The WorkingPhilanthropy Blog

Pardon the interruption

2009-10-05T16:43:36Z

For the past few months we have been focused on creating new products and services for our sector, so we have limited our communications to 140 characters or less AKA Tweets (@workinglori and @lawson_david). Now that we have helped to launch DonorTrends, we are getting back to our blog.

While we enjoy the brevity of Twitter, and we will keep Tweeting, the blog gives us the freedom to say it in as many or few words as we want as well as include multi-media content when it makes sense. There is a lot of talk about the blog being passe but we believe it has a place in the conversation.

A very good thing that happened while we were away is the economy has started to show some signs of life. For fundraisers this is small beam of light towards the end of what has been, and continues to be for most, a very long, dark tunnel. We certainly hope you have continued to be out there asking despite so many experts saying wait wait don’t ask now!

Recently we talked with an old friend that works for a small non-profit in Florida who said she is having a great year and in part this is because so many of the donors she is visiting are not being visited by their Alma Maters and the large charities.

No rose-colored glasses here - we do know that all is by no means well and as we approach the all important Q4, the following chart from Nielsen Claritas will give you pause and remind you that it will take a great effort to make this a successful fundraising year. Nielsen asked quite simply, “At this moment, the time to buy the things you want and need is…” 81% answered either “Not so good” or “Bad”. You can click on the chart to read the full article.

We are glad to be back blogging and as always we welcome your comments. If you wish to hear from us daily, follow our tweets.

Fundraisers feeling blue need to think green

2009-04-20T12:10:01Z

At the same time we are losing blue collar jobs we are starting to see more and more green collar jobs created. An example is NatureWorks, a company headquartered in Minnesota with a manufacturing plant in Nebraska. NatureWorks sells bio-degradable packaging:

“Ingeo™ biopolymer is the world’s first and only performance plastic made from 100% annually renewable resources. Corn-based Ingeo™ biopolymer offers the cost and performance necessary to compete with traditional petroleum-based materials in the packaging and serviceware markets. Clear and strong like petroleum-based plastic, yet Ingeo™ biopolymer can be commercially composted”

Simply put the packaging goes back into nature rather than polluting it.

Their latest client is Frito-Lay which plans to use the packaging for their Sun Chips brand. The plan is to launch the new packaging on Earth Day 2010. Sales are going so well NatureWorks is looking for a new manufacturing plant to meet demand. You can search for companies that use their products at NatureWorks Partners.

NatureWorks is a joint venture that includes Cargill, a company that has been cutting jobs over the past year and just released a quarterly report showing a 68% decline in earnings. What does this mean for fundraisers? It means there are going to be new companies (and products), and the jobs that come with them, to replace the ones being lost as our economy goes through another natural (albeit painful) transition.

Where’s the Money Now?

2009-04-16T12:59:32Z

There has been a lot of focus on how much wealth has been lost over the last year and what fundraisers need to do to survive these tough times. Lori and I decided it was time to focus on where the money is rather than where it isn’t. On May 12th we are offering a webinar simply entitled Where’s the Money Now? Here are a few of the questions we plan to address:

Where has wealth moved and how you can adjust
your prospecting activities to move with it?
What have high net worth individuals been doing to
protect their wealth and how is that affecting the way
they give?
Why will this recovery be different from previous
ones and what do you need to do to prepare for it?
Which of your prospects will benefit from the stimulus
plan and how can you find them?
How can you benchmark your fundraising data
against the economy so that you are analyzing your
fundraising results in the proper context?

To help you before the webinar, and after, we are including a subscription to our monthly newsletter on wealth and philanthropy - 15th & Lawson™. As soon as you register you can immediately access all 2009 editions which include an in-depth report on who is benefiting from the infrastructure spending and a look inside the CleanTech industry everyone is talking about.

If you are ready to start focusing on where the money is instead of where it isn’t, this webinar is for you. Visit https://www.workingphilanthropy.com/webinars/ for details.

How at-risk are your pledges?

