth (28%) have never volunteered.
Don't think that the 28% indicates any lack of interest. For many of them, it's simply a matter of not knowing how to connect, or being offered the right opportunity. Only one third of the non-volunteers indicated a "lack of interest" as their primary reason for not volunteering.

So, what's your excuse for not using more volunteers in your organization, or for not including them in your fundraising campaigns?

Thursday, November 12, 2009

Getting Nonprofit Job Classifications Right

I've spent some time this morning and earlier this week in phone consultation with a for-profit company, and it's been great. No, I haven't turned away from the nonprofit sector. I'm still fully busy serving as an Interim Executive Director for one agency, and squeezing in some retreat facilitation and training when I can.

But this for-profit came to me with a problem that has bugged me for many years, and I'll bet you've had the same frustration. When you've gone to the major, general interest job sites (Monster, Career Builder, etc.) have you ever looked at the classifications for nonprofit jobs and said to yourself, "They just don't get it."?

Well, this company is putting together a new, better job search engine, and is really trying to get the nonprofit jobs right. It gave me a chance to think about how we describe ourselves and our positions in the nonprofit world.

Do you consider yourself an advocate first, and the area of your advocacy second? Or do you consider yourself an environmentalist, or a human services person first, and advocacy second? What about for fundraisers? Are you a committed to your issue are first, or could you raise money for any cause? Is the answer different based on your job function? I'd be interested in reading your comments on this.

Hopefully, soon, they will complete their project and launch the site, and I'll be able to give them a plug here. I know I'm looking forward to seeing the end results.

A plug I can give now is to Nancy Schwartz, of the Getting Attention blog. Nancy is a nonprofit communications and PR expert who annually compiles the Nonprofit Tagline Report. This year's report was just released and is available for download by clicking this link: In the report you'll learn "How to Build Your Nonprofit's Brand in Eight Words or Less..."
  • The 10 Have-Tos for Successful Taglines. Put your nonprofit marketing into high gear.
  • The 7 Deadly Sins. Examples of what not to do.
  • What Makes a Winning Tagline. Winners of the 2009 Nonprofit Tagline Awards.
  • Over 2,500 Nonprofit Tagline Examples. Put them to work for tagline brainstorming.
Enjoy the report, and thanks for reading!

Monday, September 21, 2009

Loose Ends: Honors for me and you

While I've been off on my latest Interim Executive Director assignment - and virtually ignoring this blog - it seems I've accumulated two more honors for the blog:

Top nonprofit blogs award

The first is a listing from The Daily Reviewer on the Top 100 Nonprofit Blogs (click the ribbon above), and the other is a listing on "Alltop" as a Top Nonprofit News source. A big Thank You to each of those web sites for the inclusion!

Now, on to the honors for your organizations and your peers...

My friend, Nancy Schwartz, of the Getting Attention blog, would like me to remind you that the Nonprofit Tagline Awards are now open for voting (click through to vote). Voting is a quick and certain way to strengthen your messaging skills. Through voting, you’ll be able to reflect on what works and what doesn't, and consider how your organization's tagline holds up. And voters can register to receive the free 2009 Nonprofit Tagline Report, with 2,500 tagline examples (to be published in late fall).

There's also time left to recognize the top-rated youth-focused nonprofits through the 2009 GreatNonprofits Youth Thrive Awards ( Throughout September the organizations with the most positive reviews will be featured on GreatNonprofits and Guidestar, the premier site for philanthropic research on the Web.

Thursday, September 03, 2009

Fundraising Success You Can't Buy

These days more and more nonprofit agencies are looking to online social networking tools and sites, such as Facebook, to see how they can use them to increase donations (and if you're not on Facebook, why aren't you?). Well, here's a great Facebook fundraising success story:
The story began Aug. 11, when Jenni Ware of Redwood City lost her wallet at Trader Joe's, and a woman standing behind her in line — Carolee Hazard of Menlo Park — offered to pay the stranger's $207 grocery bill. The two exchanged addresses. Ware found her wallet later that day and repaid her grocery "angel" $300 - with $93 extra to perhaps get a massage.

But Hazard asked her Facebook community what her friends would do with the bonus amount. Swift electronic responses urged Hazard to give the money to charity - the local food bank, since the act of kindness began in a grocery store.

