Nolo’s Fundraising Tips for Busy Nonprofits

In my last post on text-message-based fundraising, I and the rest of the world were impressed by the American Red Cross having raised $9 million for Haitian relief efforts via mobile phone text messaging. That number has since gone up to $26 million -- even harder to ignore.

If there were any lingering doubts that this type of fundraising has caught the popular imagination, one need look no farther than the 2010 Oscars ceremony, at which the good folks accepting the award for best documentary, "The Cove," flashed a sign saying, "Text Dolphin to 44144." (You had to be watching closely, since the powers-that-be quickly moved the cameras in another direction -- with the predictable result that the moment is getting more media coverage and video linkings than it would have otherwise.)

But what's the bottom line -- has mobile text messaging (or "SMS") become, overnight, the hottest fundraising strategy around? The fees for nonprofit users are apparently trending downward as more providers enter the market, such as the Mobile Giving Foundation.

Nevertheless, a recent report called the "2010 Nonprofit Text Messaging Benchmarks" report concludes that, while text messaging can be an effective part of a communications mix with existing supporters that also includes email, the Web, and direct mail, it's main role for the moment will be to reinforce other messages and provide an immediate engagement opportunity in urgent situations.

In other words, if you're not responding to a widely known-about crisis like the Haiti earthquake, don't start counting your millions just yet. But start collecting your supporters' mobile phone numbers, just in case. 

I was having dinner with friends recently, and out of nowhere, one of them began excitedly describing her experience of having donated $10 to a Haiti-related charity via a mobile phone text message. Her words, more or less, were: "It was so easy! I didn't have to call a number or fill out a form -- all those steps that might normally make me feel like I'd taken on a chore and might want to give up in the middle. Within seconds, I'd made the donation, and felt good about it."

For readers not familiar with this form of giving, here's what the mobile phone donor literally experiences: They're told (via various marketing means) that, by simply typing a numeric code into their mobile phone, and then typing in a word, they can make a donation of a particular amount -- usually $1, $5, or $10 (the max).

For the American Red Cross's Haiti efforts, for example, donors were advised to text the word, "HAITI" and send it to 90999. Donors then get a message asking them to confirm their wish to donate, to which they'll hopefully respond by typing the word, "yes" back, at which point they get another automated confirmation message. When their mobile phone bill comes, they'll see the extra charge representing their donation.

My friend isn't the only one who's finding it easy and satisfying to give via text message. If you look at recent press reports, a number of charities -- particularly those raising funds for Haiti -- are making good use of donors' urges to do something to help right now, immediately, with no unnecessary steps. As Verizon spokesman Chuck Hamby said to Richard Mullins for an article in The Tampa Tribune, "People want to do the right thing and give. When you make it as easy as tapping out a one-word message, people respond."

The numbers are, in some cases, eye-popping -- especially given that the mobile donation systems limit people to $10 per text message or $25 per cause (apparently to protect people from having their kids start happily pressing buttons on their phone). The American Red Cross reported as of January 14, 2010 having raised more than $5 million for Haiti via text-message donations. (See Consumer Reports blog.) 

Of course, such big numbers are partly explained by the fact that fundraising for emergency relief efforts tends to dwarf (or even take away from) fundraising for ongoing needs. Meanwhile, Consumer Reports noted that the American Red Cross's intake was more than three times the amount of money that all U.S. charities had raised via text in the last two years combined.

Nevertheless, the success of the American Red Cross's effort may have awakened audience awareness that texting is an available and easy way to give. What's more, texting as a giving method is reportedly helping charities reach potential new donors who are otherwise hard to connect with, particularly young people or those in minority communities.

Okay, so how realistic is this as a fundraising method for small-ish nonprofits? The numbers still look a bit iffy. The widely acknowledged go-to place for setting up such arrangements is the MGive Foundation. It currently charges a one-time setup fee of $500, plus $399 a month (at its lowest program level) for ongoing services with a one-year minimum contract, plus a per-transaction fee of 35 cents and 3.5% of the donation. This obviously works best for large nonprofits with a big public presence. (In fact, to sign up, MGive requires that your revenues be at least $500,000 per year.)

