Friedman Consulting

2012-01-31T11:14:00.000-08:00

Simple Tools for Finding In-kind Donations

Looking for new office furniture? Desperate to upgrade your software? Need art supplies for your children's activities? Hoping to spruce up your landscaping? Trying to cut costs from your annual budget? Here are some simple, practical suggestions for finding donations that are either free or very inexpensive:

Post a wish list: This is one of the easiest and most effective ways to solicit in-kind donations. Simply post a list of all the things you need on your website, newsletter, and printed brochures. You might be surprised at what you get - folks often recycle items that are perfectly workable and practically new. Be specific about your needs, and find a way to thank people while gently and kindly declining donations that do not fit your specifications.

Check out Tech Soup: This nonprofit offers free and/or discounted technology products and information to other nonprofits. This includes articles, blogs, and free webinars as well as more than 400 products from donor partners including Microsoft, Adobe, Cisco, Intuit, and Symantec: http://home.techsoup.org/pages/default.aspx

Register with Good360: Good360 donates new products like office furniture to nonprofit agencies from the corporations that manufacture them. First you register, then search for the products you need - or you can submit a wish list. Just note that you will be required to pay any shipping costs: http://good360.org/

Sign up with Ireuse: Ireuse is another online resource, this one offering used office furniture for free to registered nonprofits. The furniture comes from for-profit businesses that are upgrading: http://www.ireuse.com/site/

Post on Craigslist: Search to see if the item you need is available through Craigslist. Or you can post your own specific request at no charge. Make sure to provide contact information and a link to your website so folks know who you are and what you do: http://sfbay.craigslist.org/

Ask at your local Thrift Store: Often, small local thrift stores will keep an eye out for specific merchandise for community-based nonprofits - and give them to you for free or for a discounted price. This is an especially good resource for art and craft supplies.

Build relationships with local businesses: Shop locally - and once or twice a year, ask those businesses to give back to you with a specified in-kind donation. If you are a membership organization, this can a way for them to join. Be sure to acknowledge these donations publicly through your website, member lists, and newsletters.

Just a couple of final notes: send formal thank-you letters when you receive in-kind donations, and be sure to include the total value of in-kind donations in your annual fiscal reports.These strategies can help build donor relationships and financial sustainability. Good luck, and happy shopping!

2012-01-02T14:20:00.000-08:00

Navigating Nonprofit Budgets

Do your eyes glass over when fiscal reports are reviewed? Do the numbers seem impenetrable? Are you afraid to ask questions for fear of looking stupid? You are not alone; it's a common condition for nonprofit board and staff members who are much more comfortable discussing programs than budgets. Yet it is your professional obligation as staff - and your legal responsibility as a board member - to exercise prudent financial oversight of your nonprofit organization.

Here are some basic but important questions you should be asking about your agency's budget:

How does it compare to last year? Look for significant changes in both revenue and expenses (either up or down). Find out whether these changes are situational, or indicative of trends for the future.

Does it match up with your current projected budget? Check to see if you are meeting your targets and if not, ask why.

Are revenue projections realistic? You need to know whether the revenue indicated in your budget represents funds already committed, funds pending, or pie-in-the-sky hopefulness.

Have you budgeted for facility and/or technology maintenance and upgrade? It is essential to plan for ongoing maintenance and upgrade for both technology (computers, phones, copy machines, websites) and facility - or you can be hit with big unexpected expenses.

Are you facing any significant changes in either revenue or expense within the next 1-3 years? Do you have any time-limited grants that are providing basic funding for core programs, operating expenses, or staff? Will any long-time staff be leaving in the near future? Don't wait until the last minute to plan and budget for big transitions.

Are salaries and benefits in line with similar organizations in your area? If they are too high, funders and donors will be unhappy. If they are too low, you may have difficulty maintaining competent staff, and you could be faced with significant upgrade costs when there is a staff turnover. Take the time to do your research; the Northern California Nonprofit Compensation and Benefit Survey is a great resource: http://www.ncg.org/s_ncg/doc.asp?CID=11346&DID=46405

Are your fundraisers really raising funds? Too often, nonprofits fail to do accurate accounting of annual fundraisers. Don't hang onto a long-time fundraising event out of either nostalgia or inertia. Look at a detailed budget for each fundraiser that includes costs for staff time and facility expenses as well as direct expenses.

Make sure that your agency fiscal reports are presented transparently, in layman's language that everyone can understand. This should include a narrative report as well as spread sheets that include the most recently completed fiscal year, a current to-date accounting, and the current year's projected budget. Find a format that works for you and your board, insist on sufficient time ask all the questions you need answered, and don't be afraid to ask them.

2011-12-09T15:37:00.000-08:00

Five Keys to Financial Sustainability

As our dismal economic climate continues, focusing on financial sustainability has become essential for nonprofits. This means making sure your organization has the ability to provide services responsive to your community and generate the required resources to fund current programs without compromising the future.

Here are some key elements that can help you achieve financial stability:

Nonprofit business model statement: Having an explicit business model statement is a tool for defining your financial goals and strategies. This statement includes both revenue strategies as well as mission impact. Here's an example: We provide after-school enrichment programs for working parents, supported by fees and foundation grants, and supplemented by net income from fundraisers.
Diversity of income: Does your organization receive 30-50% of total revenue from one source? Do you have just one or two donors who make significant gifts? Dependence on one or two sources of funding is a dangerous path. Your revenues should include a healthy mix of earned income, contributed income, and grant funding. It is particularly important, given the current political climate, not to be dependent on government grants.

Overall profit: It sounds like a contradiction, but nonprofits need to make a profit in order to be sustainable - which means maintaining adequate working capital to do your good work. You may be surprised to know that nonprofits are not prohibited from having a budget surplus, though they are indeed restricted as to what can be done with that money - which is re-invest it in the organization and its mission. Note that it goes with the nonprofit territory that some of your activities will lose money while others will make money, but the system as a whole must be moderately profitable to keep up with cost-of-living increases, maintain competent staff, and allow program growth.

Adequate program reserves: Every nonprofit should maintain a liquid program reserve of at least three (but preferably six) months of operating expenses in case of an emergency and/or significant funding cuts. When you end a fiscal year with a budget surplus, plan to set aside a portion of this money to be placed in a designated reserve fund.

Active and knowledgeable Board of Directors: It is the job of your Board to see that your agency has the resources (revenue, equipment, facilities, supplies, staff) to do your work. Make sure your Board members know their legal responsibilities, understand agency fiscal reports, and are actively committed to fundraising.

All nonprofits need to make decisions, set goals, and define strategies that balance mission impact with profitability. Your programs are important - and financial sustainability will assure that those programs continue.

2011-11-07T09:31:00.000-08:00

How to Deal with Difficult People

Do you regularly deal with difficult people in your nonprofit workplace - whether it be coworkers, supervisors, board members, volunteers, and/or clients? Here are some simple techniques to save your sanity as well as facilitate a more positive and productive work environment:

Breathe: This may sound simplistic but taking a deep breath before you speak helps you avoid the most common urge to get angry and defensive. This response may feel good at first yet it is rarely productive.

Resist: State your point of view clearly and calmly, but try to resist the very human urge to win the argument. Winning will not facilitate workplace cooperation.

Modulate: Pay attention to your tone of voice and body language. These often express more than actual words. Be sure your voice sounds neutral, pleasant, agreeable, and that your body language conveys a willingness to listen and understand.

Listen: Pay attention actively and carefully to what the other person has to say. Give them time to speak their mind without interruption. Be willing to understand the difficult person's frustration without blame of defensiveness.

Acknowledge: Offer your best assessment as to what he/she is feeling and ask for feedback. Here are some useful phrases to use: "It sounds like you feel; if I heard you correctly; so what you're really trying to say is; is there anything else?" Look for any kernel of truth in what they say. And focus on the positive intent; this can be as basic as a shared dedication to the organization and its mission.

Apologize: A simple apology, whether it is for an actual mistake or for the manner in which you have communicated, is a very powerful and healing act.

Appreciate: These days, with all the stress and economic challenges we are facing, folks often simply feel overworked and unappreciated. Remember to take a moment to appreciate the good work of your co-workers and clients, to thank your volunteers and board members. Simple gestures can make a big difference.

Above all, keep your eyes on the goal. The goal is not to be right; the goal is to further the work of your organization. Focus on the problem, not the person. Assume the best and give your difficult person the benefit of the doubt. Know that you cannot change another person's personality or behavior. You can change your own reactions. And in doing so, you may actually be able to change the dynamics of your working relationships.

