Monday, August 31, 2009

A Personal Touch: Fundraising the Forbes Health Foundation Way

Twenty-five years ago I worked in the development department at St. Vincent's Hospital in Los Angeles. Using a crude computer program we created direct mail campaigns. With a good list we expected a two-percent return on every mailing and we usually got that or more. That is simply not the case anymore. Except for direct mail solicitations to existing members or donors, most direct mail campaigns to new prospects cost more money than they raise. The goal of new prospect direct mail campaigns is to increase the list of donors or members, not to reap a windfall.

Now, much more effort needs to be directed toward personal solicitation. This can be daunting if yours is a small to medium sized organization that doesn't have the budget for full-time development staff. It requires the involvement of the entire staff and board. And it requires making sure potential donors understand how important you are.

Mary Lee Gannon, President and CEO of the Forbes Health Foundation, wrote me an email outlining their efforts to make fundraising personal. I like how she says "we have adjusted our development plan to meet the needs of our donors." Interesting concept. How can you adjust your development plan to meet the needs of your donors? Bunnie

A Personal Touch: Fundraising the Forbes Health Foundation Way

by Mary Lee Gannon, President and CEO

I am the president and CEO of Forbes Health Foundation in Pittsburgh. We raise money for Forbes Regional - a 340 bed suburban community hospital east of the city. We have adjusted our development plan to meet the needs of our donors during this downturn in the economy and it has been beneficial. We are staying in closer touch with our major donors who understand that our needs have not changed and are even greater in these challenged times. The development staff is making personal thank-you calls to all donors over $200 as opposed to a higher amount in the past.

We are meeting with more people on a face-to-face basis and decreasing direct mail activity. Relationship building for now and in the future is our focus. We have worked with our chaplains at both the Hospital and Hospice to host memorial ceremonies when we place leafs on our Trees of Life.

Our Employee Campaign this year was greater than ever because we stressed that during these difficult times, people still do fall ill and that the improvements the Campaign funds would not otherwise occur were it not for philanthropy. We met with as many departments in person as would allow us to present.

Regarding corporations as well as individuals, we are focusing on our existing partners as well as the ones who have no giving history. The latter is not typically advised but we are specifically seeking potential donors who may never have been asked. Then we are arranging private tours whereby our new friends are delighted to see the breadth of our service to the community. They really didn’t know who we were and who we served before the visit.

The number one reason why people give is because they are asked. Think of all the potential donors who are not being asked. If we don’t ask during hard times we are pre-judging people’s dedication to the causes they care about and may support especially when the need is greatest. Know what your need is. And be able to define what would happen to the constituency you serve were you to disappear.

Contact Mary Lee Gannon at

Tuesday, August 25, 2009

How Does Charity Navigator Work?

Charity Navigator has long been a gold standard in evaluating the fiscal health and well being of Nonprofits. Now, more than ever, people are determined to make informed decisions about where their charitable dollars will go and whether the charity they are considering will spend their contribution wisely and efficiently. Ken Berger provides a glimpse into how Charity Navigator rates charities. Bunnie

How Does Charity Navigator Work?

by Ken Berger, President and Chief Executive Officer

Charity Navigator ( is the largest evaluator of charities in the United States. Our team of professional analysts has examined tens of thousands of non-profit financial documents. As a result, we know as much about the true fiscal operations of charities as anyone. We've used this knowledge to develop an unbiased, objective, numbers-based rating system to assess the financial health of over 5,400 of America's best-known mid to large sized charities.


What Kinds of Charities Do We Rate?

Criteria are based on our goal to help individual donors.

• Tax Status: 501(c)(3) public charities.

• Sources of Revenue: Depend on support from private contributions (at least 33%).

• Type of Programs: All types of programs and Services.

• Length of Operations: At least 4 years.

• Location: All parts of the country.

• Size: America's largest charities.


Charity Navigator's rating system examines two broad areas of a charity's financial health – how it functions day to day as well as how well positioned it is to sustain its programs over time. Each charity is then awarded an overall rating, ranging from zero to four stars. To help donors avoid becoming victims of mailing-list appeals, each charity's commitment to keeping donors' personal information confidential is assessed. The site is easily navigable by charity name, location or type of activity.

