I will be away from the office for the next several days, and most likely will not have the opportunity to post anything here. This is a good opportunity for you to subscribe to this blog's feed. By subscribing you'll always know when there are new postings here without having to check the site.
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Sunday, July 09, 2006
Friday, July 07, 2006
Bad News in Threes
They say that bad news always happens in threes, and within the last couple of weeks three nonprofit agencies with which I've been associated have made negative announcements. One is going through another round of lay-offs, another is having lay-offs and disclosed a massive deficit and service cuts, and the third is shutting down completely.
Frankly, one of them has been mismanaged for years and is mostly responsible for its own problems. The other two (and even the first to a degree) are simply victims of the economy.
Despite reports that donations increased in 2005 (I've reported on that earlier), expenses increased as well. Besides expenses increasing, demand increased as well. Certainly a few more dollars came the way of the nonprofit sector in the last year, but it did not keep pace with the additional clients seeking social services or the cost of providing services.
The economy is on the rise, we are told. What new jobs there are, however, don't include health insurance. Retirement benefits are being slashed leaving seniors without support. Low-income parents must choose between putting gas in the family car or paying for day care so they simply go to work.
And who picks up the pieces when these things happen? Who fills in the cracks in the system? Certainly not the government. The nonprofit sector is what allows the economic engine to keep churning as it does, without providing benefits to employees.
Be proud of the work you do, and be sure to tell the story of how your organization contributes to the community and allows the rest of the economy to grow. And then ask for another donation.
Tags: nonprofits, economy, social services, donations
Frankly, one of them has been mismanaged for years and is mostly responsible for its own problems. The other two (and even the first to a degree) are simply victims of the economy.
Despite reports that donations increased in 2005 (I've reported on that earlier), expenses increased as well. Besides expenses increasing, demand increased as well. Certainly a few more dollars came the way of the nonprofit sector in the last year, but it did not keep pace with the additional clients seeking social services or the cost of providing services.
The economy is on the rise, we are told. What new jobs there are, however, don't include health insurance. Retirement benefits are being slashed leaving seniors without support. Low-income parents must choose between putting gas in the family car or paying for day care so they simply go to work.
And who picks up the pieces when these things happen? Who fills in the cracks in the system? Certainly not the government. The nonprofit sector is what allows the economic engine to keep churning as it does, without providing benefits to employees.
Be proud of the work you do, and be sure to tell the story of how your organization contributes to the community and allows the rest of the economy to grow. And then ask for another donation.
Tags: nonprofits, economy, social services, donations
Thursday, July 06, 2006
Should Philanthropy Go On Forever?
Most charitable foundations in this country operate as perpetual giving machines. That is, they manage their funds and grant making in such a way that they will never spend out their entire endowment. In fact, many manage to grow their endowed base, even while awarding out millions of dollars in grants each year.
The IRS mandates that foundations must spend down at least 5% of their endowment each year, or face penalties. The perpetual foundations usually treat that 5% minimum as their set goal, and rarely give above that. The other 95% stays tied up in investments and helps to grow (or at least maintain) the endowment.
Philanthropists will give you two main reasons for setting up perpetual giving machines.
The first reason most people think of is, "to maintain a legacy." If they can't live forever, at least the foundation bearing their name can. It's usually worded something like, "I want to continue to do good long after I'm gone."
Many in the nonprofit field - who would like to get their hands on the foundation money sooner, rather than later - look at this argument as pure ego. "We have problems that need solving now," we argue, "Why grant out the money 5% at a time, when if you grant it all today we could cure cancer and AIDS, develop renewable energy sources, and end childhood hunger in this generation."
The other main reason for the perpetual foundation is a simple economics equation. By managing endowments in a manner that grows them - even while making grants - more money is eventually generated for nonprofits. Basically, would you rather have $10 million today, or $30 million over time?
It's a sound argument in a strong economy. But all one has to do to argue with it is to remember back just a few years to the dot-com bust, and what it did to foundation endowments (particularly those in my area, which were heavily invested in tech stocks). The means for growing endowments are investments, and there are no guarantees.
More and more, in the last few years, I've seen articles about philanthropists who are saying, "To Hell with posterity," and making plans to give their fortunes away entirely in their lifetimes. The latest of these being Howard G. Buffett (son of Warren).
According to the Chicago Tribune, Buffett doesn't intend to let philanthropy go on forever (get passwords here). As you've certainly heard by now, the senior Mr. Buffet is giving his fortune away over the next few years. A portion of that will be going into the foundations of each of his children, including Howard, who intends...
Tags: philanthropy, nonprofits, foundations, charity, philanthropists, Howard Buffet
The IRS mandates that foundations must spend down at least 5% of their endowment each year, or face penalties. The perpetual foundations usually treat that 5% minimum as their set goal, and rarely give above that. The other 95% stays tied up in investments and helps to grow (or at least maintain) the endowment.
Philanthropists will give you two main reasons for setting up perpetual giving machines.
The first reason most people think of is, "to maintain a legacy." If they can't live forever, at least the foundation bearing their name can. It's usually worded something like, "I want to continue to do good long after I'm gone."
Many in the nonprofit field - who would like to get their hands on the foundation money sooner, rather than later - look at this argument as pure ego. "We have problems that need solving now," we argue, "Why grant out the money 5% at a time, when if you grant it all today we could cure cancer and AIDS, develop renewable energy sources, and end childhood hunger in this generation."
