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Dear Nonprofiteer, Victory on points?

April 22, 2011

Dear Nonprofiteer,

I recently saw an offer to serve on a non-profit board where there was a monetary donation requirement each year, but the amount could be substituted by service or other activities through the scale pasted below. Here’s the way they phrased it:

To ensure active participation, members earn points for financial contributions and volunteer service. We ask that a contribution of $250 be made in order to remain as an Associate Board member. You can, however, combine a cash donation of $100 with your fundraising and volunteer efforts by earning these points:

Sample Opportunities to Earn Points
Opportunity Points
Additional cash contribution of $50 50
Plan a Board Social or Fundraising Event 50
Serve in a leadership role 50
Secure $100 event sponsorship 15*
Represent [agency] at a public fair or presentation 15*
Sell a ticket to a fundraiser 10*

I was wondering, is this a common practice? I’m actually thinking about recommending it for another board where I’ve been asked to donate money.

Signed, Victor on Points or Technical Knock-Out?

Dear Knock-Out:

The Nonprofiteer knows that some larger organizations use this point system, but for smaller organizations she thinks the record-keeping and arguments about “what counts” are more trouble than they’re worth.  Obviously it depends on the size of the required contribution, but in general everyone on a Board should be expected to give AND participate, and in roughly equal measure.

This is expressed in a number of different formulations: Board members offer the three Ws (Work, Wealth and Wisdom) or are expected to provide the three Gs (Give, Get and Govern). Whichever initials you use, the point is the same: Board membership is not an either-or proposition but a yes-and one. The best way to assure fulfillment of these expectations is to adopt a clear statement of them for Board members, and go over that statement with every Board recruit. “Every Board member is expected to make a $500 contribution, and buy a ticket to the annual gala, and attend monthly Board meetings, and serve on a committee . . .”. That way, no one agrees to join the Board who isn’t prepared to do all those things.

People are fond of making exceptions to this in two cases: for Board members perceived to be significantly poorer than the rest of the group, and for those perceived to be significantly wealthier or better-connected than the rest.

In the first case, the Nonprofiteer’s advice is: don’t count the money in other people’s pockets. Poor people are more generous than rich people generally, and thus are often less upset by minimum Board gifts than their wealthier counterparts. If a rich Board member can just write a $500 check while a poorer one has to ask 10 friends for $50, well, that’s just another example of ways in which poor people have to work harder than rich people. And, as $500 per year is less than $10 per week, most working people—regardless of their assets—can afford it.

In the second case: if someone tells you s/he’s too busy to actually do anything but s/he’ll be glad to be on your Board, remember this motto: if they can’t do the time, they can’t do the crime. Someone willing only to lend his/her name and write a check should be placed on an Advisory Board (create one if you have to, or dub the person a “Special Advisor” and put him/her on the stationery), not on the Board of Directors. If you do put such a person on the Board proper, s/he will have all the legal responsibilities of Board members without being there to discharge them—a recipe for disaster and hard feelings, should the agency be socked with a bill for unpaid withholding taxes or a lawsuit from an injured client.

In short: the Board is a governance institution, and governance includes assuring that the agency has the resources it needs to fulfill its mission You shouldn’t have to negotiate with your governors about their tasks, which is what a point system suggests. Rather, they should be the ones setting their own goals and meeting them, and attracting others who will do the same.

And that’s the final reason not to use this point system: no one wants to serve on a Board of lazy people. Your group is more attractive to prospects if everyone’s revved up and ready to go on every possible front. You can find such people, provided you don’t declare defeat and stop looking.

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Posted in Benefit events, Boards of Directors, Finances, Fundraising, Nonprofit management, Nonprofits--General, Personnel Issues, Private Philanthropy, Volunteers/Volunteerism | Leave a Comment »

Everything old is new again; and nonprofits should stay that way

April 21, 2011

So a couple of weeks ago the Nonprofiteer received a press release announcing “Redefining [of] the Nonprofit Model.”  Doubtless you’re all familiar with the genre: a group of business people get together and decide that the nonprofit sector hasn’t cured cancer or ended poverty because people in the nonprofit sector are stupid and lazy, and that an infusion of good old hard-headed American for-profit business practices will compensate for that.  Voila: instant Great Society!