It also features, among/other things, the CEO’s salary for each organization we evaluate, opinion pieces by Charity Navigator experts, donation tips, and top-10 and bottom-10 lists which rank financially efficient and inefficient organizations in a number of categories. Charity Navigator accepts no funding from the charities that we evaluate, ensuring that our ratings remain objective. Furthermore, in our commitment to help America's philanthropists of all levels make informed giving decisions, we do not charge our users for this data. Accordingly, Charity Navigator, a nonprofit 501 (c) (3) organization itself, depends on support from individuals, corporations and foundations that believe we provide a much-needed service to America's charitable givers.

The two broad areas of a charity’s financial health mentioned above are their organizational efficiency and their organizational capacity. We use a set of financial ratios or performance categories to rate each of these two areas, and we issue an overall rating that combines the charity's performance in both areas. Our ratings show donors how efficiently we believe a charity will use their financial support today, and to what extent the charities are growing their programs and services over time. We provide these ratings to help donors in the process of making intelligent giving decisions, and so that the philanthropic community can more effectively monitor itself.

At its most general level, our rating system is relatively simple. We base our evaluations on the financial information each charity provides in its informational tax return, or IRS Form 990. We use that information to analyze a charity's financial performance in seven key performance categories, described below. After analyzing those performance categories, we compare the charity's performance with the performances of similar charities. We then assign the charity a converted score ranging from zero to ten in all seven performance categories.


  • Program Expenses: Percent of total functional expenses spent on programs and
    services (higher is better).

  • Administration Expenses: Percent of total functional expenses spent on
    administration (lower is better).

  • Fundraising Expenses: Percent of total functional expenses spent on fundraising
    (lower is better).

  • Fundraising Efficiency: Amount a charity spends to raise $1(lower is better).

  • Average Annual Growth of Operating Revenue: Measures growth of grants and contributions, revenue generated from programs and services, and membership fees and dues over 36 months.

  • Average Annual Growth of Programs and Services: Measures growth of program expenses over 36 months.

  • Working Capital Ratio: Determines how long a charity could sustain its level of spending using only its net liquid assets, as reported on its Form 990.

Contact Ken at

Friday, August 21, 2009

One Little Club, One Big Impact

Part of what I like doing with this blog is highlighting Nonprofit efforts. When I read Deborah Graham's piece on the Grafton Garden Club, I got dizzy. The programs of the club are amazing and even more amazing is that they are doing all of this with a $20 membership fee (and some additional fundraising). I also love the attention being paid to young people, getting them engaged in the club's activities early on, maybe creating our next generation of nature lovers. This piece makes me want to move to Grafton and join the club! Bunnie

One Little Club, One Big Impact

by Deborah Graham, Grafton Garden Club

Started in 1931, the Grafton Garden Club is a non-profit, 501(c)(3) organization whose purpose is to promote interest in, and knowledge of, gardening; to provide scholarships for students from Grafton, Massachusetts furthering their education in one of the following fields: agriculture, botany, forestry, horticulture, landscape architecture, plant and soil sciences, or environmental science; to award grants to educators in the Grafton Public School District and the horticulture Department of the Blackstone Valley regional Technical High School to be used for projects and creative efforts designed to motivate the student’s interest in plant and soil science, botany, horticulture, and the environment.

The Grafton Garden Club meetings and programs are aimed to inform and entertain. In the upcoming year (July 1, 2009 to June 30, 2010), the Club plans on participating in the Farmers Market on the Grafton Common, presenting a slideshow on Indentifying Mushrooms, and then organizing a Mushroom Foray where a mushroom identification expert checks over what everyone gathered, and taking a trip to Newport, Rhode Island to visit Whitehorne House and Rough Point gardens. And that’s just in September!

The Club has scheduled a presentation on How to Create a Period Garden in October. Christmas in Williamsburg in November prepares attendees for the Williamsburg Christmas Centerpiece Workshop in December. Also in December is Grafton Celebrates the Holidays where businesses and organizations in Grafton come together and present family-friendly activities. The Club will be offering bird feeder workshops for kids while also displaying the results of the Williamsburg Workshop. Also in December, the Club decorates the local Willard Clock Museum (this year there will be an “updated” look with Victorian Decorations to match the Christmas Victorian Tea for Club members).

