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Tuesday, June 30, 2009
We recently conducted a client focus group to get insights from customers who are using a new product of ours called DonorPages. It helps nonprofits use social networking to assist supporters soliciting donations or sponsors for events (or virtual events). Anyway, the feedback was really interesting and incredibly useful -- and not entirely what we expected.
I suspect that most nonprofits have never thought about organizing a donor or constituent focus group, but I think it is a great idea and not hard at all. Here are a few tips based on our experience:
Virtual focus groups - A simple conference call is easy to setup and not at all costly (even free). Since you don't have visual queues like raising one's hand in a virtual meeting, it usually best to keep them to about 6 participants.
Have a clear theme - What are you trying to learn? For example it could be what aspects of your mission are most important to donors or how to improve your communication with supporters. Focusing on one main topic helps keep the sessions from getting out of control.
Prepare just 3 or 4 questions - Keep them open-ended to encourage more in-depth responses. Listen and ask probing follow-up questions when appropriate. To "break the ice" ask participants to introduce themselves and answer a short question like how long they've been a supporter.
The moderator - Speak as little as possible. Your job is just to ask the questions, facilitate discussion by keeping it on topic and encourage participation by all. Let participants know that you may need to limit their comments so everyone gets to speak.
Record the call - You probably want someone else listening and taking notes but recording the call makes it easy to ensure all the insights get summarized. It is also a great way to share information with others who don't participate.
In this challenging economy, it is that much more important to stay in touch with your constituents. What better way than to ask them what they think? So try a focus group -- and let me know how it goes.Labels: fundraising basics
Wednesday, June 10, 2009
Many non-profits are thinking about using social networking tools like Facebook and Twitter to expand their communication with donors, volunteers and other constituents. We recently decided to setup a Facebook page for our fundraising product, DonorPerfect (check it out). I also created a personal facebook page to get some first hand experience with what this is all about.
I learned a lot. Besides discovering that there was no way my 13 year-old son would let me "friend him," I was very surprised to see how many fully-grown and busy adults use Facebook. More importantly I was amazed at how effectively I could keep up with what they're doing. I'm still not ready to make it my browser home page, but I can now appreciate how systems like this can become addictive (although not essential).
So is this a new paradigm that every non-profit should be experimenting with or a distraction? My sense is that it is both! It is technology that has lots of interesting potential uses, but it can be a significant time-waster.
I hope to share some additional insights as we gain experience with our product page, but for now I'll share the following suggestions.
1) If you don't have a personal Facebook or LinkedIn account -- set one up. It's easy and you will be surprised by who contacts you (and how many how quickly!).
2) If you decide to create a Facebook page for your organization -- have a clear idea of what you want to try to achieve. Is it an alternative method of keeping current constituents informed or a way you hope to attract new supporters?
3) Don't expect significant immediate results. Social networking is viral but it takes time to spread.Labels: facebook, social networking
Friday, May 15, 2009
Like everyone in the non-profit community, I've been horrified by the Bernie Madoff scandal and its impact on so many non-profits and foundations. Most of what I've read has focused on the magnitude of the fraud, how it could go undiscovered for so long, and the impact of this massive loss of resources on the nonprofits affected.
There's no doubt that the charities and foundations that lost money will suffer in some immediate and unfortunate ways, but I'm worried that non-profit boards and investment committees could take the wrong lessons from this scandal and make decisions that will impose additional financial hardship on their organizations.
To me the lessons from the scandal are really these:
Use common sense - If something seems to good to be true (e.g. an investment strategy that always yields positive results), it probably is. Certainly there are a few (very few) talented investors like Warren Buffet, who have outstanding investment records, but unlike Madoff, Buffett makes no secret of his investment strategy and has results that are easily analyzed and validated.
Don't invest in what you don't understand - There is simply no good reason for a non-profit to incur the costs, risk, and liquidity associated with hedge funds, private-equity and money managers with complex investment strategies. I doubt their ability to consistently produce superior returns, particularly after fees, and its unlikely that non-profit boards have the time or expertise to evaluate and oversee such investments.