Hazard, a green activist and former Genentech biochemist, loved the idea, and she not only sent in the $93 that Ware had given her as a "thank you," but matched that amount herself. So did a Facebook friend. And another. And another. Kids have pitched in 93 cents. And since the story has been pushed out on Facebook's own site, others are donating what they can, too, even $9.30.

Hazard has since started the "93 Dollar Club" on Facebook, where people across the globe can easily read the story and comment on the good karma phenomenon. There are links on that page where people may donate to their own food banks close to them. And commenters say they are reading - and giving - from Iran, Israel, Spain, Portugal, Turkey, the Czech Republic, Australia, Hungary, Sri Lanka and beyond.
The result for Second Harvest Food Bank of Santa Clara and San Mateo counties, where it all began? Nearly $10,000 raised for Silicon Valley's hungry in a week — the most raised in such a short period of time, according to the food bank.

So, yes, it is quite possible to raise large amounts of money using social networking sites. This is not the only such success story I have come across, and they come from Facebook, from Twitter, MySpace, and beyond. But - and it's a huge but - the secret to nearly each of the success stories I have read is giving up control.

An old expression about good press coverage is that it's like "advertising you can't buy." Well, good viral fundraising is pretty much the same. To be truly "viral" it has to come from your supporters, not your staff, and it has to come on their schedule, not yours, and it has to be their ideas.

Now, that doesn't mean you should be doing absolutely nothing. You should be setting up your Facebook fan page and cause page, and have a Twitter account, and each should be linked and pushing content to your official web site (well-equipped with donation buttons).

Start using these tools as extensions of your current campaigns and to bring in new donors who prefer electronic methods of communication and participation. But don't expect dollar miracles overnight. The magic comes when one of your supporters (or potential supporters) has a "grocery angel" experience of their own and decides to launch their own campaign.

When they do, you'll want to be ready, and easy to find, with an established online presence that they can point to. Because, if you're not online, in place, and ready to receive those donations, another organization will be.

Visit the $93 Club on Facebook (may require Facebook login)

Wednesday, August 19, 2009

100 Incredible Philanthropy Blogs

No, I'm not going to give you the list of 100 incredible philanthropy blogs, I'm going to tell you where you can find it, and brag that this very blog is part of it!

The list of "100 Incredible Philanthropy Blogs" is posted at Bible College Reviews, and breaks the 100 down into the categories of General Philanthropy, Individual Ways to Make a Difference, Group-Based Philanthropy, News and Commentary, Fundraising, Charitable Organizations, Nonprofits, Social Entrepreneurship and Innovation, and Faith-Based Philanthropy.

I was pleased with the comprehensiveness of the list, and have found some great new resources from it. I look forward to visiting many of the "other 99" as I dig in deeper. Meanwhile, I thank the folks at Bible College Reviews for including me, and wish you all happy surfing.

Thursday, July 23, 2009

One Week Left to Tagline Victory!

Yes, you have one more week to enter your nonprofit organization's tagline into the 2009 Getting Attention Nonprofit Tagline Awards. Yes, the tagline awards! Nancy Schwartz of the Getting Attention blog hosts these online awards each year to recognize the best taglines as means of motivating nonprofits to focus on the basics (e.g. powerful, distinctive, succinct messaging) in their marketing efforts.
A strong tagline does double-duty -- working to extend your organization's name and mission, while delivering a focused, memorable and repeatable message to your base. It's one of your most basic, and effective, marketing tools, but the 2008 survey showed that 72% of nonprofit organizations don't have a tagline or rate theirs as performing poorly.

Take 3 minutes now to enter your nonprofit's tagline here ( All entrants will receive a free copy of the fully-updated 2009 Nonprofit Tagline Report in late 2009. It's the only complete guide to building your org's brand in 8 words or less -- filled with how-tos, don't-dos and models.
The deadline for entry is July 31 - just over a week from now - so put this on your to-do list for today! (And be sure to follow the selection process on Twitter, too).

Friday, July 17, 2009

Upcoming Workshops

For those who've written to ask, I've got a couple of public workshops coming up soon. Both will be held at the Community Foundation of Santa Cruz County, 2425 Porter Street, Suite 16, Soquel, CA.

Grant Proposal Writing 101 - Wednesday, July 29, 2009, 10:00 a.m. to 4:00 p.m. - This is an introductory workshop for those new to proposal writing, and unsure of what elements to include or what foundations are looking for.