This particular redefinition was truly revolutionary:

One hundred advisors, including many of Silicon Valley’s elite, are coming together to disrupt the nonprofit space. . . . [They] have committed to one full year of serving on the board of a nonprofit. . . . [and] attending monthly salons where they will discuss the specific pain points of their assigned nonprofits and attempt to find solutions as a team. . . . [This] is part of a larger movement . . . to make the non-profit world more efficient. . . .  “This is just the start of how [we] will disrupt the nonprofit sector and create new, innovative ways for business leaders to contribute . . . . Before [this], there was no easy path for nonprofits to find experienced leaders to help them at a board management level. A board role is not just about fundraising, but includes developing growth plans, operational efficiency, cause marketing, customer relationship management, event planning, and much more.”. . . . In order to maximize results, [the group] carefully matches advisors to nonprofits based on their skills, interests and a nonprofit’s needs.

So let’s review: a bunch of business people are going to sit on nonprofit Boards of Directors!  And then periodically those business people will get together and talk about how to be better Board members!   As Board members, they will not only fundraise but contribute their skills!  They’ll join Boards based on their interest in the nonprofit’s mission!  And they’ll seek ways to improve the whole sector!

The accumulation of these radical notions caused the Nonprofiteer to swoon;  but the one idea that really had her down for the count was that the entire purpose of the endeavor was to “disrupt the nonprofit space.”  Because really, what nonprofits trying to serve their clients need most of all is disruption of their management to supplement the disruption of funding they face constantly, disruption of their staff produced by those funding crises, and disruption of their ability to operate smoothly or secure resources when their message is being drowned out by a constant drumbeat of demands for “reinvention.”

The Nonprofiteer understands that in the tech world, “disrupt” is a positive word, suggesting the kind of change-the-world ethic that fueled Microsoft and Facebook.  But she urges everyone to notice that when those disruptive entrepreneurs Bill Gates and Mark Zuckerberg moved into the nonprofit sector, what they did was to find nonprofits doing good work and give them lots of money to do more of it.  If the disruptive “advisers” of the press release would just do the same thing, there would be less “news” but a healthier nonprofit sector.

As she fanned herself back to consciousness, the Nonprofiteer was struck once more.  In this case, the weapon was yet another article about hybrid corporate forms designed to enable nonprofits to earn their own revenue and stop “begging.”  Whether the discussion purports to be about L3Cs or public benefit corporations or Triple Bottom Lines, the argument is always the same: nonprofits should just get with the capitalist program, identify lucrative markets and earn their keep like every other good red-blooded American.

This approach ignores the fact that nonprofits’ markets usually consist of clients who are not profitable to serve—because if they were profitable to serve, the for-profit sector would be serving them.  The better a nonprofit is at finding and serving its market, the poorer it will be, because though for-profit clients are a profit center, nonprofit clients are a cost center.

Fine, say the hybrid-benefit-earn-your-own-revenue people: so start a profitable business and funnel its profits into the charity.  But this notion of a two-headed agency is, like most similar creatures, a monster.  If nonprofits expend their limited energy on creating market-based revenue streams, they’ll be diverted from their mission-based activities.  Either the marketing strategy succeeds, in which case the profit-generating people gain the power within the organization and mission falls to a sad second; or the marketing strategy fails, in which case it has consumed significant resources that should have gone to serving clients.

There are, of course, institutions for which running a business can be part and parcel of mission, for instance, job-training centers.  But for mental health agencies, arts organizations, group homes, rape crisis hotlines and most of the other charities which do the important work in our society, running a business is a dangerous distraction.

What if, instead of spending time telling nonprofits how they should operate differently, business people re-examined their own operating principles?  What if every business set aside 25% of its profits for investing not in the business itself but in the wider community?

In other words, instead of asking why a charity can’t be more like a business, let’s start asking why businesses don’t operate more like charities.  Businesses receive all sorts of public services and protections, from the enforcement of contracts in the law courts to well-maintained roads along which to distribute their products.  Why shouldn’t they be expected to contribute to the public good in return?

Most business people would say, “But our primary duty is to our shareholders, not to the public good” (and those over-influenced by Ayn Rand and the University of Chicago economics department would say “Our SOLE duty is to our shareholders, the public be damned”).  Right: and the primary (or SOLE) duty of charities is to their/our clients.  Anything that takes nonprofits away from that activity is perforce improper.

