Earlier this month I attended a workshop at the Community Foundation of Santa Cruz County called "Show Me the Money: Nonprofits Talking Taxes." The workshop was conducted by Kim Klein, a well-known, much respected, and quite beloved fundraising consultant and trainer.
But "talking taxes"? Kim Klein is the grassroots fundraising guru, not an economist or policy wonk. But, as she explained at the start of the workshop, over the past several years of the recession-that-will-not-end, with each round of budget cuts at all levels of government, more and more public institutions were turning to private foundations and individual donors to fill the gap.
Nonprofits that have always relied on those sources were suddenly in competition with schools and libraries. Not to mention those nonprofits who had been reliant on government funding suddenly got the message about diversifying their fund development plan and were also doing their first fundraising letters and grant proposals. Of course, the funds available did not grow. In fact, many foundations (and many individual donors) have less resources to meet these rising needs.
Meanwhile, the nonprofit sector as a whole has been remarkably silent in the public discussion of government budget cuts, tax cuts, and the unwillingness of many to talk about new revenue. Those behind Nonprofits Talking Taxes believed that it's high time for the sector to get involved in this debate as if our organization's lives depended on it, because that's not far from the truth.
This is not simply a fight for those nonprofits who receive government funding; this is about all of us who care about what direction our society and our communities are heading. As has been said by many, a government budget is not simply a financial document, it is a direct reflection of a community's values. So what does the California State budget say about our values, that it sacrifices the jobs of teachers rather than inconvenience corporations?
The workshop was not all gloom and doom. Quite the opposite. Through humor and group participation, we learned more about the state budget, taxes, why all nonprofit professionals should care about it, and left feeling optimistic; that we can have some control and say over the future direction of our state.
For an example of how humor is used to talk about the topic, click here to take the "Nonprofit Tax Quiz" that Kim created (on Blue Avocado).
These workshops are free, and are available to any nonprofit group in California. For those elsewhere, I'm sure they'd be happy to provide some guidance to creating a Nonprofits Talking Taxes curriculum for your state.
Learn more at the Nonprofits Talking Taxes website.
Sunday, August 28, 2011
Friday, May 13, 2011
Shoe Changes Foot
All of us in the nonprofit sector have heard the drumbeats over the last few years accompanying the chants of, "Merge! Merge! Merge!" That pundits outside the sector were saying it, we could brush aside as the rantings of somebody who didn't know how efficient and cost-effective most nonprofits really are, but when our funders - including government at all levels - joined in, many of us took it seriously and at least explored mergers, whether they were completed or not.
And now, the tables have turned... A nonprofit in New Jersey has now made it its mission to get towns to get with the times and start merging:
And now, after the merger fever that's swept through our sector the last few years, who is better positioned to show how mergers can really work for the benefit of constituents and the public good than nonprofits?
And now, the tables have turned... A nonprofit in New Jersey has now made it its mission to get towns to get with the times and start merging:
In New Jersey there are 566 towns. California, by comparison, has only 482 municipalities. An organization called Courage to Connect N.J. believes that the situation is unsustainable in light of the growing financial straits of local governments... They say too many local governments, and the costs associated with them, drive up property taxes.While I was at first simply amused by the headline and the irony of nonprofits encouraging governments to merge, when I read the article I simply had to agree. If there's one thing that for-profit businesses and nonprofits can agree on, it's the inefficiencies of government.
And now, after the merger fever that's swept through our sector the last few years, who is better positioned to show how mergers can really work for the benefit of constituents and the public good than nonprofits?
Wednesday, April 06, 2011
When is a Donation Not a Donation?
A donation that's not a donation? What's that? When it's a situation where the supporter believes they've a donation, but the nonprofit does not see it that way.
Such as, a small nonprofit puts a link to Amazon on their website, because they get a few pennies back from each book sale as part of the "associates" program. The nonprofit thinks, "We're providing a service, and getting a little extra cash." The organization's supporter thinks, "What a fun way to make my donation!" On a larger scale, it could be the logo of a national organization placed on items or the marketing of a national chain store.