2011-10-03T09:55:00.000-07:00

Seven Basic Guidelines for Grantwriting

Looking for grant funding to help support your work? These guidelines will help you to use your time wisely as you evaluate your options:

Do a comprehensive fundraising plan first. Have an approved case statement that includes mission, goals, objectives, target population, agency history and achievement, organization budget, and project budget. You can use this to cut and paste into every proposal. And be sure your agency fundraising plan includes a diversity of funding sources including individual contributions, earned income, and grants.
Do your research. Your initial research and preparation are as important as the actual writing of the grant. You don't want to waste your time writing a proposal that has little prospect of being funded. Be sure that the foundation gives grants in your geographic area, has goals and objectives that are a match for your organization, accepts unsolicited proposals, funds at a level that is within an appropriate scale for your organization, and gives the kind of funding you need (whether it be operating support, scholarships, or capital campaigns). You can search foundations databases at these places: CVNL - http://www.cvnl.org/, The Foundation Center - http://foundationcenter.org/, Volunteer Center of Sonoma County - http://www.volunteernow.org/.
Do a cost analysis. Weigh the benefits of receiving a project grant against the extra time and resources that will be required from you and your staff before you make your decision to apply. Sometimes grants end up costing more than they are worth.
Do know that most grants are project-based. The majority of available grants are for defined, time-limited projects with identifiable goals and outcomes, rather than ongoing operating expenses - although you can budget a limited amount of money for administrative costs within project grants.
Do assume any grant funding will be for one year only. It's a rare funder that provides continuing support over time. This does not mean you cannot apply again - in fact, you should do so, but never make presumptions that your project once funded will always be funded.
Don't fabricate. Never fashion a grant specifically for a granting agency that does not actually reflect the work of your organization. It is counter-productive - and unethical.
Do communicate effectively. Be precise and concise. Speak honestly and passionately. Use bullets, charts, and diagrams for readability. Find wording that is appropriate to the stated priorities. Match your goals to those of the funder. And be sure to have someone else read and edit before you submit.

Don't make the mistake of expecting grant funding to solve all your financial problems. Grants are a great way to fund specific projects, or to jump-start a new approach - but they only work well hand in hand with a solid financial plan that focuses on mission impact and the development of sustainable and diverse funding support.

2011-09-15T12:55:00.000-07:00

The focus this fall in both Point Reyes and Petaluma is Greek, and I'm having a great time introducing new dances I learned while I was in Greece in August. I'll be teaching:

Zaramo - This dance from Greek Macedonia was done at every festival I went to during my sojourn. Done in shoulder hold in 2/4 rhythm with variations called by the leader, the name means "shoulder to shoulder."
Tsamiko Konitas - This lovely, elegant, 6-measure tsamiko (in standard 3/4 rhythm) is from Epirus.
Hora Samson - Hora Samson is a classic and very popular Pontic dance. It's danced close together, traditionally in a closed circle, with the small bounces in the feet traveling through the whole body.
Sofka - Another dance from Greek Macedonia, this one features a wonderful flowing pattern of steps moving first in line of direction and then in reverse line of direction.
Pontic Halay - The footwork for this dance is a simple pattern similar to a basic hora or Hassaposerpico but done very slowly, to a beautiful modern piece of music that talks about the expulsion of the Pontic Greeks from their homes by the Black Sea and their longing to return.
Paiduska - This fun Greek paidusko (in 5/8 rhythm) is similar to a classic Bulgarian paidusko, but with a twist.

2011-08-31T11:42:00.000-07:00

Tax Facts for Nonprofits

What's tax-deductible and what's not? Donors and supporters often make erroneous assumptions, usually in their own favor. It's important for nonprofit staff members to have accurate information. Here are some guidelines about a few common situations:

Donated services: Donated services and volunteer time are not tax-deductible for the donor/volunteer. A volunteer can deduct expenses related to his/her volunteer work, including parking expenses, mileage, or the cost of a book purchased to aid in the work. If you have a professional volunteer who really wants a tax deduction, your volunteer can bill you for the services, get paid, and then write a check back to your organization for that same amount.

Raffle tickets: In general, the amount you pay for raffle tickets is not deductible. Buying a raffle ticket is simply not a donation; it's a purchase of a gambling ticket (like buying a Lottery ticket), despite what may be said on the ticket itself or to what admirable charitable purpose the money is put. There's one exception: if you win something of significant value (cash, a car, a house), the cost of the ticket can reduce the gross amount of your taxable income from the prize.

Tickets to fundraisers: Similarly, buying a ticket to a fundraising event is also not considered a donation, but rather a purchase of an item of value. If the basic ticket is $25, and an individual purchases a special sponsor ticket for $250, then $225 can be counted as a donation for tax purposes. If a business becomes a sponsor in exchange for recognition on a program or poster (essentially, advertising), this is considered a business expense, not a charitable donation.

Auction purchases: Sorry to break the news, but when you purchase something in an auction fundraiser (live or silent), the amount you pay is not tax-deductible - unless you pay more than the actual value of the item, in which case the difference is considered a donation.

Thank you letters: Not all thank you notes are required by law - but you are legally required to send a receipt to a donor for any donation of $250 or more. Use this language: Organization is an IRS-qualified 501(c)(3) organization and your contribution is tax-deductible to the extent provided by law. No good and services were provided in exchange for your gift.

Which brings us to membership perks: Small gifts, such as pens or post-it-pads or cheap cloth bags, are considered of negligible value by the IRS. However, if your member receives tickets to a performance (or an item valued at $20 or more), the value must be deducted from the charitable donation - and this needs to clearly stated in your acknowledgement letter.

For more fascinating facts about taxes, check out the fun tax quiz which inspired this article, on Blue Avocado (a nonprofit website definitely worth following): http://www.blueavocado.org/node/684.

2011-07-09T12:17:00.000-07:00

Good News, Bad News: Charitable Giving in 2010

This just in - a new report from Giving USA, the annual survey of charitable giving in the United States, indicates that donors remained cautious and wary last year, resulting in a minuscule increase of 2.1% (after inflation) over 2009.

The previous two years experienced the sharpest drops in giving ever recorded in the five decades Giving USA has been tracking charitable contributions - 7% in 2008 and 7.2% in 2009. These decreases easily beat the previous record of 5% during the 1974 recession.

Here's some more bad news:

Individual giving barely increased at all (a mere 1.1%) from 2009 to 2011.
Grant-making fell by 1.8% for an estimated $41 billion.
Environmental, animal welfare, and human service agencies all suffered declines varying from 1-2.3%
Human services would have experienced the biggest loss - an estimated 5.6% - if you subtracted all the money donated for Haiti disaster relief. This is especially concerning, as in all previous recessions giving for basic needs increased.
Giving dropped more over time than since the Great Depression.

And now the good news:

Charitable contributions continue to represent about 2% of the national's gross domestic product, despite the economic downturn.
Charitable bequests rose 15.9% up to $22.8 billion - the biggest growth in 2010 philanthropy.
Corporate giving, including both in-kind and cash support, rose 8.8% to $15.3 billion.
International nonprofits saw a significant increase of 13.5% in donations.
Arts and cultural organizations experienced a surprising increase of 4.1%

Individuals continue to make up most of the philanthropic pie. Of the total amount ($291 billion) contributed this year, 73% came from individual donors.

The message is clear: a continuing, personalized, targeted focus on building and sustaining relationship with individual donors remains the best way to raise money. Now is the time to continue communicating actively with your supporters. Present your case with passion and creativity, using both conventional and social media. Keep donors in the loop about what's going on financially and how you are continuing to do your good work. Let them know about your current strategies to balance your budget while protecting core programs. Be sure to focus on results achieved. Consider placing a greater emphasis on planned giving and strengthening your relationships with corporate givers, while decreasing your reliance on grants.

So what's the outlook for the future? After the Great Depression, it took 6 years for giving to return to pre-Depression levels, so we may be looking at several more difficult years. Certainly, the trend of ever-increasing charitable donations experienced in previous decades is not likely to return for a long time. Nonprofits need to get used to this new normal of a slow and cautious philanthropic climate. Take the time now to engage your Board actively in assessing programs, staff, and funding for long-term sustainability. Be innovative, entrepreneurial, and pragmatic as you develop an organizational strategy appropriate for these challenging times.

2011-06-06T15:27:00.000-07:00

Eight Internet Tips for Nonprofits

The internet offers a dizzying array of sites and services for nonprofit organizations. Here are a few worth checking out:

SwipeGood rounds up debit or credit card purchases to the nearest dollar and allows your supporters to donate the difference: https://swipegood.com/

eScrip is a resource for fundraising for nonprofits serving youth. Your supporters just have to sign up, choose your organization, and register any one or all of their existing credit, debit and/or grocery cards: http://www.escrip.com/

Causes makes it easy for users to ask their friends (via Facebook) to donate to your nonprofit on birthdays and holidays: http://www.causes.com/

eBay Giving Works allows sellers on the site to contribute to your organization. As well, eBay users can select a favorite nonprofit which then receives a $1 donation every time they make a transaction: http://www.ebaygivingworks.com/nonprofit-info.html

GreatNonprofits is an online "Zagat" for nonprofits; folks can find, review, and share information about great nonprofits on the site: http://greatnonprofits.org/about/

Yelp has become the place folks look for feedback on local businesses - and the site does indeed include nonprofits. Encourage your supporters to write a laudatory review: http://www.yelp.com/

Google for Nonprofits provides access to products and resources to help you expand impact and increase traffic to your website. It also includes a designated nonprofit channel on YouTube: http://www.google.com/nonprofits/

Google, Bing, and Yahoo are the most-used browsers on the internet. Make sure people can find you there - search for "submit your site" along with the appropriate browser name and follow the directions.

