The Gift of Giving to Non-profits

As a development professional, I am passionate about my belief in the gift of giving to non-profit organizations. At this time of year, mailboxes are brimming with appeals from a variety of organizations, many groups who rely on fundraising dollars to support their worthwhile missions.

Aviv Centers for Living recently sent out an appeal that quoted the Talmud as saying, “One person’s candle is a light for many.” We took a walk down memory lane recalling that when the original founders of Aviv gathered in 1945, the world was a very different place. Gasoline cost about 15 cents a gallon. Elvis Presley debuted at age 10. Harry Truman was sworn in as the 33rd President of the United States as George and Barbara Bush wed and the United Nations was formed. While the darkness of World War II clouded the universe, a group of citizens gathered in Lynn to create light for seniors and founded the Jewish Convalescent Home, fondly called “the Home.”

Well over 66 years ago, while the world was a different place, the desire for good people to galvanize for grand purposes was just as important as it is today. As you prepare for the holidays, take a moment to look in your heart and make a donation to a non-profit organization. It may be the best gift you give this holiday season.

Volunteers: Friend or Friend?

One of my favorite volunteer board members - the chair of the development committee at a university I worked for - once said to the entire board, "Remember, WE volunteer board members are the fundraisers here. The staff is hear to help us do our jobs." This resonated for me because I started out in development as a volunteer for one of the large Jewish Federations. We (the volunteers) always understood that the task of asking for gifts was OUR responsibility, and that the campaign wouldn't be successful if we didn't do our jobs. Believe me, it was difficult, and took a lot of time; and we all had day jobs, too (mine was in the real estate business.)

By the time I was working at that university, development had changed - fundraising was much more in the hands of the professional staff, with limited support from the volunteers. That trend has continued, and the large size of the development staff at some institutions is evidence of it. But that volunteer chair still understood the power of the volunteer ask!

I still believe, as he does, that the best development work is done by volunteers. When a business person asks a peer to support an organization that he or she believes in, the ask is almost always successful. When a development staff person makes a similar ask, the result is not nearly as assured. Peers asking peers still works best! Perhaps it works even better today because it is not as common.

This is not to say that development staff isn't important. I still work in development, and believe that my work in cultivating and soliciting major prospective donors is crucial to the success of the organization I work for. But I also believe that when I can get the Board Chair, or another volunteer, in the room with the prospect, it is much more likely that we will get the gift we are seeking. Sometimes it takes a volunteer just to get the phone answered or the appointment set! Someone once said that when you get the right person doing the ask for the right project at the right time, magic happens. As a professional development officer, I aspire to succeeding at that task, and really try to find the "right person", knowing that it is sometimes me, but is much more often a volunteer!

It really pains me when I hear development staff members deriding volunteers as unskilled or "adding work" to "our already busy days." I am currently volunteering myself (yes, I sometimes take a "bus man's holiday") with an organization that has a half-time development officer who wouldn't be accomplishing nearly what she does if it weren't for a small group of volunteers dedicated to the success of the organization who are doing the hard work of developing strategies, cultivating, and soliciting major donors. I have never heard her complain about a volunteer!

Volunteers are our best friends in development. If you would like some help in figuring out the best ways to work with yours, give me a call.

What does it mean to serve on a non-profit board?

There was a wonderful article in today's New York Times titled, "Trustees Find Board Seats Are Still Luxury Items." It carries a sub-title on the NYTimes.com website of "To Join the Met's Board, Have a Checkbook Handy." The sub-title is actually unfair. The article does talk about the importance of having board members who bring things other than money to the table.

However, the most important thing about the article, in my mind, is that it discusses openly the importance of having expectations understood when recruiting new board members for non-profit organizations. In particular, the article focuses on the importance of board members making financial commitments to the organizations on whose boards they serve. Two wonderful "cliches" are mentioned: "Give, Get, or Get Off," and "bring your Time, Talent, and Treasure," to the board. While both of these have been said over and over again, it doesn't hurt at all to remind our non-profit board members of their importance.

Board members who believe that "I give my time, so I don't have to give money," must be reminded that time alone is not enough. If for some reason they are not able to make a financial contribution, they must reach out to others for such commitments. If they are able to give and choose not to, they have no business serving on the board, and arrangements should be made for their removal!

The article also talks about the process of involving potential board members in the life of the organization before asking them to serve on the board. It is wonderful to have this reminder of the importance of building relationships - with our board members, as well as with our prospective donors - in the life of non-profit organizations. While the article is specifically written about the "premier" arts organizations in New York City, its themes are applicable to all non-profits.

