2018 | Nonprofit Predictions

2018 written with Sparkle firework and light bulb , abstract 2018 Happy New Year background concept.

This is the fourth year I have attempted to predict the trends of the coming year. How did I do last year, and what’s next?

With a conservative Administration in place, federal grant funding is under review and constantly in threat of reduction. Still, some nonprofits have continued to do well securing federal grants. But the smart ones have also broadened their work to incorporate more private sector fundraising and partnership-building. Many have also remarked on the current Administration’s desire to push federal funding initiatives out of Washington to individual states for “local” funding and oversight.

Bitcoin and Blockchain, alternative “digital” financial vehicles, exploded in popularity in 2017. I believe this trend will continue in the coming year. For resources that will help you understand and make use of these financial tools, follow this link to the resources section of Carolyn’s Nonprofit Blog.

On another front, here in Texas I continue to see undiminished interest in crowdfunding versus traditional major gift fundraising campaigns. This means many nonprofits are attempting to turn the traditional donor pyramid upside down! But as I have cautioned before, crowdfunding requires research, planning and continuous monitoring (including well after your campaign attains its goal). Many of the same factors involved in traditional major gift campaigns are at work in crowdfunding campaigns. Still, crowdfunding is a relatively “new” approach and attractive to many.

Nonprofit fundraising technologies of all types continue to proliferate. I referenced the text-to-give platform GivBee last year. This year, I’d like to put in a good word for Everybody Helping. Everybody Helping is focused on Millennials, monthly giving (which encourages donors to make small gifts monthly that add up significantly by year-end), it helps nonprofits chart impact, and it includes direct messaging. Thanks to Scott McElroy for providing an in-depth look at Everybody Helping for our local NTEN & NetSquared Nonprofit Tech Club Austin Meetup this year.

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Tracking nonprofit activities with data – and donor requests to review objective data in order to better understand the success of their donations – will continue to increase. Shown above is an Instagram taken during the Social Solutions Impact Summit conference in Austin last fall. Almost every presenter talked about the increase in donor requests for objective data. But also, many noticed that the higher the caliber of their data collection processes, the more efficient and effective their nonprofits have been in achieving their goals.

My new prediction is we will see an increase in full-time, nonprofit data management professionals going forward. To collect data well, to manage it across departments, and to continually make improvements for the benefit of the whole takes time and skill. It is a full-time pursuit. Looking for a new career? Consider General Assembly and its data science courses.

Update | From Fortune CEO Daily, “The fastest growing job in America is… data scientist” (April 6, 2018).

NTEN: Nonprofit Technology Network recently shared an article by Chuck Longfield for npENGAGE this fall, “New Study Monitors Dramatically Transforming Donor Behavior” (October 24, 2017). Some of my earlier nonprofit predictions are reinforced by Chuck’s article.

  • “While the value of individual giving in the United States increased about 3.4% (adjusted for inflation) in the decade from 2003 to 2013, the number of public nonprofits increased 23.4% or almost 5 times the rate at which individual giving increased
  • The impact of the Great Recession of 2007–2009 on the ever-expanding nonprofit sector still challenges recovery of giving to pre-recession levels
  • Baby boomers, infamous disrupters of all commerce, have been dominating the prime age range of giving (45 to 64) for more than a decade.”

He suggests, “There are three fundamental objectives in raising money from individuals: keep the donors you have, increase their value to your organization over time, and recruit more donors than you lose to attrition.” Toward that end, consider using a donor data management system that specifically helps you retain donors, like Bloomerang.

But also, study the personality traits of Baby Boomers, and focus to some meaningful degree on courting them. You would be smart to do so, as they will continue to be influential in philanthropy for the next several years. Boomers tend to have a more emotional reaction to charitable needs, but be careful not to err too much in that direction, because hard data is still being requested by donors of all ages, and by their professional advisors.

“Everything in moderation – that’s what I live by.”

