Fundraising in the Current Economic Climate – Is Your Glass Half Empty or Half Full?

by David A. Mersky

As I travel around the country – and as individuals from around the country come to campus – it has become increasingly clear that, as far as fundraising and development is concerned, we live in interesting times.

About a year ago, the Dow Jones Industrial Average reached bottom. Fifteen months ago, Bernard Madoff was arrested. Eighteen months ago, Lehman Brothers, the global financial services firm, collapsed. By all indications, current realities reflect the worst economy since the Great Depression. According to a report from the Conference Board, a private research group, U.S. consumer confidence plunged 10.5 points in February 2010, raising concerns about the outlook for consumer spending. Consumer confidence is now the lowest since April 2009 and is far below the expectations of economists.

With low consumer confidence and a current unemployment rate of 10.6 percent, it is not surprising that there is both a loss of faith in and anger toward individuals and institutions responsible for creating solutions to the current economic situation. Several examples include:

• The American people’s initial enthusiasm and euphoria upon the election of President Obama has dissipated.
• Leaders and managers of philanthropic enterprises are now being questioned in a fashion that has never previously been the case. Some foundations and nonprofits have been severely crippled, if not wiped out altogether.
• Despite pressing needs, charitable giving has decreased in current dollar terms for the first time since 1987, as the chart below demonstrates.

I spend much of time counseling nonprofits throughout North America, the UK and Israel. And, during this past year, as part of the Fisher-Bernstein Institute for Jewish Philanthropy and Leadership, I, along with Amy Sales and Reuven Kimelman, have worked with representatives from ten agencies as part of an inaugural program on fundraising education and organizational change entitled Development at the Core.

I have learned much from my clients and from participants in Development at the Core. Most importantly, I have rediscovered the importance of optimism in the face of challenge in today’s fundraising environment, notwithstanding the voices of the doomsayers. From my vantage point, if there is even a drop of water in the bottom of the glass, I see it as overflowing. Here are some ways to use the current economic situation to your advantage:

Talk to donors: Pick up the phone and call. Set an appointment to visit. A gift solicitation does not have to be the purpose of every call. Use the time to thank donors for past contributions, and bring them up to speed about what is currently happening at your agency. Talk with them about a new initiative or project, or ask them for their feedback on an issue of current importance to your organization. In other words, engage them further in your organization’s programs and projects. And don’t forget that modest donors appreciate your call just as much as your largest donors. Conversations are crucial for building and strengthening relationships with mid- and lower-level contributors. Your efforts may well generate continuing financial support in months and years ahead. Your mid-level donors may even become major donors.

Strategize new alliances: Current economic realities make it an ideal time to focus on critical programmatic, financial or administrative opportunities that will help to support fundraising. Consider forming a strategic alliance, collaboration or partnership with another organization that could be beneficial to both. Raise the possibility in your conversations with donors. Once again, you will be engaging them with your organization and strengthening important relationships.

Prepare contingency plans: Clients of mine that have financial contingency plans already in place, or that developed such plans when they first saw signs of trouble, are in more stable financial situations than organizations without plans. Contingency plans offer a road map to follow. The ride may not always be smooth, but having a plan can help to avoid even more serious problems.

Reinvent your case for support: When asking for money, what is your strongest story? Making a strong case for support is not just for a capital campaign. You don’t need to be in campaign mode to rewrite your case statement. What has worked for you in the past may not be the story you need to be telling today. Think strategically about what your needs are and how your donors might respond. There is no better time than now to be sure your case is out in the community telling people who and what you are all about.

Plan for capital campaigns now, not later: No, I am not crazed with stress. I am a realist wanting to fill my glass. If you have a campaign in your future, the future is now. It takes six to nine months to complete a plan and a feasibility study to put your agency in position to move into a full-blown campaign. Nine months from now the fundraising environment will be stronger and you will regret not having done campaign planning, because those who did will be far ahead of you.

So, to summarize what I have learned in the past year…I encourage you to join the “glass full to the top” club. Meet with your donors and brainstorm about new and different ways of serving your community. Surround yourself with people who have positive energy and who have creative ideas. Look around and see what others are doing, and borrow ideas from successful people. Collaborate with successful organizations. Be an optimist!

David A. Mersky is Founder and Managing Director of Mersky, Jaffe & Associates, a consulting firm that provides financial and human resource development solutions to nonprofits and family controlled enterprises worldwide.

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Today, most nonprofits know that maintaining strong, positive brand positioning is as important to their health and well-being as are their activities aimed at keeping donors informed and engaged or their staff members motivated. Yet, like so many things we have to worry about, understanding what it takes to maintain brand excellence is markedly different than it was just a few years ago.

Today, with so much of a brand’s identity is channeled through informal social networking and other web 2.0 user-directed interactivity rather than paid advertising and traditional media coverage, how do you protect and nurture your brand? What and who do you measure to understand brand impact? And, does it make any sense to try to measure brand impact in traditional ways when influence and brand value have been put on the digital public common for all of us to tweet or blog about.