What’s the point of this thought experiment, in which charities chide businesses instead of the other way around?  Simply to demonstrate how much business advice to charities is sheer nonsense.  To presume that the voluntary sector doesn’t make a profit because it hasn’t thought about how to do so is to fundamentally misconceive its role in the wider economy.

Besides, what nonprofits need isn’t more advice: it’s more money. When business people are ready to provide that—when they’re ready to serve on Boards not as agents of disruption but as securers of resources; when they’re ready to advocate for a tax system which will underwrite the necessary work done by the voluntary sector—well, THAT will be the time for a press release.

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Posted in Advocacy, Boards of Directors, Coverage of nonprofits, Current Affairs, Earned income, Finances, Marketing, Mission, Nonprofit management, Nonprofits--General, Philanthropy and Taxation, Poverty, Private Philanthropy, Social enterprise, Technology, Volunteers/Volunteerism | 9 Comments »

A delicate balance

January 27, 2011

If fundraising is concentric circles, as consultants often say (you ask your friends and then their friends and then their friends’ friends), then it seems to make the most sense to start asking right in the bosom of the family: from your staff and volunteers.  Indeed, this is what most nonprofit executives think of when they hear the phrase “Charity begins at home”!

But staff and volunteers are in quite different positions with respect to your organization, and so they can’t be treated alike in terms of asking for money.

Often agencies are afraid to ask their volunteers for money on the grounds that they’re already getting the volunteers’ time, and it would be greedy to ask for more.  But in fact no one is in a better position to appreciate the value of the work you do, or the scarcity of resources under which you labor, than a volunteer.  Further, though not all volunteers are privileged, they are at least people who have leisure time to donate, which suggests they’re not grindingly poor.  If your volunteers show up at the office with a cup of Starbuck’s in hand, consider what that represents: 1 Venti/day@$2.50 x 5 days/week x 52 weeks/year = $650.  So they’re probably spending more on coffee than you’d think of mentioning in an initial ask.

Will any volunteers take umbrage at being asked to give money as well as time?  Sure; a certain percentage of the population finds discussion of money distasteful and crude, and such people may well be represented in your volunteer corps.  But you’re not any poorer for asking them, and there’s very little reason to think they’d stop volunteering at an activity they enjoy because you asked them a question to which the answer was “no.”

Don’t extend this blithe attitude, though, to asking your volunteers to ask for money.  Direct-service volunteers are apt to be offended if they’re asked to do other kinds of volunteer work, such as fundraising, because the request suggests that they’re not already working hard enough.  You understand the difference between time and money, and your need for both; your volunteers are equally sophisticated.  So ask them for money, not for more time.

Staff members are a different issue.  People who work in nonprofit agencies are already donating enormous sums to the agency, in the form of foregone income–-the money they could be making working in the for-profit sector.  In this sense they are almost certainly the top donors to the agencies at which they work.

The Nonprofiteer took a nonprofit executive job for half the salary she had been earning as a practicing lawyer—a not inconsiderable sacrifice, though one she was glad to make.  But when members of the Board suggested that she also write a check to the agency, her attitude was, “The very second the Board gives $25,000 a year to the agency–-collectively, let alone individually!—it will have the right to come back and ask for something more than the $25,000 worth of lost wages I’m already giving.”

To be fair, hers is a minority view.  Many agencies regard staff donations as some sort of measure of staff commitment to the agency.   But staff members indicate commitment every day through the work they do, the salaries they accept, the health insurance they lack.  At some agencies they even demonstrate their commitment by working overtime for which they don’t get paid—and by not ratting out their employers to the U.S. Department of Labor or the state agency charged with regulating wages, hours and working conditions.  The fact that our agencies do socially valuable work doesn’t entitle us to exploit our laborers, though of course for many years nonprofits have survived their lack of financial capital by consuming human capital instead.

So don’t ask your staff for money, and do ask your volunteers.  Maybe they’ll donate enough to make it possible for you to offer the staff health insurance, or paid sick leave, or even a raise.

Well, one can dream, anyway.

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Posted in Boards of Directors, Fundraising, Nonprofit management, Nonprofits--General, Personnel Issues, Private Philanthropy, Relations with funders, Social Service Agencies, Volunteers/Volunteerism | 7 Comments »

Dear Nonprofiteer, There’s trouble in the pulpit: Can I get a witness?

