The Hackers Are Coming: What Steps to Take NOW To Ensure Cybersecurity of Your Non-Profit

This is an area I've been thinking about a lot lately.  Organizations and individuals at all levels are vunerable to hacking.  There is a major initiative in this country to counter "cyber terrorism" and cyber security is the hottest topic in board rooms and war rooms.  What is scarey is that many nonprofit organizations have limited ability and resources to combat security breaches.  And as more nonprofits move to online donations, online membership registrations and sales, personal information becomes more accessible to those who would exploit it.  Joseph Steinberg points out that nonprofits must be concerned with cybersecurity and should take up this issue as soon as possible.  Bunnie

The Hackers Are Coming: What Steps to Take NOW To Ensure Cybersecurity of Your Non-Profit

By Joseph Steinberg, CISSP, ISSAP, ISSMP, CSSLP

Non-profits, like most modern organizations, handle significant amounts of sensitive information – which often residesin electronic form on Internet-connected computers and networks. Donor details, information about programs run and people receiving aid, employee and payroll records, and many other forms of data are all of significant value to criminals. 

Hackers know that non-profits often don’t have the resources to invest in expensive security systems, and that computer systems in use may be several years old and designed before non-profits were being targeted with digital attacks. Cyber-thieves understand, therefore, that such systems often contain vulnerabilities and lack cyber-defenses, making them easier to hack than many systems in the commercial sector.

The consequences of compromised security may not be small. Bad press, the breach of confidentiality and embarrassment emanating from the leakage of data about people being helped by the non-profit, fines from credit card companies for failure to confirm to security requirements, or donors suffering the anguish of identity theft and blaming anorganization’s negligencecan be catastrophic.

Some cases have made the media. When the Columbia Triathlon Association website was hacked, for example, cybercriminals successfully pilfered information about over 8,000 members – including a password database in encrypted form.

So what can a non-profit do to ensure that it remains cyber-secure? While a single article is not sufficient to cover all the aspects of cybersecurity in a non-profit setting, here are several high-level pointers…

 

First and foremost, commit to actively ensuring cybersecurity. The cost – in terms of time, money, and aggravation – will likely be far less if a proactive approach is taken.

Create proper policies governing who has access to which resources, and implement rules and technology to enforce these policies. Access to systems and information should always be on a “need to know” basis. Systems should be used for only their intended purposes and not for others, such as reading email or accessing Facebook. Ensure that every user has her own credentials and that all systems require a login with a password that is not easily guessable or found in the dictionary.

If wireless (or wired) Internet is provided for guests within a facility, implement it on its own separate network – isolated from any non-profit systems and networks.Visitors have no need to access any internal systems. 

Don’t let them.

Branch office managers should ensure that they conform to all security policies of the parent organization and should also implement security to ensure that a breach at another branch, or at the main office, does not prorogate to their location.

Ensure compliance with all credit card security rules, and, unless truly necessary, do not store credit card data after processing transactions.Never store credit card security codes or debit card PIN numbers.

Store all sensitive data – including donor information, employee data, documents related to programs being run and beneficiaries from any charity, etc. – in encrypted formats. When in doubt, encrypt.

Select and implement security technology to meet functional and security requirements– and ensure that all technology is kept up to date. Keep in mindthat all major recent cybersecurity breaches have occurred to organizations running firewalls, anti-virus software, and other security products, and so…

Perhaps most importantly, leverage the services of a skilled cybersecurity professional to properly design your cybersecurity plan.Remember, cybercriminals have technical expertise. Shouldn’t you have it to defend your organization?

Joseph Steinberg (CISSP, ISSAP, ISSMP, CSSLP) is a respected cybersecurity expert and the C.E.O. of Green Armor Solutions, a leading provider of information security software. An industry veteran with 20 years of experience, Joseph is often sought after by organizations ranging from global corporations to small businesses to assist them with their digital security needs. He is the inventor of several cybersecurity technologies, the author of a book and many articles on cybersecurity-related matters, and a frequent lecturer on topics related to cybersecurity, technology, and business. For more information, or to contact him, please visit www.JosephSteinberg.com

The Back Story: Great Taglines Promoting Good Causes

I just love the "Taggies."  That's Nancy Schwartz's awards program to recognize fabulous "taglines."  It's fun to read the entered taglines and to vote for your favorites.  And then, Nancy puts them all together in a report!  2010 Nonprofit Tagline Awards

It's well worth signing up to get the report to share it with your board.  And while taglines are not the final word on marketing your organization, they certainly go a long way toward making your organization or event memorable. 