Either way, the supporter is often likely to confuse the $25 spent on goods with having made a $25 donation direct to the nonprofit. I've been skeptical of these arrangements for years, and (when I was consulting) often warned my clients not to put too much effort into such arrangements. But it was just my feeling that this was happening. Now, I have a little bit of evidence.
In today's Nonprofit Quarterly online, there's an article saying that Cause Marketing Drives Down Donations. The evidence comes from a University of Michigan study:
I think you can still use marketing arrangements, and sell goods, but you must do it with caution, and with eyes wide open. Make sure that the potential donation is enough to make it worth your time. Use these co-marketing deals to reach new supporters - those who haven't heard of you before and were not going to give a donation otherwise - rather than presenting these opportunities to your current donors.
Ask yourself this; is the business you're considering partnering with going to be promoting your mission to their customers, or are they expecting you to promote their products to your donors? Who does more work in the contract, and who gets more of the profits? If the balance is off, it's okay to just say "No."
I've said it before, and I'll say it again, "If you only ask for small donations, you'll only get small donations."
Such as, a small nonprofit puts a link to Amazon on their website, because they get a few pennies back from each book sale as part of the "associates" program. The nonprofit thinks, "We're providing a service, and getting a little extra cash." The organization's supporter thinks, "What a fun way to make my donation!" On a larger scale, it could be the logo of a national organization placed on items or the marketing of a national chain store.
Either way, the supporter is often likely to confuse the $25 spent on goods with having made a $25 donation direct to the nonprofit. I've been skeptical of these arrangements for years, and (when I was consulting) often warned my clients not to put too much effort into such arrangements. But it was just my feeling that this was happening. Now, I have a little bit of evidence.
In today's Nonprofit Quarterly online, there's an article saying that Cause Marketing Drives Down Donations. The evidence comes from a University of Michigan study:
More precisely, the study found that giving decreased if a donor had previously purchased a cause-related product, even if the donor was going to make the purchase independent of any charitable considerations. As a result of her findings, Professor Aradhna Krishna, the study's lead researcher, suggests that maybe not all giving is good giving.There are already some criticisms of the study - small sample size, range, methodology - but I believe that further study will only bolster these results. So, does this mean you should avoid all such arrangements?
I think you can still use marketing arrangements, and sell goods, but you must do it with caution, and with eyes wide open. Make sure that the potential donation is enough to make it worth your time. Use these co-marketing deals to reach new supporters - those who haven't heard of you before and were not going to give a donation otherwise - rather than presenting these opportunities to your current donors.
Ask yourself this; is the business you're considering partnering with going to be promoting your mission to their customers, or are they expecting you to promote their products to your donors? Who does more work in the contract, and who gets more of the profits? If the balance is off, it's okay to just say "No."
I've said it before, and I'll say it again, "If you only ask for small donations, you'll only get small donations."
Sunday, February 06, 2011
My First Nonprofit Job
A first blog posting after a long absence is always difficult; so many things to talk about, it's hard to decide what the most relevant topic would be. First, let me remind you where I've been...
After about seven years as an independent consultant, in January I began a regular, full-time executive director position with a local nonprofit organization, and spent the month fully immersed in learning the programs, the culture, and the needs. I've been working long days (and nights) and coming home exhausted but happy. My orientation and training will continue for another couple of months at least, but I feel I can come up for air long enough for a blog post or two.
Which brings us to the topic of this post, how did this career of mine start? The truth is, at the time of my first nonprofit job, I had no idea that it would be my career. At the time, I was still planning a life in film production. I had not yet returned to school to get degrees in politics (BA) and public policy (MPPA), and was just looking for an interesting and meaningful way to earn some money to pay for my creative projects and take a few cinema classes here and there.