The other main reason for the perpetual foundation is a simple economics equation. By managing endowments in a manner that grows them - even while making grants - more money is eventually generated for nonprofits. Basically, would you rather have $10 million today, or $30 million over time?
It's a sound argument in a strong economy. But all one has to do to argue with it is to remember back just a few years to the dot-com bust, and what it did to foundation endowments (particularly those in my area, which were heavily invested in tech stocks). The means for growing endowments are investments, and there are no guarantees.
More and more, in the last few years, I've seen articles about philanthropists who are saying, "To Hell with posterity," and making plans to give their fortunes away entirely in their lifetimes. The latest of these being Howard G. Buffett (son of Warren).
According to the Chicago Tribune, Buffett doesn't intend to let philanthropy go on forever (get passwords here). As you've certainly heard by now, the senior Mr. Buffet is giving his fortune away over the next few years. A portion of that will be going into the foundations of each of his children, including Howard, who intends...
... to try spending the yearly installments of about $50 million from his father as fast as they arrive. He is not considering having his philanthropy operate in perpetuity but expects to set a distant date at which it will disburse its assets and shut down.Bravo Howard! Let's see who is the next philanthropist to get on board.
Tags: philanthropy, nonprofits, foundations, charity, philanthropists, Howard Buffet
Wednesday, July 05, 2006
Thick Skin and Good Advice
There's an old quote from Babe Ruth that I love to apply to fundraising: "Each strike gets me closer to the next home run."
I was reminded of that yesterday when I read Adviser to fund-raisers: Go where the money is in The Journal News. The article is about Peter J. Gallagher, who has been in the nonprofit fundraising business for over 40 years.
"Failing nine times out of 10 is enough to get a worker fired in most jobs," the article begins. But, in the world of nonprofits, "[G]arnering a 10 percent response rate to fund-raising solicitations is considered a benchmark of professional success."
That's important for all of us to remember. At some level we do know that it takes about a dozen asks (or grant applications) to get to one "yes." But at another level, we all want our statistics to show greater success than that. The key to reaching a higher-than-average success rate is to maintain a positive attitude.
For nonprofits, where the money is, is individual donors. I've talked about it here, and you've heard it a million times elsewhere, but it bears repeating: "Foundations and corporations account for a combined 17 percent of donations. Individuals account for 83 percent."
Gallagher's advice to fundraisers: Go where the money is
Tags: nonprofit, fundraising, fundraisers, grants
I was reminded of that yesterday when I read Adviser to fund-raisers: Go where the money is in The Journal News. The article is about Peter J. Gallagher, who has been in the nonprofit fundraising business for over 40 years.
"Failing nine times out of 10 is enough to get a worker fired in most jobs," the article begins. But, in the world of nonprofits, "[G]arnering a 10 percent response rate to fund-raising solicitations is considered a benchmark of professional success."
That's important for all of us to remember. At some level we do know that it takes about a dozen asks (or grant applications) to get to one "yes." But at another level, we all want our statistics to show greater success than that. The key to reaching a higher-than-average success rate is to maintain a positive attitude.
"You can't allow yourself to get discouraged," Gallagher said. "It is like when you fall off a horse. Get back up again. ... You have to define what your message is so that you can persuade people to hop on your boat."The reference in the title of the article is, of course, to another old quote. Willie Sutton, a notorious bank robber of the 1930's, was once asked, "Why do you rob banks?" "Because," Willie replied, "That's where the money is."
For nonprofits, where the money is, is individual donors. I've talked about it here, and you've heard it a million times elsewhere, but it bears repeating: "Foundations and corporations account for a combined 17 percent of donations. Individuals account for 83 percent."
Gallagher's advice to fundraisers: Go where the money is
Tags: nonprofit, fundraising, fundraisers, grants
Sunday, July 02, 2006
What Exactly Is a Grant Writer?
This seems like an obvious enough question, and yet it does come up from time to time, even in professional circles, as it did this week in an online discussion group I belong to.
One the main services I provide to my nonprofit clients is popularly called "grant writing" although, technically, it's not accurate. What I do is more properly called "grant proposal writing."
The people who write the grants are the foundation officers who [hopefully] respond to my proposals. And, apparently, some of them take exception to people such as myself calling our profession "grant writing."
Personally, I believe that this is one of those cases where common usage wins over linguistic perfection. When I say that I have several clients for my grant writing services, it is understood by all that these are nonprofits looking for funds, not foundations looking to distribute money.
When I have tried to be liguistically correct and tell people I was a proposal writer, on the other hand, it has caused confusion until I explained it more clearly as grant writing.
So, I will continue to abuse the language and call myself a "grant writer." I sincerely apologize if that offends you.
Tags: grant writing, grantwriter, nonprofit, foundations
One the main services I provide to my nonprofit clients is popularly called "grant writing" although, technically, it's not accurate. What I do is more properly called "grant proposal writing."
The people who write the grants are the foundation officers who [hopefully] respond to my proposals. And, apparently, some of them take exception to people such as myself calling our profession "grant writing."
Personally, I believe that this is one of those cases where common usage wins over linguistic perfection. When I say that I have several clients for my grant writing services, it is understood by all that these are nonprofits looking for funds, not foundations looking to distribute money.
When I have tried to be liguistically correct and tell people I was a proposal writer, on the other hand, it has caused confusion until I explained it more clearly as grant writing.
So, I will continue to abuse the language and call myself a "grant writer." I sincerely apologize if that offends you.
Tags: grant writing, grantwriter, nonprofit, foundations
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