Your nonprofit’s brand value is no longer protected behind the marketing director’s gate. Rather, it now takes a very smart, savvy marketer to know how to let go of the urge to “manage the brand”( really outdated language that implies controlling the brand) and instead “guiding the brand experience” which is a more realistic way to understand and nurture brand excellence in a world where anyone can grab your brand identity, trash it, embrace it, and do who-knows-what-with it.

Nonprofit marketers need to stay both cool and current. You need to be in the moment; participate and know what people are doing with or saying about your brand and be poised to give those brand activists support that enhances the brand’s value (always in an honest and transparent way – like up to the moment and accurate information about your work; testimonials; facts; statements of performance) and prepared to dispassionately counter those unhappy people who had a negative experience with your brand (including those very few bad actors out there looking to destroy you) who may choose to virally spread negative messages about your organization.

Your job is not to be gatekeeper. That is over. Your job is to be always mindful of both the opportunities for brand support and enhancement (think of that unknown army of friends who each have 50 friends they tweet routinely) and ever watchful for the critics (both legitimate and otherwise) who will from time to time, put your brand identity through the wringer of public scrutiny.

Certainly, there is still a valid place for traditional, well-placed media stories and even paid advertising; but today the brand nurturing job is more about looking beyond the basics and realizing that your brand is an asset that people either want to associate with or not. Its’ value is determined by the marketplace. The question is what are you doing to assure they want a positive association between their personal brand and yours and what are your doing to make your brand one that everyone wants to wear? And, figuring out how to use the new metrics that matter so that you have a handle on the pulse of your brand as users experience it.

Gail Hyman is a marketing and communications professional who currently focuses her practice, Gail Hyman Consulting, on assisting Jewish nonprofit organizations increase their ranks of supporters and better leverage their communications in the Web 2.0 environment. Gail is a regular contributor to eJewish Philanthropy.

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from Crain’s Detroit Business:

Carrying on Max’s vision
Fishers continue legacy of giving

Five years after his death, Max Fisher’s philanthropic, civic and entrepreneurial legacy lives on – through his wife, five children and, soon, his grandchildren.

The Max M. & Marjorie S. Fisher Foundation, one of the largest family foundations in the state, with assets of $235.9 million at the beginning of 2010, continues to support many of the causes Fisher supported during his lifetime, including Jewish communities at home and abroad, the city of Detroit and local arts institutions.

Fisher left some philanthropic values for his wife and children, but no specific instructions.

… The foundation has made grant commitments totaling $53.8 million since 2007-2008, when distributions from Max’s estate moved to the foundation, said Executive Director Douglas Bitonti Stewart.

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Are you sick of having conversations with people with their noses buried in an iPhone? Are you that person?

Then put down the cell phone, stop the status updates on Facebook, shut down Twitter, sign out of e-mail and relax, as part of a National Day of Unplugging.

People across the nation will tune out to reclaim time to slow life down and reconnect with friends, family, the community and themselves for 24 hours, starting at sundown, Friday, March 19. The Sabbath Manifesto’s principles were created for individual styling, but for one day we are asking you to take on the challenge of Principle Number 1: AVOID TECHNOLOGY. Let us know how you interpreted this Principle.

How do you unplug?

Join Sabbath Manifesto in fighting back against the tidal wave of technology taking over society and our lives.

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For 30 years the International Fundraising Congress (IFC) has showcased ideas that have helped fundraisers change the world. To celebrate the 30th IFC, they’ve invited 30 of the sector’s leading minds to share weekly insights into the future of fundraising…

For more information on the IFC, check the Congress Website.

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from Philantopic:

Mass Morass: New Data Privacy Law

There’s a new Massachusetts regulation that affects nonprofits that access or store personal information provided by residents in the state. Do you accept gifts from Bay State donors and process their credit cards? Process or save copies of their checks? Are you seeing or holding the Social Security numbers of constituents?

A “yes” to any of these brings your organization within the purview of Title 201 of the Code of Massachusetts Regulations Section 17.00, Standards for the Protection of Personal Information of Residents of the Commonwealth. And compliance isn’t pretty.

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The Association of Fundraising Professionals Winter 2010 Public Policy Update contains information on the proposed caps on the charitable deduction, the IRA Rollover provision, the proposed Consumer Financial Protection Agency and the charitable mileage deduction. It also includes state issues in Massachusetts, Rhode Island and New York.

The update also covers the Canadian government’s recognition of National Philanthropy Day and the elimination of the disbursement quota.

Follow this link for the update.

