A big topic of conversation lately has been whether donors really care about impact, or whether they simply just give based on less scientific things like their emotions, or their friends recommendations. Which is why I’m excited to announce that I’ll be participating in a Google Hangout April 30th about using data to attract donors.
Writing in the Stanford Social Innovation Review, Tim Ogden claims that donors have never really been interested in impact. And Ken Berger from Charity Navigator and William Schambra of the Hudson Institute debate (here and here) whether moving the nonprofit sector toward performance management helps or hurts social change efforts.
To add to this conversation, David Henderson and I are hosting a Google Hangout, “How to Use Real Performance Data to Raise More Money,” on Tuesday, April 30th at 2pm Eastern. David is a super smart guy who runs Idealistics, a consultancy that helps nonprofits learn from their outcomes data, increase impact, and demonstrate results to funders and stakeholders. David’s professional focus is on improving the way social sector organizations use information to implement higher impact poverty interventions. He has been quoted in the Chronicle of Philanthropy and has written for Change.org and the Huffington Post. You can read my interview with him from a year and a half ago here.
David and I thought it would be interesting to host a conversation with nonprofit leaders about how nonprofits can use real performance data to raise more money. We’ll kick off the hour-long conversation with a couple of points and a case study or two of nonprofits that are using data to raise more money, but then we’ll open it up to you for questions. You can send us your questions ahead of time (via email to email@example.com or firstname.lastname@example.org) or simply post them to the Google Hangout here as you watch.
I hope you’ll join us!
How to Use Real Performance Data to Raise More Money
A Google Hangout with David Henderson and Nell Edgington
Tuesday, April 30th, 2013
Can nonprofits that use real performance data to raise more money? Are donor increasingly interested in impact data? How can nonprofits communicate their program data to donors? And how should nonprofits respond to questionable performance claims by other organizations? Join David Henderson from Idealistics and Nell Edgington from Social Velocity in a Google Hangout on Tuesday, April 30th at 2pm Eastern to discuss these and many more questions about how nonprofits can use real data to raise more money. We’d love to have you participate in the discussion, so send your questions ahead of time to Nell or David, or leave a comment at the Google Hangout here.
Photo Credit: 401(K) 2013
As I mentioned earlier this week, I participated in a Chronicle of Philanthropy Live Chat on Tuesday with Karina Mangu-Ward from ArtsFwd. We were talking about how to connect money and mission. The Live Chat was a lot of fun, and we got some great questions from the audience. Below is an excerpt from the Chat. If you want to see more you can read the entire transcript of the chat at the Chronicle site here.
Here’s an excerpt from the Chat:
TB Asks: How would you suggest starting to rein in an organization what has started to chase dollars vs. trying to fulfill it’s mission? In my organization’s case this includes having acquired multiple other programs and is looking to take over more. They are good programs, but the alignment to mission is marginal and that ability to be financially stable as an organization is threatened. The CEO is all in, the board is apathetic. As the development officer I’m not sure what I can do to get the train back on the tracks. Thoughts?
I would start by bringing everyone together with a theory of change…
A theory of change articulates how a nonprofit translates community resources into change to a social problem…
Without that you will just be chasing dollars and programs. A theory of change can also excite and inspire a disengaged board and staff…
It can serve as a rallying point for the organization to determine what they are trying to accomplish and what resources they need (financial model) to be able to accomplish those things.
TB – One of the things that I’ve seen organizations struggle with the most…
is having difficult conversations….
conversations that require staff and board to let go of the old way of doing things….
to challenge their assumptions about how much money they need and for what…
i completely agree with Nell that having a framework for change is essential…
change doesn’t happen quickly. It’s incredibly difficult work, and acknowledging that it’s a process that organizations must learn and get good at is essential.
You can read the transcript of the full chat here.
Photo Credit: Chronicle of Philanthropy
Last week I spoke to a group of nonprofit leaders about 5 Nonprofits Trends to Watch in 2013 and a woman stood up and said “These trends are all well and good, but we need to talk about the fact that the money just isn’t there anymore. We are having to compete with more organizations for much less available funding. We need solutions to that.”
Agreed — fewer resources and more competition for those shrinking resources is the reality we are facing. But it’s not going to change anytime soon. So it is up to nonprofit leaders to embrace and adapt to that new reality. Instead of beating our heads against the wall of change, let’s adapt to meet it.