There is Gardening with Native Plants program in February and March is a Xeriscape (Drought-Tolerant) Gardens presentation. In April, the Club is planning a Vegetable Gardening Panel Discussion. Also April is the 5th Grafton Garden Club Presents: Grafton Community Day. This is when Grafton gets a Spring Cleaning. Businesses and residents pull together and form clean-up teams and attack public areas of the town that need trash pickup or weeding, or maybe a splash of color. When the Grafton Garden Club decided to undertake this new project, the first public area to receive a face lift was one of the Welcome to Grafton signs on a major route into town. Where once there was a lonely sign, now there is a tree and an undergrowth of perennials and color welcoming visitors and returning residents.

In subsequent years, other areas of the town have received plantings courtesy of Grafton Community Day, including all three libraries in town, the Grafton Common, the Municipal Center, and other public areas. All this was accomplished through donations specifically for Grafton Community Day and the efforts of the businesses and residents of Grafton and the members of the Grafton Garden Club. Last year, we partnered with the Grafton Land Trust and managed to get even more people involved with the cleanup effort and the celebratory lunch and kids activities afterwards.

May brings the main fundraiser for the Grafton Garden Club’s funds for scholarships and grants. The year ends (usually) will the Annual Meeting and Members Lunch/Tea/Supper where a presentation is given about all the activities of the past year and the upcoming activities planned for the next year.

Membership in the Club is currently $20/year. More information about the Club and the meetings and programs can be found at For any questions, you can email

Tuesday, August 18, 2009

The ENA Experience

There it was in an email this morning, the announcement of a staff layoff at a national association. There is no doubt that layoff was an incredibly painful experience but the budget demanded it. The Emergency Nurses Association (ENA) has instituted pro-active measures to weather economic setbacks. I really like the "monthly budget performance memos." Rather than waiting for a quarter to go by (or heaven forbid an entire year), the ENA, headed by David Westman, aggressively tracks their financial health on a monthly basis. And has developed a several tiered system for contingency. What is your organization doing? Write and let me know. Bunnie

The ENA Experience

by David A. Westman, CPA, MBA
Executive Director, Emergency Nurses Association and ENA Foundation
Chief Executive Officer, Board of Certification for Emergency Nursing

Compared to many non-profit organizations, the Emergency Nurses Association (ENA) has fared relatively well. We have diversified revenue streams, and several of those streams have continued to perform admirably during the economic downturn – most notably revenue from our train-the-trainer model trauma and pediatric care courses, which are delivered to more than 50,000 nurses each year domestically and internationally. Our membership levels and associated revenue are also (amazingly) still increasing this year. As a result, we haven’t had to take the drastic actions some of our colleague not-for-profits have been forced to into like staff layoffs, salary freezes, etc.

However, we certainly have been negatively impacted by the recession in some key areas. Attendance at our national conferences is down and we have also received diminished support from the corporate world (i.e., sponsorships, conference exhibit sales, publication advertising, mailing list rentals, etc.). This has caused us to tighten our belts in many regards and unleashed creativity in how we approach current corporate sponsors and serve our members.

In terms of cost control, very early in the year we put a freeze on most employee training/development expense and expenses associated with employee celebrations. We also took a hard look at every expense line item and developed our “X, Y, and Z” plans. Each of these plans includes specific expense reductions that may be triggered sequentially after analyzing each month’s financial statements.

The Executive Director and Finance staff, based on this analysis, has developed monthly budget performance memos. This includes recommendations for action that are reviewed by the Board’s Finance Committee. The Committee then makes recommendations to the Board as a whole. Year-to-date, all of their recommendations have been approved.

For example, given results through March, 2009 (we’re on a calendar year) a decision was made to exercise the “X” plan. We’ve now implemented most of our “Y” plan. The good news is that the financial picture seems to be stabilizing, which may mean that the “Z” plan (the most painful of all) will be avoided. Several of the expense line items included in the “X” and “Y” plans may eventually be reinstated towards the end of the year if the revenue picture continues to improve.

In terms of creativity, we’ve taken a number of steps to minimize the negative impacts on employees and our members. Employee training and development continue, with more sessions offered in-house and using low-cost programs. We’ve found creative ways to have fun in terms of employee relationship building and recognition (e.g., brown bag lunches in the office instead of eating out at restaurants).

Relative to our sponsors, we’ve been working with an outside consulting firm to develop lower cost/lower value sponsorship offerings pertaining to both our national conferences and year-round sponsorships. So far, corporate reaction appears to be favorable.

We’re also unleashing additional creativity within the staff organization by creating a new Pipeline Work Team, with the charge of identifying new revenue generation opportunities to supplement or replace the stagnation we have experienced in corporate support.