Fundraising Planning in the New Economic Environment - Thursday, September 24, 2009, 9:00 a.m. to 12:30 p.m. - To survive the current crisis will require a plan. This short workshop provides a few tools for you to use in getting your plan started.

Please see the Community Foundation's website ( for more information, fees, and online registration.

Tuesday, June 30, 2009

Can non-profit organizations meet all the needs for-profit businesses currently meet?

I just came across an interesting blog post by Stephen Monrad with title of "Can non-profit organizations meet all the needs for-profit businesses currently meet?" His conclusion is that "If a non-profit organization wanted to produce toothbrushes, there is no reason in principle that it couldn't."

I found it to be an interesting post. What follows is the comment that I left on the blog:

In the original post you say that there "is no reason that I could find that they need to limit their work to charitable or social goals." Well, actually, there is... In the U.S., at least, nonprofits receive their tax-exempt status - 501(c)(3) - from the IRS. The application requires a statement of the organization's charitable, educational, or social goals or mission. Presumably, the IRS reviews that before approving the application... presumably...

But, that doesn't mean that a nonprofit couldn't manufacture toothbrushes. If, somehow, the production of toiletries were related to the charitable purpose. For example, I'm aware of a catering company that is a tax-exempt nonprofit. The nonprofit's mission is to train at-risk populations in how to work in the food industry. New cooks enter the program, are trained, work real catering gigs, and then graduate to make room for the next group of new cooks.

To the clients hiring them for parties, they're just like any other caterer, but to the IRS it's a legitimate social enterprise providing educational assistance. I don't know how to translate that story to making toothbrushes, but you get the point.

A nonprofit can also run a for-profit business. A typical example would be a thrift shop set up to support a social cause. In this case, the IRS sees the profit from that enterprise as "Unrelated Business Income." The nonprofit does pay taxes on that portion of their income, but as long as it doesn't become their primary activity, it doesn't endanger their tax-exempt status for the charitable work.

In one of the comments, Clyde writes, "... Losses are a definite probability, but profit is a no-no, by definition." You'd think so, but "nonprofit" is really a misnomer. Nonprofits can (and, in good years, should) earn more than they spend in order to build reserves for lean years (such as we're now experiencing). What nonprofits are barred from doing is distributing that profit to the Board or principals as dividends. Profit is wonderful, as long as it is re-invested into the charitable mission.

Anyway, thanks for this post - It's an interesting conversation.

Wednesday, May 20, 2009

Mission-Driven Careers

I know of very few people in the nonprofit sector who are here "just for a job." The few that are don't rise high in the ranks, and don't usually stick it out for very long. Those of us who've made a career of the nonprofit sector do it as part of our personal mission.

Mission is what drives us to work long hours for below average wages and next to no benefits. Mission is what makes all of that bearable, and even inspiring. We may occasionally be tempted to look for greener pastures, but we always end up back on our missions.

Jobs for Change, a part of, is looking to inspire and recruit the next generation of nonprofit leaders - those looking for a mission-driven career. Here's a part of their Vision Statement: "We believe...
  • "People are the most important factor in advancing social change. To address the social and environmental problems we face, we need to attract a diverse range of people and the most promising leaders from across the country to work on issues both local and global in scope.

  • "To attract these people, we need to enhance the social sector's ability to recruit, develop, and retain talent. Too many people interested in a career in service do not end up or remain in the sector because of a range of obstacles that include misperceptions about work and compensation, insufficient information about how to take the first steps, or limited recruiting resources from budget-strapped organizations. We need to address these issues."
I've signed on to that vision statement and am pleased to put my name on the list of those who've been mission-driven in our careers, and who hope to inspire the next generation of nonprofit leaders.

Sunday, May 10, 2009

Should Your Nonprofit be on Twitter?

By now, I'm sure you've all heard of the micro-bloggging platform, Twitter. In a nutshell, micro-blogs - or "tweets" - are posts of 140 characters or less, typically answering the question, "What are you doing now?" Twitter is also the hottest thing going right now in terms of web 2.0 / social media. But is it right for your organization?

First, some of the criticisms of Twitter: "It's shallow." "It's vapidity to the point of depravity." "Who cares what you're doing right now?" And, when users take the "What are you doing now?" question too literally, those criticisms can be very valid. Posts of "Waiting for the bus," or "Just finished lunch, need to burp," are hardly useful or inspirational to anybody but the person who posted them.