I don't even recall the exact year, but it must have been in the early or mid 1980s, when I accepted a job as a canvasser for the Campaign for Economic Democracy (aka Campaign California) in Santa Monica; an organization started by Tom Hayden and his (then) wife, Jane Fonda. At the time, Hayden had recently been elected to the state Assembly, but he did speak with us occasionally. I don't recall ever seeing Ms. Fonda, but rumor was that her exercise videos were our number one funding source.
Each afternoon we'd gather in our 3rd Street office for some motivational presentation before hitting the residential streets of Los Angeles County to knock on doors and ask for signatures on petitions (mostly promoting solar energy and environmental protection) as well as collect donations to support our work.
Asking for those $10 and $25 checks was the hardest thing I'd ever done. Nobody could have ever guessed at that time that fundraising would become a large part of my professional career. Confession: I was not the best at getting those checks, although I did get many signatures.
There was, of course, a downside to working for a figure such as Tom Hayden. As much as he may have been lionized in certain west-side, ultra-liberal enclaves, he was quite reviled and hated elsewhere, especially in areas where there were many veterans of the Vietnam war. I was physically threatened on several occasions, including once by gentleman who kept a saw by his front door and chased me off his property waving the saw violently after me.
But there were many wonderful people too, who would invite you in for a glass of lemonade on a hot LA evening. We'd make note of these "safe houses" to know where to run when the guys with weapons got out of control. I didn't last long as a canvasser, but I did eventually get better at asking for money...
How about you? What was your first experience raising money for a cause or working for a nonprofit?
After about seven years as an independent consultant, in January I began a regular, full-time executive director position with a local nonprofit organization, and spent the month fully immersed in learning the programs, the culture, and the needs. I've been working long days (and nights) and coming home exhausted but happy. My orientation and training will continue for another couple of months at least, but I feel I can come up for air long enough for a blog post or two.
Which brings us to the topic of this post, how did this career of mine start? The truth is, at the time of my first nonprofit job, I had no idea that it would be my career. At the time, I was still planning a life in film production. I had not yet returned to school to get degrees in politics (BA) and public policy (MPPA), and was just looking for an interesting and meaningful way to earn some money to pay for my creative projects and take a few cinema classes here and there.
I don't even recall the exact year, but it must have been in the early or mid 1980s, when I accepted a job as a canvasser for the Campaign for Economic Democracy (aka Campaign California) in Santa Monica; an organization started by Tom Hayden and his (then) wife, Jane Fonda. At the time, Hayden had recently been elected to the state Assembly, but he did speak with us occasionally. I don't recall ever seeing Ms. Fonda, but rumor was that her exercise videos were our number one funding source.
Each afternoon we'd gather in our 3rd Street office for some motivational presentation before hitting the residential streets of Los Angeles County to knock on doors and ask for signatures on petitions (mostly promoting solar energy and environmental protection) as well as collect donations to support our work.
Asking for those $10 and $25 checks was the hardest thing I'd ever done. Nobody could have ever guessed at that time that fundraising would become a large part of my professional career. Confession: I was not the best at getting those checks, although I did get many signatures.
There was, of course, a downside to working for a figure such as Tom Hayden. As much as he may have been lionized in certain west-side, ultra-liberal enclaves, he was quite reviled and hated elsewhere, especially in areas where there were many veterans of the Vietnam war. I was physically threatened on several occasions, including once by gentleman who kept a saw by his front door and chased me off his property waving the saw violently after me.
But there were many wonderful people too, who would invite you in for a glass of lemonade on a hot LA evening. We'd make note of these "safe houses" to know where to run when the guys with weapons got out of control. I didn't last long as a canvasser, but I did eventually get better at asking for money...
How about you? What was your first experience raising money for a cause or working for a nonprofit?
Monday, December 27, 2010
What's Your Non-Profit's Bottom Line?
From Guest Blogger Nick Cooney. Nick is the author of "Change Of Heart: What Psychology Can Teach Us About Spreading Social Change" (www.ChangeOfHeartBook.com), and the founder and director of The Humane League, an animal advocacy organization based in Philadelphia, PA.
Is your non-profit succeeding in its mission? How can you tell?