In fact, it is time for a new kind of nonprofit leader, one who has the confidence, ability, foresight, energy, and strength of will to really lead the nonprofit sector forward.
This new nonprofit leader:
Moves to Impact. She realizes that it is no longer enough to just “do good work.” Nonprofits must create a theory of change and then find a way to measure and articulate the outcomes and impact they hope they are achieving.
Finances the Work. He works toward completely integrating money into the mission his nonprofit is trying to achieve, understanding that big plans are not enough, he also must finance them. And beyond just recognizing his lack of infrastructure, he puts together a plan for raising capacity capital and convinces donors to start investing in a stronger, more effective organization behind the work.
Refuses to Play Nice. She overcomes the nonprofit norm of politeness at all costs and gets real with funders, board members, or staff who are standing in the way of the mission and impact of the organization.
Looks Outside. He understands that a nonprofit can no longer exist in a vacuum. He and his board and staff must constantly monitor the external marketplace of changing client needs, demographic and economic trends, funder interests in order make sure their nonprofit continues to create community value.
Gets Social. She embraces the idea of a networked nonprofit and is willing and able to open her organization and let the world in as fully engaged partners in the work her nonprofit is doing.
Asks Hard Questions. He constantly forces himself, and his high-performing team of board, staff, funders and volunteers to ask hard questions (like these and these) in order to make sure they are pushing themselves harder, making the best use of resources and delivering more results.
This new nonprofit leader is confident, engaged, and savvy. She will, I have no doubt, lead this great nonprofit sector to new heights.
If you need help figuring out how to adapt to this new reality, let me know.
Photo Credit: John Morton
One of my resolutions this new year is to add more video to the Social Velocity site. I love watching video, and I’d love to see more nonprofits using the medium, so I thought I should probably follow suit. A few months ago I created a Social Velocity YouTube channel and will continue to add video to it over the course of the year. I also plan to do some video blogging this year, which I’m pretty excited about.
But today I want to introduce my new consulting video. Here I discuss how I consult with nonprofit clients. If you are reading this in an email, you can see the video by clicking here. Take a look!
I’ve written before about when nonprofit fundraising goes really wrong. An organization that I donated to a few times refused to leave me alone after 11 years of ignored solicitations. Today I want to flip it and talk about a nonprofit that has done a great job at fundraising. (In some ways they mirror my earlier post about when fundraising goes really right.)
Foundation Communities is a nonprofit in Austin, Texas that provides affordable housing and support services to low income families and individuals. About 4 years ago a friend invited me to a lunch at a Foundation Communities housing complex. It was NOT the traditional nonprofit gala luncheon.
Instead, when we walked into the common area of the housing complex there were box lunches waiting for us. The executive director and a couple of board members gave us a 5-minute description of what Foundation Communities is and does and why they are passionate about it. Then we watched a 10-minute video of the program in action and interviews with their some of their clients.
Finally our group was split into smaller groups led by a board member to tour the complex. On the tour, the board member explained how Foundation Communities uses an innovative financing model to acquire ineffective housing, renovate it and make it livable and affordable, while providing much needed after-school care, financial services and other help to the residents there.
At the end of the presentations and the tour we were asked to fill out a brief card with our name, contact info, and if/how we’d like to get involved with Foundation Communities (volunteer, take another tour, meet with a staff member). We were also asked if we could recommend a friend who might like to come to a future lunch. Foundation Communities holds these informal lunches every month. With that, the hour was up and we were on our way.
After that interesting and compelling introduction to the organization I started giving an annual gift. They were always very prompt with both an email thank you (since I made my donation online) and a paper thank you explaining how my gift would be used and all of the great work Foundation Communities is doing. Every once in awhile I would get an email about another specific campaign for which they needed my help. For example, right before school started one year they asked me to contribute the cost of a back pack and supplies for one of the children in their program. I found the email timely and compelling, so I complied.
When I gave my annual contribution again this year at Christmastime, I received a very nice voice mail from their Development Director thanking me for the gift and inviting me to call her back if I wanted to learn more about the program or had questions. I also received my usual email and paper thank yous, but this time with a special handwritten note from the executive director on the paper thank you.
I continue to give year after year to Foundation Communities because I am impressed by the organization, the results they are achieving, and the organization’s leadership. But I also continue to give because I appreciate how they treat me as a donor. They are informative, gracious, timely, transparent, but not annoying or needy.