On the other side, a few months back when a US Airways plane made an emergency landing in the Hudson River, Twitter got out the news quicker than any official media and carried the first photo of the evacuation of the plane. The presidential campaign of Barrack Obama demonstrated to community organizers worldwide how Twitter could be used to promote events, get out a message, and raise money for causes. But, again, is it right for your organization?

I personally love Twitter, and previously on this blog I've encouraged all nonprofits to use blogs and other social media as a communications tool. But on Twitter, I have to say that it may not be the best choice for smaller organizations who don't have staff dedicated to either outreach or public relations.

This is because the best use of Twitter requires listening, as well as frequent posting. One of the simplest, but most powerful, tools within Twitter is the reply post. Beginning a tweet with @(username) makes it a reply to that user.

If you're not prepared to quickly read and follow-up on replies to @yournonprofit, your use of Twitter could backfire. Rather than be seen as involved in the community and wanting two-way communication, you risk appearing out-of-touch or as putting yourself above your supporters.

For those organizations who have staff whose primary role is public communications, and who are tech-savvy, Twitter can be a great way to connect with potential supporters, organize activities, and (yes) raise needed funds.

But if Twitter is going to be an after-thought to an over-worked staffer who's focus is elsewhere, it's probably best to stick to traditional blogging for now. But, what you can do is encourage your supporters who are on Twitter to give you plugs (with links) on their Twitter feeds.

Tuesday, May 05, 2009

How Much Should Board Members Give?

This is the question that has haunted many a nonprofit Executive Director and Development Director. How to encourage Board giving without either asking too little or scaring off new members.

A posting today on the Chronicle of Philanthropy's website asks if "the expectation of giving is something that is simply understood?" and gives a quick roundup of how some organizations answer the question.

The Asian American Justice Center in Washington, asks board members to "either donate or raise $2,500 for the organization - an expectation that is spelled out in their job descriptions."

Gail Perry, a consultant and author in Raleigh-Durham, N.C., says that "Board members will contribute and raise money for organizations that they believe in strongly," and that "They will give the minimum when they 'have' to." Ms. Perry believes that un-engaged Board members will find giving requirements "offensive." "Our job, of course," Ms. Perry goes on to say, "is to get them so fired-up that they are sitting on the edge of their seats ready to ... give."

My experience is that "give or get" policies are popular, but I always encourage my clients to tell their Board that they need to "give and get."

To me, the "getting" is part of their fiduciary responsibility as a Board member to make sure the organization is financially stable and sustainable. The "get" can be done in many ways, from directly asking friends and family, to arranging matching gifts through their employer, to helping plan an event, to writing grant proposals, etc.

The "give," on the other hand, is a recognition of their personal commitment beyond the work. The point I make to Boards is that if they have not personally invested in the organization, why should anybody else? And, I go on, people will know. Perhaps not the average donor, but Major Donors will ask about Board giving, and so will Foundation officers when they come on site visits.

As to how much they should give, I don't believe in stated dollar minimums. Rather, I prefer the phrase, "Board members must give at a personally meaningful level." That means that if a member normally makes $500 gifts to other nonprofits, they should give $750 or $1,000 to the nonprofit they're on the Board of. If they normally give $25 to others, they should give $50 here.

I work with mostly smaller, local organizations, who are particularly timid about the Board member ask because their Boards are more likely to include former clients and neighborhood activists than high-powered international executives and bank owners. An ask that takes ability to give into account, while still recognizing and honoring their commitment to your organization, allows the client representative to give $2 while sitting next to the Doctor who gave $5,000, each knowing they were respected and that they did all they could.

It is up to the Executive Director and Development Director (if you have one) to personally craft the ask, just as you would any Major Gifts ask, based on what you know of your Board member's giving history, occupation, net worth, etc. Explain the "personally meaningful" policy clearly, and ask with confidence.

If your Board member is still reluctant to give, it may be time to question their commitment and start recruiting to fill that seat.

Monday, May 04, 2009

Nonprofit Marketing and Fundraising Zone

I am pleased to announce that as of today, the Nonprofit Consultant Blog is part of the Nonprofit Marketing and Fundraising Zone. The Zone is a topic hub started by Katya Andresen, Nancy Schwartz, and Kivi Leroux Miller for collecting and organizing information around these topics.

I'm honored that my posts will be in the company of posts from some of my favorite nonprofit blogs, including Donor Power Blog, Getting Attention, Kivi's Nonprofit Communications Blog, Studio 501c3, and several more.

