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Category: Fundraising

  • Fundraising and Working with Donors During the COVID-19 Crisis

    Fundraising and Working with Donors During the COVID-19 Crisis

    In the midst of the current coronavirus pandemic, many nonprofits are faced with tough choices related to raising the necessary resources to meet their missions and support the great needs of the communities they serve. The Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector provides guidance for how organizations should act when planning resource development and states, “An organization’s resource development program should be maintained on a foundation of truthfulness and responsible stewardship. Its resource development policies should be consistent with its mission, compatible with its organizational capacity, and respectful of the interests of donors, prospective donors, and others providing resources to the organization.”

    Some of the decisions nonprofits are grappling with right now relate to special events that have been scheduled for a long time, which are vitally important to raise revenue in support of the organization’s important mission. Many have been forced to cancel events that were to take place in March, April, May, and June. Others are trying to develop contingency plans, expecting the cancellation of important revenue generating events for later summer, fall, and beyond.

    Of course, many of these events have been in the planning stages for months and months with some donations and sponsorships already deposited in the nonprofit bank accounts. When faced with the legal and ethical considerations around what to do with such sponsorships for events that will likely be cancelled or significantly altered in light of the global pandemic, we can again turn to the Standards for Excellence code and its encouragement that “nonprofits must honor the known intentions of a donor regarding the use of any and all types of donations  (including but not limited to: cash, in-kind, cryptocurrency, stocks, etc.).”  We must use donations, including sponsorships, in the way the donor intended.

    To address fidelity to donor intent, many organizations are reaching out to donors and sponsors who committed to events now cancelled to see if they would approve a change in their contribution from a “purchase of a ticket to attend a gala, dinner or auction” to a “completely tax deductible donation” that is not accompanied by a special dinner or entertainment.  Such outreach helps the nonprofit honor the intention of donors and gives the donors the opportunity to support the work of the nonprofit in a different manner.  

    As nonprofits reach out to their donors with these requests, care should be taken to communicate with donors in a way that is respectful and honors the intentions that they initially placed on their gift.Every effort should be made to avoid placing undue pressure on donors in this time when we are all concerned about health, finances, job security, and emotional well-being. Many donors will agree to redirect their gifts, however, others may not wish to do so.  As leaders in the sector, we can use the communication around change of gift intent as an opportunity to deepen our relationships with our donors, and express concern and compassion for their situation at the same time.

     

     

    The Standards for Excellence educational resource packet on Fundraising, Solicitation, Acceptance of Gifts, and Working with Donors provides additional background on this subject and includes a helpful Model Solicitation and Acceptance of Gifts Policy.

    This educational resource packet and the full series of all packets – including sample policies, tools and model procedures to help nonprofits achieve best practices in their governance and management – can be accessed by contacting a licensed Standards for Excellence replication partner,– one of the over 150 Standards for Excellence  Licensed Consultants, or by becoming a member of the Standards for Excellence Institute.

     

    We share our sincere wishes for your continued good health and patience as we all navigate these challenging and uncertain times.

  • Ethical Giving in a Pandemic: Give Now, Give Generously, Give without Strings from the Markkula Center for Applied Ethics

    Ethical Giving in a Pandemic: Give Now, Give Generously, Give without Strings from the Markkula Center for Applied Ethics

    “Many of these nonprofits operate on a tight budget and don’t have a significant cushion in reserve. Many rely on fundraising events to provide funds for their services and those events have been canceled. Many nonprofits have employees who are at the bottom of the pay scale and cannot afford to be laid off. The fundraising capacity of these nonprofits is currently paralyzed. Ethical giving in a pandemic looks different than in normal times.”

    Joan Harrington, the director of Social Sector Ethics at the Markkula Center for Applied Ethics, a Replication Partner of the Standards for Excellence Institute wrote a blog on the Ethics of Social Media and Nonprofits. Read the full article to learn more about this topic. 

  • The Importance of Having Gift Acceptance Policies

    The Importance of Having Gift Acceptance Policies

    This is part of a special series, brought to you by the Standards for Excellence Institute, to provide nonprofit leaders with a brief nonprofit governance and management tip weekly over the course of 2020. We hope these short tips will be helpful to you and the nonprofits you serve. If you have suggestions for future topics, please forward these to acmadsen@standardsforexcellence.org.

    I recently read an article “Nonprofits Decline Gifts With Too Many Strings or Misaligned Values, Survey Finds”  in the Chronicle of Philanthropy with interest and even a little glee. In some cases, it seems that nonprofits lean toward accepting gifts almost without limitation to ensure that they are not offending their donors. However, in many cases, accepting an unusual or unanticipated gift ends up creating hardships and added expense for the organization.

