Archive for the ‘Foundation Hall of Shame/Stupid Foundation Tricks’ Category

The 5 Ws of Individual-Gifts Fundraising

November 1, 2010

As all budding journalists know, every story can be told through judicious use of the 5 Ws: Who? What? When? Where? Why?  Here the Nonprofiteer employs this efficient system to tell the story of how reluctant volunteers can become enthusiastic and successful individual-gifts fundraisers.

For most small- and medium-sized organizations, everything about this story is a blank.  So here’s a primer on how to fill in that blank.

WHO to ask?: Only two types of people should be asked individually for gifts: people who’ve given to your group before, and friends of your Board members.  With anyone else, it’s sheer impertinence: “Hi, nice to meet you, open your wallet.”  Ask friends (of the agency and the Board), and ye shall receive.

What to do when your Board members say, “I don’t want to ask my friends for money”?  Reply: “You don’t have to ask your friends.  Just ask each other’s friends!”  So Angela asks John’s friend, and John asks Angela’s.  All they ask of their own friends is to come to a meeting, and all they have to do at that meeting is wax enthusiastic about the group and listen while the other one solicits the gift.

WHAT to ask for?: If they’ve given to the agency before, you’re asking for more.  You have to make the leap of imagination (from $250 last year to $1000 this year) before the prospective donor can think about making it.

Don’t worry about being too ambitious in your monetary goal.  Very few prospective donors are offended by being mistaken for rich people.  (Women, though, are more likely to be taken aback than men, so ask for slightly less from women.  They’re more likely to say ‘yes,’ so it all evens out.)

If you’re asking a Board member’s friend, ask for slightly less than the Board member gives him/herself, because the first thing the prospect will do is turn to his Board friend and say, “What do you give?”  If the Board member doesn’t think the agency’s worth $500, the friend is unlikely to think it’s worth anything.

What if your Board member’s friend is a gazillionaire?  (We should all have this problem.)  Then prime the Board member to say, “I give $200, because that’s what I can afford.  We’re hoping you’ll likewise consider a gift based on your capacity.”  Again, few people mind being suspected of success, so if your Board member is prepared to say, “Listen, I know you made a killing last year when you sold your Google stock . . .”  his friend is unlikely to want to correct him!

WHEN to ask: The Nonprofiteer is a prompt—some might say premature—fundraiser.  As a cautionary tale, she offers the story of how her alma mater took her out for coffee repeatedly to soften her up for an ask, despite her saying, “Guys, I’m a fundraiser.  I know what we’re doing here.  Just ask me for the money!”  By the time they were ready to ask her, she’d been reminded that the school’s investment philosophy would have permitted owning shares in slave-ships, and did permit investing in companies propping up genocidal regimes; and therefore she declined to give, though she wouldn’t have reneged on a preexisting pledge.  So don’t delay; get the yes!

“What about cultivation?” you ask.  The Nonprofiteer believes that lots of what passes for “cultivation” in individual-gifts fundraising is nothing more than stalling.  Don’t hold “cultivation” events and plan to ask for money later; if you hold an event, either get contributions through the ticket price or ask forcefully that night.

All you need to do to “cultivate”  people is to demonstrate that you’re thinking about them on a regular basis, and you can do that by forwarding something you think they’d like to read.  Better yet, send them invitations to your activities, whether performances or client graduations or river cleanups.  People give where they feel they belong, so be on the lookout for “belonging” opportunities.  For this purpose, the less special the event, the better.    If you do something special for a donor, make it an ask.

One word of caution about WHEN: don’t ask too soon after the last gift.  May and June may be two separate fiscal years to you, but your donors probably think (and give) on a calendar-year basis.  So they’ll think you bizarre and ungrateful if you respond to their May gift with a June ask.

WHERE?: Over breakfast, lunch or dinner (or possibly bedtime snack).  The Nonprofiteer is a firm believer in the power of food to facilitate fundraising.  In any case, the advantage of a meal is that it requires the prospective donor to sit still for about an hour, during which time you can a) learn about her; b) educate her; and c) ask her.