Think for a moment.  What is your tagline?  Does it truly capture your relevance and the good work you are doing?  Is it time to tweak your tagline?  Do you even have a tagline?  Food for thought.  Bunnie

The Back Story: Great Taglines Promoting Good Causes

by Nancy Schwartz, Getting Attention

A nonprofit’s tagline is hands down the briefest, easiest and most effective way to communicate its identity and impact, or to lead its fundraising campaign, program marketing or special event promotion.

But this high-impact, low-cost marketing tactic is often overlooked or under-emphasized by nonprofits. GettingAttention.org’s 2008 survey of nonprofits showed that 7 in 10 nonprofits rated their tagline as poor or didn’t use one at all. The majority of nonprofits not using a tagline indicated that they had not thought about it or couldn’t come up with a good one.

The Nonprofit Tagline Awards program is designed to address this missed opportunity, and guide nonprofits to craft effective taglines.

This year, for this first time, voters selected program, fundraising and special event tagline award winners, in addition to the strongest organizational taglines. The addition of these three new tagline types gave more organizations a chance to showcase their best efforts to engage their target audiences.

The 17 winners, reviewed in this brief video, were selected by more than 6,100 voters from 70 finalists, identified by our expert panel of judges. The finalists were drawn from 2,700 nonprofit taglines entered in the 2010 program.

2010 Award Winners

Fundraising Tagline: Oregon Zoo Foundation: Capital campaign to fund lions' return after 10-year absence—Bring Back the Roar!

This memorable tagline plants a strong seed in one’s mind–You can hear and see that lion roaring. It’s fun, pithy, emotional and unique with a clear call to action (an absolute must for fundraising messaging).

Program Tagline: Massachusetts Dental Society (MDS): Awareness campaign to educate the public about the important relationship between oral health and overall health—Your Mouth Can Say A Lot About You

MDS’ tagline is strikingly personal. As a result, it provokes immediate interest (with a touch of emotion, my mouth?), generating an unavoidable urge to know more about the program.

Program Tagline: Youth Service America (YSA): Semester of Service—Serve a Semester. Change the World.

YSA engages hearts and minds in its passionate focus on improving the world. Its tagline opens a world of possibility to students, and invites them to act.

Special Event Tagline: Hirshberg Foundation for Pancreatic Cancer Research: Kids Can Cure Fun Run, LA Cancer Challenge—Little Feet. Big Strides.

This tagline is extremely engaging and visual. It fosters an emotional connection by declaring that small children can make a difference, while highlighting the direct impact that those who run it have on the cause.

Organizational Taglines

Arts & Culture: Coffee House Press—Where good books are brewing

Nonprofit literary publisher Coffee House Press prides itself on its measured acquisition and editorial process, and the active discussions percolated by its publications. Its clever mash-up of a tagline clearly and succinctly conveys both aspects of its unique way of doing business. The surprise of the mixed imagery (books, rather than coffee brewing) makes it easy to remember.

Association: Indiana State Council of the Emergency Nurses Association (ENA)—E.R. You Watch It... We Live It!

The Indiana ENA’s tagline draws a clear connection between its mission and its service delivery and is emotional, fun and highly memorable. The tagline’s reference to E.R.—the longest-running primetime medical drama (15 years)—has broad appeal as long as the show stays in reruns.

Civic Benefit: Drums Not Guns—Instruments of Mass Percussion

This tagline is a clever play on words (instruments of mass destruction), but remains clear and powerful. That's a delicate balance to strike, and this tagline does it well as it paints a crystal-clear picture in your mind of this organization’s focus.

Education: Osher Lifelong Learning Institute at Clemson University—Because Curiosity Knows No Age Limit

The Osher Institute’s tagline is both poignant and emphatic. It is a definitive and positive statement on seniors’ characteristics and capabilities, likely to engage the very seniors who are prime prospects for participating in the Institute’s learning opportunities.

Employment & Workforce Development: Volunteer Blind Industries—Our Vision Does Not Require Sight

Volunteer Blind Industries’ tagline surprises with its play on the word “vision.” This tagline makes the organization’s focus clear in a concise and compelling way, with a touch of inspiration.