Overall, our goal from the very start has been to avoid decreasing value perceptions on the part of our 37,000 members. Hopefully they have seen minimal to no impact on such value. Perhaps the closest to a negative impact involves converting hard copy materials (e.g., national conference programs) to electronic formats. However, we’ve been able to position this, truthfully, as an opportunity “Go Green”.

In conclusion, this has certainly been a painful period of time but ENA remains strong. We have taken a number of steps to help us “get by” which will hopefully pay dividends going forward in making us stronger.

Contact David A. Westman at DWestman at ena dot org

Wednesday, August 12, 2009

Bridging the Divide from Members to Board

I always enjoy Debra BenAvram's contributions to Nonprofit Conversation. This entire article is good, but one thing that really caught my eye was the idea of a "competency matrix" as a tool for choosing Board Members. How many of you have that kind of formalized approach? How many times have we thrown out the net to find Board Members without really analyzing the skills and talent the organization really needs? Good read. Bunnie

Bridging the Divide from Members to Board

by Debra BenAvram, CEO of the American Society for Parenteral
and Enteral Nutrition

Professionals become members of industry organizations for a variety of reasons: education, information, resources, networking and often for certification. While they may value their affiliation, most never take it to the next level by becoming engaged in a volunteer or board capacity. There are, however, a select number who become increasingly active, first as part of a committee, then perhaps even as a leader. A very few, very active members move on to a board position.

It’s not surprising then, that the profile of a board member does not necessarily mirror that of the overall membership. Board members are likely to have a deeper understanding of governance issues, how decisions are made and the overall strategic direction of the organization. They are likely to be more committed to the organization and to the profession it represents.

However, some organizations face challenges when it’s time for the board to make decisions on behalf of the entire membership. Some board members may make decisions based on instinct; others may want to take action despite receiving contrary feedback. This is where an organization’s staff can play a key role, providing some gentle diplomacy efforts to challenge the board’s decisions and to ensure that the views of the members are duly recognized.

A board’s job, after all, is to see where an organization needs to be in 10 or even 20 years. In that case, the staff can work to ensure complete transparency around decision making, communicating with all members and giving them insight and context as to why certain decisions are being made. If, after providing ample education, the majority of membership is still in disagreement with a particular decision, a board may need to adjust course.

I’ll share an example from my own organization, the American Society for Parenteral and Enteral Nutrition (A.S.P.E.N.), an interdisciplinary organization whose members are involved in all aspects of clinical nutrition therapies. Our board is one that I would place in the visionary category. It has a strong view of where the organization needs to be in the future to advance our mission. One of the fundamental elements is a focus on research, and, accordingly, a significant percentage of our resources are allocated to furthering that goal.

However, 25 percent of our membership is brand new each year. And, for the most part, research is fairly far down on their list of priorities. So it is imperative that we balance the board’s overall vision with the needs – i.e. networking, professional development, resources, certification - of our general membership. At the same time, we must work to gain buy-in from those new professionals on the organization’s research focus. Helping these members see how research impacts their practice builds the bridge between what where the members are and where the Board wants to go. It doesn’t always work that way—sometimes there’s a major disconnect—but a truly visionary Board ideally works to gain member buy-in and avoids mutiny.

Resolving the Difference

Thankfully, there are some tried and true approaches that create balance. By using these steps, A.S.P.E.N. has managed to bridge the gap between our board and general members:

Refer Back to Your Strategic Plan - Often

Having a documented road map - and ensuring all members have access to it – helps keep everyone informed of where the organization is headed. When decisions are made, it should be to further the objectives of this plan. Strategy should be seen as living, though, not as a static document that must be followed. The Board and other leaders should continually review and update the plan to ensure that the course is the right one, and that the organization is on track. All of this should be well communicated to members. After all, it’s their organization.

Use Data

Poll members regularly to ensure board decisions reflect their needs and desires. Even when budgets are tight, don’t be tempted to cut funding for membership surveys--there are both expensive and inexpensive ways to gather data. It is imperative to understand your members’ needs as you make decisions about where the organization is going. Involving Board members and other leaders in the survey design helps them to become even more vested in the outcome.

Facilitate Board Interaction with Members

This might seem simple, but it’s something that needs to be consciously tended. For instance, at A.S.P.E.N.’s annual meeting, Clinical Nutrition Week, our board members have historically been “locked away” at meetings. However, at the 2009 event, we made a conscious decision to have board members participate as attendees so that they could see the fruits of their labor and network with members. Providing attendees with informal access to board members created great dialog and a lot of good will.