December 20, 2010

Dear Nonprofiteer,

I’m dealing with a non-profit corporation, a church as a matter of fact, that is for all practical purposes a for-profit business masquerading as a non-profit.  The board is not independent—it is made up of the leader, her family and various of her hangers-on.

It would be easy to just walk away from this situation—it is so tempting!  However, taking the easy way out to let the organization fail on its own isn’t necessarily the way to minimize the harm the organization will likely do along the way while doing this masquerade.

Do you know of any tests that can be applied to non-profits, especially churches, that can expose cases where they are for-profits masquerading as non-profits?  If you have any other advice or guidance I would be glad to receive it.

Signed, Clean and Pure

Dear Clean and Pure,

There are all sorts of phony nonprofits.  There are “Astroturf” nonprofits, subsidiaries of for-profit corporations purporting to be grassroots efforts to educate the public on issues of financial import to the corporations.  There are what I’d call “lunch bucket” nonprofits, which exist to accept Congressional earmarks whose benefits actually flow primarily to for-profits.  And then there are flat-out scam nonprofits, which exist to provide tax-shielded income to their founders rather than the public benefit for which the tax shield is a quid pro quo.

The good news is, the IRS discourages out-and-out scams by requiring 501c3 groups to raise one-third of their income from public donations.  Though it seems peculiar on the face of it to identify charities by their income rather than their outflow, the theory seems to be that raising money is such hard work, no one would be willing to do it just for the purpose of stealing.  It’s easier to sell something, anything, and then steal from the earned revenue.  So that’s one of the many reasons that agencies which support themselves entirely by earned revenue are presumptively for-profits (and therefore taxpayers).

State Attorneys General also keep track of the scams, requiring agencies to specify a public or charitable purpose (which is sometimes broader than the IRS’s definition of a nonprofit, sometimes narrower) in order to qualify for tax-favored treatment.  (At the state level, this includes exemption from property and sales taxes, among others.)

There are hard and fast IRS rules about when a presumably public charity needs to be re-classified as a private foundation, but that represents a decision about which kind of nonprofit we’re dealing with, not the “phony nonprofit” scenario you’ve described.  Further details about those decisions and other IRS rules of thumb are available on the very clear and comprehensive IRS Website (no, really!) on the subject.  The decisions and guidelines often refer to  something soporific like “reclassification of exempt organizations,” but they are full of traps for the unwary nonprofit as well as disincentives for the dishonest one.

The bad news is, neither Federal nor state regulations are very often enforced against churches.  The First Amendment protects free exercise of religion and prohibits the government from becoming “excessively entangled” with religious organizations.  “Excessive entanglement,” according to the courts, includes most tax regulation, for if the government has the power to insist on an audit, what faith institution would be safe from government oppression?

This is all very well, except for situations like the one you’ve described.  Occasionally someone will petition the state Attorney General or the IRS to reclassify a “church” as a non-church to capture the kind of self-dealing you’re talking about.  But that would be very occasionally, which is why Jim and Tammy Faye Bakker and their ilk have managed to get so wealthy under cover of the cloth before crashing and burning for more venial (but juicier) sins.

The only thing you can do to keep yourself clean is to walk away.  If you’d like to notify your state’s Attorney General and/or Secretary of State that you believe this agency is not actually a church, you may do so.  But bear in mind that the burden of proof will be on you, and the mere fact that the pastor and her brood and buddies govern without membership input and  seem to be well-paid will not be enough.  Many churches are governed without membership input except in an advisory capacity (consider parishes of the Catholic Church, or affiliated congregations of the Lutheran Church, in which the diocese or the synod rules and the congregation obeys).  And many ministries are a family business: think Billy Graham and his son.

So though the Nonprofiteer wrinkles her nose in distaste at the situation you’re describing, she thinks you have no recourse but to walk away.  If you’re right, and the agency will crash and burn without your intervention, so much the better.  This would demonstrate the wisdom of the Bible saying, “All things come to him who wait.”

Sorry.