Diversify - The fact that some of these nonprofits had all or most of their investments with a single money manager and investment strategy violates the first principal of sound investing. Depending on the amount of assets, investment committees should try to not have more than 5% of their assets in a single investment, unless it is a mutual fund that is already providing a diversified portfolio -- in which case it may be appropriate to have as much as 25% in such a fund.
Understand Risk - It's ironic that the appeal of investing with Madoff was the idea that the investment would provide consistent & attractive returns -- making it "safe" from periodic losses. The real and under-appreciated risk was from the possibility that these results would not continue or as it turned out weren't real -- and the resulting lack of diversification and due diligence.
Don't over-react - My fear is that in the wake of this scandal (and the significant decline in the stock market), non-profit boards & investment committees will decide to keep all or most of their funds in "ultra-safe" investments like treasury bills, money market or bond funds. These are low-yielding investments and although they may reduce the risk of direct loss of asset value, they virtually guarantee a slow but steady loss in the buying power of the nonprofits savings due to inflation. Just review any long-term inflation-adjusted graph of investment returns such as this one and note the negative "real" (after inflation) returns for Treasury Bonds, and T-Bills during the 60's & 70's.
My view is that unless your non-profit has a near-term plan to use the money that is invested for a particular project, your objective should be to take a long-term view toward preserving the assets while providing income and/or appreciation that exceeds inflation by a realistic amount (historically 3.5% is pretty realistic). This income/appreciation can then be used to fund operations or larger one-time projects or saved to provide additional financial stability in case of financial crisis. Achieving this doesn't require much time, expertise, or cost. It can be as simple as investing in four or five no-load mutual funds like those offered by Vanguard. I favor index funds and would recommend that at least one of them be Internationally oriented.
My intent is not to criticize the decisions of non-profit boards or investment committees, but simply to share my observations from many years of successful investing. Non-profit boards have a real challenge -- striking the right balance between risk and return. It is just important that they consider that being too cautious has the potential to hurt the organization as much as being too aggressive.
Tuesday, January 20, 2009
Everyone's mother did, and thanking donors is a basic rule of successful fundraising. That's why I'm amazed at how often I don't receive a gift acknowledgement or when I receive a thank-you letter weeks or months after my donation. I'm pretty certain the charity's Executive Director or Director of Development isn't aware that this is happening, so here are a few potential causes (and suggested solutions).
1) DELAYS IN ENTERING GIFTS - Typically, sending a donation acknowledgement letter is the last step in entering the gift into fundraising software and many nonprofits can't keep up with the volume during peak periods like the end of the year. Two ways to address this are:
Encourage online donations - If your website has been setup to accept online donations and automatically provide donors a gift receipt and thank-you email, encouraging year-end giving this way ensures a fully automated and timely acknowledgement. Assuming your online donations automatically download into your fundraising system, it even cuts down data entry so that a more formal thank-you letter can be generated quickly and easily.
Use temps or volunteers - They're the most cost-effective way to handle seasonal peaks in work. This can be particularly easy to implement if your organization is using a web-hosted fundraising system since temporary workers or volunteers can be setup to work from their homes.
2) COMPLEX PROCESSES TO GENERATE THANK-YOU LETTERS - If generating a thank-you letter requires lots of steps or manually editing letters each time, consider ways to simplify and improve the process such as:
Have pre-written thank-you letter templates for your most common types of gifts (new donor, donor who gave more, donor with company matching option, etc.). Each letter should be setup to automatically merge name, address, gift details, etc. directly from your fundraising database (why would you ever want to have to type the same information twice?). The best fundraising systems allow you to just pick which acknowledgement letter you want to send as you enter each gift, and then generate all of them as one print-batch.