Environment & Animals: Save the Strays Animal Rescue—Finding good homes for great dogs

Working smoothly in concert with the organization’s name, this tagline conveys the essence of Save the Strays’ impact. Our judge for this tagline category called this tagline “emotional catnip for every dog lover.”

In fact, she was so moved by this tagline that she went to the organization’s website to learn more, and ended up making a donation. That’s tagline success.

Faith-Based & Spiritual Development: Religions for Peace—Different Faiths, Common Action.

This tagline’s impact is based in its clever use of contrast and comparison. It clarifies what Religions for Peace does, and how it works, in just four words. Powerful!

Grantmaking: Greater Menomonie Area Community Foundation—Connecting People Who Care...With Causes That Matter

The Community Foundation’s tagline emphasizes the value it adds to giving, while clearly educating those who don’t know it on its role in the region.

Although we’ve heard from a few other community foundations that use this same tagline, that fact alone doesn’t counteract its impact. One key criterion for a high-impact tagline is that it isn’t used by other organizations hoping to engage the same target audiences. Since community foundations serve specific regions, that criterion is met.

Health & Sciences: United Hospice of Rockland, Inc. (UHR)—When time matters most.

UHR’s powerful tagline is a heart-stirring message that’s hard to forget. This tagline works because it is so simple, yet profound.

Human Services: Canine Companions for Independence (CCI)—Help is a four-legged word

This tagline tells the story in a style that is honest, compassionate and smart. The play on words works here because it catches you a bit off guard and gets you thinking about what CCI actually does.

International, Foreign Affairs & National Security: Episcopal Relief & Development—Healing a hurting world

This brief tagline quickly highlights the way in which Episcopal Relief & Development approaches its work, as it motivates compassion and a desire to learn more. It’s straightforward but emotional, a proven combo for taglines that connect.

Library: Edmonton Public Library—Spread the words.

Edmonton Public Library’s tagline is another example of effective surprise as a familiar saying takes an unexpected turn. Who would have thought that one little “s” could make a tagline sing—and zing?

Other: Charity Navigator—Your Guide To Intelligent Giving

This tagline is unique and clear to its mission, and conveys an air of wisdom and refinement.

You immediately sense via the word “Guide” that the Charity Navigator service is an asset to you. The phrase “Intelligent Giving” feeds egos (who doesn’t want to be intelligent?) while it underscores the difficulty in wading through information to make an informed and wise giving choice.

3 Keys to Successful Fundraising in Good Times and Bad

I was just having this conversation yesterday...giving is down, times are hard, nonprofits are suffering.  Having said that, I also believe that dwelling on that can become a self-fulfilling prophecy.  If you and your organization are having that conversation, it's time to read Sandy Rees' article and pass it around at the next board meeting.  I completely agree, attitude is half the battle.  Bunnie

3 Keys to Successful Fundraising in Good Times and Bad

by Sandy Rees, CFRE

Raising money can be tough, no matter what the economy is doing.

It’s not easy to raise money in a recession. There’s a lot of fear and worry about what will happen. Will people donate? Will they donate as much as last year? What do we do if they don’t?

Your mind and your attitude play a HUGE part in your success as a fundraising. Take this short quiz to see what your attitude toward fundraising this year really is.

True/False quiz

1. Fundraising this year is going to be hard.

2. People aren’t going to give as much as last year.

3. We probably won’t reach our fundraising goals this year.

4. We should probably lower our fundraising goals this year.

5. Things are bad everywhere.

6. All nonprofits are struggling.

7. It’s just the economy and there’s nothing we can do about it.

If you answered “true” to some, most, or all of these questions, you need a major shift in your thinking! No doubt that we’ve all thought one or two or all of these things at one point or another. The trick is to recognize this kind of negative thinking and stop it in its tracks.

Key #1. Get your head in the game.

Your attitude will ultimately determine your success or failure. Before you begin fundraising, it’s critical to get your head in the game.

Don’t assume the economy is affecting people negatively. Many people are just scared and still have money to give. If you assume people won’t give and you stop asking for money, they WILL stop giving.

DON’T get scared and slip into a message of doom and gloom. Stay positive. Stay focused. The minute you buy into the “stinkin thinkin,” your fundraising efforts will start to slide.