Nonprofits are Mission Driven

You can be sure that all those who engage, from general members to the board and everyone in between, are connected with the mission in some way, even if they don’t realize it. Sometimes, decisions are made that are not immediately understood across all levels. It’s a challenge, no doubt. But, as long as they are data-driven, have been made sensitively, with respect given to the lens of the general population, and every effort has been made to create transparency, the organization will likely be able to successfully move forward.

Nurturing Future Leaders

Most organizations can benefit from having a formal structure in place to identify future leaders. It can help solve for some of the most challenging aspects of organizational management. The path of developing future leadership team members is highly individualized and time intensive. So how do you groom future board members? Here are a few things that have helped me along the way:

Use People’s Skills in the Right Place

Not every volunteer should be a board member, and that is perfectly acceptable! Some members might add tremendous value and have great energy at the committee level or even by simply being a general member. The trick is to find what works, and it’s an individual process. That said...

Never say “no” to getting someone more involved. Use people who volunteer – all of them. When an obvious fit for a potential volunteer doesn’t seem to exist, find one. Create one! For instance, if a member wants to become more active but may not be particularly well-suited to an existing committee, I often ensure they participate in an ad hoc group. This is a team of people who provide an invaluable resource to A.S.P.E.N. as a sounding board. Doing so let’s that individual know their enthusiasm is valued. It also sends the right message to the entire membership; if you want to get involved, there is a place for you.

Don’t Rely on the Top of the Organizational Pyramid for All the Answers

When a strategic decision is being made, reach out to people, invite them to participate in the process and educate them on the best way to do so. All members, not just those with defined positions, own the organization.

Ask all leadership – not just board members - who they think would make appropriate volunteers. People on a particular committee might have strong opinions and suggestions for others who would make good additions to their team. Be sure to get a variety of inputs. Build diversity into the mix. Whether there is a formal process or not, ensure you are vetting potential board members against the needs of the entire group. For instance, A.S.P.E.N. uses a competency matrix as part of its assessment of board nominees. Not only do we have an approved set of skills and experience that the individual must have, but we’ve established a set of competencies needed on the board as a whole. So in evaluating potential new board members, we look across the existing members to determine what particular aspects might be missing and what gaps can be filled. Of course, this can’t be too rigid of a process or you could miss out on some terrific candidates who don’t fit a particular mold. But this type of assessment helps ensure that a full complement of skills is represented.

Ensuring a strong, vibrant pipeline of future leaders is an important, although somewhat intangible, objective for any volunteer-led organization. This isn’t something that always happens on its own, and by the time you realize you don’t have a good group waiting in the wings, it may already be too late. You don’t want to wake up one day only to realize there are no good board candidates or committee chair nominees for the upcoming year. By thinking about your leadership in a purposeful and inclusive way, your organization can avoid this challenge and focus on building for the future.

Debra BenAvram serves as the chief executive officer of the American Society for Parenteral and Enteral Nutrition. She is a certified association executive with areas of expertise including strategy, organizational culture, and volunteer management. She enjoys the balance of working with internal staff, the Board and others to shape the organization. Working with these partners, she works to facilitate the articulation of and movement toward the organization’s vision of its future.

Monday, August 10, 2009

Do You Have a Media Marketing Plan?

by Bunnie Riedel, Host, Nonprofit Conversation

Whether it’s new media or old media, getting attention for your organization can be a challenge. Remember, there are millions of Nonprofits out there and your organization is in competition with every one of them and the competition gets hotter when you narrow it down to just “like-minded” organizations.

I’ve recently had calls from several start-up Nonprofits wanting basic advise on what they need to do, whether it’s board development or how to incorporate as a Nonprofit or what kinds of grants they might pursue. I have a tool that I’ve developed to help me get to know them better and frankly, to help them focus. I call it a “marketing questionnaire” but it goes beyond simply “marketing” to drilling down on the who, what, and why of the organization.

I’ve found that people who start Nonprofits do so because they have identified a need in their community. Sometimes that need is to help the disadvantaged or to highlight a problem or even to provide peer professional networking. By and large, folks who start Nonprofits are highly altruistic, but that altruism doesn’t necessarily translate into framing a vision that is practical or sustainable. The marketing questionnaire can be daunting because it asks questions that may not have been asked previously. One Nonprofit entrepreneur exclaimed “You’re forcing me to come up with a business plan!”