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Posted in Boards of Directors, Charitable Choice/Church-State Separation, Charity scandals, Earned income, Finances, Fundraising, Mission, Nonprofit management, Nonprofits--General, Volunteers/Volunteerism | Leave a Comment »

Fired up to volunteer

December 13, 2010

The Nonprofiteer first learned of the work of catchafire.org several months ago through our mutual colleagues at Mission Research.  She’s been getting around to writing about Catchafire’s work placing high-skill volunteers at New York nonprofits.  Now that founder Rachael Chong has been interviewed on NPR’s Marketplace, the Nonprofiteer realizes that time waits for no blogger.

Rachael describes her organization as “Match.com for volunteers and nonprofits.”  A nonprofit pays a low fee to have Catchafire figure out its needs (“scope its projects,” in site jargon) and find a volunteer with the right skills to accomplish the task.  (At the moment the group operates only in New York, which mysteriously has one of the lowest volunteering rates in the country, but it hopes to expand to other communities in fairly short order.)  Volunteer in, do project, volunteer out, bada-bing, bada-boom—the whole thing happens in a New York  minute.

The Nonprofiteer applauds Catchafire’s mission and part of its approach–the part about helping nonprofits figure out what they can actually do with high-skill volunteers other than asking them to stuff envelopes.  But for every volunteer who wants to root, shoot and leave she knows two who are looking for a long-term volunteer home, and though obviously a Catchafire volunteer isn’t precluded from becoming a permanent volunteer, s/he comes in branded as a person who will, and therefore probably only can, do one thing.

The Nonprofiteer is also concerned about sending a single volunteer to do a project, even if it seems apparent that a single pair of hands is all that’s required.  Many people volunteer to alleviate their loneliness (or, more positively, to connect with others) and a single-person project—even in the midst of an agency with lots of people—is likely to be isolated, and isolating.

The Taproot Foundation, which likewise uses a project-based model of providing assistance to nonprofits, addresses the isolation concern by assembling a team to complete each project.  The good news is, each volunteer gets to know and work with other high-skill volunteers.  The bad news is, teams of volunteers are to nonprofits as hairballs are to cats: tolerable on a temporary basis but unlikely to be integrated permanently into the system.  High-skill volunteers searching for a cause about which to stay passionate and a home in which to express that passion instead find the opportunity to be coughed up.

The Nonprofiteer’s theory is that both groups are treating the symptom [failure to use high-skill volunteers] rather than the cause [staff hostility to the use of volunteers].  It may be that only the symptom can be treated; but in her own practice, the Nonprofiteer works to help organizations identify and overcome the sources of staff resistance, so they can make use of high-skill volunteers on an extensive and long-term basis rather than a restricted and short-term one.  We all know that staff turnover is expensive because every new person has to be trained; the same must be true of volunteer turnover, and therefore solutions requiring constant orientation of new people create problems of their own.

But may the best model win!  And if nonprofits use some high-skill volunteers better as a result of any of these approaches, we’ll all win.

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Posted in Coverage of nonprofits, Current Affairs, Mission, Nonprofit management, Nonprofits--General, Personnel Issues, Volunteers/Volunteerism, Women's Issues | 4 Comments »

Dear Nonprofiteer, Who quit and made me president?

November 4, 2010

Dear Nonprofiteer:

Recently I started serving on a board of a small social service organization.  In the last six months our board president has slowly retreated from his leadership duties due to a variety of personal issues that he’s facing and I find that I’m essentially left driving the bus.  What resources are there that you would recommend for those seemingly newly anointed to oversee a nonprofit?

Signed,Nickeynewguy and Lost

Dear Nickey,

Of course the best resource is the Nonprofiteer it/herself–the site has no search function, I’m sorry to say, but if you just keep trolling backwards you’ll find numerous bits of advice for Board presidents.  But here’s the central thing to remember: even if you’re suddenly the Board PRESIDENT, you’re not suddenly the whole Board.

So the first thing to do is call a meeting of the Board (with the Executive Director in the room—s/he will be your most valuable partner) and say, “Well, I appear to have become president by default.  This wasn’t your choice and it certainly wasn’t mine; so let’s figure out what has to be done and divide up the tasks.”  In other words, make it clear from the word Go that you’re not going to be in this alone.