Obviously Foundation Communities is way ahead of the curve, but I think they could take it further and gain even more support in the process:
- Instead of assuming that I want their paper newsletter every month (which I do not), they could ask me via email, phone or letter how and when to best communicate their results with me (email, phone call, social media, etc).
- Because I have a giving history with the organization, they could attempt (via email, phone, social media) to get to know me and my interests in order to 1) understand how to find more donors like me and 2) to explore whether they can increase my giving level.
- Since I have given to them over time, and I am active with social media they might explore whether I would be willing to tap into my networks to find others interested in supporting their organization.
Foundation Communities is doing a lot of things right. Other nonprofits could learn from their example about how to consistently and effectively build a donor base. But I’d also love to see Foundation Communities build on their great work to secure even more support.
Photo Credit: Foundation Communities
With the new year comes new year’s resolutions and one I’d love to see more nonprofits embrace is getting smarter about raising money. Imagine if more nonprofit leaders were to take a big step back and develop an overall financing strategy for their organizations that integrates money with their mission and allows them to play on their assets. In so doing, we could move away from a sector that struggles to get by.
To help you along in developing a smarter way to raise money in 2013 I’m offering two webinars this month.
This webinar builds on the earlier Financing Not Fundraising: Evaluating Earned Income webinar and is intended for those nonprofits that have a business idea and are ready to pursue an earned income stream. This webinar, complete with case studies of other nonprofits that have launched earned income businesses, will show participants how to:
- Pilot a new business idea
- Find customers
- Price products/services
- Project future business income and expenses
- Create goals for the business and monitor progress on them
- Report progress on the business to the board
Next is a repeat of November’s sold out “Creating a Financing Plan” webinar:
Creating a Financing Plan Webinar
This webinar will help nonprofit leaders understand the steps to creating an overall financing plan for their organization that results in sustainable, long-term money coming in the door. Webinar participants will learn how to:
- Set goals for ALL revenue streams flowing to the organization
- Determine the infrastructure dollars they need to raise
- Tie their financing plan to their strategic plan
- Create tactical steps to make the plan a reality, with activities, deliverables, people responsible, timeline
- Divide tasks by staff and board members
- Develop ways to monitor and revise the plan going forward
And remember, all of our webinars are available as recordings right after the live webinar, so even if you can’t make the time of the live webinar, you can still register and have access to all of the content. The registration fee for any Social Velocity webinar will get you:
- Access to the live, interactive webinar (live webinar only)
- A link to a recording of the webinar, which you can watch as many times as you like
- The PowerPoint slides from the webinar
- The ability to ask additional follow-up questions after the webinar
You can see the complete list of all Social Velocity webinars here.
I hope to see you at one of these webinars!
Photo Credit: sylvester
Along with the burgeoning social entrepreneurship movement comes a bit of hubris that social entrepreneurs know better how to create social change than do the nonprofits that have been working on it for decades. We can’t dismiss an entire sector that has been working on social problems for years. However, I do think that there are some things that nonprofits can learn from social entrepreneurs. The most important is how to lose the Charity Mindset.
Nonprofits are sometimes referred to as “charities,” and it is a real misnomer and does a real disservice to nonprofits. A charity mindset is when a nonprofit, its board, funders or others promoting its work have a narrow view that the organization is benevolent, but not critical, to the world at large. The charity mindset assumes that a nonprofit starts from the position of need, inadequacy, and burden, rather than a position of opportunity, strength, and effectiveness. The charity mindset differs from a social entrepreneur mindset in a number of ways:
- Symptoms vs. Solutions: A charity, by its very definition, exists to provide aid to the needy, not to solve the underlying cause of the need. This is not to say that every nonprofit can work toward solving an underlying problem; there will always be organizations that exist simply to provide basic needs (food, shelter, safety, etc.). But I wonder if too many nonprofit organizations view their work as residing in the “charity” camp, instead of working, as social entrepreneurs do, to understand the cause of the need and how how they may be able to attack and solve it.
- Fundraising: A fundraiser in the charity mindset apologizes for the burden of asking someone for money, but a social entrepreneur offers investment opportunities to prospects. Wendy Kopp from Teach for America went around evangelizing the Teach for America story and sought investors who wanted to get in on the ground level of an incredible opportunity to change the American public education system.