“Yes,” I said “That’s the idea of the questionnaire.”

Every Nonprofit needs to step back from time to time and ask “Why do we matter?” If you and/or your board doesn’t know why the Nonprofit matters how can you convince anyone else that you matter? Maybe that’s the perfect way to start your next board meeting, spend fifteen minutes answering the question “Why do we matter?” Why you matter leads to being able to pitch media stories that will be picked up, it leads to creating relationships with media that will last over time, it leads to getting noticed.

Answering “Why do we matter?” also leads to finding out what is unique about your Nonprofit. As I said earlier, you are in competition with millions of Nonprofits and you are in heated competition with other Nonprofits who have similar missions. In order to get the 3 M’s (money, membership, media) your Nonprofit has got to stand out in the crowd. Take the case of two fictitious animal shelters:

Shelter One is fairly traditional. It receives stray animals, provides initial medical care, places them up for adoption and if not adopted in 120 days, euthanizes the animals.

Shelter Two not only receives stray animals, provides initial medical care and places them up for adoption; but it has an active foster parent membership, behavior rehabilitation services, web-cam capabilities so prospective animal owners can see the animals live and in real time, hosts adoption fairs at the local pet store, provides spay and neuter clinics to the public for a nominal fee and doesn’t euthanize but has a 100% placement rate (even for those hard to place animals).

Shelter Two is a marketing dream. There are about six stories that can be pitched for Shelter Two. And part of the Shelter Two pitch is how much better Shelter Two is than Shelter One.

Another question I ask is “Who is your target audience?” You can call it audience, constituency, membership, it doesn’t matter, what matters is the need to identify who you are trying to reach. I’ve seen Nonprofits mistakenly identify the entire world as their audience and unless your Nonprofit is the International Space Station, the “world” is not your audience. In identifying your audience you really need to apply some tough love. You may want to serve everyone, but can you? Think of it as “niche marketing.” If you can’t determine who your target audience is, maybe it’s time to pull out that mission statement and give it serious consideration. Figuring this out helps you narrow your pitch and narrow the field where you pitch and helps you be more successful because you are focused.

There’s more that needs to be explored but I’ll leave it for another time. If your Nonprofit doesn’t have a media marketing plan, now is the time to develop one. The competition for attention won’t get easier as time goes by it will only get tougher, especially in light of new media. This is an area that is woefully lacking for most Nonprofits and many simply do not include it as part of their regular programming activities and rarely give it a line item in their budgets. Your Nonprofit can stand out in the crowd if you include media marketing as an important component of your business plan.

Contact Bunnie at info at riedelcommunications dot com

Friday, August 7, 2009

The Art of Collaboration

I had the pleasure of meeting Jerry Adams about a year ago and the pleasure of seeing the Human Services Coalition (HSC) of Prince George's County in action at a conference this summer. What the HSC does is fantastic! It leverages its members' capabilities and helps those Nonprofits build capacity. There cannot be a more important time than now for Nonprofits to come together, share resources and support one another. I am reminded that whatever issues we face in our communities, it is usually Nonprofits at the forefront of solving those issues and providing service. I hope this article gives you some great ideas and be sure to visit their website to see how dynamically the HSC is serving its community. Bunnie

The Art of Collaboration: The Human Services Coalition of
Prince George’s County

by Jerry Adams, Executive Director

Incorporated in 2001 the Human Services Coalition of Prince George’s County (HSC) has hit its stride over the last three years. HSC has gone through the pretty typical growth pattern that many if not all emerging nonprofits that are now members of the coalition go through. We pretty much serve as an example to our member organizations as to how to become a sustainable nonprofit organization. Here is what has transpired:

The founders of the HSC were themselves executive directors of thriving nonprofits in Prince George’s County. They saw an extreme need for an organization that would 1) build the capacity of so many struggling nonprofits to deliver the best services to more people, and 2) advocate for resources and public policies that would enable nonprofits to be more effective and efficient. As with most start-up nonprofits, they had very limited funds. They committed themselves to be the volunteers who would start addressing the capacity building and advocacy needs with the help of a part-time consultant. After the first two years of trying to develop a program offering that was based on grouping organizations into affinity groups according to the type of services they provided (Youth, Aging, Disability, etc.), the leadership felt that they were not being very effective. The organization had no clear membership, and no committee structure to engage members in the work of the coalition. Something had to change.