Second, if you’re the sort of person who ends up leading by default, that means you’re a natural leader in one way or another.  I’m going to proceed on the assumption that your leadership flows from quiet competence rather than noisy charisma (otherwise you’d have been Board president to begin with).  So use that quiet competence to help the Executive Director and your fellow Board members think through:

  • What do we have to do that’s urgent?
  • What do we have to do that’s important?
  • Are we letting the urgent get in the way of the important?
  • If so, is the urgent really so urgent?
  • If so, do we need more people to address things, urgent and important alike?
  • If so, who will lead a brainstorming session to identify and recruit prospective new Board members?

Note that I’m not suggesting you do the recruiting, though you may be the most motivated to do so, having suddenly awakened to a whole set of unasked-for responsibilities. Nor should the Executive Director do it—s/he’s got plenty to do already.   But the only way you can do your job is to make sure other Board members do theirs, and the best way to get them activated is to give them the fun job, namely, thinking about who else would just love the work you’re doing if only they knew about it, and then talking to those people with great enthusiasm about what you do.

Any Board member who can’t run, or at least participate whole-heartedly in, a recruitment campaign should be given some essential but boring task like reviewing budget vs. actual expenses or assuring compliance with the Federal and state filing requirements.  That person should have to report at the next Board meeting, as will the recruiters.  As soon as you’re having Board meetings where Board members talk to each other (instead of sulking, or reporting to the Executive Director or to you as though you were the only responsible parties in the room), you’ve got this presidency stuff down pat.

For more detailed guidance, the Nonprofiteer strongly suggests checking out any of the sites on the blogroll (in the right margin), as well as going to boardsource.org, which as its name suggests specializes in making Board service as straightforward and resource-rich as possible.  The Boardsource “Knowledge Center” is chock-a-block with guidelines, forms and checklists to help you make sure the essential bases are being covered—even in the center fielder’s absence.

And as further questions arise, please feel free to write again!

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Posted in Boards of Directors, Nonprofit management, Nonprofits--General, Personnel Issues, Social Service Agencies, Strategic Planning (and the tactical kind, too), Volunteers/Volunteerism | 2 Comments »

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.

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Posted in corporate giving, Finances, Foundation Hall of Shame/Stupid Foundation Tricks, Fundraising, Nonprofit management, Nonprofits--General, Private Philanthropy, Relations with funders, Volunteers/Volunteerism, Women's Issues | Leave a Comment »

An oldie but a goodie

October 27, 2010

A recent publication in Contributions Magazine of the Nonprofiteer’s rant “Board Members are not Hypothetical Constructs” produced the following helpful comment from Pamela Hawley of Universal Giving:

I recently read your article on board members, reposted in Guidestar.  What a helpful post to nonprofits, encouraging them to find board members who can both fundraise and be passionate about the mission. I’d also add a key criteria is strategy, and, integrity/values. We’ve had people try to give us millions of dollars and join our board, but the ethical fit was not right.  Money coming from not the right source could derail your organization for years, if not permanently.

Patience, too, is helpful. One board member stated he wouldn’t be fundraising. His motives, track record and relationships were so strong, it was more than worth it to have him engaged.  And five years later, he just made a huge introduction to a high networth donor.  So, it might be all right to have some board members join without fundraising at the beginning.

Thank you again for such a helpful article.

Ms. Hawley is absolutely right about patience, a quality the Nonprofiteer notoriously lacks.  It’s always worth remembering that “Board development” is a phrase encompassing the effort of fostering the Board members you have as well as that of attracting excellent outsiders.

And thanks to Ms. Hawley for reminding us all that the real essential for a good blog is smart readers.

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Posted in Personnel Issues, Nonprofits--General, Boards of Directors, Fundraising, Volunteers/Volunteerism, Nonprofit management | Leave a Comment »

Whether women are more generous than men, and whether it matters

October 26, 2010

The Women’s Philanthropy Institute at Indiana University’s Center on Philanthropy has just released a study showing that at all income levels women give more than men—both more frequently and more generously when controlled for income.

This study’s headline is that across nearly all income levels women 1) are more likely to give and 2) on average give more than men.

Specifically, women who make $23,509 or less (Q1) are 28% more likely to give than men; women who make $23,509 – $43,500 (Q2) are 32% more likely to give; women who make $43,5000 – $67,532 (Q3) are 49% more likely to give than men; women who make $67,532 – $103,000 (Q4) are 43% more likely to give than men; and women who make +$103,000 (Q5) are 26% more likely to give than men.