The fees would be worth the price even for a smaller nonprofit, of course, if the dollars coming in swamped the up-front investment -- but the case studies shown on its website don't indicate that any small or local nonprofits have seen dramatic results. In fact, one of the success stories mentions Defenders of Wildlife (a nonprofit with overall annual revenues of $31 million in 2008) having raised around $2,000 via texting within a two-month period, also during 2008 -- nice, but hardly an avalanche of money.

We're just at the beginning of learning how to use this giving method, however. As more nonprofits get on board, no information will no doubt be developed about how to engage donors' interest and get the maximum return on a text message campaign. It's probably worth keeping your eyes on this emerging possibility -- especially so that you don't try to get on board after its usefulness has peaked! 

During a recession may seem like the last time your nonprofit would want to go without the services of its executive director or other key managers -- but such thinking just means you haven't read the report, Creative Disruption: Sabbaticals for Capacity Building and Leadership Development in the Nonprofit Sector, published by Third Sector New England and CompassPoint.

Based on surveys of nonprofit executives who received grants to go on sabbatical, the report shows how their absence (of about three months) can help them recharge their batteries and return with new ideas and energy around managing and raising money for the organization. It can also help other staff learn new skills and perhaps get ready to assume higher-level roles within the organization.

The grants themselves (available from sources detailed within the report) typically cover the executive's salary during the absence (which could allow your organization to hire some temporary help) along with, in some cases, travel and related expenses, plus help for the organization itself during the transition. Sounds like a great way to avoid burnout and shake things up a bit!

If you're feeling the Twitter void from Miley Cyrus having deleted her account, here's something new to keep you busy: tweets from Bill Gates!

Which raises the question, is someone at your nonprofit keeping the world up on your activities via Twitter yet? It's one of the fastest and easiest methods of reaching out to people.

Of course, one has to wonder whether Gates writes his own entries or delegates this to his PR team -- he is, after all, reputed to be a pretty busy guy. But if you don't have your own PR team to handle such things, just bear in mind that there's something to be said for the personal touch, with messages that come from your heart, as your nonprofit confronts its challenges, in real time.

Foundations can be narrow in their funding scope, it's true, but I recently came across a happy reminder that funding niches can be found in the most unexpected of places.

Audubon magazine's January/February 2010 issue reported on the discovery of a new subspecies of rabbit by researchers who'd been funded by a grant from Playboy Enterprises. They named it, appropriately enough, Sylvilagus palustris hefneri.

Before you start adding bunny projects to your slate of activities, take note that the grant has since run out, and the Playboy Foundation has turned its focus to supporting civil and reproductive rights. But who knows what other interesting matchups between corporate image and funding needs have since opened up?

Lest we think the news is all grim these days, here are reports of some nonprofits that have launched successful fundraising efforts despite the poor economy.

For example, the Salvation Army of Livingston County, Michigan reportedly brought in more than $180,000 in Red Kettle Campaign contributions over the holiday season, surpassing its 2008 total of $158,000. It took 900 volunteers working more than 1,150 hours, including bell ringers who stood out in the cold and snow for hours at a time, but they ended up overtaking even their own money-raising projections.

In Cape Cod, Massachusetts, the Needy Fund -- which collects money for local individuals residents to them pay for food, rent, mortgage payments, utility and heating bills, medical bills, and more -- is said to have surpassed its holiday fundraising goal of $625,000, having reached $665,611 by December 31st.

Up in Canada, the "Polar Bear Dip" (billed as Canada's Largest Charitable Polar Bear Festival, in which 600 participants this year jumped into icy cold Lake Ontario on New Year's Day) brought in a record $230,000 for charity. It will go toward third-world water projects.

Is there any common thread between these? To me it looks like basic people power. Even though many people these days have far less to give, a lot of them (or us) joining together to give of their time, or at least a little bit of money, can add up to a lot. And if there's a bright side to the recession, it may be that we're all developing more compassion for how quickly one's luck can change, and becoming more willing to help others who've gotten the worst of it.

Here's hoping for more good news in the new year!  

 

 

Here's an alarmist headline for you, from the Consumer Reports Money Blog: "What's a donor to do when a charity watchdog lowers its standards?"

The article expresses concern (if less outrage than the title would imply) over the BBB Wise Giving Alliance's recent announcement that, in considering whether to accredit a nonprofit, it will look at whether at least 55% of its expenses were used for charitable programs, as opposed to fundraising and administration. That's a reduction from the former 65% standard. Their reasoning was that the economy is making it difficult for nonprofits to fundraise. They also said that their standard for spending on fundraising will go to 45% of contributions, up from 35%.