You will find a link to the Nonprofit Marketing and Fundraising Zone in the sidebar to the right, along with a search form to find articles on that site compiled from this blog and each of the other participating blogs.

Sunday, April 26, 2009

Stimulus Caution

With the drying up of donations from individuals, grants from foundations, and contracts from local governments, many smaller, locally-based nonprofits are looking to Washington for funding, hoping to get in on some of the economic stimulus packages as a means of surviving this recession.

While the temptation for "big money" or "easy money" is a terrific lure, and we do need to investigate all potential funding sources for our organizations, I do want to express my concern that you approach with caution.

Consider not only your short-term money needs, but the long-term effect of the funding, and your capacity to take on the project.

Most of these stimulus programs are not designed for grass-roots organizations; they pretty much require large structures, with already large budgets, and the capacity to take on new projects without much additional overhead.

Seriously, if you have an annual budget of only $500,000 you should not be looking at a grant for $300,000/year for only two years, and with only 5% allowed for administration.

First off, you're likely not going to be approved for such a thing, and the time spent pursuing this would be better spent on more realistic prospects. But secondly, if you did get the grant, are you really prepared for such a massive expansion of your program? Can you realistically manage it with what they allow for overhead? And what will you do when the money goes away? That will be quite a shock to your organization on all ends.

Now, that doesn't mean you can't benefit from the stimulus money that's been announced. By partnering with larger organizations as a sub-contractor, you can help them perform the work (keeping your staff employed) without being directly obligated to the Federal government and all the bureaucracy that that entails.

So, do keep your eyes and ears open for these opportunities, but do so with caution, with careful analysis of your own capacity and how the goals of the funds fit with your programs, and with a willingness to be a partner with others in your community.

(Of course, a stimulus bill aimed at "bailing out" small, local nonprofits would be quite welcome as well...)

Thursday, April 09, 2009

What are your volunteers worth?

According to the Independent Sector, the estimated dollar value of volunteer time for 2008 is $20.25 per hour. According the report, this value
" based on the average hourly earnings of all production and nonsupervisory workers on private nonfarm payrolls (as determined by the Bureau of Labor Statistics). Independent Sector takes this figure and increases it by 12 percent to estimate for fringe benefits."
Of course, for specialized work (lawyers, architects, etc.) the BLS assigns higher average rates, but only use them when the specialist is volunteering in their professional capacity (IE: Don't value a Doctor's work at the higher rate if she's helping with the filing).

Why are these values important? Because volunteer time is part of how we in the nonprofit sector leverage donor dollars. It's part of the story of how we can get $10 worth of services out of a $5 gift. Donors, large and small, private and institutional, want to hear that their investment in your organization is helping to bring in additional resources.

Track the hours and assignments of your volunteers, and include that value in budgets as an in-kind donation. Tout that figure in newsletters and annual reports. But, according to FASB (the Financial Accounting Standards Board), only include the figure in official reporting if "the organization would have purchased the services if they had not been donated."

So, what do you think of the $20.25/hour figure? Too high? Too low?

Thinking of the small, local nonprofit where I'm currently the Interim Executive Director, and other like-sized organizations, I wondered if we were now valuing the volunteers more than the staff.

Our average wage for non-supervisory staff would be about $15/hour, adding 12% as Independent Sector did for "benefits" (really, just payroll taxes, SSI, etc. - most of these staff are part-time and not receiving health insurance, etc.), that bring our figure up to $16.80/hour.

Do we now need to launch into a conversation about how we value our staffs?

Thursday, March 26, 2009

When Incentives Turn into Disincentives

All of us in the nonprofit sector are aware (or, should be aware) that the Foundations who support us have a minimum 5% payout requirement to maintain their nonprofit status. That is, they have promised the IRS that their grants and related expenditures will equal at least 5% of the total value of their assets each tax year.

There are those of us (and if you read this blog regularly, you know I'm one) who consistently call on the foundations to grant out more than the minimum, particularly in years, such as this one, when social need for nonprofit services is high and individual donations are low.

A little less known than the 5% payout, is the excise tax that foundations pay on their investment earnings. Currently, it is generally a 2% tax. However, it is lowered to 1% in any year that a foundation grants out more than their five-year average. This was meant to be an incentive for higher payouts in times of need.