- Investment in Infrastructure: Charities spend every last penny on the program and leave little money for building the organization. Social entrepreneurs understand that it takes organizations, infrastructure, systems, and talent to effectively execute on a solution to a social problem.
- Respect: Charities may be beloved by their supporters, but they may not garner a lot of respect from them. Social entrepreneurs behave as equal partners with funders in creating solutions, and, as such, they command and receive real respect from investors, volunteers, partners and others.
- True Costs: Charities like to claim that as much money as possible goes to direct services, but social entrepreneurs recognize the true costs of their endeavors and are open and honest with funders about those costs. In fact they demand that funders understand and support those true costs.
I think the old adage is true, people will treat you the way you ask to be treated. If a nonprofit acts like a charity, people will treat it like one. Nonprofits need to stand up and demand to be treated as critical, equal partners in creating solutions.
Photo Credit: wolfgangfoto
I started a tradition in December of 2010 with a blog post on the nonprofit trends to watch in the coming year. Keeping with that tradition, here is my take on the nonprofit trends for 2013 (you can read my nonprofit trends posts for 2011 and 2012 as well).
As I’ve said before, I’m more optimist than fortune teller, but I do think that the nonprofit sector is changing in some exciting ways. And I for one am excited to see what the new year brings. Here’s what I think we should watch for:
1. More Demand for Outcomes
The biggest trend I see is a growing demand for nonprofits to 1) articulate what results they hope their work with achieve and 2) track whether those results are actually happening. Nonprofits have long discussed the outputs of their work: # of people served, # of services provided. But the sector is increasingly being asked to articulate and track the outcomes they are achieving. How are people’s lives changing because of the work a nonprofit does? Social change has become an increasing demand of funders and other supporters. That means nonprofits must develop their own theory of change (how they use community resources to create change to a social problem) and then measure whether that theory is becoming a reality.
This increasing focus on nonprofit outcomes is leading to the 4 other trends:
2. Decreasing Emphasis on Nonprofit “Overhead”
The bane of the nonprofit sector is the meaningless and destructive public perception that you can separate nonprofit programs from the administrative costs (staff, technology, systems, materials, fundraising) to make those programs happen. This separation is so destructive because it forces nonprofits into a misalignment of money, mission and competence which sets them up for failure. A nonprofit cannot succeed if they don’t integrate their operations and money-making efforts into their mission. But the good news is that more and more people are coming to realize that you can’t just invest in programs without the staff, infrastructure and fundraising to make those programs happen.
3. More Advocacy for the Sector
as a Whole
The nonprofit sector has long been a fractured grouping of organizations of various sizes, business models, and issue areas. It has been almost impossible to organize the disparate sector to fight for better government regulations, improved public perception, more funding. But that tide is starting to turn. With the advent of groups like CForward and a growing discussion about how best to advocate for the sector as a whole, I believe that we will start to see the sector organize, mobilize and build the confidence necessary to claim its rightful place.
4. Savvier Donors
Because nonprofits are getting more savvy, donors are as well. In addition to an increasing demand for proof of outcomes, donors are slowly starting to understand the difference between two kinds of money in the sector: revenue and capital. They are starting to recognize that nonprofits cannot exist on revenue alone. Nonprofits must have infusions of capital every once and awhile to strengthen and grow their staff, technology, systems, fundraising. Call me crazy, but I truly believe that donors are becoming more open to making capacity capital investments in the nonprofits they love. That’s because donors are realizing that in such a stark economic environment those nonprofits that don’t have adequate infrastructure simply will not survive, let alone be able to adequately address the social problem they were organized to solve.
5. Increased Efforts to Rate and Compare Nonprofits
As nonprofit outcomes are increasingly in demand, donors become savvier, and the “nonprofit overhead” distinction diminishes, we will increasingly evaluate nonprofits based on the results they achieve, not on how they spend their money. But that requires that a whole infrastructure for evaluating and rating nonprofits emerges, just as it has for the financial markets. This has already started with Markets for Good, GreatNonprofits, and the changes Charity Navigator has made to how they rate nonprofits. I think this market for nonprofit rating infrastructure will continue to grow and evolve as we get smarter about focusing resources on the most effective nonprofits.
These are exciting times for the nonprofit sector. It seems that for the first time in a long time everything is on the table. And its up to nonprofits to understand the trends and where they fit as the sector evolves.
Photo Credit: zigwamp
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