Personalization - Including a personalized P.S. or note is a great idea and it's possible to setup your thank-you letter so you can enter your custom message as each letter is produced. Often handwritten messages are even more effective and can be added once the letters have been printed.
3) NON-STANDARD TYPES OF DONATIONS - I frequently make donations of appreciated stock, though I now do this through a donor advised fund I established with the Vanguard Charitable Endowment Program (see my earlier post for why I love giving this way). Anyway, I'm sure most nonprofits get a relatively small number of donations this way and they haven't established a good procedure for acknowledging the gifts.
Create the necessary acknowledgements and processes - Although less frequent, gifts of appreciated assets, grants from donor advised funds, matching gifts and other types of gifts involving "soft credits" are typically larger and will continue to become even more popular, so invest a little time in ensuring you can record and recognize them efficiently and accurately. Look for another post with some tips on this soon.
I'm sure these aren't the only challenges that cause delayed acknowledgements, so please feel free to email me a dschoenberg@softerware.com with other problem areas you've identified. I promise to promptly send you a thank you acknowledgement if you do.Labels: fundraising basics, gifts of appreciated assets
Tuesday, December 16, 2008
Last week, I listened to Gerda Weissmann Klein speak at the school my kids attend. She was simply amazing. She spoke about her experience as a survivor of the Holocaust, but her real message was that we still live in a world where millions of people suffer from intolerance; but it is also a world of great compassion where everyone of us can -- and should -- do something to make things better.
I was truly inspired and motivated. So I asked myself what I ask my employees when they get excited about something: "So what are you going to do about it?"
1) I'm going to try to share her message -- starting with this post.
2) I just made a grant recommendation via my donor-advised fund to her foundation http://www.kleinfoundation.org/
3) I also thought there were two important lessons I took from this experience that I think are pretty relevant and useful to virtually any non-profit.
The power of speaking - Would I have been as motivated to make a donation or act if I had received a letter from Gerda? I doubt it. Sure most people aren't blessed with Gerda Klein's ability to tell a story, but all you really need is a passion for your cause. Seek out face-to-face opportunities with groups large and small to share your vision and why your mission is important to you. If you provide a clear and specific call to action, I believe many in your audience will be motivated to get involved.
Multiplying your impact - One of the Klein Foundations projects provides teachers with an education kit of materials to assist them in teaching tolerance. It's been distributed to over 122,000 teachers, and as a result it has been used to teach over 12,000,000 students around the world! Non-profits can use this same concept of "Multiplicative Effect" by harnessing the power of your constituents' social networks. Simple viral email campaigns can be used to generate awareness of your mission, advocate social action and of course for fundraising. Today's headlines may be disheartening with tales of greed and economic woe, but I for one agree with Gerda Weissman Klein. The world is filled with way too many energetic and caring people to not be optimistic about our ability to solve problems and give our children a better world to grow up in. You don't have to be rich, you don't have to be famous, you just have to care. And share your story. Labels: fundraising basics, social networking
Monday, December 8, 2008
Creating a donor advised fund with the Vanguard Charitable Endowment Trust was one of the best philanthropy decisions I've made in the last couple of years. Why? It has dramatically reduced the time and effort required for me to make donations of appreciated securities.
In general, giving shares of appreciated stock is incredibly tax-efficient because you eliminate paying taxes on the capital gain, but it can be a hassle. The nonprofit must have a brokerage account and then you (the donor) need to get your brokerage firm to transfer the shares. It also takes extra effort to make sure the charity knows where the transfer came from, and since most charities get relatively few stock donations, I often found getting a correct acknowledgment of my gift for tax purposes required extra effort. As a result, I gave appreciated stock only when I was making larger multi-thousand dollar donations.