Is this a "lowering of standards" that should make donors worry? I don't think so.

In fact, the very idea that there's something nefarious about spending money on administration and fundraising strikes me as inappropriate. What is fundraising, except an effort to raise community awareness and get people involved in a cause -- so that the cause can be supported an maintained? Why should we consider that activity divorced from actually doing the programmatic work? And even if the two are separate, do donors expect fundraisers to work for free? This might have been realistic in an era when board members had extra time to play with, but nowadays, everyone who isn't desperately looking for a job is working darned hard to keep the one they've got. Paid fundraisers are a must, and the good ones don't come cheap.

Sure, I get it that some organizations have let their top employees milk the funding while the programs suffered (though not as wealthy as corporate CEOs). But to punish every organization for the few who've gone too far seems like overkill. There's got to be a better way to judge which organizations are doing good work. 

The holiday season is upon us and so is the year-end deadline for making charitable donations for 2009. Many people wait until the last minute to make their final contributions for the year -- which can be nervewracking for nonprofits as they compete for those last gifts.

One way to keep your relations with your donors solid at this time is to understand the bigger tax picture, and do your part to make sure they get all the tax benefits possible.

Whether it's cash, stocks, clothing, or other property, the IRS rules for deducting donations have changed over the last few years and gotten stricter. Here's what you should know about the current rules for charitable giving.

• Clothing and household items. To be deductible, these items must be in "good used condition or better." The IRS doesn't say what constitutes "good used condition or better" but you can create guidelines for what your organization will or won't accept, which are considered helpful in determining what the IRS might view as acceptable. If the amount being claimed for a single item is over $500 and there is a qualified appraisal, then this standard does not apply. You'll also need to give the donor a receipt that includes your nonprofit's name, the date of the contribution, and a written description of the donated property (but not its value). Be sure you train your staff people about the importance of these receipts and how to fill them out.
• Monetary donations. Under relatively new rules, donors must have a written record for all cash donations -- no matter how small. For donations under $250, donors can use a bank record (such as a cancelled check or credit card statement) or a written communication from the nonprofit. That means, for example, that if you hold an event and pass the hat, donors who make cash donations won't be able to claim a deduction. They'll appreciate it if you remind them of the rules, and recommend that they either use checks or see someone for a receipt. The receipt must show the name of your nonprofit and the date and amount of the contribution. For donations over $250, the long-standing requirement that the donor obtain a written acknowledgment from the nonprofit with amount and date of the contribution still applies.
• Certain IRA contributions. Under an IRS rule scheduled to expire at the end of 2009, donors age 70 ½ or older can make tax-free transfers from their individual retirement accounts (IRAs) to certain eligible nonprofits of up to $100,000 per year. The transfer must be made directly by the IRA trustee to the nonprofit and the amount transferred counts in determining whether the IRA owner has met his or her required minimum distribution for the year. The donor does not get a deduction for the amount transferred, but it is not taxed as it would be under normal rules.

For more information on charitable deductions and IRS rules for nonprofits, see Every Nonprofit's Tax Guide: How to Keep Your Tax-Exempt Status and Avoid IRS Problems, by Stephen Fishman (Nolo) and IRS Offers Tips for Year-End Donations on the IRS website at http://www.irs.gov/newsroom/article/0,,id=164997,00.html.

I don't usually follow the sports news -- much less point other people to it -- but you've got to check out this article by Rick Reilly, of ESPN Magazine.

It's about a curmedgeonly lawyer named Alfred G. Rava who attended an A's game to benefit breast cancer causes, at which women were offered free mammgrams and floppy plaid sun hats. When Rava didn't get a hat (because he's a man), he sued.

I wish I could offer some words of wisdom about how to avoid such situations, but complainers like this guy are hard to anticipate.

In the meantime, comfort can be drawn from Reilly's report that other A's fans have shown no interest in cashing in on the settlement that resulted from the lawsuit.

 

I'm always on the lookout for a good way to convey the notion of "planned giving" to your donors. It's hard to find a middle ground between vague, circular statements like, "Plan a planned gift today!" and overly direct statements like, "At least leave us something when you die!"