Too many boards today forget these rules, and don't understand their most important roles in non-profit governance, setting policy and providing money (giving or getting!)

If you need help in reminding your board about it's role, or if you are a board member who wants to really help your organization, give me a call. Let's talk about ways to re-build the expectations of both your organization and your board.

Telethon Telethon

So here I am, a philanthropy professional for over twenty years, and I hate getting telephone solicitations. I even ran the telephone program at Brandeis for several years. I know, "dialing for dollars" is the most efficient way to raise funds from a house list. It has a much better response rate than direct mail, and is second only to face-to-face solicitation - even for major and campaign gifts. Yet I hate being on the receiving end of the calls. I always answer, I'm always polite, and sometimes I even engage in a bit of conversation with the caller (especially if it's a cause I like,) but I won't make a pledge over the phone. Am I being hypocritical when I tell my clients to use phoning as a tool in their fundraising program? I don't think so, since it is still effective with many, many people (just not me!)

I really think the combination of e-mail and phone might just be the best set of fundraising tools these days. Unfortunately they both have problems - answering machines/voicemail for calling, and spam filters for e-mail. Viral e-mail is probably the best way to go at the moment. Get your friends to e-mail their friends, etc. Of course viral phoning is the VERY best - get your friends to CALL their friends. Then it's not a telemarketing call! It's a personal solicitation! It starts with a relationship and builds on the relationship for the benefit of the non-profit.

As always, it's all about building relationships. If you'd like some advice about building your philanthropic relationships, e-mail or call me. I promise I'll answer!

Nonprofit hospitals - are they?

I just read an article in today's Boston Globe about Partners Healthcare's financial results for the quarter. Apparently Partners is reporting a large deficit for the first nine months of the year, but didn't do as badly in the third quarter as it had in the prior two. If the trend continues, the article says, it will be the first annual loss in the "company's" history.

What's missing from this article? There is not a single mention of the fact that Partners Healthcare is a nonprofit organization, and the parent of two of the best hospitals in the country (along with a number of other smaller units.) How does Partners (and Brigham and Women's Hospital and Massachusetts General Hospital, it's two big members) raise money from the philanthropic community with this kind of news? It's part of the problem that hospitals all over the country have in making the case for philanthropic support: they are treated in the media (and sometimes behave) like for-profit companies, and the general community gets confused.

In the whole current debate about healthcare reform, I have heard only one comment - on the radio the other day - that mentioned that most hospitals in the U.S. are non-profit. And hospitals are mentioned, for the most part, in the same breath as the other "villians" in the healthcare meltdown, big pharma and the insurance companies.

This is a real shame. I have always felt that medical care is a right, and the provision of it is a mission best served by nonprofit hospitals, and that those hospitals deserve the support of the philanthropic community. But how do we best make the case for that support? If you're interested in further thoughts on this issue, e-mail me, and I'll send you a copy of an article I wrote on this subject.

Death of a Theater

I was saddened to read this week about the closing of the North Shore Music Theater in Beverly, Massachusetts. This non-profit theater had been around for 54 years, but couldn't survive a combination of a fire, borrowing to rebuild (beyond what the insurance paid,) an apparently rocky transition of leadership, and the precipitous downturn of the economy. I don't know all the details, but what I have learned about NSMT over the past several months seems to provide some lessons for non-profit arts organizations, and other non-profits.

Full disclosure: I learned about NSMT this past fall, as I was in the midst of negotiating with them for either a consulting contract or employment as their full-time VP for Development (it wasn't clear at the time which way they wanted to go, then became clear that neither would be possible due to their financial disaster.)

One of the stories I heard from several sources was that while NSMT has always been a non-profit theater, it didn't like to admit it! That is, under the previous administration, the theater attempted to operate on its ticket revenues (and education, etc.) alone. It really didn't want to behave like a non-profit by making a substantial effort at development. Only in the past year or so had the theater begun putting a donation envelope in all of its programs and mentioning that it depended on contributions to help fund its programs in its evening-opening announcements.

