Stanford Social Innovation Review

Nonprofit Silos Choke Off Conversations

Smart fundraising is no longer a one-way stream of information, where organizations tell would-be donors whatever will motivate them to give.

Fundraising has become a conversation. 

There’s just one problem: In many nonprofits, especially the larger and more professional ones, the people actually charged with conversing with donors have little incentive to do so.

They’re typically found in the Donor Relations department, and they report to managers outside of Fundraising. So while fundraisers may want to nurture rich two-way conversations with donors, the people who answer the phones, emails, and complaint letters would rather eat cockroaches drowned in mop water than engage in conversations. And because they’re in a different department, they’re being measured for efficiency and other very non-conversational skills.

So you have a Talking Department (Fundraising) and a Listening Department (Donor Relations) working in different silos and holding different goals and conflicting philosophies. Sounds like a mental illness, doesn’t it?

Add to that an independently operating Marketing Department (which, for the sake of the metaphor, we’ll call the Yelling at Random Strangers Department) and the Online Department (or the Navel-Gazing Department). If this nonprofit were a person, he’d be locked up!

Nonprofits that allow bureaucratic turf to get in the way of listening to and serving donors won’t survive the change in how donors interact with their charities. When donors get a taste of the rich, respectful relationship they can have with a nonprofit that has its organizational act together, they’re going to drop those who can’t make the change.

The time to explode your silos is now.

Jeff Brooks is creative director at Merkle, a direct-response agency serving the nonprofit world.  He blogs at the Donor Power Blog.

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Five Steps Out of Stupid Fundraising

Most larger nonprofits depend on direct marketing to raise revenue. Unfortunately, most depend on high-volume, low-cost, low-impact, low-relevance tactics to bludgeon gifts out of just enough donors to keep the program churning.

Let’s call it Stupid Fundraising. 

The old pool of duty-driven donors who responded to that stuff is dying off, and the generation replacing them is profoundly different—it demands relevance.  The time for change is now. Change won’t be easy, but for some organizations, it’s possible. Here are five steps for breaking free from Stupid Fundraising:

1. Different lists.  A low-relevance program is built on years of fine-tuned list-testing for high-response but low-involvement donors. Sadly, relevant messaging may not work very well for those lists. Those are folks who don’t want relevance and power!
   
2. Lower response rates.  When you drop your low-relevance program, you will most likely experience lower response. If you do it right, however, you’ll more than make up for the drop in response with higher average gift. 
   
3. Higher costs.  The small, information-light packages that drive low-relevance programs have a hard time being relevant—they just don’t have room. I’m not talking about slick, high-production packages; just some more paper so you can powerfully and convincingly make your case.
   
4. Real offers.  Here’s the hard part: You need to move away from vague, generic, and symbolic fundraising offers. With the new donor, you need specificity—donor dollars making a difference. This likely takes profound, organization-shaking change—and a better grade of accountants.
   
5. Vital brand.  The old-line low-relevance fundraisers usually have bland, generic, and low-impact brands, which are appropriate for the old donor. But now you need an exciting brand the promises (and delivers) significance and involvement in something exciting.
   

Not quick. Not easy. But necessary. Besides, who wants to keep being stupid?

Jeff Brooks is creative director at Merkle, a direct-response agency serving the nonprofit world.  He blogs at the Donor Power Blog.

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…but some are more equal than others

You’re meeting with a nonprofit Board as it tries to establish a mandatory minimum gift by individual Board members.  These meetings are always excruciating because Americans would rather detail their sex lives--honestly!--than talk about money.

But this meeting is about to become doubly excruciating, because the agency in question serves poor people of color and has one or two Board members of color adrift on a milky sea.  Often these Board members have been recruited from institutions in the neighborhood the agency serves--the pastor of a local church, perhaps. 

So no sooner is the toxic monetary topic broached than some well-meaning pale person says, “Well, of course, whatever number we pick we wouldn’t expect Reverend Jones . . . “ and then tails off because s/he doesn’t want to say what s/he’s thinking so obviously it could be spotted on Google Earth: “ . . . . wouldn’t expect Reverend Jones TO HAVE ANY MONEY BECAUSE HE HAS DARK SKIN AND LIVES/WORKS IN THIS AWFUL NEIGHBORHOOD.”

