Introducing IssueLab

Just a quick note today: There's a new link in the "Blogroll" on the left side to IssueLab's newsfeed.

IssueLab "is an online publishing forum for nonprofit research. Each month we do an editorial CloseUp on a different issue that nonprofits are addressing in their own research work. This month we are focusing on research related to the issue of Volunteerism. You can check out the collection, which pulls work from an interesting cross-section of organizations, at www.issuelab.org/closeup."

The newsfeed (to your left) will bring you all sorts of good stuff.

National Volunteer Week is Coming...

National Volunteer Week is coming up this April 27-May 3. It's the biggest volunteering event on the calendar, and it's a great opportunity for you to encourage socially minded folks (like your organization's supporters) to participate in local activities.

Head on over to the VolunteerMatch web site and read the press release to find out more about National Volunteer Week, and how your nonprofit can tie into this promotion.

“National Volunteer Week is a terrific opportunity to harness the growing, nationwide surge in volunteerism,” said Greg Baldwin, president of VolunteerMatch. “It affords a chance for individuals to reach out and discover fun and meaningful volunteer activities in their own neighborhoods.”
...
VolunteerMatch is helping transform the landscape of nonprofit outreach—connecting good people directly with good causes, and providing access to an entirely new generation of volunteers who are eager to contribute. Since 1998, volunteers have generated just over 3.4 million matches to the 56,784 local nonprofits registered with VolunteerMatch.

On a personal note, I generally do not use my blog to simply edit and repost press releases I receive in my email (if I did, I'd be posting three or four blogs a day). When I do pass along information from a press release it is because it is an organization or a cause that I believe in and find value in.

I have used VolunteerMatch to find volunteers for several nonprofit organizations and have found it easy to use and highly effective in recruiting quality volunteers. If you can possibly use the theme of National Volunteer Week in your recruitment efforts, I think you will find it well worth your effort.

Market failure and collusion in the philanthropic marketplace

That's a bit of a heady title, but stick with it and humor me for a minute or two longer. I'm going to use a lesson from basic economics 101 to explain why nonprofits are unnecessarily forced spend too much time and energy chasing dollars instead of achieving their missions.

Cast your mind back to college days. and remember that intro to economics class. Remember how the supply and demand curves are supposed to work? In a functioning market, each are at least somewhat elastic. When demand outpaces supply, shortages occur and prices rise till supply can catch up. When supply outpaces demand, prices begin to drop. In each case, the correction (either dropping prices or increased supply) brings the market back into equilibrium. Ta daa! The invisible hand at work.

When these forces fail to bring the market back to a working situation, for whatever reason, the resulting state is called a market failure. One possible cause of a market failure is collusion; where a number of players one side of the equation agree to withhold either supply or demand in order to manipulate the market for their own ends.

Okay, so now let's look at the market for foundation grants to nonprofits. It is an accepted fact of life that the demand far outpaces the number of grants awarded. We know that the rule of thumb is that only one in twelve proposals will be funded (some of us do somewhat better than that, but it's balanced by those who do worse), and that none of us who have been at it long can boast of a perfect record of every proposal funded.

Because of a low supply of grants from foundations, nonprofits pay a higher than market price for searching out, applying for, and managing what few grants are available to them. Economics 101. That higher price nonprofits pay to receive grants has to come from somewhere, so it comes from programs; from mission.

This would suggest that there's a shortage in the supply chain of charitable dollars. But that's simply not true. Foundations are sitting on massive endowments that could satisfy most any nonprofit's needs. These dollars have already been earmarked for charitable purposes and the donors have already received their tax benefits at the expense of the public treasury. So why are they not being distributed?

And that's where the collusion comes in. While the IRS requires that foundations spend out a minimum of five percent of their endowments each year, the majority of U.S. foundations have taken that five percent to be the industry standard (a few notable exception spend at higher rates, and they are to be commended).

In the face of a contracting economy, with rising demand for the social services provided by the nonprofit community matched with fewer dollars to pay for it, this collusion of foundations has become the single largest impediment to nonprofits succeeding at their missions and a danger to the public safety, health, and societal well-being.

Alright. Maybe I'm going a bit too far here. I like to exaggerate to make a point. But the fact stands: In tough times the community of foundations have the ability - and I would argue social responsibility - to step up to the plate and increase the flow of grants.

And, while we're at it, maybe they can cut some of the administrative burden associated with the process. Oops. I know. This time I've really gone too far.

Introducing the Angelcheeks Foundation

This posting is a bit personal, as well as nonprofit related. A friend of mine lost his infant son a year ago to SIDS. While the family had insurance that covered the expenses of putting his son to rest, what they learned through the process was how many families are completely unprepared for such a tragedy.

In living memory of their son, he and his wife have now founded the Angelcheeks Foundation, to make grants to families in need, and to education on issues surrounding Sudden Infant Death Syndrome.

Below, you will see a video by the family and their friends (yes, I'm in there somewhere) that was released today to promote the foundation. Please watch it, and if you are half as moved by it as I was, please consider donating.

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.