After the fire in 2005, there was apparently some fundraising done, but the loss from the fire, the shortened season, and the reconstruction was apparently more than $4 million, and this debt was never paid down by fundraising or any other means. Understand that I am not suggesting that a campaign to pay down debt would have been easy - it's never easy to fundraise to pay down debt. However, the rebuilding campaign that was held apparently did not raise nearly enough. Perhaps this is a case (I've seen this kind of behavior in other institutions) of wanting to build a certain kind of facility, and deciding to do so whether or not the money has been raised. "We can borrow the money to finish the building, and then raise the money later to pay off the debt." Too many non-profits say this, and then end up in trouble. The truth is that the board has the responsibility to either find the money to pay for the building at the time, or find the money to pay off the debt. Too many non-profit boards don't live up to their fiduciary responsibilities to oversee the staff when it comes to making realistic financial decisions, or to raise the money to fund those decisions. This is the hard work non-profit boards must do, and too often do not. North Shore Music Theater is not the only non-profit in the Greater Boston area that has had financial difficulties in the past few years because of overspending on construction projects not fully funded by donations or income.

We hear often about how important it is for non-profits to behave more like businesses. This is true especially when it comes to living within your means, but this is also one of the most difficult things for non-profits to do when it comes to fulfilling their missions. It is very hard to say "no" to mission-critical expenditures. So where does the money come from? It is the responsibility of the board to provide the funds needed to fulfill the mission of the organization. That doesn't mean board members need to give it all themselves, but if they aren't willing and able to participate fully in the process of raising the funds needed for the organization to fulfill its mission, they probably shouldn't be on the board. What this really means is working to develop relationships with potential funders (mostly individuals and families, but also including corporations and foundations) that will lead them to make gifts to the non-profit. The hardest thing for most organizations to figure out is that you can't just turn on the spigot of charitable contributions. If you haven't built relationships before you need the money, you almost certainly won't be able to raise the money when you need it! This is the sad cause of the failure of the North Shore Music Theater. The new administration had recently begun building relationships with potential funders, and there were some promising starts; but unfortunately there weren't enough potential donors ready to step in when the crisis really hit.

So we must sadly say "good-by" to the North Shore Music Theater. There are apparently still some options for rebuilding. If a buyer can be found to take over the property and lease it back. Or if an "angel" comes forward. Unfortunately, there were not enough relationships built with those who might be able to help for any of these possibilities to be very likely. Too bad.

So what's the takeaway? It's never too early to start a development program, but unfortunately it can get to be too late. People make gifts to organizations they feel connected to - especially large gifts. So they won't respond to emergency appeals if they haven't already been connected. Want to talk about ways to better connect your donors? Give me a call.

New ideas in fundraising

So, everyone is trying to figure out new ways to raise money. There is tremendous fear that direct mail won't work anymore, that telephoning is too intrusive (it is, but it works!), and that the economy is too terrible for people to come to galas. So what's a non-profit to do?

It seems to me that it all comes down to development, not fundraising. Now that won't help you if you need to raise a lot of money today or tomorrow, but development is what is needed to build philanthropic income. People give to the organizations they feel connected to and passionate about. And they give major gifts to the organizations they feel most connected to. And, the most cost effective way to raise money is through major gift solicitations. I even read an article many years ago that argued that annual giving programs should be abandoned because they cost too much, and for the same expenditure in major gifts much more money would be raised. I'm not willing to go that far because I think annual giving programs can provide a base of income for the organization, as well as broadening the base of potential major donors (especially true for organizations that don't have a "natural" constituency like alumni or grateful patients.)

So what does development mean? Developing relationships that make people feel connected to your organization. I know... this is development 101. But I think all too often we forget the crucial importance of relationship building in the rush to figure out how to raise a lot of money by tomorrow. If we've been doing the relationship building, and suddenly have a crisis that requires more money, we have the prospective donors ready to call upon to fill the gap. If we haven't built the relationships, we're forced into an "emergency" direct mail letter, or telemarketing program. These might raise the money, but they won't make anyone feel good, and they won't build for the future. The big challenge is to continue to build relationships that provide a pipeline for future gifts, while at the same time raising current gifts.

One of the best ideas I've seen recently is also one I have seen in the past. It's the "virtual" gala. A number of years ago, a library foundation sent out an invitation to people to "stay home and read a good book," and send us a gift. I never heard how much it raised, but it sounded like a great idea to me. I have just heard about the International Hillel Foundation running a similar program, but with a twist that makes it development in addition to fundraising. They have recruited volunteers around the world to host small house parties on the same night. Each has a fundraising goal, and each will also serve the relationship building function. To bring everyone together, there will be two live web feeds that can be viewed in real-time, or delay if appropriate, coming from the house party being held at the home of the international chair. Sounds like fun to me, and it sounds like the kind of event that could raise money now and build relationships for the future!

Do you have ideas for new ways to build relationships and raise money? Do you need some? Give me a call if you'd like to explore some possibilities.