[The Nonprofiteer doesn’t mean to suggest that only agencies serving poor people of color do, or should, have nonwhite Board members.  Rather, she’s trying to give clueless whites the benefit of the doubt.  At a community-based social service agency, white Board members might conceivably think Reverend Jones doesn’t have any money because of the neighborhood he and the agency share.  Whereas at the city’s main art museum, white Board members who hastened to exempt the Reverend from having to make a gift would be proceeding solely and blatantly on the basis of their beliefs about his skin color.]

If the consulting gods are with you, you’ll be spared the necessity of forcing the issue ("You wouldn’t expect Reverend Jones to do what?  And why not?") by that gentleman’s polished pastoral tact.  Reverend Jones, who’s too polite to have said “I’m right here!” when his Board colleagues began talking around and about him instead of to him, will ask, ‘How much money are we talking about, again?” and, once the number is reiterated, nod and say, “That wouldn’t be a problem for me.”

But you can’t always expect to be so lucky; because, again, most people will do whatever they must to avoid talking about money, especially their own.  So any random Reverend Jones--one might almost say any self-preserving Reverend Jones--will most likely keep his mouth shut and enjoy not being pressed for a contribution the way the rest of the Board will and should be.  Because after all, if you’re going to tolerate the costs of your fellows’ racism you might as well enjoy the benefits.

The Nonprofiteer can’t possibly be the only one who understands that we’re talking about literal costs, actual lost gifts, to every charity in America where white people let their racism trump their good sense.

And it goes beyond Boards: friends of friends of ours, who’ve retired very comfortably, observe that local charities never ask them for contributions.  Why?  They’re only guessing that the color of their skin, coupled with the slight drawl that reveals their roots in the South, causes people to assume they’re just “poor country Negroes.” They, like the imaginary Reverend Jones, are gracious about it, but you can tell it sticks in their craws.

So here are some suggestions.  Every Board President should--and if s/he can’t or won’t every Executive Director must--impress upon every member of his/her Board the sacred Nonprofit Syllogism:
All Board members must be treated equally;
Every Board must include members of color;
Therefore, Board members of color must be treated equally. 
Client representatives are an exception to this rule, though the Nonprofiteer strongly suggests that even they be asked to make some contribution--"meaningful to the giver” is the phrase currently popular.  Why?  Mostly because it requires non-client Board members to treat clients as partners instead of supplicants, but also because it makes for a great story when you’re out soliciting.  “100% of our Board gives to support the agency--even the client members!”

If necessary, mention that
Not all poor people are black or brown.
Not all black or brown people are poor.
Most poor people are more generous (by percentage of income) than most rich people--and if that makes you uncomfortable, handle it by giving more yourself not by asking less of others.
If you have indeed recruited people to your Board with some special half-articulated understanding--he’s a community representative; s/he’s from a cooperating nonprofit and has prior fundraising commitments--now’s the time to revisit that understanding.  In a private conversation, those “special cases” will readily agree (at least in principle) that every Board member needs to meet the same standard. 

So ask her to do so.  Don’t just assume she can’t.  There’s a tendency to let one’s prejudices skew the outcome--to try to spare someone the imagined embarrassment of having to say, “I don’t want to do that” by asking them to do something else, something less: “Chair our new Community Advisory Board!  You won’t have to give any money!”

But that’s just compounding the original underestimation of Ms. Special’s capacity--which may well have been based on her race.  Lest you accidentally create a separate-but-unequal Board for people of color, ask her to accept the full range of Board responsibilities, and give her the chance to decline.  If she does, you can always float the Advisory Board idea then--but she won’t.  Because amazingly when you treat people as your full partners, they return the favor.

Kelly Kleiman, who blogs as The Nonprofiteer, is a lawyer and freelance journalist whose reportage and essays about the arts, philanthropy and women’s issues have appeared in the Wall Street Journal, Washington Post, Christian Science Monitor and other dailies; in magazines including In These Times and Chicago Philanthropy; and on websites including Aislesay.com and Artscope.net.

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If we don’t give donors power, they can take it

It’s easy to talk about the subject of empowering donors as a theoretical option for forward-thinking nonprofits.

It’s not going to stay that way.  If you don’t give donors power, they’re going to seize it, leaving you all goggle-eyed and confused, like Marie Antoinette, wondering what happened.