Successful fundraising depends on many factors, but it mostly depends on you, the fundraiser. Your knowledge, ability, and attitude determine whether or not you will be successful in reaching your goals. Here are the ten tips to being a successful fundraiser and keeping your head in the game.

1. Have passion for the cause. You must believe deeply in the work you are doing before you can successfully engage other people. Your passion and enthusiasm for the work your organization does is contagious and will attract others.

2. Show genuine concern for people. The more genuine concern you show for the people around you – coworkers, volunteers, donors, etc. – the more likely you will be able to engage them in fundraising. With donors, it’s critical to put their needs first over the needs of the organization.

3. Know yourself. Know your strengths and your weaknesses. Play to your strengths and work on your weaknesses.

4. Believe in yourself. Don’t take it personally if a donor says “no.”

5. Have an attitude of gratitude. Be sincerely grateful to anyone and everyone who helps your organization achieve its mission. Thank donors, thank volunteers, thank the custodian. Thank everyone.

6. Listen well. You were given 2 ears and 1 mouth. Use them accordingly.

7. Nurture your eagerness to learn. Never think that you know it all. Be a lifelong learner. You’ll be more likely to stay ahead of trends and find new ways to raise support.

8. Willingness to work with others. Fundraising is not a solo sport. You must be able to function on a team. Play nice and remember, there’s no I in TEAM.

9. Be flexible. Go with the flow. Don’t get your feathers ruffled at change.

10. Be organized. Manage all your resources, including your time and creativity. When your workspace is tidy, your creativity has more room to expand.

If you’re afraid of what might happen (or not happen) this year, you're not alone. Lots of people are concerned about fundraising. But you can’t let it control you or dictate your actions.

Believe in abundance. There is plenty of money out there for all of us. If everyone in the United States who currently gives to charity would give just 1% more, we’d all be cash-flush! Billions of dollars are donated to nonprofits every year. Our job is to give donors the chance to support OUR nonprofit. Believe in the abundant resources that are out there and you’ll find fundraising easier.

Don’t assume that people won’t give. The truth is that you don’t know WHAT people will do until you give them the opportunity.

Don’t get or sound desperate. People don’t want to support a sinking ship. They want to support organizations that are solid and have a strong game plan.

Speak from your heart and your passion. Enthusiasm is contagious, so spread yours about your cause.

Key #2. Evaluate where you are.

Have a look at the “State of the Union” of your organization or your fundraising efforts. Trim any fundraising activities that aren’t productive. This may not be popular, but it might be necessary.

Cut back expenses where you can. But don’t cut your nose off to spite your face. (Don’t trim your expenses so far that it hampers your ability to deliver service or fundraise effectively!).

Don’t cut back on renewing donors or acquiring new ones. It’s tempting to do this just to save a few dollars, but it’s not worth it. Consider this: Every year, you lose as many as 35% of your donors (don’t believe me? Go have a look.) You must keep acquiring new donors or your donor base will one day shrink to nothing.

Review all your fundraising activities. Leverage and enhance those that are working. Drop those that aren’t.

Key #3. Move forward.

The journey of a thousand miles begins with a single step. All great nonprofits started somewhere, so just get moving.

Stay focused on your mission. No matter what else happens, stay true to your mission. After all, that’s the main reason you’re here, right?

Be clear about your goals. Know what you’re trying to accomplish and be able to celebrate when you reach your goals. If you don’t have a written fundraising plan, get one! Having a plan in writing will help keep everyone on the same page and working in unison.

Go back to the basics – get the word out, tell your stories, build relationships. Repeat. You will never go wrong following these basic steps. Tell your stories, tell your stories, tell your stories. This is what donors want to hear.

Love on your donors. Make sure you thank every donor every time. This is no time to skimp on acknowledgement! It’s simple and cheap to thank a donor and the benefits can be great!

Be sure to show your appreciation to your best donors – those folks who are there for you in good times and bad. Don’t ever take them for granted. Be sure that they are clear how much you value their support.

Build relationships with your mid-range donors. This is an often-ignored group in our databases. Pay attention to those people who can rise up and become bigger or major donors.