That's why I was impressed by a recent ad in Nature Conservancy Magazine, which displayed a number of gorgeous landscape and animal photos, and read:

THEY'RE MORE THAN PLACES OF LIFE AND BEAUTY
THEY'RE YOUR LEGACY IF YOU WILL IT

Clever, huh? And the "If you will it" was in orange (which unfortunately I don't know how to reproduce on this blog screen). This little tag line manages to convey the positive side of planning for one's demise -- making a lasting difference to the best parts of this world -- while actually getting the word "will" in there.  

Of course, now that they've come up with this word combo, other nonprofits can't simply copy it. But it's a great illustration of the infinite combinations that words offer -- play with the possibilities long enough, and you may come up with a great tag line of your own.

It was only a matter of time before Marge posed nude for a charity calendar, right? Don't miss it, November 15th. The episode is called "The Devil Wears Nada." 

I'm getting weary of studies that tell us what we already know: donor giving is down, foundations have less money than ever, and so forth.

But now, there's a recent study that helps nonprofits actually do something about their need to raise funds: It's from the Center on Philanthropy at Indiana University, and apparently for the first time, has correlated motivations for giving to income and education levels. It found, to quote their press release, that:

• Among lower-income donors (income less than $50,000), the phrases that resonated as a motivation for giving were helping to meet basic needs or helping the poor help themselves.
• Donors with income between $50,000 and $100,000 were more likely than donors in either higher or lower income groups to say that they gave to "make the world better."
• Among donors with income of $100,000 or more, the phrases selected as motivations for giving included "those with more should help those with less" or "making my community better."

Here's the full press release.

Sorry, couldn't resist the alarmist title. Or reading this article on MSN.com about whether paper money can carry flu germs. Turns out, it can.

Of course, I'd never suggest that you turn away cash donations. Instead, how about suggesting to donors that now's the time to get rid of all that germ-infested money!

According to the article by Gary Strauss, "TV: It's prime time for volunteerism," in the Tuesday, October 13, 2009 issue of USA TODAY, there's a movement afoot: to promote, not only through public service announcements, but by actual examples in scripts of prime-time TV plots, the great things about volunteering for a cause.

Yes, you read that right. It's part of a project called "I Participate," and if you keep your eyes open and your tube plugged in, you might notice, for example, crime solvers on Ghost Whisperer donating blood; doctors on Private Practice treating the homeless; 12-year-old Louise on Gary Unmarried making videotaped greetings for U.S. troops; and more.

Of course, the question on everyone's lips is whether this will make a difference. But hey, Strauss points out, when the character Fonzie on Happy Days got a library card, kids all over the U.S. ran out to do the same thing.

All of which leads to another question: If more volunteers start coming your way, will you be ready? The world is full of disgruntled volunteers who started with great intentions, then dropped out because they were bored, frustrated, or felt like they weren't really make a difference.

This seems like a good time to remind readers of the basic principles of orienting and keeping volunteers (which are covered in far more detail in my book, Effective Fundraising for Nonprofits), including:

• Figure out their personal motives for volunteering, and try to satisfy those at the same time as you get some work out of them -- even if they just want to get some exercise or meet other singles!
• Train them well, and ask for a specific time commitment. Counterintuitive though it might seem, demanding more of volunteers can make them understand their own importance to your organization.
• Make their commitment as convenient as possible to fulfill, including finding ways they can work odd or irregular hours if possible.
• Make it fun! You probably need a lot of tedious tasks done, but don't lay these on too thick. Also figure out how to integrate more interesting work into the time volunteers spend at your organization, such as working directly with people or animals.
  
• Show appreciation much more often than you feel is normal. Everyone likes to hear a "thank you," or receive one in writing. Singling out volunteers in newsletters, throwing volunteer appreciation parties, or simply saying "See you next week -- and thanks again for all the great help!" are great ways to do this.

With committed volunteers at your side, you can get oodles more done, and need to fundraise less.

A fascinating article in the Boston Globe discusses how the combination of fundraising and cause-related marketing embodied in the pink ribbon (which indicates that a portion of a product's proceeds will go to breast cancer charities) is a victim of its own success.

Yes, the pink ribbon raises money for cancer research and education. But it also boosts corporate profits, creates an increasingly visible to reminder to women suffering from a disease they'd like to forget about once in a while, and for some, is just too much pink!

There's no easy lesson to be drawn here -- and many charities wish they had the problem of their cause having become overly visible -- but it is a reminder that mixing charitable work and business can create some unexpected public relations issues.