It's easy to feel overwhelmed by the internet and all it has to offer, but strategic use of its resources can be powerful in increasing outreach and raising dollars for your work.

2011-05-03T15:52:00.000-07:00

Jokes for Fundraisers

Feeling like your fundraising work rivals that of Sisyphus, the Greek king who was condemned to rolling an immense boulder up a hill only to watch it roll back down - and repeat this through all eternity? Then perhaps it's time to take a break and enjoy a few of my favorite jokes:

A hurricane blew across the Caribbean. It didn't take long for the expensive yacht to be swamped by high waves, sinking without a trace. There were only two survivors who managed to swim to the closest island - the boat owner Dr. Eskin and his steward Benny. After reaching the deserted strip of land, Benny started crying. Dr. Eskin, however, seemed completely unperturbed as he relaxed on the beach.

"Dr. Eskin, how can you be so calm?" cried Benny. "We're going to die on this lonely island. We'll never be discovered here."

"Sit down and listen to what I have to say, Benny," began the confident Dr. Eskin. "Five years ago, I gave the United Way $500,000 and another $500,000 went to Stanford University. I donated the same amount four years ago. Three years ago, since I did so well in the stock market, I contributed $750,000 to each. Last year business was even better, so the two charities each got a million dollars."

"So what?" shouted the frustrated Benny.

"Well, it's time for their annual fund drives, and I know they're going to find me," replied Dr. Eskin.

A visitor to Israel attended a recital and concert at the Moscovitz Auditorium. He was quite impressed with the architecture and the acoustics. He inquired of the tour guide, "Is this magnificent auditorium named after Chaim Moscovitz, the famous Talmudic scholar?"

"No," replied the guide. "It is named after Sam Moscovitz, the writer."

"Never heard of him. What did he write?"

"A check," replied the guide.

At a circus, the strongman Hercules startles everyone with magnificent feats of strength, lifting hundreds of pounds over his head and putting a fist through a solid wall. For his final act, he takes a lemon and squeezes it. At first, the juice dribbles out quickly, then it slows down, and finally not a single drop comes out. The circus manager steps forward and says, "I will personally give anyone who can squeeze even one more drop from this lemon two hundred dollars." Two large men step forward. Each one squeezes the lemon with all his might, but not a drop comes out,

"Does anyone else want to try?" the manager asks.

A short, slightly built man steps forward. People in the crowd snicker. The man picks up the lemon and squeezes. Juice gushes out. The manager is stunned. He steps forward with the cash, but as he hands the money over, he can't resist asking, "Who are you? What do you do?"

"Seymour Goldstein," the man replies. "I'm a fundraiser for the United Jewish Appeal."

Have any good fundraising or nonprofit jokes of your own? I'd love to add them to my collection! Email with your best at cjay@horizoncable.com

2011-04-06T14:58:00.000-07:00

Fundraising Do's and Don'ts

Fundraising isn't rocket science - but there are some very important guidelines to keep in mind as you work to build donor relationships and raise the funds necessary to support your nonprofit services.

Don't:

Blindside your prospective donors. Most folks who care about your cause will be open to a fundraising ask - but not if you make a cold call, invite them to a donor party without telling them its purpose, or shanghai them unexpectedly in the supermarket. A serious and ethical fundraising ask will be preceded by a thoughtful process that includes getting to know the donor, establishing rapport, and sending a well-written solicitation letter, all prior to arranging a personal phone call or meeting.

Bombard donors with endless appeals. You've all had the unfortunate experience of receiving constant and repetitive solicitations via phone, direct mail, or email. Besides being irritating and intrusive, it often results in the loss of donor support, even when the donor actually believes passionately in your cause. Nonprofits can - and should - regularly ask for donations, but you need to develop a reasonable schedule that will not drive people away.

Ignore their expressed wishes. Pay attention when donors specify how and when they wish to be contacted. And when a donor requests anonymity, be meticulous in honoring his/her privacy. Organize your database to track this information and be sure to carry information forward when there are staff changes.

Do:

Know your donors. Do your homework! Find out which of your services are closest to their hearts; keep track of events they attend; know their giving history.

Communicate honestly and efficiently. Stay in touch with important news and updates about your clients, programs, and services - not just through solicitation letters. Let them know about your achievements, but also let them know if your agency is experiencing serious financial difficulties, significant staff changes, and/or re-thinking its mission. Invite their feedback as you work to improve services and plan for the future.

Thank them promptly and often. Always thank a donor immediately for all donations with a letter including the approved IRS language, plus a person note, sent via first class mail - and proofread to be sure you have the correct salutation, amount, and method of payment. But don't just stop there; continue to thank and communicate with your donors throughout the year using email, newsletters, letters, postcards, published donor lists, thank you phone-a-thons, and an annual donor appreciation event.

Ethical fundraising is not just about money; it's about developing long-term partnerships in support of your nonprofit mission. Just as you would with a business of life partner, take the time to nurture these important relationships. Treating your donors with care will pay off both for your organization and yourself.

2011-03-03T10:18:00.000-08:00

Common Sense Performance Review

Does your nonprofit do an annual performance review of the Executive Director? Or has your Board of Directors consistently managed to dodge this task? If you do have a process in place, are you satisfied with the format and your results?

Many nonprofits, especially those with small budgets and staff, simply fail to do an annual assessment of the organization's leader. Yet an annual review can be one of the very best tools to keep your nonprofit in running order, as well as to promote a continuing positive relationship between board and staff. And it is important to note that every nonprofit Board has a legal obligation to provide prudent management, which includes oversight of the Executive Director's work.

A well-conceived, annual ED performance review will help:

Ensure that your nonprofit programs and services align with your mission statement

Monitor your progress in achieving organizational goals and objectives

Provide support for your ED by acknowledging work that has been well-done as well as brainstorming how to make improvements

Provide a written document for the future as a basis for salary increases - or for probationary action and firing.

It doesn't have to be complicated or tortuous. You'll need three basic tools: an up-to-date job description, a list of basic goals and objectives for the year (both in program and finance), and a committee to oversee the process. This committee could be your standing Personnel Committee, your Executive Committee, or an ad hoc committee specifically designated for this purpose.

Here are some guidelines:

Keep it simple: Base your evaluation forms on the existing ED job description. Break it down into clearly defined sections (program, finance, fundraising, management, etc.) and provide a place for comments about both achievements and improvement opportunities. There is no one correct format; find one that works for your organization.
Make it a two-way street: Be sure to create a similar self-evalution form for your ED. This form should include a section for the ED to note achievements and improvement opportunities for the Board of Directors.
Keep it personal: Don't just use numbers or grades - include thoughtful written comments. Make sure the ED gets a chance to read the document beforehand, and that the process includes a personal meeting.
Keep it positive: One of the biggest mistakes nonprofits make is seeing a performance evaluation as a time for criticism. Talking only about mistakes and problems is counter-productive. Be sure to acknowledge good work, and suggest potential improvements in a supportive manner.
Make it annual: Put the annual performance review on the Board calendar, and stick to it. Once your have all your systems and forms in place, it will become much easier.

Above all, approach the ED performance review as a valuable and welcome opportunity to take stock, set new performance objectives, evaluate the board/staff relationship, and improve not only your chief executive's performance but the work of your organization.

2011-01-31T12:53:00.000-08:00

Is the Fundraising Cup Half Empty or Half Full?

Predictions about current nonprofit fundraising efforts keep ranging from optimistic to gloomy and back again - even within the same reports. A new survey by The Chronicle of Philanthropy indicates that 62% of those polled raised more in November and December 2010 than at the same time in 2009. Almost 70% said their 2010 numbers would exceed 2009, and over one-third raised more in 2010 than they did before the onset of the global recession.

At the same time, another one-third reported that their contributions decreased, and 10% said giving remained the same. And almost half reported that their donated income for the year was less than the amount they had been able to raise prior to the economic downturn.

In the midst of all this fundraising uncertainty, it is both useful and encouraging to hear some success stories. Here are some of the strategies that helped those nonprofits that were effective in increasing donor contributions:

More frequent (but shorter) appeals. The Foundation for Jewish Culture in New York more than doubled its year-end giving by asking more often, setting dollar goals to reach within short timelines.