In 2003, two of the HSC leaders went to visit the Howard County Association of Community Services, a very successful coalition of service provider organizations, to see how they were structured. Upon their return, they recommended a complete restructuring of the HSC. A Membership dues-paying structure was implemented. Four new committees were formed to engage the membership in developing and delivering a set of services to members: Membership, Public Policy, Programs, and Annual Conference Committees were formed. A part-time administrator was hired (still didn’t have much financial support). The board surveyed members to see what interests the members had. Membership meetings were based on those interests.

By 2004, the structure was in full swing and a small grant was awarded by United Way to replace not augment the previous funding. Most members felt that the organization’s offerings were not robust enough to impact on building capacity, and to make a difference with regard to advocating on behalf of the sector. During the next two years, membership dues, and corporate sponsorships from the annual conference provided the HSC with a growing fund balance. In 2006, the board decided to make a bold move to hire an executive director who could take the organization to the next level.

Since that time, the membership has seen a more than 100% increase. The organization’s budget has increased from $50,000 to over $300,000. These funds represent a growing awareness in the funding community and the county government of the value to all of the citizens of Prince George’s County of having an entity that can help nonprofits be more effective, and that can advocate on their behalf. These funds have come from a variety of sources and support significant new programs. HSC now operates an historic Nonprofit Incubator program funded through the Community Development Block Grant program. The Incubator provides core training, peer mentoring and professional executive coaching to 11 nonprofits. HSC has applied to the US Department of Health and Human Services for $500,000 to expand this effort to more than 20 additional nonprofits, and be able to re-grant $200,000 to some of those nonprofits.

HSC has a vibrant Public Policy agenda that has three sub-committees (made up of members and chaired by board members) that are seeking to 1) work with county departments to improve the efficiency of payments to nonprofits that contract with those departments, 2) seek to influence the development of the county budget so as to see the allocation of more funds to nonprofits, and 3) pass an ordinance requiring that a Community Benefit Agreement (CBA) be part of every development and re-development plan that goes forward through the Planning Division. This effort is supported by a grant from the Washington Area Women’s Foundation as each of the public policy initiatives will assist single women headed households with children under 18 and incomes under $40,000 to achieve financial security. The Women’s Foundation grant allows HSC’s Public Policy Committee to have the support of a professional public policy consultant.

HSC continues to have wonderful support from the Prince George’s County Executive, and has recently been awarded a grant from the Morris and Gwendolyn Cafritz Foundation for general operating. We enjoy ongoing collaboration with other funders and capacity building organizations. The Partnership for Prince George’s, a philanthropic effort hosted by the Prince George’s Community Foundation, has funded HSC to develop a public policy initiative concerning the county budget. We also collaborated on hosting three excellent forums on advocacy seeking to get more of our members comfortable with joining the advocacy efforts.

The Eugene and Agnes E. Meyer Foundation funded our strategic planning effort that will be our guide for the next five years. They have also asked HSC to submit a proposal for general operating funds as they see that we have reached the limit of our current staff, space and equipment capacity to expand our work to help more nonprofits succeed and thrive. In light of the dire economic times, HSC hosted a dynamic one-day Nonprofit Survival Kit Summit that encouraged member organizations to collaborate, share resources and otherwise help each other survive. A panel of funders also told members what they had to do in this new economy to attract funds ... COLLABORATE! ... our theme for the year.

Tuesday, August 4, 2009

It's Not (just) the Economy Stupid

Eeek! It's tough to shine the spotlight back on your organization and ask the tough questions about why your donations or membership numbers have declined. Brian Reich says it's not just the economy, there are many factors that affect fundraising and involvement and some of those factors have to do more with ourselves than with a slumping economy. Good read. Bunnie

It's Not (just) The Economy, Stupid
by Brian Reich, Managing Director of little m media

Donations to nearly every type of charity are down, in some cases fundraising has hit lows we haven't seen in a half-century. People argue that the economy is the reason people aren't giving -- that philanthropy is a luxury (e.g. you pay your bills first and then start making charitable gifts). And while the economy is a big part of the story, there are other important reasons why people are giving less money to support their favorite organizations and the causes they care most about.