    The Chronicle article, which is based on research from the Center for Effective Philanthropy,  notes that 40 % of nonprofits have declined a gift. The research cites that the most common reason for turning down gifts is that the gifts came with too many strings attached.  Other reasons given in the survey included the practicality of the donation and conflicts between the values of the donors and the values of the nonprofit organization.

    The Standards for Excellence Institute has been a proponent of board-approved gift acceptance policies since its inception. In fact, our Standards for Excellence code states, “An organization should have policies in place to govern the acceptance and disposition of charitable or in-kind gifts that are received in the course of its regular fundraising activities.” These policies should include:

    • Procedures to determine any limits on individuals or entities from which the organization will accept a gift
    • The purposes for which donations will be accepted
    • The types of property that will be accepted
    • Whether to accept an unusual or unanticipated gift considering the organization’s mission and organizational capacity.

    The Standards for Excellence code also states that “nonprofits must honor the known intentions of a donor regarding the use of any and all types of donations, including but not limited to cash, in-kind, cryptocurrency, and stocks.”  When taking both benchmarks together, it is easy to see that if a nonprofit cannot or will not be able to honor the intentions of the donors regarding a gift, the most positive outcome is often to turn down the gift. Certainly, having a well thought out and comprehensive gift acceptance policy can help make and communicate such decisions in a smoother,less personal manner.  

    In the more than 20 years that we have been encouraging nonprofits to have gift acceptance policies, I am pleased to say that we’re getting fewer comments like, “Why do we need a gift acceptance policy? We are a small nonprofit, we need EVERYTHING!” and getting more comments supporting the idea that gift acceptance policies are important and such policies help nonprofits turn down gifts that are not mission-centered in a way that is not offensive or off-putting for our donors and community members. I hope you explore how a gift acceptance policy will help your organization.

    The Standards for Excellence educational resource packet, Fundraising, Solicitation, Acceptance of Gifts, and Working with Donors contains a comprehensive gift acceptance policy that can be modified and customized to meet the needs of nonprofits around the country. 

    This educational resource packet and the full series of all packets  – including sample policies, tools and model procedures to help nonprofits achieve best practices in their governance and management – can be accessed by contacting a licensed Standards for Excellence replication partner, one of the over 150 Standards for Excellence Licensed Consultants, or by becoming a member of the Standards for Excellence Institute.

  • Treating Donors with Respect

    Treating Donors with Respect

    This is part of a special series, brought to you by the Standards for Excellence Institute, to provide nonprofit leaders with a brief nonprofit governance and management tip weekly over the course of 2020. We hope these short tips will be helpful to you and the nonprofits you serve. If you have suggestions for future topics, please forward these to acmadsen@standardsforexcellence.org.

    Earlier this week, I answered my home phone and a paid fundraiser working for a nonprofit that my family and I have supported for years was on the line. Despite our past support, the call was a challenging one where the caller informed me that she was interested in speaking with my spouse about this institution (and was not interested in speaking with me). This really rubbed me the wrong way because my husband and I both have the same connection to the organization and because I coordinate much of our family’s charitable giving. When the conversation was over, I felt intensely disrespected and belittled due to the comments that the paid fundraiser made to me.

     

    Nonprofits need to do all that they can do to treat donors respectfully and professionally. The Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector  states that “solicitations should be free from undue influence or excessive pressure, and should be respectful of the needs and interests of the donor or potential donor.” 
     


     

    How does your nonprofit ensure that you are respectful of these needs and interests?  What can you do to ensure that those raising money are your behalf are positive and helpful ambassadors for your nonprofit organization?  With solicitations flooding our inboxes, I heartily encourage you to include yourself on the list of individuals who receive them (all written, verbal, and virtual!). Put yourself in the position of a donor who may not interact with your organization daily or even monthly.  Is it possible that your solicitations may be considered disrespectful, distasteful, or offensive? Take the time to test your messages with your audiences and make adjustments as needed.

    More information is available in the Standards for Excellence educational packet on Fundraising, Solicitation, Acceptance of Gifts, and Working with Donors which includes discussions and helpful resources on: Donor relationships and donor privacy, donor intent, acceptance of gifts, fundraising policies, as well as online fundraising.

    This educational resource packet and the full series of all packets  – including sample policies, tools and model procedures to help nonprofits achieve best practices in their governance and management – can be accessed by contacting a licensed Standards for Excellence replication partner, one of the over 150 Standards for Excellence Licensed Consultants, or by becoming a member of the Standards for Excellence Institute.