Expanded options for earmarked giving. A Volunteer Center in California found people responded positively to appeals that offered several specific options to choose from for their donation's impact.

More email appeals in November and December. Ramapo for Children, a New York camp for young people with special needs, discovered that folks who received three email appeals at the end of the year were more likely to give than those who got just one.

Publicizing loss of government income. The Elizabethtown Public Library in Pennsylvania made sure their community knew the extent of state cutbacks for library services. In the current climate, folks are very aware that government funding is being slashed - and they are sympathetic. Making sure your donors and members know that your agency has been directly affected can be an effective strategy.

Increasing the number of total donors. The New York Council for the Humanities was able to double the number of donors. People may not be able to give as much as in the past, so a strategic focus on expanding outreach and increasing numbers can really pay off.

Coordinating online and direct-mail efforts. The Trust for Public Land in San Francisco focused on making sure their online and direct-mail appeals complemented each other. The result was that their donors increased by 29%. For next year, their goal is a 45% increase.

Effective marketing, strategic use of both conventional and online tools, clear communication about the value of each donation, a diversity of giving options; all of these go hand-in-hand with the most basic tenets of fundraising - stating your case articulately and passionately, working hard to build and sustain donor relationships, and using all the appropriate methods available to ask for people to participate in furthering your mission.

2011-01-02T14:12:00.000-08:00

To Committee or Not to Committee

Are you feeling frustrated about your organization's committees? Are the meetings chaotic, unproductive, or simply non-existent? Do you struggle to find enough volunteers to reach critical mass? Does the fundraising committee fail to raise money, the nomination committee fail to recruit, and the personnel committee fail to effectively evaluate your executive director?

If so, stop wasting time and start streamlining your committee structure:

Eliminate most of your standing committees. Maintaining inactive and unproductive committees is foolish, time-consuming, and can lead to staff and volunteer burnout. Use committees only when it is clear the issues are too complex or too numerous to be managed by the full board.

Creative specific time-limited task forces and ad hoc committees. Your board members and volunteers will feel much more motivated signing up to work on projects with defined goals and deadlines, rather than on a standing committee with a vague purpose and no end in sight. Tasks can include evaluating programs, reviewing marketing plans, updating personnel policies, and planning special events.

Make fundraising a job for the full board. Providing adequate resources is first and foremost a board responsibility; effective fundraising is an important measure of the board's capabilities and commitment. Yet most board members shy away from soliciting donations, and few are willing to join a fundraising committee. The best way to get every board member to fundraise is to make this a core function of the whole board.

Recruit skilled volunteers who are not board members. Each committee should have a critical mass of at least five people: two board members, the appropriate staff member - and committed non-board members with relevant expertise.

Schedule effectively and efficiently. Use email and online bulletin boards for progress reports; schedule meetings for strategic planning, decision-making, and assignments. Establish a timed agenda, stay focused, and make sure your meetings last no longer than two hours - after that, no one attending will be paying much attention or at their best.

Two permanent committees are essential:

The Finance Committee is charged with ongoing financial oversight. This includes developing projected budgets, tracking actual spending vs. the budget, looking at cash flow, overseeing insurance coverage, assessing salaries and benefits, and reviewing financial policies.
The Governance Committee is responsible for the health and functioning of the board, as well as maintaining a good board/staff relationships. This includes determining what skills are required on the board, recruiting new board and committee members, recommending a slate of officers, orienting new members, reviewing and updating organizational policies, assessing the board's work, organizing board retreats, and conducting an annual executive director performance review.

There is no one correct model for a nonprofit committee structure. What your organization needs to further its mission is dependent on your organizational culture, its size and budget, and how long you've been around. Plus your needs will change as your nonprofit grows and evolves. Be thoughtful and creative as you assess what functions and what doesn't, and establish a committee structure that will truly work for your organization.

2010-12-08T15:32:00.001-08:00

"Tis the Season to Recruit

Your Board of Directors is the heart and soul of your nonprofit organization - carrying the responsibility for prudent fiscal management, overseeing programs that fulfill your mission, and defining organizational focus. Yet many nonprofit boards operate with woefully small numbers, or with members ill-suited to the required tasks.

Is your board at full capacity? Does everyone show up to meetings? Do you have the expertise - and the energy - you need from the group? Here are some tools for strengthening your board with board recruitment that is constructive and organization-appropriate:

Establish a process: Review and update your board job description annually (or be sure to create one if it doesn't exist). Create a job application form that asks pertinent questions for prospective board members. Be sure to develop an annual timetable for board recruitment - and stick to it.

Have a full board at all times: Providing adequate resources (staff, volunteers, funding, in-kind donations, energy) is first and foremost a board responsibility. A small board translates into a much smaller circle of contacts, lacks the critical mass for sustaining enthusiasm, and leads to board burnout.

Make your search ongoing: Be on the lookout for new members year-round. Consider dedicated volunteers and donors, involved clients, and important community contacts. Keep a list of possibilities. And advertise: put a regular notice in your newsletters and emails saying you are looking for board members who are passionate about your work.

Do an honest assessment of your current board: Does the membership reflect the demographics of your community and clients? What kind of expertise do you lack? Use your assessment to identify priorities for new members.

Be truthful about the job: Tell your prospective board members that the job involves more than just showing up at an occasional meeting. Far too many nonprofits deliberately underplay the level of commitment involved.

Recruit outside the box: Traditionally, boards have looked for lawyers, financial people, donors, or prominent community members - yet these folks are often better as pro bono volunteers on a committee, advisory council, or specific project. Look instead for a mix of generations, geography, and community connections. Find folks who fit your unique organizational culture. Above all, you want someone who will be a team player, is passionate about the work of your agency, and will actually show up for meetings.

These days, nonprofits find themselves so strapped for funding that they rush to recruit folks who are wealthy - yet everyone can learn to fundraise, but not everyone has the temperament or time to do the important work required of a board member. And nonprofits are often so desperate for board members that they'll take anyone with a pulse - yet it's essential to put as much time and planning into choosing a board member as it is with an employee.

Get the board that you need and deserve - with a board recruitment process that is creative, organized, thoughtful, and ongoing.

2010-11-02T13:41:00.000-07:00

Overcoming the Fear of Fundraising

It is the legal responsibility of every nonprofit Board of Directors to ensure that their organization has the resources to fulfill its mission - and that means fundraising. Yet those who recruit new members often fail to mention this for fear of scaring people away. And board members frequently become paralyzed when asked to do their part to raise money in the one manner that is the most efficient and cost-effective: asking donors directly for contributions.

Here are the most common fears people have - and some suggestions about how to address them:

Fear of rejection: First of all, you're going to be turned down;on average 50% of good prospects will give - but note that this means on average 50% do contribute! Your job is to know that being turned down has nothing to do with you personally. When people choose not to give, they do so for many reasons - but it does not mean that you are a bad person or that they hate you.

Fear of failure: It's important to change your definition of success in fundraising. Success is how many times you ask. And if you make all your asks, you get an A+.

Fear of looking stupid: No donor will expect you to know everything. And when someone asks you a question you can't answer, say "That's a great question - thanks for asking! Let me talk with the Executive Director and get back to you." You can also approach the donor with a knowledgeable partner (staff or board).

Fear of alienating friends: Have you ever lost or damaged a friendship because of a charitable request? If you make your asks with integrity (and without blindsiding your friends unexpectedly), they may or may not give, but they will not disinherit you. Give them an out: "If you choose not to participate, that's OK: we'll still be friends. But I sure hope you can help."

Fundraising is not about your feelings - it's about the donor. Just as you feel good when you make a charitable donation to a cause you care about, you are giving the donor an opportunity to feel good. It's not about begging or hounding people - rather it is about facilitating a fair exchange where donors give one thing of value (their money) in exchange for another thing of value (the good work of your organization). And it's not just about money - it's about building sustained relationships.

Your job is to reach out with integrity - speak with passion about your agency's mission, make a clear case, listen carefully, and invite the donor to become involved. There are strategies and techniques but they are far less important than the one quality you need to be successful: your passion for the mission.

So kick yourself and your fears out of the way and let the cause talk. Your job - and it is indeed an honorable one - is to get out there and raise the money your agency needs to do its good work.

2010-09-30T12:50:00.000-07:00

Dollars and Sense

One of the most fundamental legal responsibilities of all board members is prudent fiscal management. This has become even more important due to a climate of increased scrutiny precipitated by numerous public scandals revolving around fiscal mismanagement by nonprofit Executive Directors, hand in hand with lack of board oversight. Yet more often than not, nonprofit boards fail to pay attention to their organizational dollars.

So: here are some guidelines about what you need to know:

Do your board members receive, read, and understand the organization's fiscal reports? Boards should be looking at financial statements on a quarterly basis at minimum. If you find these statements confusing, know that you are not alone - accounting is a foreign language to most people. Your job is to make sure the information is presented such that everyone fully understands the numbers and their implications.