1) Choice Paralysis

There are more than a million registered nonprofit organizations in the United States, and tens of thousands of new nonprofits are created every year. All those groups are communicating about their different activities, adding to the crush of marketing messages that people receive each day. They are also competing for the same dollars from the audience, making it challenging for donors provide the kind of support that will have a real impact. And they are all claiming success, while audiences have trouble seeing the outcomes in terms they can relate to and understand. In short, the audience is overwhelmed. There are too many nonprofits, too many messages, too many options and not enough success. The audience wants to understand what nonprofit organization or cause to support, but they feel paralyzed. When they can't make a decision, they don't make contributions -- especially in challenging economic times -- because they aren't confident they are making the right choice.

2) Nonprofits and charities are not doing enough to earn their donations

People make contributions to nonprofit organizations and charities for many reasons -- and whatever the motivation, every person has their own expectations of what the organizations they support will do, and what value they will get out of the relationship. Unfortunately, many nonprofits are now focusing more of their energy on growing and sustaining their organizations and not as much on improving the way they do business or deliver services. Organizations send millions of emails but settle for ridiculously low open rates, failing to talk about issues that resonate with their audience. People sign petitions online every day, with one click of a mouse, but audiences are beginning to realize those petitions rarely (if ever) change minds or impact the outcome of a vote. Put another way, organizations are serving their causes instead of solving their causes - and we are letting them get away with it. Or we have, until now. The audience knows and they increasingly feel as if their support is not appreciated, and that is reflected in less giving.

3) People believe they can do more to support an organization than donate money

The internet has empowered audiences in new and powerful ways. Technology gives each of us direct control over our information and the choices about how we spend our time and focus our energy. And we can use these tools to help organizations and address causes in ways that go well beyond donating. But most nonprofit organizations haven't embraced these new and different ways to engage and mobilize their audiences. Nonprofits invest much of their focus and energy on directing action behind a single, centralized agenda, instead of expanding their reach and looking for the best way to tap into the community (online and offline) to help address issues. Nonprofits seek short-term fundraising gains, often at the expense of developing deep relationships with their audience and providing the necessary education and support to keep them engaged. And audiences simply aren't interested in helping groups to sustain organizations in that kind of focus when they know individual efforts can have results as well.

Make no mistake about it, there are lots of incredible nonprofit organizations, focused on serving a particular community in need or addressing an important cause, and doing so efficiently and/or with an innovative approach that drives real, meaningful, measurable impact. But there are just as many, if not more, that operate inefficiently, that are duplicating efforts of other groups, or that are prioritizing talking about action over actually having an impact. In the past, the audience couldn't easily tell the difference. Today, with more information available, its easier -- and the audience is paying closer attention. The economic slowdown may have attracted new attention to the struggles that nonprofit organizations are facing in terms of fundraising, but it should not be assigned all the responsibility for the problem. The challenges that nonprofits have had in convincing people that they are worthy of support, and sustaining that support, have been brewing for a while. Addressing those issues will be even more important as the nation emerges from its economic downturn and audiences are even more determined not to make the same wasteful mistakes they did in the past.

Everything about how we communicate, get and share information, engage each other -- online and offline -- has changed because of the role that technology and the internet play in our lives. Information moves faster, people are more closely connected, and the expectations we all have for where we will donate, who will we trust, and what kind of relationship and support we want from an organization is changing. That means how organizations operate, educate, engage, and look at directing supporters and donors to take action must change as well.

We can use the tools that are now widely available online to conduct campaigns, and send notices, raise awareness of issues or solicit funds, and do so more efficiently and cost effectively than ever before. But, that doesn't mean that work should take priority over developing relationships and providing value to our audiences. We have prioritized telling a quick story that suggests progress over investing in long-term impact that both changes the world and drives people towards deeper commitments to organizations. We have become too accustomed to measuring success based on the size or popularity of an organization and not the value that the audience, who we rely on for support and donations, places on the work that groups are doing. As long as groups continue to focus on these wrong efforts, or blame the economy for its larger issues, nonprofits will continue to struggle.

Brian is the Managing Director of little m media. He provides strategic guidance and other support to organizations around the use of the internet and technology for communications, engagement, education, and mobilization. Brian is also the author of Media Rules!: Mastering Today's Technology to Connect With and Keep Your Audience (Wiley 2007).
He is also the Director of Community and Partnerships for iFOCOS, the media think tank and futures lab that organizes the We Media community, conferences and awards and Managing Editor of Contact Brian at