In every income group except for Q2, women give more than men. In Q1, women give 92% more (or almost twice as much) than men; in Q3, women give 95% more (or almost twice as much) than men; in Q4, women give almost 45% more (or almost one and a half times more) than men; and in Q5, women give 94% more (or almost twice as much) than men.

The study’s authors resist the temptation to make bold claims about why this is the case, though they note that generosity tends to increase with education and that women now earn more than half of all bachelor’s degrees.  Generosity also increases with income, and more women are employed now, and therefore earning their own income, than ever before.  But even controlling for income, education and wealth, in what principal investigator Debra Mesch calls “pure terms,” women are the more generous half of the population.

[Digression: Women now make 80 cents for each male dollar.  This represents an increase from 62 cents in 1979, at which rate we'll achieve wage parity in 2043.  Only the most ridiculously strident feminists regard this as a problem.]

What’s the source of women’s greater generosity?  When prompted, Mesch is willing to indulge in a bit of speculation:

Women are socialized to take care of their families and their communities, and because of that socialization process we see the motives of empathy and caring.  We’ve done another study that looks at difference in motives for giving, and women score much higher on empathy and principle of care.

Her new study’s results comport with the trend to focus international aid on women because they’re more likely than men to spend surplus income on their families instead of themselves.  Mesch is unsurprised: “I think that’s an international phenomenon, that women are the caregivers and nurturers; they have more of those prosocial behaviors.”

So what difference does any of this make, except the sheer giggle value of demonstrating female superiority to the male of the species?  Mesch is the Queen of Tact on the subject:

I think what we need to understand is that one is not better than the other,  just different.  Women give for different reasons, give differently, are much more egalitarian in their approach.  As girls, we’re taught to be nice and share.  Men have been taught to be much more competitive, and to communicate status.  Men are strategic and women want to be equalizers.

[Oh, right, of course: no one's better, we're just different.  But the Nonprofiteer defies anyone to offer an example of how "less generous" can be better than, or even equal to, "more generous."]

If we’re lucky, the study will help eliminate the prejudice afflicting most professional fundraisers: that women are timid askers and chintzy givers who never donate without asking someone’s permission.  Not only will cultivating a female donor be more likely to yield a “yes” than comparable effort spent on a man, but women’s giving will increase faster than men’s relative to their economic power.  You’re betting on a stock that’s going up.

But you can’t treat your female donors like men in drag.  As Mesch notes,
If you’re a fundraiser, you have to communicate with women in a different way than with men.  You need to involve and engage them, because if you feel involved as a woman, you contribute not only your money but your time.

Thus the study suggests a lot more than it claims: that today’s efforts to find meaningful work for female volunteers will produce tomorrow’s major gifts.  That achieving equal pay is essential not just to women but to the charities we support (so, a little help here, guys?).  That female-headed households can be a resource to be tapped and not just a problem to be solved.  That the future of philanthropy rests in women’s hands.

What makes this more than a parlor game is the extent to which it reveals the role of empathy in giving.  Just as poor people give a greater proportion of their income to charity than rich people—presumably because they know how it feels to be on the needing side of the give-and-need equation—so women may give more generously because we know what it’s like to be dependent.  Women are less likely to imagine that having been born on third base means we hit a triple; and the feminist mantra that every woman is one divorce away from welfare makes most of us acutely aware that there but for the grace of God go I.

Part II of the study, scheduled to be released in December or January, will address gender differences in the kind of charities supported: secular or religious?  Large or small?  Do women’s gifts go to operating expenses, while men’s go to bricks and mortar on which they can carve their names?  Says Mesch,

What I can tell you is from the previous research, men and women do give to different causes.  We find women seem to give more to the social service areas, to helping the needy.  Plus women seem to spread their giving out [among multiple charities] and men are much more strategic.

The results of her research leave Mesch hopeful.

My ideal wish is that at some point, we won’t have a need to study women’s philanthropy.  It would be wonderful if philanthropy is just philanthropy, and we understand that women have caught up in terms of their income and education and wealth.

We can really change the world––women are at the tipping point.  It’s going to be a huge movement where women can really see themselves as making an impact and being philanthropists.