Are your program costs aligned with your stated mission? It is the board's responsibility to ensure that your money is being spent on programs that directly further your mission.

Does your nonprofit have cash-management policies in place? Every organization should have basic financial controls in place to maintain the integrity of its bookkeeping process. The bottom line here is to have checks and balances, with more than one person handling fiscal responsibilities, plus secure storage of cash/checks.

Does your agency have a diversity of funding sources? Reliance on one single source of funds, whether an individual donor or a foundation, is dangerous. Ideally, you want a healthy mix of earned income, donor contributions, and grants.

Does your agency have a program reserve? A designated reserve fund that covers 3-6 months of operating expenses in case of a dire emergency is an essential.

Are you required to do audits? If your budget is $2 million or more, you are required by the IRS to have annual audits. If not, whether you do an audit is dependent on many factors including grant requirements, significant organizational change, and the size of your nonprofit.

Does the board maintain proper oversight of wages and benefits? Be sure your board reviews all employee compensation and benefits annually in conjunction with performance reviews. The Northern California Wage and Benefit Survey, available at http:www.nonprofitcomp.com/index.html, is a great resource for comparative data. Note that all nonprofits are now required by the IRS to have a written policy on Executive Director compensation.

Do you have the appropriate kind and amount of insurance? Every nonprofit should review insurance policies on a regular basis to ascertain whether the organization is properly covered.

The ongoing economic downturn has placed added stress on all nonprofits, and along with it, the need to truly understand your organization's financial situation as you make difficult decisions in regard to program and operating expenses. Don't be afraid to ask questions about your organization's budget and fiscal policies; in fact, it is your responsibility to do so.

2010-08-30T11:38:00.000-07:00

Five Tools for Better Boards

Whether you are an Executive Director struggling with a combative Board of Directors, or a Board member secretly wondering why you made the commitment to monthly meetings that often waste your time, working effectively with a nonprofit board can be challenging.

When so many people know what a good board should look like, why are there still so many boards that are contentious and unproductive? Here are some reasons:

Board members are volunteers with jobs and lives that take precedence over their nonprofit commitments.
Dysfunction is frequently the norm when groups of people get together.
On any given board, you are likely to have one person who is a flake, one person having a personal crisis, and one person convinced he/she is always right.
Most board members haven't a clue about their actual legal and fiscal responsibilities.
Despite all the written materials, there really is no one model for board structure and procedures - because every board is different.

Nonetheless, here are five tools that can help you oil the waters and facilitate a dynamic, creative, and cooperative working environment for your nonprofit board:

Focused recruitment: Expand your search beyond the standard categories of lawyer, banker, donor - consider geography, age, family circumstances, community connections, special skills, ability to work with others. Be absolutely honest about what the job entails when you talk to potential recruits.
Thorough orientation: Put together a complete orientation package that includes a detailed job description, fiscal and program information, annual calendar, policy manual, by-laws, and personnel policies. Meet individually with each new board member to review the materials, find out particular interests, and answer questions. Make sure every board member actually understands the organization's fiscal reports.
Creative culture: Aim for less reporting and more problem-solving. Tackle big issues first, before the minutiae. Evaluate your board agenda; change it if it's not working. Provide snacks and refreshments. Allow some time for fun - nothing improves a meeting more than a good laugh.
Clearly articulated procedures: Create a set of guidelines for board conduct that emphasizes civil discourse and consensus (and leave Robert's Rules of Order behind). Review and update your policy manual annually. Never schedule a meeting you don't really need. Always summarize, make work assignments, and designate the person who will nag everyone about deadlines before the meeting concludes.
Regular renewal: Once a year, read the organization's mission out loud and re-affirm your commitment to that mission; do the same for the board job description. Conduct an annual assessment of board strengths and weaknesses; create a work plan to follow up. Do an annual review of basic board roles and responsibilities.

Above all, stay open to change. Every board is different, and every year in the organizational life cycle is different. Budgets get bigger, staff turns over, the dynamics of the group shifts, client demographics change, and the balance of power between board and staff fluctuates. Be willing to see the change and make the adjustments that will further sustain your organization in accomplishing its mission.

2010-08-03T14:07:00.000-07:00

Nuts and Bolts: Maintaining Nonprofit Infrastructure

Salaries and benefits, facility costs and maintenance, fundraising expenses, technology upgrades - these are the nuts and bolts of running a nonprofit organization.

Nonetheless, most nonprofits fail to consistently plan for and fund basic overhead costs - for these reasons:

Government contracts generally allow grantees to use no more than 15% for operations, finances, human resources, fundraising, and facility costs.
Foundations are just as rigid, allowing on average 10-15% for overhead.
Nonprofits must prove, based on IRS Form 990 information, that overhead and fundraising costs are low in order to receive funds through United Way.
Most available grant funding focuses on time-specific projects, rather than ongoing operating expenses.
According to the Better Business Bureau's Wise Giving Alliance, more than half of adults feel nonprofits should spend less than 20% on infrastructure - and the majority often makes choices based on this assumption.

On top of this, the current recession has forced many organizations to cut back even further in order to maintain programs. A survey of 100 executive directors across the country by the Bridgespan Group found that 56% were planning to reduce overhead spending.

There's nothing sexy about ongoing operating expenses yet no organization can exist without the funds to pay for them. And failing to designate money for overhead can be devastating:

Your key staff people become stressed out, overworked, and underpaid
Staff salaries lag behind the market, leading to sticker shock when someone leaves
Your staff is not trained in up-to-date procedures and technology
Your buildings, fixtures, and furniture deteriorate
Your essential technology - computer hardware and software, copy machines, phone systems - dates from the dark ages

But faced with pressure to meet the demands and expectations of funders and donors, nonprofits consistently make do with less, in fact making a point of how little they spend on basics - while under-reporting administrative expenses on 990's and fundraising materials. Thus, supporters and funders don't know what it truly costs to run a successful organization (note that overhead rates in the for-profit world average around 25%). It all becomes a self-perpetuating cycle.

How can nonprofits buck this trend? To begin with, start speaking the truth about the actual costs of doing your good work. Advocate with funders and donors about the importance of basic expenses as the foundation for accomplishing your mission. Evaluate if it even makes sense to apply for a grant, especially given potential reporting and audit costs attached. See if you can negotiate with foundations about their expectations. Factor in realistic overhead expenses in any grant application and all budget projections. Be sure to include line items for technology, facility, and salary upgrades in your annual budget and strategic plan. And work towards developing relationships and strategies with individual donors to encourage and value unrestricted giving. Educating your donors about how investment in infrastructure benefits the organization's clients could be the most important thing you can do to further your good work.

2010-07-06T14:46:00.001-07:00

Viva los Volunteers!

2009 was a tough year for the economy and charitable giving - but it was a boom year for volunteering.

A recent study by the Corporation for National and Community Services indicates that more than 63 million Americans - almost 27% of the population - gave their time as volunteers helping nonprofit organizations in the last year. This represents the largest single-year jump since 2003. About 8.1 billion hours of service were donated, valued at approximately $169 billion.

These figures from 2009 defied the expectation that when the economy goes bad, people just want to take care of their own families and close friends.

The largest percentage of Americans - over 30% - volunteer at churches or religious organizations. But social service agencies saw the number of their volunteers go up from 8.4 million in 2008 to 8.8 million in 2009. Note that this study did not measure all the people who volunteer at schools or helping out neighbors.

And note that the most popular volunteer activity (27%) was fundraising!

There are many factors that may have contributed to this wealth of volunteers:

The president and first lady's emphasis on the value of volunteerism
A large number of jobless people hoping to gain experience, skills, and contacts (and with the time to do so)
A growing emphasis on volunteerism, including required volunteer hours for graduation, at high schools throughout the country
People short on cash choosing to continue to support the causes they care about by giving their time
Improvements in the way nonprofits recruit and retain their volunteers
The breadth of the global downturn acting as a catalyst for people to be more understanding about the plight of others

Volunteering is a great way for people to contribute to a good cause while having fun, gaining work experience, and broadening their community. For cash-strapped nonprofits with staff stretched to the limit in these challenging times, volunteers provide absolutely vital services. At the same time, these volunteers are more likely over time to make charitable donations.

With the recovery from the global downturn moving at a snail's pace, now is a good time to evaluate your volunteer program, be sure to thank your dedicated volunteers, double your outreach efforts, and work to increase the number of people actively involved in supporting your good work with their donated time.

2010-06-08T10:41:00.000-07:00

Giving Good Meetings

Are your meetings endless and unproductive? Do you dread the approach of your next board or committee meeting? Are commitment, creativity, and attendance dropping? Here are some guidelines for making your meetings more constructive and fun:

Do a meeting reality check. If you didn't have to be there, would you go to your meetings? Think about meetings you have attended that have been effective, and use them as a role model.