Large for–profit corporations spend millions of dollars each year gathering data to compare the success of different approaches in advertising, audience targeting and product offerings. The success (or failure) of each is measured by the impact it has on the company's bottom line. Imagine what would happen to businesses if, instead of using a bottom line to analyze their success, they used the type of information commonly cited by non-profits: anecdotal evidence, raw output and how much they cared.
Anecdotes and reports of our non-profit's raw output can’t give us clear insight into how much good we've done. Even worse, they provide no guidance on how to be more successful in the future. Setting a bottom line enables us to quantify the amount of good we’re doing now and compare it to the amount of good we could be doing by using other methods, messages, or strategies. Without a bottom line (and gathering data to see the impacts our different decisions have on that bottom line), we'll be relying on assumptions and guesswork when assessing our accomplishments and deciding what to do next.
What exactly is the bottom line for non-profit organizations? Generally speaking, it is the amount of good that we have created in the world. Our bottom line should be the number of people (or animals, or portions of the environment) whose lives we've impacted.
A sound bottom line for a family planning organization would be the number of unwanted pregnancies they had prevented that year. "This year our non-profit reduced the teen pregnancy rate at Northeast High School by 10%." A follow-up question would be, "Which one of our programs contributed the most to that drop: distributing free condoms; in-class presentations about the importance of contraception; or hanging posters around the school encouraging students to make all sex safe sex.
A sound bottom line for an environmental organization would be the amount of harm they've prevented from happening to the environment. "This year our non-profit prevented 100 tons of greenhouse gas emissions; how can we increase that amount next year?" Follow up questions would be "Which of our programs contributed most to those greenhouse gas emissions: encouraging the public to carpool to work, or encouraging home owners to reduce their electric use? And how much money did we spend per ton of greenhouse gas emissions savings with each of those two programs?"
The Jameel Poverty Action Lab at the Massachusetts Institute of Technology has applied a bottom-line focus to analyzing poverty-reduction and public health efforts around the world. Founded by M.I.T. economist Esther Duflo, J-PAL’s mission is to conduct randomized trials of aid projects to see which are successful and which aren’t. Much like clinical drug testing, J-PAL researchers create both a test group for a particular project and a control group and then analyze what impact the project had.
For example, in trying to prevent the spread of malaria is it more effective to give away bed nets (which protect people from malaria-carrying mosquitoes) or to sell them at a low price under the assumption that a person is more likely to use a net if they had to purchase it themselves? To find out researchers divided a segment of Kenya’s population into two groups, giving away free nets to the first group and selling the nets at low cost to the second group. Researchers then tracked how many of the nets were put to use and how they impacted the spread of malaria in each of the two groups. The result: free nets did more to combat the spread of malaria than low-cost nets, at least in Kenya.
J-PAL’s scientific analysis on the effectiveness of different aid programs should serve as a model for advocacy organizations. Any non-profit serious about creating change should be collecting data on how effective their programs are (and whether they’re effective at all), and basing all decisions around their bottom line. Heartwarming anecdotes and emotional appeals are perfect when soliciting donations, but a by-the-numbers analysis is what's needed to make sure we're putting those donations to good use.
For more on the role that research can play in helping non-profits succeed, visit www.ChangeOfHeartBook.com.
Is your non-profit succeeding in its mission? How can you tell?
Large for–profit corporations spend millions of dollars each year gathering data to compare the success of different approaches in advertising, audience targeting and product offerings. The success (or failure) of each is measured by the impact it has on the company's bottom line. Imagine what would happen to businesses if, instead of using a bottom line to analyze their success, they used the type of information commonly cited by non-profits: anecdotal evidence, raw output and how much they cared.