The donor-advised fund lets me make a single large donation of an appreciated stock, whenever I want. In my personal example, I know the staff at Vanguard handles this type of transaction all the time, so they make sure the transfer happens as I've requested, and I always get an immediate acknowledgment of the gift. Vanguard automatically sells the security and credits my charitable fund with the proceeds, which are then invested in the investment vehicle of my choice. To request grants to organizations I want to support, I just go online and put in a request. If I've given to the organization before, there is virtually nothing I need to enter other than the amount I'd like to see donated. Once reviewed and approved, a check is sent to the organization with information that lets the non-profit know that I have provided them a grant. It couldn't be easier!
Its better for the nonprofit too because:
1) They get a donation in cash and don't have to deal with the effort and expense of selling the donated stock.
2) I give more. Why?
Two reasons: The minimum grant request is $500, which is often more than I might otherwise have given the organization. I've also found that because I don't have to decide which specific charities I want to support when I donate the stock, I am more comfortable giving a larger block of stock. I've found that once I've made the contribution to the fund, I tend to make more gifts, partly because it is so easy and partly because I feel why not put the money to good use, rather than just letting sit in the donor advised fund.
So if you are philanthropically-oriented and have appreciated assets, particularly stocks, I highly recommend creating your own donor-advised fund. I also encourage non-profits to promote donor-advised funds to contributors that have given, or expressed an interest in giving, appreciated assets. It will make the process easier for you and the donor, and I'll bet will ultimately result in more donations to your cause.Labels: donor advised funds, gifts of appreciated assets
Thursday, October 30, 2008
Over $600 million dollars, with a record breaking $150 Million raised in September -- in the midst of a steeply declining stock market and widespread economic worries. What is the Obama campaign doing right and what can your non-profit learn from this success?
Small donations can really add-up - Consider this quote from a recent LA Times Blog post:
"The Wall Street crisis appears to have had little effect on Obama's small-time donors. He expanded his fundraising base by 632,000 individuals in September to a record total of 3.1 million -- most of whom gave in small amounts. Roughly half of the $605 million Obama has raised has come from small donors, and nearly all of them give over the Internet."
http://latimesblogs.latimes.com/washington/2008/10/barack-obama-to.html
Reduced response levels from direct mail and the allure of major gifts can cause nonprofits to focus less effort on small donors, but ignoring smaller donations is a mistake. The Internet can provide a remarkably efficient and effective tool for collecting large sums in small amounts.
But what is bringing all these donors to the Obama website to give?
Great content - Check out Obama's website. There is lots of real information for visitors to learn about the candidate's positions on important issues, but even more importantly many calls to action to get involved, not just by making a donation, but volunteering, sign-up for email, etc. Giving people a reason to visit your website and multiple options for becoming involved is certainly lesson #1.
Effective email list building - Its pretty hard to go anywhere on the Obama website without providing your email address and the campaign has collected millions of them and used them very effectively to solicit financial and organizational support.
Leveraging supporters for personalized donation requests - The Obama campaign has not only mastered the use of social networking tools like Facebook, MySpace, etc., but they've provided supporters with simple tools to solicit friends and family to get involved and make an online donation or sign up for a mailing list. These personalized donation requests have been another critical piece to the growth of Obama's email list and online fundraising success.
Creative use of technology - If you think personalization only applies to soliciting donations, read this wonderful post about someones experience after making an online donation to Obama.
http://authenticorganizations.com/harquail/2008/09/23/obamas-website-made-me-cry/
Compelling message - Certainly a critical aspect of the Obama campaigns successful use of technology wouldn't be possible without his strong and motivational message. Fundraising success always requires communication that inspires people to action and Barak Obama has proven himself a true master of this. Although you and I may not have Obama's gift for communication, we can still apply this lesson (Inspiration = Motivation) when crafting email donor solicitations and website messaging.
Doing it well takes time and energy - The Obama campaigns online fundraising success didn't just happen, they have clearly spent lots of time and money developing and refining their website, emails, and messaging. Undoubtedly each of their successful efforts was proceeded by numerous less successful ones with their ultimate success the result of continuous testing and refinement.Labels: donor email addresses, fundraising basics, online donations
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