Don't hold a meeting just to have a meeting. Could your business be accomplished more easily and appropriately via email, or in an executive session? If most of your agenda involves simple reporting, consider alternative methods of communication - or just give your group a month's vacation.

Avoid Robert's Rules of Order. Did you know that Robert's Rules were developed by an Army officer in 1876? It's not 1876 anymore, and you are definitely not in the army. Robert's Rules are rigid and restrictive. And contrary to popular opinion, there is no legal requirement that requires non-governmental nonprofit organizations to follow them. Instead, work with your Board to develop simple procedures and rules of conduct that are appropriate to your organizational culture.

Stick to a timetable. After two hours, no one attending any meeting will be paying much attention or at their best. Establish a timeline for your discussions, appoint a timekeeper, stay focused and on task, and get out of there in no more than 120 minutes.

Provide thorough and clearly written materials in advance. And be sure to remind committee members if they have assignments to complete prior to the meeting. Then pray that everyone will read the notes and come prepared.

Allow some time for fun. Nothing improves a meeting more than a good laugh.

Finish with a summary and action plan. Always designate the final 5-10 minutes to summarizing what has been accomplished and coming to agreement on next steps, including a timetable and who has volunteered to do what.

Meetings get a bad rap, but there are good meetings and bad meetings. Take the time to make your meetings fun, focused, effective, and productive - and turn them into important tools towards creating partnerships and community, sustaining volunteers, supporting staff, and furthering the mission of your organization.

2010-05-10T09:38:00.000-07:00

The Power of Fundraising

Fundraising isn't just about money! It's about promoting the good work of your organization and creating an environment that welcomes donors to participate in that good work:

Promoting your mission: This is where it all starts - with the organizational mission that powers all of your services and programs. And it's surprising to discover how many folks involved actively in nonprofits are unfamiliar with the agency's mission statement. Everyone involved in fundraising should have this mission memorized, and be ready to talk about it - passionately and personally - with clients, members, and donors.

Building relationships: Every fundraiser will tell you that there are three basic reasons people give: because they want to participate in the work of the organization, because they were asked, and because they know and respect the person that asked. Your job is to represent your organization with integrity, skill, and passion. As you do this, you also have opportunity to really get to know people - and to build genuine, sustaining partnerships and friendships for yourself and for your agency.

Encouraging active participation: When people donate to an organization, whether it be $10 or $10,000, they become involved. They have a sense of ownership of the agency and its services. They care more. And that caring frequently translates into active participation doing meaningful volunteer work that benefits your clients, your organization - and the donor. A recent survey by Volunteer Match indicated that two-thirds of respondents said volunteer work makes them feel healthier, both mentally and physically.

Creating community: We live in a fractured, stressful world increasingly dominated by technology - and often sadly lacking in human connection. As you talk to people about your work in making the world a better place, as you build relationships with your donors, as you facilitate their volunteer participation, you are bucking this trend by bringing people together and creating community. Along with the important services nonprofits provide, this too is how the nonprofit sector can help heal the world.

Fundraising is about real people - staff and volunteers and board members like yourselves - and their passionate commitment to a cause. It's about developing sustaining friendships and relationships. It's about creating an atmosphere that gets people involved in volunteering to make their community and world a better place to live. And it's about creating community in a world where we need as much real personal connection as we can get.

2010-04-07T10:19:00.000-07:00

Searching for Gen X and Y

Have you been trying to figure out how to get those elusive young people in their 20's and 30's (Gen X and Y) involved in your organization? Join the crowd. Most nonprofits are dominated by folks age 50 and up - as staff, volunteers, board members, and donors.

Gen X and Y have been born into a very different world - dominated by the fear of environmental collapse and terrorism, an exploding world of new media, and decreasing faith in institutions. But they also have a strong desire to help others and to raise money for their favorite causes.

Members of Gen and Y now constitute more than half of the pool of potential donors - yet they contribute less money, support fewer charities, and are challenging to hold onto. According to a recent study by Edge Research, Gen Y donors averaged gifts of $341 to 3.6 group; members of Gen X gave $796 to 4.2 organizations. By contract, Baby Boomers contributed $901 to 5.2 groups and those born before 1946 gave $1,066 to 6.3 charities.

For Gen X and Y, no one manner of giving dominates - 43% used direct mail, 35% a nonprofit website, 13% cellphone donations. In fact, 77% of those surveyed said they learned about helping quake victims in Haiti via their cellphones, and the majority found information on nonprofits primarily through internet sources. Older folks respond primarily to direct mail and print materials - 77% said they gave through the mail in the past two years.

Younger donors enjoy giving as part of social events and through volunteering - personal contact with an organization , especially when it involves fun and friends, is still important to them.

Gen X and Y give just because they are asked by friends - and this is increasingly happening through social media networks. 36% of those under 30 had forwarded a message from a charity to a friend in the past month, 37% would join an organization's Facebook group, and 29% had posted information about a favorite charity on their person Facebook page.

Younger donors are likely to say they will be increasing charitable donations this year - and much less likely to feel that the global recession has affected their giving.

So: in order to retain current donors and reach out to Gen X and Y, your nonprofit is going to have to do it all: Facebook, text messages, enewsletters, volunteer work parties, youth-oriented events and parties, brochures, phone calls. Your challenge is to engage the genuine desire of young people to make a difference in this world, using every new strategy at your fingertips.

2010-03-08T15:10:00.000-08:00

The State of the Arts

These are challenging times for nonprofit arts organizations - and not just because of the economy:

Since 1998, the number of nonprofit arts groups - all competing for audience and participants and grant funding - has increased by 42%. At the same time, attendance and ticket sales at most mainstream arts organizations have been in a steady decline.

People are increasingly staying at home, choosing to participate in the arts through television or the internet - where you can find almost anything you want to see, for free - or through do-it-yourself arts projects.

For-profit businesses - bookstores, cafes, restaurants, retail stores - have become very proactive in promoting and presenting lectures, concerts, and events. For the most part, there is no admission charged because the payoff is increased business, foot traffic, and name recognition. Often these events are benefits for local nonprofits, increasing goodwill for the business while blurring the lines between the for-profit and nonprofit worlds.

The cell phone culture, in which anyone can be reached and plans made at any moment, has resulted in a casual and last-minute approach to life. This has lead to reduced advance ticket sales and subscription series sales.

As America's population grows in diversity, people are seeking out arts experiences through ethnically and/or culturally specific organizations rather than standard arts venues.

At museums, concerts, and theater performances, the majority of folks attending are gray-haired and Caucasian. Nonprofits are struggling to find ways to engage new and ethnically diverse audiences, especially those who are under 40.

In the competition for government and foundation dollars, arts agencies rarely win when pitted against agencies that feed the poor and house the homeless. For the past decade, arts and cultural groups have been steadily losing their share of philanthropic dollars to international, environmental, disaster relief, and social services agencies.

What does this mean for the future? There are some innovative success stories to consider: the Metropolitan Opera's simulcasts in movie theaters, ArtsMemphis' Iphone app that allows people to directly access their calendar, the new wave of (not quiet anymore) libraries with cafe-like atmospheres and lots of computer access, lively singles' nights at theaters and classical music venues. Arts organizations are going to have to work harder, be more creative and business-savvy, stay up on current trends in social media, experiment with programs designed to reach people of all ages and cultures, and actively seek out collaborative efforts with both for-profit and nonprofit partners that draw new participants.

2010-02-02T14:48:00.000-08:00

The Lifecycle of Nonprofit Organizations

Is your organization just starting up, and full of excitement about its mission? Or does your agency have a long track record, assets to manage, and a big staff? Nonprofits - like people - travel through different stages of development over time, and each of these stages poses specific challenges. Identifying your organizational stage will aid in your ability to effectively analyze agency issues as well as plan for the future.

Stage One: Your agency is just starting up. There is tremendous passion about your mission and what you want to accomplish. What you don't know about nonprofit management is more than compensated for by your boundless enthusiasm and willingness to work. Your focus is on services; policy-making and fundraising happen on an as-needed basis. Your strengths: excitement, commitment to mission, lots of volunteers. Your challenges: lack of expertise, funding, and a track record.

Stage Two: The work you want to do to serve your mission begins to crystallize. Your organization hires paid staff to do the nitty gritty work, but board members run ongoing operations. Board and/or staff are beginning to see a need to formalize systems for management and oversight, but there is a deep reluctance to giving up the fun and informality of the early years. Your strengths: ability to provide services on a shoestring budget, creativity, friendly and casual atmosphere, a highly committed board and staff. Your challenges: lack of consistent funding, long-range planning.