WHY?: Why bother with individual gifts?  Why not just write some more grants?  (asks your Board.)  Three reasons:

  • Because grants come and go.  Institutional funders have the attention span of fruit-flies: this year they’re interested in AIDS but next year it will be architecture.  If you’re not the fad, you’re out of luck.
  • Because even if they continue to embrace your work, very few foundations or corporate giving offices will give money to support your operations.  They want to support programs, the newer the better, often leading agencies to elaborate their programming beyond what their infrastructure can sustain.  If you need to pay your light bill—or your employees—you need individual gifts.
  • And finally, even if they love you to pieces, most institutional funders want to sustain you while you find broader support.  They’re not interested in being your permanent sugar daddy.

By contrast, most individuals give because they’re asked, and what they’re asked for is support for a cause or an agency (not a single program), and once they’ve agreed they keep giving out of habit.  So you have to actively offend them before they stop.

So that’s the story of successful individual giving.  And if who-what-when-where-why merely piques your interest, you can learn how right here.

Dear Nonprofiteer, What to do when foundations slam the door?

July 21, 2010

Dear Nonprofiteer:

We are a small non-profit music school. We have been running into a problem with grants strategy–as in, we aren’t getting any.

I am consistently getting feedback:

1.    “Lovely program but we are only funding projects that can promise to reach 500-1000.”  We are small with 350 students and while I can conceive of a program that would reach a larger audience, I don’t feel I can creditably offer that in a proposal.

OR

2.    “Great ideas but we only fund people who we funded before.”

Previous executive directors in more generous times had decided that grant seeking was not worth the effort. I  think we need to make a big push but I am starting to wonder if they were right.

We have a subsistence existence with only earned income and I feel we are desperately in need of a more diverse income stream if we are ever going to grow or prosper. Operating at less than break-even is not an option with my board.

What’s the small non-profit to do?

Signed, Stymied at Every Turn

Dear Stymied,

The Nonprofiteer suspects, as you’re starting to, that your predecessors were right when they gave up seeking foundation support.  At the best of times, foundations have the attention span of fruit-flies, which means even agencies receiving support spend the whole grant term sweating blood over whether they can get it next time–nonsensical program-officer-speak  to the contrary notwithstanding.  (What kind of response is, “We only fund those we’ve funded before,” anyway?  It’s barely lucid, let alone reasonable–unless it’s just a bald-faced lie.)

And these aren’t the best of times.  (Like you hadn’t noticed.)  Some foundations are stepping up and spending a larger percentage of their income on grant-making to make up for a loss in their portfolios; others can’t, or won’t.  And as aggravating as it is to have a foundation ask you to provide services on a scale beyond your capacity, the Nonprofiteer will defend that point of view: foundations are in the business of trying to have broad impact with narrow means, and your program simply doesn’t meet their needs.

So you have to seek funds from another source.  Earned income is all very well, but of course you’re required to raise one-third of your budget in contributions simply to maintain your 501(c)(3) status.  How?

Well, as the Reverend Mother did not say, “When a foundation closes a door, somewhere an individual donor opens a window.” Stop pounding your head against the foundations’ doors and get thee to an individual gifts program.  This may be your only option; it’s certainly your best one.  Seek small gifts through an annual campaign, and big ones through individual appeals made by you and members of your no-deficit Board.  (They made the rules, now they have to play the game.)

The annual campaign: Ask your students and their families, as well as any alumni you may have, to help you make up the difference between what it costs to provide this first-rate music education and what you charge in tuition.  (If you don’t know that number, figure it out: it’s magic.  Not only does it encourage contributions, it makes future tuition increases easier to swallow.  Why do you think colleges keep repeating, “Tuition covers only a fraction of the cost of educating a student”?  Though at $40,000-plus a year, one might begin to wonder what fraction, exactly.)

Ask at “Back to School” time, and again around Christmas, and again before or during recital/graduation season.  Also, ask at performances.  Don’t be shy: remember that most people say they give because “Someone asked me.”  Your school is just as deserving as any other charity, and with 350 people in the program someone connected to you should be willing to cough up some dough.

Major gifts: Identify anyone who’s already been giving you money and take him/her out to lunch and ask for more.  If your Board members aren’t already giving, conspire with your Board president to get them to do so–and once they’ve given, ask each of them for the name of one person who could be asked.  Remember the Nonprofiteer’s rule: Board members don’t ask their friends for money–they ask each other’s friends for money!

Individual gifts come in smaller chunks than foundation gifts (though not in your case, actually).  Moreover, they’re infinitely renewable and will sustain your school for years to come.  Good luck, and let us know how you do.