When you do the right things at the right time for the right reasons, you can be successful in raising money for your organization, regardless of the economy.

contact Sandy at http://www.getfullyfunded.com

Website Best Practices for Nonprofits

It's always good to go back over the basics when it comes to website design and functionality.  Antoine Dubeauclard points out some basics we all should be thinking about.  I particularly like the idea of thinking about functionality.  Can I get the information I need easily and quickly?  How many times have I been to websites that "bury" content and then become frustrated trying to find what I want.  Also, if I want to donate money to your organization, will you make it easy for me?  Bunnie

Website Best Practices for Nonprofits
By Antoine Dubeauclard, President of Media Genesis

Keeping pertinent and updated resources readily available to people is what many nonprofit organization hope to achieve with their website, yet many still fall short.

Using Focus: Hope as an example, I would like to point out some best practices for nonprofit websites.

Focus: Hope is a Detroit civil and human rights organization that has constantly worked to bridge the racial divide in southeast Michigan. In March, the organization not only celebrated their 42nd anniversary, but also the launch of their new website. Below I have highlighted some features and functionality of Focus: Hope’s website that are key for any nonprofit.

Updated and well organized content

First, it’s important to deliver relevant content to the several and varied, audiences of non-profits. You want to give people a reason to come back. If your website has stale information and doesn’t engage the users – guess what – they won’t be returning. Creating a vibrate, easily updatable and engaging website was in the plan from the start – everything from the structure to design to functionality. Media Genesis built Focus: Hope’s site to have a custom content management system (CMS), so anyone within the organization can update the information. Now, content, videos, news and pictures can all be easily updated as often as needed– giving users something new to come back to. Having an organization of content is also very vital. Focus: Hope may have a lot of content, yet it is labeled and structured in a way that people don’t have to hunt for the information they are looking for.

Donations

A strong donation system is essential to keep any nonprofit up and running. Keeping this in mind, donors should not be left out when it comes to picking out your top audiences for your website. Remember, as a rule, don’t make people search. If you are actively seeking donations, make it easy for people. On Focus: Hope’s website a “Make a Donation” button is prominent on every page. We also customized their third party donation system so donors no longer have to leave the site to make a donation. This is key as it allows visitors to the site to make a donation, yet still browse and engage with the site content afterwards without ever leaving.

Social Media

Using social networks such as Facebook, YouTube and Twitter are great ways to share videos, start a discussion about an interesting fact, or spread the word about an event. It also portrays more transparency and lets people observe a more human aspect of the organization. Focus: Hope has links to their different social networks on every page, making it easy for users to peruse.

Correctly identifying your audiences, assessing the needs of your organization and finding ways to engage users should all be best practices when it comes to planning and developing any nonprofit website.

Contact Antoine Dubeauclard at Media Genesis

The Development and Communications Equation

There's the rub...how do you combine development and communications? In small nonprofits, there is rarely the staff to have robust development and communications efforts. In larger nonprofits, that actually have staff or even departments solely devoted to these two things, there often seems to be a chasm between the development arm and the communications arm. And now, more than ever, as the scramble to survive continues on, these two elements (working in harmony) are even more critical. Good advice from Jessica Berk Ross. Worth mulling over at the next staff meeting. Bunnie

The Development and Communications Equation
by Jessica Berk Ross


This past year has been a challenging one. The economic downturn has put pressure on all organizations to increase efficiency and to do more with less. While that’s not a new mantra for nonprofit organizations, those competing for philanthropic dollars have a renewed sense of urgency. They have an even greater mandate to gain mindshare, communicate relevance and demonstrate impact in order to secure the funding they need to further their mission.

2010 is poised to be an even tougher year than 2009 for nonprofits. Giving levels have been nearly nonexistent, leading to what may be a particularly dismal period in the next 12 months. It is a critical time to evaluate organizational communications and how messaging and outreach can effect real outcomes--both programmatic AND financial.

Development Outreach is Communication

“We want to launch this new initiative, but need to secure funding.”

“We’ve applied for a grant to support this program. Without it, we won’t be able to operationalize this initiative.”

“Our usual donors have been bombarded with requests this year. How can we compete?”

Statements like these have become all too familiar over the past year. It’s a tough time to be raising funds even for the most worthy of causes. But there is something you can do so that your efforts have a greater impact. One important – but often overlooked - way to optimize development outreach is by thinking about it through the lens of strategic communications. At its heart, development outreach is communications. It is reaching an audience – in this case donors rather than, say, consumers, shareholders or the media – to build awareness and spur them to action. But far too often, the development and communications functions are almost entirely separate within an organization. When combined, though, these functions are far more effective--and efficient-- than when operating independently.