At Network For Good, an online giving portal, 20 percent of donors choose to be anonymous when they give.  Their gift goes to the nonprofit of their choice, but their receipt is issued by Network for Good.  The organization they gave to can neither thank the donor, report back, nor ask again.  It’s not a very attractive situation for nonprofits.

Last year, anonymous donations through Network for Good were more than $7 million, with an average gift of about $100.

While some donors may choose anonymity for noble or spiritual reasons, a significant group like what nonprofits do (like it enough to shell out a sizeable gift), but they don’t like the nonprofit--they don’t want a relationship at all!

The old contract with donors was this:  You give to us, and we have the right to do whatever we want with you after that--send as much mail as we want, telemarket, rent their names to others .... Worse, many nonprofits fail to report back on the impact of their giving, fail to offer donors meaningful choices, and don’t treat donors with respect.

A lot of donors don’t buy in to this contract.  They want to do good deeds, but they don’t want the stuff that follows.  And now, with places like Network for Good at their disposal, they can opt out of the contract.

This is going to get bigger, not smaller.

Your only defense: earn the right to have relationships with donors.  Make it so being on your list is the coolest experience around, and they spread the word.

For more on this subject, read Your Secret Donor Hates You at Trent Stamp’s Take, a blog by Trent Stamp, president of Charity Navigator.

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Lose the Marketing Department

The marketing department is destroying your organization. Not on purpose, but the very fact that marketing is segregated into a department is what’s doing the damage.

It doesn’t matter how smart (or lacking in smarts) your marketing department is.  If marketing isn’t built into your entire organization from top to bottom and side to side, you’re lost. 

It’s everyone’s job to tell your story in a way that donors, prospective donors, and third parties (like the press) can understand.

It’s everyone’s job to create memorable, exciting programs that donors can love and support.

It’s everyone’s job to take part in the conversation that’s forming around the things you impact.

It’s everyone’s job to know, understand, and respect donors.

When these things are only the marketing department’s job, they’ll only get half-way done.

Sadly, many nonprofit marketing departments think it’s their job to be gatekeepers for “marketing” functions, keeping everyone else out of it. That leads, usually, to an irrelevant marketing department that spends its time and energy controlling the message and keeping others quiet, while they themselves neglect the real things: buidling a truly remarkable organization, and the genuine conversation that forms around such organizations. That’s what marketing is becoming.

Unless you have a marketing department.

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Private Language in Public Places

BY JEFF BROOKS

He works every day at the corner of 6th and Pine in downtown Seattle.  He’s been there for years.  He holds a sign that says (in part; it’s a full paragraph long):

FRYE APT AND SEATTLE POLICE

YOUR COMMUNIST-DEVIL COMMUNIST LIAR!

He doesn’t interact with the people that swarm around him on the sidewalk, but he shouts at cars as they pass.  His voice is deep, gravelly, loud, and unintelligible. 

6th and Pine Man has something very important to say, and he’s absolutely dedicated to saying it.  Trouble is, he’s speaking his own private language.  He’s going to have a lot of trouble attracting supporters to his cause.

Here’s another Seattle sign that’s working to gain some traction for an important issue:

This is a yard sign you’ll see often in my neighborhood.  The organization behind it is Queen Anne Neighbors for Responsible Growth.  A locally owned and much-loved grocery store faces being bought, torn down, and replaced by a national chain supermarket of the worst, most characterless kind.

You wouldn’t know that from this yard sign, would you?

That’s because like 6th and Pine Man, QANRG has chosen to speak a private language in public.  In their case, they’re trumpeting the philosophical underpinnings of the argument against the Big Ugly Supermarket.  That’s very sophisticated, but it’s going to cost them support.  Because the real issue is No Big Ugly Supermarket in our Nice Neighborhood! Even if you whole-heartedly agree with what the sign says (assuming you understand it)—it doesn’t lead you to any specific call to action that might galvanize opposition to the new supermarket.  And that’s too bad.  Because it’s a worthy cause.

Any time you’re talking in public, take a moment for a reality check.  Are you talking to those you’re targeting?  Or are you talking to yourself?

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Cruelty to Donors?

JEFF BROOKS on believing in fundraising.

To hear some fundraisers and consultants talk, you’d think asking donors to give was a vile and rude act.  Some in our industry seem to equate a direct mail fundraising appeal with a slap in the face by a very ripe fish: painful, odoriferous, and just plain uncalled for.