The nonprofit equivalent of Razzies

April 21, 2010

Many thanks and kudos to Blue Avocado and the Nonprofit Online News for this glorious skewering of the news coverage and foundations which so dominate the nonprofit sector.

Or, as one of the Nonprofiteer’s pithier colleagues remarked, “Narcissism in philanthropy–really?”

Foundation Friday: Project Streamline

April 24, 2009

Hat tip to our colleagues at PhilanTopic for their report on efforts to reduce redundancy and excess paperwork in the grant application and evaluation process, and a salute to the grantmakers and grantseekers involved in Project Streamline.

The Nonprofiteer believes strongly that most nonprofits’ futures lie with individual donors, but that doesn’t change the fact that institutional support is important in launching and sustaining many agencies.  So anything that makes the process of securing that support simpler and more straightforward is a major contribution to nonprofit health.

In one of her previous lives the Nonprofiteer was an admissions officer, in which context she was made aware of the enormous waste of applicants’ time and money involved in having a different application form for every single school.  But each school insisted it was impossible to get its unique needs met through a common application form–and it was impossible, right up to the point at which it got done.

In philanthropy, we’re still in the “impossible” stage; but maybe that’s just the last stage before “Voila!”  Here’s hoping, anyway.

Foundation Friday: “Astroturfing” and foundations

April 10, 2009

A bit of fine reporting, and thoughtful skepticism, from the Community Media Workshop about the relationship between community groups and the philanthropies who fund them.  And another example of the same phenom, from the same dogged source. When foundations fund community groups, whose voice really gets heard: the community’s, or the foundation’s?

This is something we ought to be wary of, as we begin to hear calls for foundations to take over funding newspapers.  If those same foundations are funding a particular approach to school reform, can we expect to see that approach critically appraised in the pages of its captive newspaper?

Social Innovation in the White House

April 7, 2009

In the midst of a thoughtful discussion at the Wagner Center of the competing demands on philanthropies for funding of overtaxed social services and of social-change advocacy, big news: the White House is about to announce creation of the long-proposed Office of Social Innovation to bring together government responses and resources to the concerns of the philanthropic and charitable sectors.

Bureaucratic-style confirmation: the office appears on the list at whitehouse.govSpeculation about possible leadership has begun.

Where’s the beef?: Big projects swallow up all the money

April 6, 2009

Hey, Nonprofiteer, here’s my beef:

I read (Crain’s Chicago Business, March 16, registration required) that the Chicago Olympics 2016 committee has a corporate sponsorship goal of $1.8 billion.  Isn’t that going to cut into corporate responses to nonprofit funding requests?  Is that going to make things worse for nonprofits than they already are?  I remember hearing a nonprofit Executive Director grousing about how much money was diverted from regular charitable donations to go to [naming opportunities in the city's new downtown] Millennium Park, and the Tribune recently mentioned the same possibility in connection with the Olympics.

Should I worry about who will pay if the Olympics go over budget?

(This guy sounds a little worried:

http://behindthebid.blogspot.com/2007/03/crains-olympic-challenge.html)

Signed, Bean Counter

Hey, Bean–

You’re asking two separate questions.  Second one first: you shouldn’t worry about who will pay for inevitable Olympic cost overruns, because it’s all settled: you’ll pay, if you’re a Chicago taxpayer.

I think the Olympics are a bad idea on about six different dimensions, but the first one you raise is discussed least often: the tendency of big projects like the Olympics (or, before it, Millennium Park) to sop up huge volumes of corporate and foundation funding, leaving less for ordinary operating nonprofits.  But of course it’s impossible to determine what those funders would have spent on education or health care or social services had a sexier alternative not been available.

Fundraisers for high-profile projects always advance the argument that, as George W. Bush would have it, we “make the pie higher”–that donations to the Olympics constitute additional private money being put at the service of public purposes.  The notion is that glamor projects magically produce the fresh generosity necessary to sustain them.

But if Great Depression II teaches us anything, it’s that private firms actually don’t have limitless sums of money, and that if they put it in one pot (say, credit-default swaps) it’s not available for inclusion in another (say, mortgages).  By the same token, if they put the money into naming the Ronald McDonald Memorial Olympic Village it’s going to be mysteriously missing when the local food pantry comes to call.  And it stands to reason that given the option corporations (and even foundations) will choose to invest in shiny things on which they can engrave their names.