Dear Pepsi Shareholders,As laughable as such a letter would sound coming from a large corporation, for many non-profits this type of analysis represents the farthest they’ve gone in measuring their impact. And it's not just small non-profits that have failed to take a bottom-line approach to their work. A study of one hundred and fifty-five major foundations (each with over one hundred million dollars in assets) found that only eight percent could describe the specific types of information or data that led them to believe they were likely to achieve some of their goals. The study, conducted by the Center for Effective Philanthropy, found that instead of hard data most foundations used anecdotal evidence to demonstrate the effectiveness of their programs. Only thirty-nine percent used any tools or indicators whatsoever in assessing even a portion of their work, with even less (twenty-six percent) using indicators or tools to assess all of their work.
This has been a very successful year for us indeed! We know Pepsi is the best cola out there, and we are 100% committed to getting the whole world to realize it too! Our achievements this year included a $50,000 awareness-raising advertising campaign on buses, billboards, and in magazines. These eye-opening ads highlighted our higher sugar content (yum!), attractive bottle design, and our Pepsi Generation credibility. We also launched "PepsiKids2.0," an online social forum where youth can get together and let each other know why they're committed to drinking Pepsi. Enclosed is a picture of Bobby Withers, an 8 year-old boy that had been drinking Coca-Cola his whole life. Now, he and his mom are buying a 12 pack of Pepsi each week! With your support, Pepsi is helping to create the world we all wish to see: a world where everyone drinks Pepsi.
Anecdotes and reports of our non-profit's raw output can’t give us clear insight into how much good we've done. Even worse, they provide no guidance on how to be more successful in the future. Setting a bottom line enables us to quantify the amount of good we’re doing now and compare it to the amount of good we could be doing by using other methods, messages, or strategies. Without a bottom line (and gathering data to see the impacts our different decisions have on that bottom line), we'll be relying on assumptions and guesswork when assessing our accomplishments and deciding what to do next.
What exactly is the bottom line for non-profit organizations? Generally speaking, it is the amount of good that we have created in the world. Our bottom line should be the number of people (or animals, or portions of the environment) whose lives we've impacted.
A sound bottom line for a family planning organization would be the number of unwanted pregnancies they had prevented that year. "This year our non-profit reduced the teen pregnancy rate at Northeast High School by 10%." A follow-up question would be, "Which one of our programs contributed the most to that drop: distributing free condoms; in-class presentations about the importance of contraception; or hanging posters around the school encouraging students to make all sex safe sex.
A sound bottom line for an environmental organization would be the amount of harm they've prevented from happening to the environment. "This year our non-profit prevented 100 tons of greenhouse gas emissions; how can we increase that amount next year?" Follow up questions would be "Which of our programs contributed most to those greenhouse gas emissions: encouraging the public to carpool to work, or encouraging home owners to reduce their electric use? And how much money did we spend per ton of greenhouse gas emissions savings with each of those two programs?"
The Jameel Poverty Action Lab at the Massachusetts Institute of Technology has applied a bottom-line focus to analyzing poverty-reduction and public health efforts around the world. Founded by M.I.T. economist Esther Duflo, J-PAL’s mission is to conduct randomized trials of aid projects to see which are successful and which aren’t. Much like clinical drug testing, J-PAL researchers create both a test group for a particular project and a control group and then analyze what impact the project had.
For example, in trying to prevent the spread of malaria is it more effective to give away bed nets (which protect people from malaria-carrying mosquitoes) or to sell them at a low price under the assumption that a person is more likely to use a net if they had to purchase it themselves? To find out researchers divided a segment of Kenya’s population into two groups, giving away free nets to the first group and selling the nets at low cost to the second group. Researchers then tracked how many of the nets were put to use and how they impacted the spread of malaria in each of the two groups. The result: free nets did more to combat the spread of malaria than low-cost nets, at least in Kenya.
J-PAL’s scientific analysis on the effectiveness of different aid programs should serve as a model for advocacy organizations. Any non-profit serious about creating change should be collecting data on how effective their programs are (and whether they’re effective at all), and basing all decisions around their bottom line. Heartwarming anecdotes and emotional appeals are perfect when soliciting donations, but a by-the-numbers analysis is what's needed to make sure we're putting those donations to good use.
For more on the role that research can play in helping non-profits succeed, visit www.ChangeOfHeartBook.com.
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