Stage Three: Staff begins to oversee programs and services, while the board tries to figure out its changing role. Much of the board's time focuses on governance and financial management. Fundraising becomes absolutely central to the board's role, often in face of great resistance. Your strengths: growing relationships with donors who believe in your cause, the development of systems to sustain your organization over time. Your challenges: board/staff struggles over who is in charge, increased expenses, the board's reluctance to fundraise.

Stage Four: Your annual budget is significant in size, as is your staff; you have assets to manage. Staff and board must formally establish their distinct responsibilities. These roles will be different than before, requiring everyone to be thoughtful, communicative, and open to change. This can be a challenging and contentious process, but if handled properly will strengthen the organization. Your strengths: established relationships with donors, successful programs. Your challenges: more board/staff struggles, resistance to change, keeping your commitment to your mission vital.

Stage Five: Your agency is big, well-known, and well-funded. Your strengths: name recognition, established procedures, consistent resources. Your challenges: avoiding complacency, maintaining oversight of complex operations.

Numerous books and websites about nonprofits will outline all the procedures you should be following and all the policies that need to be in place. These are important to know, but be sure to exercise judgment about appropriate structures and solutions based on your developmental stage. Understanding the challenges of each stage is key to defining board/staff roles and responsibilities that match the organization's needs and further its mission.

2010-01-09T12:31:00.000-08:00

Database 101

Now that you've made it through the holidays and have a moment to take a breath, it's a good time to do some nonprofit housekeeping to prepare for your 2010 fundraising and program planning. And the key to all your efforts is your database.

Ask yourself: can you use your database to do these essential functions?

Provide basic demographic and organizational information:

Quickly find mailing addresses, 9-digit zip codes, email address, phone numbers (including cell phones), and appropriate salutations for all of your clients, donors, and volunteers
Tell what age people are, and whether they have children (and if so, how old)
Track program participation and ticket purchases by year and specific event/program area
Identify folks who do not want their names/addresses exchanged or shared
Look up all past board members, find out when they served, and on which committees

Let you know about your donors and donations:

See and date every donation made over at least the past ten years
Track specific interests of individual donors i.e. specific program interests, community affiliations, level of involvement in your organization
Look up donors who have given to special appeals and/or like to give for specific programs or purposes (such as scholarships)
Find out who has been the contact person/solicitor for each donor
Differentiate between donations of cash, stocks, materials, and volunteer time
See which fundraising events your donors have attended
Provide detailed information about donors who have committed to multi-year donations, monthly contributions, and/or planned gifts
Find lapsed donors
Identify which donors want to remain anonymous and/or prefer not to receive phone solicitations
Track all foundation, corporation, and government donations over the history of your organization including contact person's name and phone number

Document the work of your volunteers:

Track the number of volunteer hours by month and year
Find volunteers who like to help out with specific tasks and/or events
Look up volunteers with specific skills i.e. carpentry, hauling, fundraising, finance, etc.
Identify the volunteers who have given the most hours per year

Create and print reports, letters and labels including:

Customized solicitation and thank you letters
Donor lists by fiscal year, amount given, and zip code
Reports tracking in-kind donations
Volunteer lists by year, month, and task
Mailing labels and name tags for specific purposes.

This may sound like a daunting task (and may require a re-evaluation of your chosen software), but the work you do now to put your database in order will benefit your organization for years to come.

2009-12-08T17:14:00.000-08:00

Fundraising Stocking Stuffers

Recent news and polls have decidedly mixed messages for nonprofits right now; some predictions are gloomy, others surprisingly hopeful.

The unemployment picture continues to be bleak and people are still being cautious about spending. Yet according to an American Red Cross survey, only 20% of those polled planned to reduce charitable donations this year. In fact, 68% of respondents agreed that it is even more important to give right now because of the economy; 59% said that making charitable donations gets them into the holiday spirit. And folks who had their salary and/or work hours reduced this year were no more likely to cut back on donations than those whose employment has remained secure.

Even so, these continue to be challenging times for fundraising that call for creativity and extra hours in order to raise the money for your good work. Here a few simple and inexpensive Christmas "stocking stuffers" for your fundraising program:

Use free social media. Are you on Facebook? Twitter? if not, now's the time. It's a great way to get the word about your organization, send invites to events, and ask for donations.
Try new internet-based tools. Check out this website about a way for supporters to contribute $5 to your organization when they give someone a gift card: http://www.givecard.com/. Consider registering your organization for a possible donation at http://facebook.com/ChaseCommunityGiving. If your organization serves school-age children, take a look at http://www.escrip.com - donations come from participating merchants, and all your supporters have to do is sign up.
Seek out corporate matching gift programs. Many local corporations - including Charles Schwab Company, Autodesk Inc., and Wells Fargo Bank - will match employee donations. Publicize and take advantage of these opportunities (for a list of businesses with matching programs, email me at cjay@horizoncable.com).
Ask your local bank to help out. Many banks have charitable giving programs. Tamalpais Bank contributes to a customer's chosen nonprofit based on account balance; Bank of Petaluma dedicates money annually for the management of each branch to make gifts to nonprofits of their choice. Talk to the place where you do your banking; ask members and supporters to do the same.
Reconnect with lapsed donors. It's likely that you have lost a significant number of donors in the past two years, but don't give up. Try reconnecting them to your organization by asking them for modest donations via a phone-a-thon or a focused email/snail mail appeal.

Whatever strategy you use - whether it be personal contact, email, snail mail, or the internet - continue to speak from your heart about the importance of your mission. Every dollar counts, and every donor counts.

2009-11-09T14:01:00.000-08:00

Giving Thanks

With Thanksgiving approaching, now is a good time to focus on gratitude for all the people who contribute to the work of your organization, and to make sure you are communicating that gratitude.

Some ways to express your appreciation:

Lists. You can publish and post lists acknowledging volunteers and donors on your website, via email, with printed lists on the walls of your office/facility, and in your print newsletters. People love to see their names on lists.
Thank you cards. Always thank people, with a personal note, for their volunteer hours and donations.
Appreciation events. Plan appropriate and fun annual events honoring your donors and volunteers. Offer wonderful food and entertainment.
Announcements and articles. Send press releases to your local newspapers honoring the contributions of special volunteers and donors; post articles on your website, in your enewsletter, and your printed brochures.
Awards. Create organization awards for volunteers of the year and/or month; nominate your most hard-working volunteers for special local awards.
Gifts. Send a donor free tickets to one of your events. Take your staff out to lunch after they have completed a big project. Give the president of your board a bouquet of flowers.

Thanking donors:
Always be sure to promptly thank a donor for all donations with a letter including the approved IRS language, plus a personal note, sent via first class mail. But don't just stop there: continue to thank and communicate with your donors throughout the year using email, newsletters, letters, postcards, phone calls, published donor lists, a thank you phone-a-thon, an annual donor appreciation event.

Thanking volunteers:
Thank your volunteers each time they help out, with a handwritten postcard sent first class mail. Keep track of their hours so you can specially acknowledge longstanding hard-working volunteers. And don't forget that your Board of Directors is your most important volunteer crew. Take every opportunity you can to personally express your appreciation for all the work that they do - especially when there has been conflict, differences of opinion about who is in charge, or if the organization is experiencing significant transition and/or challenges.

Thanking your staff:
It's easy to get so busy and stressed out with deadlines and funding pressures, particularly in these challenging times, that you may forget to thank your staff for their work. Know that even the smallest gesture of appreciation will make people feel better, facilitate better working conditions, and foster greater collaboration.

A little gratitude will go a long way towards building donor relationships, sustaining volunteers and board members, and creating a positive work environment for your organization!

2009-10-10T09:39:00.000-07:00

Back to Basics: Raising the Money You Need to Do Your Good Work

These are tough times to be fundraising. The economic downturn has affected just about everybody, whether through layoffs or reduction in income or simply a sense of extreme worry and caution about the future. Nonetheless: in order to do your good work, to fulfill your mission, to serve your clients and your community, you're going to have to raise money - and now is the season to be asking. Here are some important facts to keep in mind as you work on your campaign:

$308 billion in charitable donations were made in the U.S. in 2008, despite the global economic crisis. Though their ability to give may be more limited, Americans will continue to give.
70% of all Americans contribute annually to nonprofit organizations they care about. This means that 7 out of 10 people you know feel it is important to support charitable causes.
82% of all charitable gifts come from individual donors. Grants from foundations provide 12%, and corporations give a paltry 5%. Fundraising events are labor-intensive projects that cost on average $1.30 for every $1 raised. So: in order to use your staff and board time strategically, be sure to focus on asking individuals.

And it's good to remember that there are just three basic things that motivate giving:

Somebody asked. It's as simple as that. Religious institutions always top the list of funds received - because they ask, every week.
The donor has a relationship with the asker. People give money to people - people whom they know and respect.
The donor wants to be part of the work. Donating money is a way to participate actively and make a difference in the world. People love to give away money to causes they care about - especially when you can demonstrate real impact. And giving connects them to a community with shared values.