2009-04-06T18:01:44Z

A recent story in the LA Times, Donor’s legal troubles may force museum into bankruptcy, is a reminder that the multi-year pledge is a nonprofit’s version of credit and just like with a mortgage or credit card, sometimes that commitment is not honored. This particular story highlights another troubling trend which is how nonprofits have become entangled in the investment schemes that seem to be uncovered on a weekly basis.

Rather than wait for bad news, take a page from for-profit lenders and start evaluating your pledges in terms of the risk they will not be fulfilled. Here are three suggestions:

For the majority of your pledges keep it simple by looking at where the person lives to determine if they are in an area with high unemployment and/or high foreclosure rates.
For multi-year campaign pledges look for people who have not made their annual gift.
For the top 10% of your pledges take a deeper look to determine who is working in high-risk industries like finance, residential construction and retail. Also highlight pledges which have been extended beyond the original agreement.

Getting through tough times requires a realistic assessment of risk. Understanding how at-risk your pledges are can go a long way towards ensuring that you are not unpleasantly surprised, and if done in a timely manner, may provide the time to prepare.

Is merger mania poised for a return?

2009-04-02T14:00:54Z

The merger and acquisition market is showing signs that maybe just maybe we are going to see some real M&A activity by the end of the year and into 2010. I recently highlighted the IBM/Sun deal, but before that there was a prediction that steel companies will be consolidating as stronger companies take-over the weak ones.

For fundraisers this means it is critical to identify those prospects that are most likely to be involved in an acquisition now so that you can be sure your mission is top-of-mind. Look for companies that are cash-poor to be acquired by cash-rich competitors. The most likely take-over targets are those that are both short on cash and need credit.

This situation presents an interesting problem for fundraisers because the most likely beneficiaries of an acquisition may well be associated with companies that are not doing well. This causes the prospects rating to fall and worse of all may cause the fundraiser to avoid the person altogether.

I realize that everyone is strapped for time so one way you can try to benefit if the M&A activity does return is to include information about giving of securities involved in an acquisition in your general communications. A simple story in your newsletter about how you can quickly handle either public or private stock will go a long way to setting the stage for the real thing.

Sadly what is most likely to happen is for the donor to sell his or her stock, pay the capital gains, and then give cash later. The winner in that scenario is the IRS.

Postponement, suspension, delay, reorg, shifting priorities…

2009-03-23T02:15:18Z

Or, our mission has not changed but our areas of interest MAY have. Recently I was researching federal grant programs, foundations and corporate giving programs in order to provide one of my clients some possible funding sources (aka, a funding search). It was amazing but not surprising the number of foundations that had posted on their site “no more proposals until we have reassessed our effectiveness” or “we are not accepting proposals at this time due to the economy and wanting to ensure we are making the most impact for these times.” While these are justifiable positions, there could be several underlying reasons why foundations are suspending their proposal acceptance process, but I highly doubt it’s because they have decided that they do not want to help any longer. In some cases, unfortunately, they may have lost their ability to donate to any cause.

Numerous foundations had a different twist on their message, “We hear you. You are in need. We are increasing our grant making activities. Check out our new programs.” Everywhere I turn, there are countless people and organizations striving to make a difference and help each other get through these tough times. Isn’t it interesting that in some cases it’s just sheer coincidence?

I was also reminded of how intertwined we all are, as I went through the 990s and could see how these foundations had invested in Lehman Brothers….AIG….Wachovia…. As we all watch what is going on - Stanford, Madoff, AIG - let us not forgot the 6 degrees of connectedness. It’s disheartening to read comments from readers of how Madoff’s victims were the ultra wealthy and due to a perceived lack of due diligence, deserved what they got, or hearing our citizenry call for the failure and collapse of various public, or formerly public, companies. When we all take a closer look, we can see the impact of all of the scandals on those to whom we may better relate: teachers, police, firefighters, people with 401(k)s and pensions, who lost everything; foundations that had to close, foundations that can no longer contribute to those programs that undoubtedly are enjoyed by those lambasting the victims. This is indeed a global recession, and we all share, directly or indirectly, in the global failures and the global successes.

