Donor Wishes are Important

Animal-welfare groups charged in court last week that  the attorney general of New York, Andrew M. Cuomo, failed to "discharge his duties" in overseeing the charitable bequest by  Leona Helmsley and failed to uphold the donor's intentions as reported in a story in the Chronicle of Philanthropy.

Many donors carefully choose how their estate will be used when they are gone. To have such wishes disregarded sends an incredibly negative message — and dangerous one too. It is important charitable groups do everything they can to ensure that donors can and should trust us to do the right thing when they are no longer here to make sure the spirit and letter of intent of their bequests are carried out. I applaud the effort to enforce the donor’s instructions and wishes.

Planned Giving Is Dead.

No pun intended. Donors are just not picking up on this fundraising term. It's time to re-label.

Donors are interested in the outcome or impact of their gift: it's a legacy gift.

Beqeusts account for 90% of the gifts often described by the phrase of “planned gift.” Often times a bequest – a legal term to describe the act of giving something through a will or larger estate plan - is viewed by nonprofit leaders as a fundraising tool. A bequest is a tool for donors too. The impact of a bequest – how the gift is used – is the real reason anyone would make such plans. Acknowledging that the outcomes are most important, nonprofits should call such bequest gifts “legacy gifts” to better describe their true value.

Growing numbers of Americans are creating and telling their own stories that demonstrate what matters most to them. An integral part of this story is how they express their lifetime values and make them real – by planning charitable gifts in the form of bequests directed to small and mid-size nonprofits. Every gift is an inspirational story about the value of the work of nonprofits and visions of a better tomorrow.

Technically the gift is planned, but calling it a “planned gift” sells short the legacy of the gift.

E-mail vs. paper
for communications with donors is a question relevant for environmental as as well as for donor relations reasons. Here's a response to the paper or electronic question posed by a development director:

One of my clients, a national group with a young, wired constituency, discovered in a survey I did with their donors that many wanted the paper version of newsletters and reports. One wrote something like: “I am on line all day and I want to sit down in the morning with corn flakes and read about what you do.” Other donor surveys I have conducted for clients suggest similar interests and needs. The challenge is to give your donors what they need and want — not what’s most convenient for your group or a particular staff member.

There are also different kinds of communications. For example, materials related to legacy gifts or bequests might be better on paper. Making a decision to include a group in a will or estate plan is one arrived at over a period of time. Having a reference card or materials that will stay on a desk or in a file for reference can be effective. You will have to decide how your messages and formats match donor needs or decision making processes.

What about giving options for paper or electronic? Good idea. BUT, and it’s a very big “but”, you really have to be able to deliver on what you say you will do. Too often donor preferences are not well tracked and you can get set up to conflicts with donors as a result. In my own case, I was a regular donor to one group but decided I did not want to get all the email. After at least 7 requests to unsubscribe it still sends me email. They are now classified as “junk” on my computer. It’s not likely I will ever give to them again. My reasoning goes something like this: if they don’t track data, what else don’t they track? If they don’t get this right, what else can’t they do? If they can’t pay attention to simple requests, my gift certainly is not important, I will go elsewhere (and I did).

As you go about this work, your tone of voice used in communications with donor should also reflect that service oriented perspective. Too often that is missing. How will you make the suggestion in a way that builds and extends a trusting relationship with a donor?

Another key reason some people decline to give you an email address is the habit of some groups to exchange lists (email and post office mailing) or that they fear you will send too many emails. Penelope Burke’s research showed donors hate it when their names are exchanged, yet many groups still persist in doing exactly that. How will you enable donors to control how much or how little email they get from you?

Good luck — saving paper really does matter. Here’s a cut and paste link to a copy of a news article on a host of tips and things to do to reduce junk mail and wasting paper:

http://www.forestethics.org/salem-news----sick-of-junk-mail-opt-out-strategies-reduce-mailbox-waste-invasion-3

(Full disclosure: this article is posted on the web site of a group to which I donate time and money to support.)

Who can be Trusted to
Tell the World Your Story?

Since January 1st more than 2,000 newspaper jobs were cut in the western United States. With fewer reporters, who will gather, report, and write about local, state, and regional activities? Blogs clogged with opinion won’t fill the absence of fact-based, vetted information.

What are the implications for the nonprofit community?

Without reporters, who will tell your stories? Who will investigate, report on, and describe topics in regards to the issues, public policies, and trends relevant to your work? Who will provide independent, third party validation of your work, impact, leaders, and supporters? This is the first of three columns on the impact on the nonprofit community, foundations, possible responses, and prospects for the future.

What Happened?

The golden age of journalism may prove to be the period between 1950 and the turning of the new century, 2000. The business model of newspapers worked during these times: there was enough advertising revenue to support large newsrooms, investigative reporting, and a wide range of news services. As ad revenue plummeted in recent years, the business model broke. Some already describe it as a dead model. Seeking to reduce costs, owners cut wherever possible. Newsrooms were obvious places to “save” great costs. The golden age is over and it’s not coming back.