Of course, it is a one-year incentive, since that higher payout raises the five-year average, the tax rate goes back to 2% unless grant amounts continue to rise each year. The return to 2%, according to some in the foundation world, actually then becomes a disincentive to increasing grants in the first place.

According to C. David Campbell, president of the McGregor Fund, a Detroit-based foundation:
"This year, most of the foundations in Detroit will be paying out much more than they have in the past because of the needs... But that will leave all of us in the position of paying more taxes going forward, which ironically will further diminish what we have to support nonprofits."
Enter Senator Charles E. Schumer, New York Democrat, and his buddies, Senators Debbie Stabenow and Carl Levin, Democrats of Michigan. Senator Schumer has proposed eliminating the current two-tiered system with a single excise tax rate of 1.32% in all years.

According to Robert S. Collier, chief executive of the Council of Michigan Foundations
"We are confident this will stimulate more giving by foundations... simply by making the administration of tens of thousands of smaller and midsize foundations much easier because they won’t have to spend a lot of time with their accountants trying to figure out if they have to pay 1 percent or 2 percent."
I'm all for anything that will encourage foundations to do what they're supposed to - support nonprofit organizations - but, really, was figuring out a two-tiered tax system really that much trouble for the foundation world?

And, more to the point, are foundations really saying that the only reason they can't step up and grant out more in this fiscal emergency is because they'll only save on one year's taxes? I know that many foundations are stepping up, and that this does not represent the attitude of the entire sector.

Now, I'm not saying that I'm against Schumer's bill. It's probably a great idea. I'm just saying that certain foundations need to increase their giving in an emergency, excise tax or not.

Thursday, March 19, 2009

Good news for fundraisers

Did I say "good news"? In this economy? Yes, I certainly did. This last January Cygnus Applied Research polled 17,365 people with a history of charitable donations to ask them about their philanthropic plans for 2009. The results (as reported in The Chronicle of Philanthropy) may surprise you:
  • 52% of donors said their gifts would be on par with 2008
  • Only 17.5% planned to give less than last year
  • Of those who were committed to a multi-year gift, 87% said they would pay on time
  • 42.5% said they would give to a charity they had not supported in the past if someone they knew was seeking the gift
  • 40.3% said they would give for the first time if the charity was working directly to help people hurt by the recession
  • Only 16% said they would not consider supporting a new organization
Survey respondents were not being unrealistic about the economy when answering these questions: 39% said they thought it would be at least three years before the economy recovered. 23.4% felt the economy would rebound in less than two years.

A final bit of caution before thinking this news is an open invitation to all sorts of fundraising plans:
Forty-one percent said they had stopped donating to at least one nonprofit group in the past five years because they felt overwhelmed by appeal letters, while more than a third said they were concerned organizations spent too much on fund raising.
As a result, online donations are expected to become more popular, while telemarketing, door-to-door canvassing, and direct-mail appeals may be less successful.

Wednesday, March 18, 2009

Washing Away in a Flood of Volunteers

Has your nonprofit been overrun and overwhelmed recently with a flood of new volunteers? The New York Times reports on the influx of the unemployed into volunteer service and its effects, both positive and negative.

The two forces feeding this growing volunteerism are, of course, the recession leaving many people with more free time than they'd care to have, coupled with inspiration from President Obama's call to service.

Here in the Bay Area, the Taproot Foundation - who help with organizational effectiveness by placing skilled professionals in volunteer positions - had more people sign up on one day earlier this year than in an entire month a year ago.

For those larger organizations, who are able to properly train, manage, and use these new volunteers, this is a wonderful resource. But what hit home for me was this paragraph:
... others grumbled that the current love affair with volunteerism ... can be a mixed blessing. Smaller organizations, with staffs of fewer than 20 and no full-time volunteer coordinator, have struggled to absorb the influx, especially since many of them have simultaneously had to cut back on projects in the face of dwindling donations and government grants.

“Can you make them stop calling?” groused one nonprofit executive, who spoke on the condition of anonymity...
I'm currently serving as Interim Executive Director at an agency with nine staff members. The Volunteer Coordinator left that position in December and because of budget restrictions has not been replaced. We now have a backlog of volunteers to follow up with, and limited resources to put them into positions where they can be of service.

Taproot has had to scale back on their recruitment of professionals:
“It’s like a Greek tragedy,” according to Lindsay Firestone, who manages pro bono projects for Taproot. “We’re thrilled to have all of these volunteers. But now organizations are stuck not being able to take advantage of it because they don’t have adequate funding.”
But, as much as we may complain now, we know it won't continue forever. The media focus on volunteerism will wane as another issue comes into vogue, and the economy will pick up sooner or later (sooner, please!) sending these volunteers off to their paid positions.