For those of us in the nonprofit space, as information professionals, we must continue to be ever aware, vigilant, and engaged as things continue to change at the speed of life. For those of you not in the nonprofit space, the same is still true. And for all us, here’s a wish: May only the good changes remain, and let’s never forget what we’ve learned along the way.

“I honor in you the divine that I honor within myself and I know we are one.” Deepak Chopra

A little Sunshine to go with your java this morning

2009-03-18T13:49:51Z

The news this morning that IBM may buy Sun Microsystems highlights that in a down economy you often see two types of merger & acquisition activity: 1) bargain hunting as stock prices fall and 2) companies seeking to find new revenue sources as their existing businesses struggle.

For fundraisers any increase in M&A activity is good because it creates liquidity for prospective donors. Sun has seen its stock plummet and this deal is a 100% premium over the current price. While many Sun shareholders will experience a loss compared to what they originally paid for the stock, at least they are getting something. There has been talk about Sun not making it at all.

For those brave souls that ventured back into the market in December they were able to buy Sun at $2.83 a share so they are smiling today at the $9 per-share offer. This is a reminder that while a lot of money has been lost in the market, there is a lot of money to be made going forward.

A change will do fundraisers good

2009-03-12T20:52:53Z

I recently co-authored, with Paul Best, an article for APRA Connections entitled Be the Change: Fundraising in Real Time with Business Intelligence. It is a follow-up article to one I wrote a few months ago about the need for real-time business intelligence to support better decision making. A common reaction to that article was “Enjoyed the article, wish we could do that here but…”

Real-time intelligence in support of decision making is just one of many changes coming to fundraising. In fact, it is now crystal clear that all “best practices” need to be re-visited. What worked even a few months ago may already be obsolete as the new normal continues to be defined.

Many people do not want change to happen, or if it has to happen, want it to be a very slow process. I had a fundraiser say to me that he was ok with new ideas but wanted their implementation to wait until he retired in five years.

Organizations can’t wait until leadership and staff are ready or until the people who resist change retire. Change is coming and change will help organizations do more good. Be a part of it!

Which economic ledge is your prospect on?

2009-03-10T16:42:01Z

We are all trying to figure when we will hit the true bottom of what is fast becoming known as The Great Recession. The problem with searching for “a” bottom is that the economy actually contains many of them. Think ledges and you will be closer to the truth.

These economic ledges have two primary characteristics: place and industry. This means you need to look for the “Retail in New Mexico” or “Manufacturing in Texas” ledge. You can further break down the ledges into metropolitan areas and counties. You can link ledges into regions.

Once you have your economic ledge defined the next step is to look for relevant data to help you determine what is happening currently and what is forecasted to happen in the near and long-terms. A great example of how different the economic outlook is across America, when you look at it in terms of both geography and industry, can be found at USA Today. This interactive chart and map was created by Moody’s Economy.com.

Click on the Picture

When you visit the site select an industry and see how the data at the state-level changes. You can then select individual states to see more detail about the job outlook there. This is the type of multi-level analysis you will need to be doing if you want to gain a true picture of where your prospects are financially, and where they are likely to be down the road.

Now get a good grip and find your ledges.

Giving from the mattress fund

2009-03-06T03:40:57Z

We are doing research for our upcoming webinar Where’s the Money Now? and we came across an interesting chart from a Capgemini/Merrill Lynch survey showing asset allocation for High Net Worth Individual (HNWI) households in 2005, 2006, 2007, and a projection for this year. Note the decrease in real estate and alternative investments (combined 36% in 2005; and 23% in 2007) and the increase in cash and fixed income (34% in 2005; 44% in 2007 and projected to be 45% in this year).

Click on the chart to see the full report

This helps explain why many philanthropists, while not making long-term major gift pledges, are willing to continue, and sometimes increase, their annual support. This does beg the question “what are major gift officers suppose to do while we wait for assets to start appreciating again?” The answer is to focus on the annual gift of prospects with long-term major gift and planned gift potential. What you are doing is stewarding the long-term while securing badly needed cash for your organization.

So until assets start to appreciate again, focus on the cash under the mattress, not what is left in the stock market.