It’s just not true.  Except in one way:  It’s self-fulfilling.  Because if you believe fundraising hurts donors, I can almost guarantee you’re doing fundraising in a harmful way.

For most donors, fundraising is the main way they experience an organization they support.  To say they love you but hate your communications is to attribute them with a nearly clinical level of cognitive dissonance!

How much better it would be to work from a higher and more beautiful set of assumptions:

• Communicating with donors is good.
  
• Donors love to hear from us.
  
• Every touch can and should be a positive, relationship-building experienceeven when it doesn’t generate a gift.
  

You’ll have a much more satisfying life and do more life-affirming and effective fundraising if you believe these things rather than the self-destructive assumption that fundraising is a necessary evil.

Of course you don’t want to send irrelevant, money-wasting mail to people who aren’t interested and unlikely to give.  That’s what smart segmentation is about.  But in your heart, you need to believe that asking is good.  Otherwise, you are on a path to anti-donor communications and fundraising failure.  And one heck of a miserable career in fundraising.

If you struggle with that dark sense that asking is shameful, wrong, or hurts donors, repeat this little catechism every day until your attitude improves:

• Donors donate.
  
• Donors love to donate.
  
• Giving feels good.
  
• Giving is good.
  
• Creating opportunities for giving is a great service to humanity.
  

When you feel these truths in your heart, you are a fundraiser.

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Does Your Program Officer Actually Read Your Progress Report?

PERLA NI on the bureaucratization of the nonprofit sector.

“I’ve randomly inserted pictures of my grandkids in my progress reports,” one executive director of a prominent mid-Atlantic nonprofit told me. “I’ve inserted lines like, ‘If you really read this, call me.’” He was bemoaning the fact that he’s forced to spend time writing reports that his foundation officer doesn’t seem to read. “Next time,” he said, “I’m going to put in an ad for my used car.”

This executive director’s stories would be funny if they weren’t true. I hope his situation is an exception, but it represents the sad state of affairs surrounding progress reports. Foundation folks I know have admitted to me that the program officer is typically the only person who reads the reports. After that, nothing is done with them. One foundation actually told me, “We say we believe in knowledge building, but the truth is, the progress reports are not shared with other staff members or the board.”

There’s a difference between bureacratization and professionalization. A lot of professions, such as law and medicine, do involve a lot of bureacracy and paperwork, but those professions revolve around many institutionalized rules. It sometimes seems that the nonprofit sector is being bureaucratized faster than it is becoming professionalized.

There are usually three prerequisites to becoming a profession:
1. There must be an accepted body of knowledge.
2. There must be a code of ethics.
3. And there must be a body to enforce the code of ethics.

The nonprofit sector is developing in all of these directions, but it isn’t quite there yet. We don’t have an accepted understanding of effectiveness. There is no code of ethics, except for fundraisers. And if we did have a code of ethics, there would be no enforcement body to suspend or admonish anyone who broke it.

The venture capital industry is similar to our sector in that is also not quite a profession; but it, however, has managed to avoid the bureaucracy. In venture capital, funders rarely ask portfolio companies for progress reports. The response would be, “What? You want me to stop calling potential customers and write a report instead?” Venture capitalists rely on quarterly phone calls or informal lunches. Formal, written quarterly earnings reports are rare until a company goes public.

While I heartily agree with the need to measure progress, do you think we’ve gone a bit far in terms of bureacracy and formality in our sector? Even though we’re not really a profession yet, do you think we’re becoming too bureacratic? Does writing progress reports give you a headache? Do you think your foundation officer really reads your reports? Would it be just as effective to brief them by phone, or in person over lunch?

Please tell us what you think.

Perla Ni, founder and former publisher of Stanford Social Innovation Review, is the founder and CEO of GreatNonprofits. She is also a co-founder of Grassroots.com.

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The More They Give, the More They Love You

JEFF BROOKS on the Ben Franklin Effect.

I know professional fundraisers whose mental picture of donor goes like this:  Donors give to us with tight fists and gritted teeth.  Every time we ask donors to give, we withdraw from a limited pool of good will—and every time they give, an even bigger withdrawal happens.  Nonprofits subsist on a tragic irony:  While they seek to do good in the world, they rely on fundraising—which is a bad thing.

