ice bucket challenge
December is often a fairly quiet month in the world of social change writing because of the holidays and time off, but there was still some great stuff to read. From Giving Tuesday, to Teach for America’s 25th anniversary, to philanthropy buzzwords, to social media trends to watch, to a critique of Charity Navigator’s naughty and nice list, there was a good bit to think about in the world of social change.
You can read past months’ 10 Great Social Innovation Reads lists here.
- Writing in the Harvard Business Review, Umair Haque provides a scathing critique of American politicians and pundits and the dirty little secrets they are harboring about our economy. As he puts it: “We don’t live the lives we were meant to by merrily shoving Artificially Fried Chicken Flavored Dorito Slurpees down our gullets while watching our societies crumble. We live them when we build things. Great things. Worthy things. Noble things. And the greatest, worthiest, and noblest of all things that mankind has ever built are not apps, drones, corporations, or profits. They are societies in which every life counts. In which every life is truly, fully lived.” Wow.
- And speaking of the disparities in our economy, there is growing concern that wealth inequality is making its way into philanthropy. The super rich are disproportionately making up American giving and are supporting their own self interests (i.e. their alma maters, donor advised funds that provide personal tax benefits but no social benefits) as opposed to a redistribution of wealth to the poor.
- Teach For America, the often heralded nonprofit that sends recent college graduates into challenged schools to teach for 2 years, marks its 25th anniversary this year. NPR reports on the challenges the organization faces, including a “self-described TFA resistance movement [with] former corps members [who] say their youthful idealism was cynically co-opted by a group that, in the big picture, acts to the detriment of public education.” Yikes.
- Amazing blogger David Henderson from Full Contact Philanthropy took a writing hiatus earlier this year, but he’s back with a vengeance, and I am loving every one of his posts, especially December’s critique of Charity Navigator’s “naughty and nice list”.
- As is her annual tradition, Lucy Bernholz offers her 2015 philanthropy buzzwords. My personal favorite are “artivists” and “citizen science.”
- I would love to see more nonprofits (and foundations) getting into the advocacy game. Rick Anderson, writing on the Markets for Good blog, provides a really interesting case study of how Washington Nonprofits, the state association for the 58,000+ charitable organizations in Washington State, has been using data to better coordinate with state agencies, elected officials, other nonprofits and foundations.
- December marked the third annual Giving Tuesday, and it was the most profitable yet, raising over $45 Million. Perhaps we have a movement?
- The Wild Apricot blog offers 5 Social Media Trends That Could Impact Nonprofits in 2015.
- Kate Barr from the Nonprofits Assistance Fund encourages nonprofit leaders to stop fearing money. As she puts it, “Let’s eliminate the fear of finance from the nonprofit sector. It doesn’t serve us personally or organizationally. Why? Because nonprofits with strong financial leadership are better equipped to deliver on their promises to the community, explore new territories and foster innovation.” Amen to that!
- The fundraising anomaly of last summer’s ALS Ice Bucket Challenge left a lot of outstanding questions. Not least of which is whether ALS would be able to retain any of those new donors. Beth Kanter talks to ALS CEO Barb Newhouse about exactly that question.
Photo Credit: US Department of Agriculture
I have to be honest. I am so sick of hearing about the ice bucket challenge that I am loathe to write about it. But I wonder if many in the nonprofit and philanthropic sector are falling victim, yet again, to shiny object syndrome, so I feel compelled to say something.
To me the ice bucket challenge is yet another example of what happens so often in the world of fundraising. Nonprofit board members and staff hate fundraising, so they desperately search for a magic bullet to make it all go away.
Sometimes that magic bullet is “an endowment,” sometimes its “earned income,” more recently it has been “crowdfunding.” This month it’s a form of crowdfunding taken to the extreme, the ice bucket challenge. Some have been so swept up in the hype that they have gone as far to say that the challenge is “rewriting the charity model.”
The reality is that if you want to create social change you need to develop a sustainable financial model that aligns with your long-term goals. It’s not sexy, it’s not easy, and I’m probably one of the few people on this planet who thinks it’s fun. But there it is.
While many nonprofits are scrambling to figure out how to create their own ice bucket challenge, and some thought leaders are offering tips along the way, maybe we should all just take a step back.
Let’s be very clear. ALS’s close to $100 million windfall is not a revenue stream. It is a one-time infusion of money. Yes, ALS may try to replicate the ice bucket challenge on a regular basis, but the stars will never align in quite the same way, people will move on to the next shiny object, and the money will eventually fade.
Because this pile of money is not a revenue stream, ALS can’t and shouldn’t add long-term staffing or programming because the money won’t be there next year. At the same time, they probably can’t create an endowment because the donors’ intent was not for the money to sit in a bank account. Regranting the money is also tricky, again because donor intent was for it to go specifically to ALS. In all of this ALS will be under the microscope, because as Ken Berger of CharityNavigator cautioned, a year from now everyone will be asking where the money went.
One of the few paths that I see for ALS is to treat the money like capacity capital. This could be an opportunity to invest some of the windfall in building a stronger organization by investing in technology, infrastructure, and systems. And they could do the same for their affiliates. They could require capacity building plans and budgets and invest in those plans accordingly. They could, in essence, create a $100 million capacity capital investment fund for the ALS system.
But the point is that far from being a great thing that all nonprofits should strive to emulate, the ice bucket challenge creates a complex and potentially damaging problem.
So instead of spending board and staff time trying to dream up the next ice bucket challenge, please, please, please spend that time and those resources building your financial model, by creating a long-term financial strategy, raising capacity capital to build your revenue-generating function, developing a compelling strategic plan in which people will want to invest, and growing and educating your board.
These are the ingredients for a robust, sustainable financial model. Not a bucket of water, a video camera, and a social media stream.
Photo Credit: StoiKNA