How we handle these eager volunteers now will greatly influence how we can use them and interact with them later.

Bertina Ceccarelli, a senior vice president at the United Way in New York, sums it up this way:
“My hope is when they decide it’s time to do something else, they have fond memories of what they learned at United Way... Maybe they’ll even become a donor..."
Of course, we all know, nobody just "becomes" a donor. Donors must be cultivated. Sending a potential volunteer away today may mean you're turning down a future donation. Something to think about.

Saturday, March 14, 2009

Resisting the Pressure to Merger

A couple of years ago, I wrote a post here about when it makes sense to take an existing partnership and explore a merger. In that posting, I wrote that
the reality is that it is increasingly difficult for small organizations (budgets under $750,000) to operate successfully, and create sustainable funding. As much as I love small, grassroots organizations, sometimes they can better serve their communities as part of a mid-sized agency.
Today, that is truer than ever, and many of the small agencies that I love so much are in major trouble as their funding dries up, while clients are still lining up at their doors. Also true right now is that there is growing pressure on these small organizations to merge coming from the funding community (foundations and local governments).

In the long term, many of the mergers they envision may indeed make sense. But the savings they imagine will not occur anywhere near soon enough to be a solution to this year's budget problems. In fact, to make mergers truly work for the betterment of the organizations (and their clients), will actually require an additional investment for FY 2009-10 - an investment that doesn't seem likely to come from any of the sources promoting the mergers.

"Quick and easy" mergers really only exist when one of the partners is in such deep trouble that their only other option is shutting their doors and the other partner has plenty of resources to invest in salvaging the best of what the defunct organization has to offer.

When two small- to mid-sized organizations, who are each struggling but surviving, come to the table together, there's much to discuss and agree upon before any mergers occur. From deciding on what name the resulting organization will be called, to which Executive Director stays on (and what to do with the one that doesn't), to how to merge the boards (and elect new officers), to going through and reconciling each line of the two different sets of by-laws, this is a process that can take at least several months to over a year to settle. And once that's done, it's time for the lawyers to review what's been decided and put it into a legal form.

Here's a sample, simplified merger budget:

As you can see, while mergers may save money in the long run (and even that is often questionable if the deposed ED is needed to stay on to manage a second site), there are considerable upfront costs, and a major time investment required to make them work. And, bringing us back to the start of this post, the partnership has to make sense.

Wednesday, March 11, 2009

A Plan to Survive

Today I gave a presentation on Fundraising Planning in the New Economic Environment at the Nonprofit Forum in Redwood City. The Forum brought about 200 nonprofit professionals from throughout San Mateo and Santa Clara Counties to the conference center on the Oracle campus to share strategies for surviving the current economic collapse.

I've taught on the topic of fundraising planning many times over the years, and, of course, have my book out on the subject, but the question I had to ask myself in preparing for today was, "Has the current economic situation changed how we should approach the subject?"

The answer was simply, "No." Good planning is still good planning. The process I outline, and the tools I include, are valid in any economy. The plan that each of them creates for their agencies, of course, will be different today than it may have been a year ago, but the process is the same.

The most important thing was simply to take the time to plan, properly analyzing their funding mix, identifying gaps, establishing realistic goals, and working the plan.

Yesterday, while doing my final preparations for the conference, I came across this posting of a new study by Retriever Development Counsel with a few characteristics of nonprofits that are surviving the recession. Those characteristics include:
  • Those nonprofits with diversified funding, good management, and "learning cultures" seem to be coping much better than others.
  • Successful nonprofits appear to be putting more focus on development activities, particularly donor relations, including cultivation of major donors.
This is nothing new. When I was working for Compasspoint Nonprofit Services (one of the organizers of today's conference) during the dot-com bust of 2002 we did a similar survey, and - not surprisingly - we found that those organizations that were doing best were those that had a development plan.

The plans were all different, and all unique to the organizations that made them. There's no right or wrong plan. The only mistake is failing to plan.

Maybe in a good economy you have the luxury of sitting back and "just letting the money roll in" without any design or thought to how it's going to happen. But today we don't have the time to take chances like that. The time spent planning will be paid back to you with security and sustainability.