As one development consultant explained, “At least 80% of the non profits I work with have communications tools that are ineffective. I do my best to try and improve it, but I don’t know that a development professional is the right person for that job.”

It’s Not Either/Or But Both

Ruder Finn, a national public relations agency, has many clients in the nonprofit and advocacy world. Very often, at the crux of the business challenges these clients face is development. Ironically, though, that is seldom what we are tasked with at the outset of an engagement
Many of these organizations either think about communications OR development, but rarely about both at once or in an integrated fashion. As we begin to work with a client on a specific program – perhaps a Web site launch or a new initiative – the discussion quickly turns to development. These programs require funding and adequate funding requires effective development outreach. . It becomes clear in a very short amount of time that communications objectives are inextricably linked to fundraising efforts.

On the flip side, communications outreach around a particular program must take into consideration messages already in the pipeline related to raising funds. You don’t want to bombard the same audiences with disparate, uncoordinated messages. If a development related message goes out one week, the collateral piece you send about your new report the following week may be met with either aggravation or confusion.

It can be far more effective to look holistically at your outreach. Leverage the tools that already exist to share news or launch a product. Do you have a donor letter going out? Why not use that to also share information on that new report? By only reaching out to donors in a very strategic, thoughtful manner, you are likely to have a far greater impact.

A Few Tips

A more integrated approach to communications can yield far greater results. And it doesn’t have to be complicated, overly time consuming or costly. It only requires a few simple guiding principles:

1. Key messages. Having a set of consistent talking points that are then referred back to and woven into all of your communications goes a long way to building a strong brand. It can elevate the level of awareness of your organization with your donors (and, by the way, any other audience with whom you are communicating). It also makes developing new materials a lot easier – you already have a starting place for the language you’ll need to use.


2. Create an outreach timeline. Establish a framework for a combined


development/communications program. At the beginning of the annual planning process, ensure that the development and communications director are not only coordinating, but have worked together to map out a timeline for donor outreach throughout the year. In short, embed development within the overall communications program.


3. Personalize the message. An integral part of success is creating awareness of your organization’s value to the community and to society as well as building an awareness of the financial need. Quantify and personalize your mission and objectives as much as possible. It’s the old “what’s in it for me” message. Targeted communications – ones that resonate with each audience including individuals, corporations or foundation - demonstrating why that person should care about your organization’s mission will create a more favorable giving climate by conditioning the marketplace.

4. Keep it up. Sustained and ongoing communications to funders and potential funders is critical. It is important to establish touch points at regular intervals throughout the year. You may have an annual dinner, but how often are you communicating with donors and potential donors in between these events? Are you updating them on progress regularly? Are you sharing good news in a timely fashion? You should be reaching out, at a minimum, on a quarterly basis.

5. Variety is the spice of life. Ideally, outreach will take place across a variety of mediums – electronic, print and face-to-face – to accommodate the different ways people absorb information. Consider what tools – collateral, events, e-mail updates, newsletters, and social media – will help you gain support from new prospects and maintain relationships with existing funding sources.

6. Social media works! Social media – including sites like Facebook and LinkedIn as well as blogs like this one – are an absolutely essential part of every organization’s communications and development programs. If you think your donors aren’t using them or you just aren’t taken them into consideration, you may be missing opportunities. If you’re not comfortable with them, there are many (free) opportunities to learn more. Organizations such as Vocus (http://www.vocus.com/) frequently host free webinars that can be very instructional.

Build it in

It starts with the strategic planning process. To make your communications and development programs a success, integrate the two from the outset. As you embark on your planning for 2010, think about increasing the impact – and the return on investment – of development programs by more efficient use of communications resources. With this adjustment to your overall operating model, you may just make a very challenging year a lot more manageable.

Jessica Berk Ross is the managing director of the Washington, DC office of Ruder Finn. With over 20 years of strategic communications experience, Jessica is adept at helping clients in both the nonprofit and corporate world meet their organizational objectives.

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 (www.charitynavigator.org) 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.

CHARITY NAVIGATOR’S RATING SYSTEM

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.

HOW DO WE RATE 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.

SEVEN PERFOMANCE CATEGORIES MEASURING FINANCIAL HEALTH

• 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 http://www.charitynavigator.org/

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

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 WeMedia.com. Contact Brian at brian@littlemmedia.com