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Formal Gift Acceptance Policies Help Donors as well as Non-Profits

by Robert I. Evans and Avrum D. Lapin

If history is any indicator, the Internal Revenue Service will audit only about one percent of the returns that individual American taxpayers file. And while some of these audits are done at random, many result from donors who may try to over-value their non-cash charitable gifts. This leads us to an important and perhaps critical recommendation for every non-profit: all organizations should create and implement formal gift acceptance policies that address any and all possibilities. Non-profit leaders should review these guidelines annually and be prepared to strictly enforce the policies.

In addition to making cash contributions, the IRS encourages individuals to donate items like clothing, food and even old automobiles to charities, by offering a deduction in return for these donations. However, there is a major problem with this system: it is up to the taxpayer to determine the value of goods that are donated. The IRS suggests that the value of donated items be between 1% and 30% of the original purchase price (unless special circumstances exist). For items valued at $5,000 or more, an appraisal is required.

Regardless of the size of the non-profit, there are many decisions to be made about accepting non-cash gifts. Here is a set of ten basic questions to address:

1. Will a donor receive “campaign credit” for all types of gifts-in-kind, such as re-paving the parking lot or installing new air conditioning equipment?
2. Will an agency accept real estate as a gift, especially knowing that it may be difficult to sell the property?
3. What is the minimum age that an organization wishes to accept charitable gift annuities?
4. Can unrelated donors merge their gifts to receive “campaign credit” for special naming opportunities?
5. How much of a gift must be received before formal, permanent recognition takes place?
6. Does your non-profit have procedures in place to accept appreciated securities?
7. Who pays for the formal appraisal of non-cash gifts that the IRS requires?
8. Even though the IRS says that non-cash gifts to a non-profit must relate to the purposes of the agency, who determines whether or not to accept these gifts?
9. If a donor gifts works of art, who determines where they will be displayed or if they will be sold?
10. Do you want to accept gifts of cars and/or boats as these are often difficult to liquidate and cause problems for donors as well as non-profits?

Other questions routinely develop about accepting non-cash gifts, especially when donors are motivated by other than charitable intent, which happens periodically. We assume that most donors – especially the largest – have financial advisors who craft gift packages that satisfy a number of their personal situations. We don’t want you to undermine your top donors but we want all non-profits to be sufficiently prepared for all situations. By developing formal acceptance policies your non-profit will be better equipped to anticipate these various situations.

Robert I. Evans, Managing Director, and Avrum D. Lapin, Director, are principals of The EHL Consulting Group, of suburban Philadelphia, and are frequent contributors to eJewishPhilanthropy.com. EHL Consulting works with dozens of nonprofits on fundraising, strategic planning, and non-profit business practices. Become a fan of The EHL Consulting Group on Facebook.

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from Civil Society Fundraising:

Continental drift: Changes in cross-border giving in Europe

The world did not have cross-border charitable giving in mind when it organised itself into separate nations. Charities, over the centuries, have been typically local or national although a relatively small number have always been truly international.  However, in recent years this has changed as both individual donors and civil society organisations have become so much more mobile in how they give and how they operate.

The amount of cross-border donations has increased. Correspondingly, so too have the frustrations of donors who naturally expect a tax benefit for their gifts.  For obvious reasons, governments have always been very reluctant, to say the least, to grant tax relief to a donor making a gift to a charity in another country. This reluctance affects not only lifetime cash gifts but legacies as well.

A temporary solution of sorts has developed over the years, in the use of an intermediary (such as ‘Friends of’ organisation) in country ‘A’ to receive the gift, issue the relevant tax receipt and convey the gift to the beneficiary in country ‘B’. The intermediary usually charges an administration fee for due diligence and other costs.  This, for example, is the solution of choice for gifts being made by US residents to foreign charities.  In Europe, a similar facility is offered by ‘Transnational Giving Europe’ (TGE), coordinated by the King Baudouin Foundation, in Brussels

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from MobileActive.org:

Texting for Charitable Dollars: The Definitive Guide to Mobile Fundraising

In aftermath of the January 2010 Haiti earthquake text donations to the Red Cross and other charities received enormous publicity, and generated a significant outpouring of donations. (SMS is an alternate term for text message – a160 character message sent over the mobile network)

The swiftness and the magnitude of the response made many nonprofit organizations take note. Appeals to donate swirled around via social networking sites such as Twitter, YouTube, and Facebook and generated numerous article in the traditional media.  There was even a widely seen public service announcement recorded by First Lady Michelle Obama.

… Naturally, text giving is now considered with great interest by many nonprofits as a tool in their fundraising efforts. Nonprofits should indeed understand clearly the strategies and technology behind donating via a mobile phone not just in times of catastrophe and emergency.  As more and more people have access to text messaging features on their cell phones (and as more and more carrier service plans include at least a minimal number of text messages a month), it is time for nonprofits to evaluate and clearly grasp how they can use mobile giving in their ongoing fundraising operations.

This article examines the process of using this still-new method of raising donations for charities – what it is, how to use it, and some of the issues to think about and plan for.

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