That’s balderdash.  Self-destructive balderdash.

Donors love to give.  They love the organizations that create outlets for their generosity.  The more they give, the more they’re likely to give.  (In fact, the top indicator of likeliness to give is recency of the previous gift!) They like being asked, and they like even more saying yes.

Furthermore, giving can lead to other forms of involvement: Volunteering, advocacy, recruiting others.

It’s called the Ben Franklin Effect.  Because Franklin once said:  He that has once done you a kindness will be more ready to do you another, than whom you yourself have obliged.”

That’s the rich, wonderful ground you’re on as a fundraiser:  Giving begets love.  Every time a donor gives, they grow more bonded to your organization.  More likely to give again, more likely to give larger gifts.  More likely to tell her friends about you.  More likely to answer other calls to action. 

Reality is directly opposed to the belief that donors are a non-renewable, zero-sum resource and that fundraising is a necessary evil.

A lot of the world of commerce is win/lose.  One side gains at the expense of the other.  Not fundraising.  The only losers here (other than frauds) are those who don’t join the circle, who hold back out of fear, who fail to see how much donors love what we do together.

(Photo courtesy of Stockxpert.)

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Marketing to Donors

BY PERLA NI

Three take-away tips on nonprofit fundraising from maketing guru Seth Godin.

Ideas that spread win. Period. This is true for nonprofits, politics, and business, said Seth Godin.

Sliced bread was invented in 1913 by Otto Frederick Rohwedder. He took out a patent, built a factory, and waited for the orders to come in. Well, not many orders came in. It wasn’t until 1930 when Wonder Bread started packaging and marketing pre-sliced bread that it became a success, said Godin.

This was one of the entertaining and enlightening examples of marketing successes and flops that Seth Godin presented at a fantastic one-day seminar that I recently attended. Seth Godin is a marketing guru, author of books like the Purple Cow and founder of www.squidoo.com, a Wikipedia-like community that raises money for charity. His seminars in New York are targeted at both for-profits and nonprofits. (He comps select nonprofits. Thanks Seth!)

How marketing is done today leaves a lot of room for improvement. According to Godin, mass advertising no longer works. For instance, Procter & Gamble spends $5 billion a year “interrupting people with messages that they don’t want.” And in an age in which we have thousands of internet and media outlets, it’s too expensive to try to put your message in front of enough people. Plus, by now, people are desensitized to advertising and don’t want to be advertised to. The old “interruption” model of marketing no longer works.

What to do if you are a nonprofit with a worthy message to get out?

1. Nonprofit fundraisers should realize that they are in a “feel good” industry. And this is true of for-profits, too. Tiffany’s doesn’t sell jewelry; it sells the aura and ooh and ahh feelings associated with the blue Tiffany box. In Godin’s words, “Just as no one needs bottled water, no one needs to donate.” So think about how your marketing can focus on how you make your donors feel.

2. Stop using interruption marketing. Marketing should be like looking for a mate. You don’t go into a bar and pop the question to strangers. You meet strangers; you turn strangers into friends; friends become girl/boyfriends, and so on. Permission cuts through the clutter, said Godin. And permission is earned over time.

I think most nonprofits understand his point that relationships take time to nurture. It’s just hard sometimes when your nonprofit is desperate for money and every investment banker you meet looks like a walking wallet. I know that direct mail does work for many nonprofits, but there’s an awful lot of waste involved, and people get irritated by the avalanche of fundraising letters that arrives around November.

Godin used Google adwords as an example of non-interruption advertising. Advertisers reach out to their targets at a point in which the consumer is searching for information. The ads are relevant to his/her search.

3. Learn from the church. Godin asked a great question: Why does such a large portion of donations go to the Church? First, people have given the Church permission to ask for money; they choose to show up every week. Second, givers are prompted to give by the people around them. Giving becomes a social requirement. Godin suggests using this effect in fundraising. Nonprofits should get people around a table, go around the table, and have each person commit to what he/she will give.

Seth Godin has A LOT more to say. If you can make it to his next seminar in New York, go! Check his blog for dates: http://sethgodin.typepad.com/

Please share your tips and experience below…

Perla Ni, founder and former publisher of the Stanford Social Innovation Review, is the founder and CEO of GreatNonprofits. She is also a co-founder of Grassroots.com.

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