Remember that fundraising is an exchange. Your donors give one thing of value - their money, in exchange for another thing of value - the good work of your organization. Your job is to educate your donors about the impact of your programs and services, learn how they want to be involved, provide donors with meaningful opportunities to participate, build lasting relationships with them, connect them with community, and thank them for their support.

Above all, return to your mission. Ask yourself what drew you to the work, what makes you feel passionate about your organization, why it's important, how it has changed people's lives. This is what you want to communicate to your donors. Reach out with integrity with your fundraising, knowing that giving to righteous causes makes people feel good.

2009-09-08T12:41:00.000-07:00

Keep Talking: Communicating with Your Donors

Maintaining positive contact with donors throughout the year is an essential part of your fundraising program. Here are a few suggestions for you as you navigate these challenging times using today's complex and diverse technology:

Communicate good news in a timely fashion. Don't hold off on good news until it's time for your regular newsletter. If something great happens, let people know right away using email and press releases - this could include an award, an exciting new program, or simply a story that lets people know good things are happening to the people you serve.

Communicate bad news, too. Many of you may have hesitated to let your donors know how this economic downturn is affecting your agency - but if we truly regard donors as investors and partners, then we'll also be willing to communicate bad news. Let them know if you've had to layoff staff or cut back on programs. Better that they find out directly and accurately from you than secondhand; plus you'll find donors are both sympathetic and much more willing to help if they're not surprised.
Let them know all the ways they can support your agency. Offer a variety of opportunities for your donors to participate. Ask if they'll join your Advisory Board. Invite them to a volunteer work day. Solicit their thoughts and suggestions about your programs directly by phone or through surveys. They may not be able to help, but they will be pleased that you asked - and they will feel more connected to your agency.
Let donors know they are your investors and partners. Ultimately, your organization will become healthier and more sustainable when your donors move from viewing their giving as an annual transaction to seeing their investment as an ongoing commitment and opportunity to participate in furthering your mission.
Use all of your communication tools strategically. There are so many ways to communicate these days: your website, email, Facebook, newsletters, press releases, phone calls, letters. Make sure your website is easily navigable, with up-to-date graphics and great visuals. Use email for weekly newsletters plus reminders about upcoming events and news announcements; use Facebook to try to spread the word to folks with event evites, good videos, and photographs with donors tagged. But be sure to still use the old-fashioned, more personal methods - letters and phone calls - most especially when thanking people for their contributions of time and/or money.
Whatever your message, frame it in gratitude. Preface every communication with continued thanks to your donors for their investment in your work. And make sure your appreciation is specific to their gift and its impact. Above all, remember that fundraising is about building relationships, and expressing appreciation is an essential element. You can never thank people enough!

2009-08-08T17:30:00.000-07:00

Hard Times & Fundraising Challenges

Guidestar has just reported that over half of charitable organizations in a recent survey experienced a drop in donations between March and May of this year, and 36% have cut their budgets. And the president of the Foundation Center is predicting that foundation grants will drop at least 9% in 2009, while individual giving declines as well.

The message for all nonprofits: assume that the current downturn in charitable giving is going to continue for some time, and act accordingly. Remember what it felt like back in the 1970's and 1980's, when agencies struggled to make ends meet from month to month? It's time to get used to financial uncertainty once again. It's also time to be strategic and creative about your strategies. Here are five tips for you as the fall fundraising season approaches:

Set lower, more manageable goals. Break your big dollar goals into smaller parts. This makes it easier to grasp, both for your donors and for those who will be soliciting funds. It also makes people feel that smaller donations can really make a difference. And consider setting a goal to simply increase the number of donors.
Use matching challenges. Raise money first from your Board of Directors and/or loyal donors, then challenge people to match it. Folks feel good when they know every dollar they contribute will be doubled.
Get full and active participation from your board. It is absolutely essential that every member of your board make a significant (based on their means) annual contribution! And it also essential that your board actively solicits donations from friends, family, and acquaintances.
Make it easy for people to donate. Offer easy options for monthly and/or quarterly donations. Make sure the Donate button is prominent on your website and email notices. Have membership/donation materials available at every event. Include remit envelopes in every snail mail newsletter.
Use your staff and volunteer time efficiently. In this time of staff layoffs and budget cutbacks, don't waste your time on more labor-intensive fundraising events or on writing speculative grants. Focus on making personalized asks to your most loyal supporters, clients, and volunteers. Remember: the quickest, most cost-effective way to raise funds is to personally ask someone you know who cares about your organization.

Above all, stay in touch with your donors - and keep asking for their support. Ask in a way that acknowledges the economic downturn, and at the same time stresses how important donor contributions are right now to further your mission and goals.

2009-07-13T08:05:00.000-07:00

Good News, Bad News, Part Two: 2009 to Date

If you thought 2008 was a bad year for nonprofits, reports about the first six months of 2009 won’t make you feel any better.

A new study by Bridgespan (from a survey of 100 nonprofit leaders) indicates that, compared to the last six months in 2008: the percentage of nonprofits laying off staff has increased from 28% to 41%; the percentage of organizations making programmatic reductions has ballooned; and many agencies have had to draw down on their reserve funds in order to continue functioning.

Almost all (92%) were experiencing serious effects from the economic downturn, with 45% saying that their financial situation had worsened in the first 6 months of 2009. More agencies have had their funding cut, and the magnitude of the cuts has increased. At the same time, demand for services has increased. Significantly, every kind of funding source has cut their levels of support – including corporations, government, private foundations, and individuals. Revenues from special fundraising events have also been affected.

Small nonprofit organizations (with budgets of less than $1 million) have been hit the hardest - 70% worse as opposed to medium organizations at 38% and large organizations at 41%. Larger agencies have been able to cut overhead more easily, and they also have more months of operating expense coverage in their reserves.

All of these statistics add up to one thing: this is no quickly passing storm. We’ve seen 9 months of challenging times for nonprofits, and it’s not likely things will change soon. Every nonprofit organization will need to plan accordingly, and assume that fundraising will continue to be difficult throughout 2009.

The good news is that 33% of the surveyed organizations reported that funders have stepped up giving to meet the current need. This country has a long-standing history of supporting charitable organizations; despite this unprecedented economic downturn, donors have continued to give to organizations they care about even if at reduced levels. And many nonprofits are working creatively and strategically to protect core programs and come up with new solutions in the face of the economic downturn.

The message is that now is a time when it’s essential to continue to communicate actively with your funders – including corporations, foundations, and individuals. Keep them in the loop about what’s going on financially, and how you are continuing to do your good work. Engage your Board actively in assessing programs, staff, and funding. Let your donors know about your current strategies to balance your budget while protecting core programs. Hope for the best, but assume the worst is a long ways from over.

2009-06-15T15:04:00.000-07:00

Good New, Bad News: Charitable Giving in 2008

This just in – despite the economic downturn, charitable giving decreased only 2% in 2008.

The good news is that people have continued to give generously despite economic hardship. The bad news is that donations to most nonprofits were coming in at a standard pace until the final quarter of 2008 – traditionally the season for most donations – and the downward trend is continuing into 2009.

According to GivingUSA Foundation, which has done an annual charitable giving survey since 1956, this is only the second year-to-year decline in more than a half century. The last overall drop was in 1987, which was the year of the Black Monday stock market collapse. The current drop was calculated by Giving USA in current dollars. If adjusted for inflation, total giving was down 5.7 percent. Based on research by the Center on Philanthropy at Indiana University, the survey includes examination of more than 400,000 federal tax forms.

Total giving in 2008 was $307.65 billion, down from a record $314.07 billion in 2007. Hardest hit were nonprofit social services agencies, with a 12.7 percent decrease in donations in a year when many were experiencing increasing demand for help and assistance. In fact, two-thirds of the nation’s nonprofits experienced decreases. Education organizations saw a decrease of 5.5 percent; health organizations 5.6 percent; arts/culture/humanities groups 6.4 percent; and environment/animal welfare agencies 5.5 percent.

Strikingly, in the midst of the recession, religious organizations received $106.78 billion (35 percent of total giving), which represented an increase of 5.5 percent from 2007. Donations to international affairs organizations also increased, but by a mere 0.6 percent.

Individual giving continued to be the biggest source of gifts, with an estimated $229.28 billion (75 percent of the 2008 total) - down 2.7 percent from 2008. Corporate giving decreased by 4.5 percent to $14.5 billion. Surprisingly, foundation grant-making was up 3 percent, to $41.21 billion.

There are two lessons here for nonprofits. The first lesson is that the worst may not be over, and nonprofits should be prepared to economize - and be creative. The second lesson is fundamental to all fundraising: religious organizations continue to top the donation list because they ask. They ask all the time, and they ask everyone, regardless of economic status and regardless of the state of the national economy. So train your board and your staff, scrutinize and improve your fundraising, and keep asking.