     

  • Upholding Fundraising Standards and Ethics

    Upholding Fundraising Standards and Ethics

    The Standards for Excellence Institute has been following a news story in Baton Rouge, Louisiana about Timothy Young, the CEO of Open Health Care Clinic and the HIV/AIDS Alliance for Region Two, Inc.  A series of articles describes a situation where Mr. Young negotiated a special compensation arrangement with his board, including an incentive that would entitle him to a bonus or finder’s fee for major gifts made to the agency under his leadership. This story raises important questions related to best practices in governance and management of nonprofit charitable resources, and provides a sharp example of the importance of embracing best practices, as articulated in the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector.  For over 20 years, we’ve been encouraging nonprofits to commit to and live by the Standards for Excellence tenets.  This story highlights the need for our fundraising standard:

    Resource development personnel, including both employees and independent consultants, should not be compensated based on a percentage of the amount raised or other commission formula.

    Of course, the Institute is not the only entity that takes a stand on percentage-based compensation for nonprofit professionals who are raising money. The Association of Fundraising Professionals (AFP) also asserts that compensating fundraisers based on commissions or percentages is unethical.  This professional association of fundraisers and development professionals recommends compensation based on a set fee.   In addition to guarding against hiring fundraisers on a percentage basis, the Association’s Code of Ethical Principles and Standards for Professional Practice also makes it clear that fundraisers should not pay, seek, or accept finder’s fees, (or) commissions.

    As we describe in our Standards for Excellence educational resources on this topic, commission-based compensation for fundraisers is considered unethical and inappropriate for many reasons, including: 

    • The practice may undermine the public’s trust in the nonprofit organization;
    • The fundraiser’s self-interest may appear a larger motivation than support of the mission, which is unintended negative messaging associated with the organization;
    • It is considered unprofessional or amateur – professionals are compensated for their time, amateurs are not;
    • The IRS may conclude the fundraiser’s compensation is unreasonable, constituting an excess benefit, and putting the tax exemption of the organization in jeopardy;
    • The practice encourages fundraisers to place pressure on donors for immediate needs, which can prove to be detrimental to the nonprofit organization and the fundraiser over the long-term;
    • It may be viewed as privately benefiting fundraisers, rather than serving the public purposes of the nonprofit; and
    • The practice may short-change the organization or the fundraiser.

    As is often the case, the story in Baton Rouge has its share of twists and turns, including major planned gifts that were promised but not yet received, investigations that were promised, and concerned staff members.  It is always courageous for leaders of an organization to stand up for the mission of the organization and their ethical principles. It appears that that is exactly what happened in Baton Rouge, where several executives left their jobs in protest over questionable fundraising practices that threaten the public’s trust in OHCC, and put its tax exempt status on the line.

    For more information on the Standards for Excellence code, please click here:  https://standardsforexcellence.org/Home-2/code

  • The Big 4: Transform Fund Development with Exceptional Donor Care

    The Big 4: Transform Fund Development with Exceptional Donor Care

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    The following post was written by Standards for Excellence Licensed Consultant Carmen C. Marshall and is part of our “Ten Years of Advancing Excellence” blog series, celebrating ten years of the Standards for Excellence Licensed Consultant program. Carmen specializes in performance improvement, ideation and execution, communications, marketing, organizational development, training and executive coaching. As a management consultant, Carmen has helped numerous leaders, executives, and organizations grow and improve impacting their bottom line, raise additional funds and create new programs that move the organization’s vision forward. Carmen C. Marshall became a Standards for Excellence Licensed Consultant in 2013. 

    Applications for the 2016 Licensed Consultant Training program will be accepted through July 1.  

    There’s good news and challenging news. The good news is that philanthropic giving to nonprofits is up. According to the Urban Institute Center on Nonprofits and Philanthropy, “in 2014, total private giving from individuals, foundations, and businesses totaled $358.38 billion, an increase of just over 5 percent from 2013 after adjusting for inflation. According to Giving USA (2015), total charitable giving rose for the fifth consecutive year in 2014. After adjusting for inflation, this is the first year to exceed the previous peak set before the recession in 2007 ($355.16 billion in 2014 dollars)”. – The Nonprofit Sector in Brief 2015 Public Charities, Giving, and Volunteering 

    The challenging news is that in 2015, the nonprofit donor retention rate average was 46% according to the 2016 Fundraising Effectiveness Survey Report.* In dollar to dollar terms, that means, over 54 percent of donors don’t return to give in the next year. This is not about simply counting the number of donors, however, but it is about being intentional around donor retention and investment of fund development resources. 

    What’s more valuable to your organization A) a fundraising event that generates a profit? B) a large one-time donation? or C) a committed donor who gives annually? 

    While a case can certainly be made for A and B, research indicates that there is no substitute for a committed nonprofit donor who believes in your organization. That donor is most likely to give year after year. Whether you’re the fund development officer or the accidental fundraiser in your organization, let’s face it, getting and keeping donors is preeminent and key to sustainability. Generating revenue to move your organization’s mission forward is paramount and inextricably tied to donor retention. There are four keys that will transform your fund development. These four keys are founded on the premise that it’s not all about you. Put these principles to work and they will not only transform your fund development, but will help you to retain donors. The Big 4 Keys to Transformation: Communicate, Cultivate, Educate and Evaluate. 