Nonprofits NEED Reporters

More than they suspect or acknowledge, nonprofit organizations rely on validation provided by news and feature stories that reporters write and produce. With fewer reporters at all levels, it is likely only the largest groups or most dramatic stories will be covered.

What will be the implications of this shift on your ability to tell your story in a credible fashion, to build community awareness, and to generate buzz about important community issues or special projects?

Validation through reporters’ stories distributed through a variety of channels seems to be taken for granted. Nonprofit leaders celebrate when they get a front page, “above the fold” Metro section story or when a local columnist features their work or one of their volunteers. Paper copies are made and mailed; electronic copies are forwarded far and wide via email; links or PDFs are posted on the organization’s web site; and excerpts are placed in newsletters and in reports. Board members brag about the stories at social events.

It is valuable when an independent outsider chooses to write about and describe the work of a nonprofit. Donors to nonprofits often proudly talk about coverage of their favorite groups. “Did you see the story about _______?” is a common question at donor gatherings. Seeing “their” group talked about in newspaper and magazine stories is validation for donors: it tells them that they made the right choice. For many donors, this is an invaluable experience that encourages continued, and even increased, gifts. It has been my experience that this is important to donors at all gift levels. Some groups have actually based their revenue/funding model on continued attention in the media. They are even more vulnerable than others at this time of media change.

Will there be a new definition of “newsworthy”? Will it trend toward only the most dramatic stories, or the nonprofit scandal of the day, or perhaps only to those that provide prepared content?

It’s Not ONLY About You.

With fewer reporters and dramatically different distribution channels for information, will policy makers and community decision makers get the information that will help them make the right big-picture decisions? Such choices have the potential to deeply affect the work of nonprofit groups at all levels. From the group that works with pre-school children, to others that help feed those in need, to those making sure we have clean water, all rely upon fact-based digging by reporters. With a greatly reduced supply of information, how will this affect the nature of public and private interactions and decisions?

How will nonprofits fill these gaps? In effect, their marketing, education, and fundraising efforts will all need to increase in response. One of the consistently reported and documented needs of donors is for detailed information about the work and impact of the groups that they support. As reporters and news distribution changes, nonprofits may be forced to increase their sophistication, volume and channels of information distribution.

The need to expand communication and accountability reporting will lead to some increase in costs of operations. Today, most accountants would group this into the category of “overhead”. Yet rather than being burdensome “overhead”, such expenditures are wise, vital, necessary expenses without which organizations will not likely succeed in the fundraising market.
This suggests that the narrow budget or functional breakdown of nonprofit activity consisting of program work and “overhead” is likely flawed and will need re-structuring or at a minimum re-interpretation.

Without enhanced public education, targeted donor education, and increased donor/volunteer/activities stewardship, program work may be severely inhibited or even hindered. The line that used to be somewhat clear between program work and everything else will blur, perhaps even disappear. This has implications for most nonprofit job descriptions, performance metrics, and staff skill sets.

Changes Outside
Mean Changes in How Nonprofits/Social Profits Think and Operate

As a result of these accelerating changes, here are some issues that will have to be addressed by nonprofits wishing to thrive in the coming years.

• How will you provide donors, supporters, and policy makers with the news and information that they need to make decisions that affect your work?
• What will you do to ensure the information reaches the people you need to reach?
• What data do your donors need?
• What data do policy decision makers need?
• What data do community leaders need?
• What data do other organizations and those linked to your mission work need?

With Demand for Greater Transparency,
this is BAD timing.

Reporters were wonderful allies in helping translate or illuminate the work of nonprofits. Their independence was highly valuable because it gave donors an experience of transparency.

Transparency is linked to integrity and trust; it is also tightly linked to the size and frequency of donations. But there is more to transparency than news stories. It is the ability of donors and community members to get the right information in a timely manner, in a useful form, and then be able to use or understand that data. Often reporters not only accumulated data from hard- to-find sources, they also interpreted it. The result was a valuable service. How will it be replaced?

This suggests that the way nonprofits report their results and financial data, and distribute their 990s and other evaluation information may need to take on new forms and require much greater levels of translation and even third-party review.

Many nonprofits have yet to post their 990s on their web site; some don’t even list staff names. If transparency is a valued objective, there is great distance to travel in a very short time for these groups.

“You are your own news reporter”

The disappearance of reporters, the change in the distribution of news, the growth of electronic media: all raise significant questions about how nonprofits have structured, presented, and distributed their key messages.

How will you tell your story?

Newsletters and donor communications will need to be fundamentally reformed, re-thought, and re-contextualized, to more of a newspaper-style news source rather than a chatty, informal collection of essays. New reporting styles and formats may take greater precedence as well.