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Posted in Coverage of nonprofits, Current Affairs, Finances, Fundraising, International, Nonprofit management, Nonprofits--General, Personnel Issues, Philanthropy and Taxation, Poverty, Private Philanthropy, Relations with funders, Social Service Agencies, Volunteers/Volunteerism, Women's Issues | 3 Comments »

Dear Nonprofiteer, How many roles does it take to screw up an organization?

October 21, 2010

Dear Nonprofiteer,

Several friends and I have started a new musical arts ensemble and are seeking to incorporate as a non-profit.  There are 8 artists in the ensemble, so we are a very small organization.  Since starting the ensemble was my idea, I have been serving as “Artistic Director,” choosing music, organizing rehearsals and performances, etc., as well as being an Artist in the ensemble.

We are currently working on our Bylaws and so have been thinking about how to structure our Board.  We have decided to have all the usual positions (President, VP, Secy, Treas) plus an Artist Representative, and a variable number of at-large Board members (no more than 5).  We have a provision in our (in-process-of-being-written) Bylaws where the Board can only select or remove the Artistic Director with a 2/3 consensus of the Artists.

At this point, all of our Artists will serve on the Board in some capacity (either as Officers or as at-large members), though we want to allow for a future time when the Artists get to be just Artists and let other people run the business side of things.  The other Artists want me to have a say-so in the running of the organization since the group was formed by my “vision”.

So my question is this:  Is it legal, ethical, practical, etc., for me to serve as both President AND Artistic Director (and an Artist in the ensemble)?  Or should one of the other Artists serve as President and I (as Art Dir) be only ex-officio with no vote?

I should also mention that my husband is also an Artist in the Ensemble, and so would also sit on the Board (for now).

Thank you very much for any advice you can give.  Signed,

Wearing Many Hats

Dear Hats:

Last issue first: it is never a good idea to have a married couple on the Board of a nonprofit, nor is it a good idea for one-half of the couple to serve on the Board while the other is employed by the agency.  (I gather you’re not getting paid as Artistic Director, but if you can be selected or fired by the Board, you’re an employee.)  A husband and wife on the Board stacks the voting since more often than not they will vote together, and the more important the issue the more likely they will march in lockstep.  Majority or not, they constitute a bloc, and blocs or factions create trouble on any Board.

And if your husband’s on the Board and you’re the Artistic Director, you’ve stacked the deck in your own favor on every issue while at the same time guaranteeing the maximum damage to the Board (your husband’s resignation) in case of any disagreement.  Don’t start out your nonprofit life with a built-in conflict of interest.

Further, as you seem to realize, no staff member (including the Artistic Director) should serve on the Board at all (whether President or not) except in an ex officio, non-voting capacity.

But let me suggest that you pause here to consider why you want to create a nonprofit structure at all.  Don’t become a nonprofit because “all arts groups are nonprofit;” the Nonprofiteer did that for a client once and it was a disaster.  As soon as there’s any money involved, you’ll find yourself fighting with the Board over whether those dollars should go directly to you, as Artistic Director; to the artists, in some proportionate way; or back into the institution.  So imagine yourself confronting that question now, and build the structure that will get you the answer that you want.

It’s fine to fill your Board with ensemble members and thus guarantee complete artistic and financial control of the agency by its artists.  But if you do, an “ensemble representative” would be redundant and should be omitted from your bylaws.

You might further consider that if you’re entirely ensemble-governed, you’re missing the opportunity to use the Board for its central purpose, which is to connect the group to the wider community (and, yes, raise money from that wider community to support the work you do).   You do your art for people; perhaps some of them should be represented on the Board—not just to do “the business stuff” but to help you maintain perspective about the relationship of your work to its audience.

In other words, as the Nonprofiteer has said in other contexts: nonprofit and 501c3 status are not mere legal trivialities to permit you to collect donations tax-free.  They’re statements about the kind of organization you are, namely, one answerable to the community through its Board.  You’re trading a certain amount of freedom for a certain amount of stability.  If you’re not ready to do that, skip nonprofit status and live hand-to-mouth til you’re ready to be a full-blown community institution–or until you figure out how to support your art entirely at the box office.

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Posted in Arts Organizations, Boards of Directors, Conflict of Interest, Earned income, Fundraising, Nonprofit management, Nonprofits--General, Personnel Issues, Volunteers/Volunteerism, Women's Issues | 8 Comments »

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