At least in Chicago, the ordinary lack of transparency in philanthropies (“It’s our money; why should we tell you what we’re doing with it?”) is complemented by an equal lack of transparency in government (“It’s your money; why should we tell you what we’re doing with it?”).  So we can only speculate that money spent on circuses will not then be forthcoming for bread.

*******************

Readers: What’s your beef?  What drives you craziest about trying to manage your agency or serve on its Board?  Is it the bully who won’t let anyone else speak?  The budgeting that features revenue everyone knows you won’t get?  E-mail your problems to the Nonprofiteer, subject line “Where’s the beef?” and she’ll solve them for all the world to see.

Formerly Foundation but now Federal Friday: Going where the money is

April 3, 2009

. . . which right now isn’t foundation coffers but the vaults at Fort Knox, as this excellent summary of how to get yours under the Federal economic stimulus package makes clear.


An epidemic of Munchausen by Charity?

April 1, 2009

This is a public health alert provided for our friends in the funding community: please be aware of a sudden uptick in cases of what can only be called Munchausen by Charity.  Though the Nonprofiteer makes her living through funded consultancies, and therefore stands to profit from outbreaks of the disease, she nonetheless feels compelled to bring this most recent epidemic to the attention of those whose funds are being consumed in fruitless treatment of its symptoms.

Munchausen Syndrome,  as readers may know from exposure to medical dramas, is a mental illness which expresses itself in faking ailments to secure the psychic benefits of being the center of attention.  In Munchausen by Charity, an agency finds itself perpetually inadequate to its tasks, and therefore perpetually in need of consulting services.

While Munchausen by Charity presents in many guises, the version with which the Nonprofiteer is most familiar goes something like this:

The  Board of Directors couldn’t possibly govern the institution without a strategic plan, so it hires a strategic planning consultant, who discovers that the Board is weak.  The Board couldn’t possibly repair that weakness without hiring a Board development consultant, who attempts to shore up the Board with a clearer description of its tasks as well as a group of new members.  The expanded Board couldn’t possibly take on its newly-clarified tasks without hiring a Board trainer, who provides the group with sessions of role-playing in which they can practice those tasks (e.g. asking for money) without ever actually leaving the safe confines of the group.  The trained Board couldn’t possibly go out and ask people for money without hiring a development consultant, who draws pyramid diagrams showing that the biggest gift goes at the top and convenes meetings at which members of the Board try to remember if they’ve ever met anyone with any personal wealth.  And so it goes–on, and on, and on.

What the Munchausen by Charity sufferer is experiencing, of course, is the euphoria of personalized attention divorced from the need to actually do anything oneself.  If this diagnosis sounds harsh, consider that before discovering the Syndrome the Nonprofiteer believed serial consultancies were nothing more than a stalling tactic to delay fundraising, or a futile search for an expert who’d say it could be avoided altogether.  But now she realizes what we’re dealing with is not a trick or a device but an illness, about which we should all be understanding.

If, however, the Nonprofiteer had the financial reins at foundations that give technical assistance grants, she might suggest a limit on the number of funded consultancies–something along the lines of “Three Strikes, You’re Out.”  It only takes two hands to find your ass; it certainly shouldn’t take more than three consultants.

Or perhaps the epidemic will subside by itself–say, by next April Fool’s Day.

h/t Jan Stempel

Foundation Friday: Case study from Detroit

March 27, 2009

This account from Sunday’s New York Times gives the flavor of life in a community where the supports are all crumbling at once.  N.B. the emphasis on the possibility that agencies will have to merge or collaborate to secure support from strapped philanthropies.

Historically, mergers and collaborations driven by funders (the United Way was an early champion of the technique) have been less successful than those initiated by the relevant agencies.  But it’s understandable at a time of crisis that philanthropists can’t wait for agency executives to get their egos out of the way, and must press for quick action.

The article also makes a point it may not have intended: that charities reliant on organized philanthropy are at the mercy of same.  Only an agency’s own individual donors–who are persuaded of the essential irreplaceability of its particular approach to issues, whether social-service, arts, advocacy or environmental–can sustain it through these tough times.

So if you’re not already raising money from individuals, time to start.


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