As a result of these accelerating changes here are some issues that will have to be addressed by nonprofits wishing to strive in the coming years.

• How will you provide donors, supporters, policy makers with the news that need to make decisions that affect your work?
• What will you do to ensure the information you need to be successful reaches the people you need to reach?
• What data do other organizations and those linked to your mission work need?
• Will you need to tell “both sides of the story” as your role changes and there is a greater need to present the other side of the story in a fair manner?

The second and third articles in this series address opportunities and options for nonprofits, foundations, and policy makers.

By Kevin Johnson

Thanks to comments from Robert McClure at Investigation West for inspiring this column.

Fundraising in Times
of Economic Uncertainty
Six strategies for the rest of the year and beyond…
By Amy Brown

"Change or die." Although somewhat dramatic, this was the bottom line sentiment expressed by one participant at an Assocation of Fundraising Professionals workshop about fundraising in times of economic uncertainty. Nonprofits that don’t step up their game in this economy are likely to get lost in the shuffle. To strengthen your organization, consider these six strategies as shared by 25 senior development professionals who participated in AFP Oregon & SW Washington’s Senior Salon, hosted by the OSU Foundation and facilitated by Kevin Johnson of Retriever Development.

Capitalize on your board's desire for more information and involvement.
The recession is motivating board members to ask more questions about financials, fundraising plans and strategies. Many feel a heightened sense of responsibility and want to be sure they are pulling their weight. Younger members are often leading the charge, raising the bar for veteran members. Take this opportunity to talk with your board about current fundraising challenges. Remain calm, confident and transparent. Engage members in discussions about how they can help. Provide them with additional training in areas such as donor cultivation and solicitation, and board development. The latter can be especially helpful if you need to trim some “dead wood”.

Strengthen relations with your donors.
Staying connected with donors should be a top priority for all development professionals right now. With many donors reducing the number of nonprofits they support, you want to be sure yours remains on their list of “keepers”. Accountability breeds trust so be sure to let donors know the impact of their last gift before asking for the next gift. Engage board members and other leadership volunteers in regular “thank you’s” and “check-in’s” with your major donors. Negotiate extended pledges as necessary. And remember, board members are donors too.

Adjust your messaging to fit the times and better connect with your donors.
If you aren’t talking about why your organization’s work is more critical now than ever before, you are missing out. Today’s donors want to help address the challenges in their community so provide them with clear opportunities to do so. For example, “in tough economic times, education costs rise and thousands more aspiring students can’t afford college. By investing $______ in a scholarship today you can make a significant and lasting impact in the life of a young adult in our community.”

Streamline operations to reduce costs and better serve your constituents.
Many nonprofits are re-packaging their programs, partnering or merging with friendly competitors to become more efficient and better serve their constituents. Others are cleaning house by eliminating "weak" staff and cutting activities with low ROI. This is an especially opportune time to get rid of sacred cows (did someone say auction?) that influential staff or volunteers have been holding onto forever, even though they hit their peak years ago.

Assess and prepare your development program for action.
With campaigns on hold and development programs in flux, now is an excellent time to conduct a development audit to clearly identify what strategies and methods work well and what needs improvement. The results of such an assessment can be used to fine-tune or create a campaign plan or action-oriented development plan (with “pipeline projections”) so you are ready to jump into action when the economy bounces back.

Use technology to more effectively communicate with your constituents.
With the drive to reduce costs and be more “green,” development professionals are increasing their use of technology to enhance donor communications. E-newsletters and on-line appeals are replacing or supplementing print newsletters and mailings. Facebook, Twitter, weblogs and other social media tools are providing excellent forums for nonprofits to extend their reach and engage in valuable discussions with donors, alumni and friends.

Now is the time to take extra steps to connect with your donors, equip and motivate your board, and prepare your organization for the future. We live in a cyclical economy so better days are around the corner. Make sure your organization is prepared to succeed!

Thanks to Amy Brown, the author of this article.

Wisdom from the Depression:
Building Market and Mind Share

A headline in The Economist reads “Past crises inspire little confidence about the outcome of this one for America.” The article described a gathering of economists and the discussions held about a series of studies of “severe” banking busts.” In other words, what ever we are going through, it will take a while to get out of it.

For nonprofit leaders and supporters, the question then becomes how will we survive AND continue to build the kind of organization that will be able to thrive now and in the years to come?

A recent column in the New Yorker magazine describes how some companies made tremendous progress during the depression. In fact, some became market leaders as a result of their strategic choices. There are some more recent examples as well. See the article here.

What choices will you make that help your favorite nonprofits survive, perhaps even THRIVE, in these times?

This is a time of opportunity. I hear of a number of social profit groups cutting back expenses -- especially marketing and fundraising expenses. It will be hard to recover donor mindshare later. A recent article in the New Yorker entitled Hanging Tough discusses the value of marketing in hard times.