    Communicate

    • Results and Impact – Nonprofit donors want to know that their money is at work doing what you promised them. They want to know that their investment is making an impact. Your value to the donor is not only what a great charity you are, but how valuable their contribution is and what a difference it is making in the world. They need to believe in who you are and what you do. Show evidence. Your story must stand out. Communicate results and impact through your organization’s newsletters, e-news, on your website, in eblasts, Facebook posts, Twitter, Instagram, thank you letters and personal notes and occasional phone calls. One of my clients, made it a point to call selected donors and visit others in their region to hand-deliver a photo album of kids and their personal thank you notes as a way of saying thank you. That donor was so touched that she continued to give and increased her giving over the years. If there are really big news items, do an official public relations campaign, to get it on national and local news outlets.

    • Arrange for donors to meet the recipients. Create small and private donor receptions, with a personal touch, to say thank you to donors. One client used such opportunities to connect donors and scholarship recipients.

    • Remember as you communicate, you’re also cultivating.

    Cultivate

    • Be smart and strategic about how, when, the frequency and with whom you make contact. Where possible, make face to face contact.

    • Research your donors; know your market, know your donors.

    • Tell a compelling story.

    • Don’t over solicit. One of the greatest mistakes of some organizations – and turn-offs – in fundraising is over-solicitation. Nonprofit donors do not want to be bombarded with requests for money.

    • Your Fund Development Plan should include goals, timetable, strategies and assignments.

    • Don’t pin donors to your schedule. Consider staggering your asks, where possible, so that dollars can come in over the year and over multiple years. After speaking with the donors, one of my clients learned that some of her donors could make multi-year contributions and structured requests to them around their giving calendar.

    • Relationship is everything so be creative. Assign someone the task of nonprofit donor relationship management, someone who can focus on caring for your donors; also remember that, in the office, fundraising is everyone’s job – from the receptionist (first line of contact) – all the way to management. Cultivation of donors is ongoing. How you communicate can be the difference between donor retention and donor attrition.

    • Honor the donor’s information and privacy. “Nonprofits should respect the donor’s right to determine how their name and contact information is used, including providing opportunities to remain anonymous, request that the organization curtail repeated mailings or telephone solicitations from in-house lists, and have their names removed from any mailing lists which are sold, rented, or exchanged….”- The Standard’s for Excellence Code of Ethics

    Educate

    • Educate your donors. Teach them something new or provide information about your cause (i.e., drop out rates, societal impact and health risks, etc.)

    • Make it about them; answer their questions, provide useful giveaways such as free ebooks, and white papers;

    • Keep it simple, short and sweet; avoid information overload.

    Evaluate

    • Track your donor retention rate. Compare last year with this year. How many donors do you have? How many gave last year? How many of those same donors gave this year?

    • Understand the value of the retention, not just the number of donors

    • Measure your growth or decline;

    • Find out what they liked or didn’t like; want or need; use nonprofit donor surveys to gain valuable donor feedback

    Strategically implementing the The Big 4 with exceptional nonprofit donor care will transform your fund development and keep donors coming back year after year! 

    * The Fundraising Effectiveness Project is produced by Association of Fundraising Professionals (AFP) and the Center on Nonprofits and Philanthropy at the Urban Institute

  • Gifts with Strings and Friends in Low Places

    Garth Brooks sings about his less-than-reputable buddies in his popular country song, “Friends in Low Places.” It is hard to determine whose reputation appeared more sullied in Mr. Brooks’ recent headlining activities – himself or the nonprofit hospital which he sued for apparently not following his wishes.

    Recently, a jury in Oklahoma ordered the Integris Canadian Valley Hospital, to which Garth Brooks had made a $500,000 donation, to refund his contribution plus punitive damages because the medical center apparently did not comply with Mr. Brooks’ wishes to place his mother’s name on a new women’s center.

    The medical center insisted that there were no conditions on the donation and that it was initially offered as an anonymous gift. 

    Ouch. Garth Brooks looks bad.  The medical center looks bad. How could this situation have been avoided?

    The Standards for Excellence clearly states that “Nonprofits must honor the known intentions of a donor regarding the use of donated funds.”  In a situation like this, it would have been more than prudent for the recipient of the half million dollar gift to have a paper trail describing restrictions (if any) placed on the gift.  That way, any misunderstandings about restrictions or lack thereof could have been cleared up at the front end instead of in a court of law and on the front pages of the newspaper, tabloids, and television news programs.

    For more information on donor relations, you may be interested in checking out the Standards for Excellence educational resource packet, Fundraising Practices, available free of charge to members of the Standards for Excellence Institute.