David Gilmour, British musician

I would be remiss if I did not mention an article by Karsten Strauss for Forbes, “The Charities That Raised The Most Money Last Year” (November 1, 2017). Fidelity’s Charitable Gift Fund is at the top of the list,  United Way is second, and Goldman Sachs is third. All three are intermediary grant makers through which donors can pass donations to charities. The activities of the charity recipients can then be monitored by these intermediaries.

“One trend The Chronicle notes is the popularity of donor-advised funds (DAFs), which have seen a 106% increase in contributions in the past five years. DAFs allows donors to have control over the ways in which their money is used while also affording them anonymity. They also do not carry the high overhead and administrative costs of setting up a private foundation.”

Let’s hope in the coming year, more nonprofit support organizations will offer programs about how best to build relationships with professional advisors (as well as the donors who establish DAFs). One of the earliest posts on my blog focuses on this very issue.

Having worked with several professional advisors during my career, I would suggest nonprofits claim and fully complete their GuideStar profiles, securing the gold seal, if not the platinum. GuideStar profiles are about transparency and sharing how professionally you operate. They do not require that you have raised a lot of money.

I know some professional advisors who go straight to GuideStar to review your organization online before they take the time to meet with you in person. Best to have that profile in good order, and be ready for questions. A polished profile will help your nonprofit stand out from the rest. But, less than 1% of all nonprofits in the United States take the time to claim and complete their profiles! As noted by Karsten in his article above, although we have seen more charitable donations in 2017, there are also more nonprofits than ever before. Competition for dollars is as heated as ever.

News flash! Check out DAF Direct, “DAF Direct welcomes donors to recommend grants from their donor–advised fund, also known as a DAF, directly from your website. Neither you nor your donors will incur any download or transaction fees.” Now, this is a forward-thinking invention.

For startups or small nonprofits hoping to ramp up their fundraising success, you might enjoy my recent blog post for Bloomerang, “How Startup Nonprofits Can Break Into the Big Leagues” (November, 2017). GuideStar is one of my recommendations, and you can also read two case studies about my use of and experiences with GuideStar, by looking in the right hand margin of my professional website.

Here’s wishing you and yours a successful 2017 year-end fundraising season, and a prosperous New Year.

Carolyn M. Appleton

For digital trends, be watching Kivi Leroux Miller, Nancy Schwartz and John Kenyon in the weeks and months ahead. I also urge you to join NTEN: Nonprofit Technology Network and avail yourself of the latest nptech information, training and support!

 

Assumptions!

August Rodin
This sculpture came to mind when I began writing this blog post urging my readers to think carefully about nonprofit fundraising. Image courtesy of Wikimedia Commons.

I am as guilty as anyone of assuming everyone knows about and understands what is involved in philanthropy and fundraising. But the truth is, most people are not well informed.

I wanted to share a few of my favorite assumptions – or infamous assumptions as the case may be – in the hope you will avoid them.

“It would be great for our nonprofit if you would agree to be paid a percentage of what you raise.”

Doing so is considered unethical by every professional nonprofit support organization and association today. It seems like a marvelous idea to some nonprofits not to pay their professional fundraiser(s) until the money comes in, despite the outlay of their time, experience, connections and personal finances. And if the fundraiser does not know the history of the organization and its prior challenges, they can be blind sighted when seeking charitable donations. In the drop-down menu of this blog (at the top), you will find a section of ethical resources that will help you steer clear of this unethical assumption. I also want to say to the uninitiated – those new to nonprofit fundraising – don’t feel bad. People ask me about percentage-based fundraising weekly, particularly those from the for-profit sector. Just do your research before you ask.

“We raised the money and we no longer need a fundraising professional on staff. Done!”

How sad I have been to invite some of my most cherished donors to support a project, to have raised substantial sums, and to be told the nonprofit no longer needs help at the end of the fund drive. The donors often feel adrift when this happens, and they question both the nonprofit for such short-sighted decisions, and sadly, the successful fundraiser. In other words, the very person responsible for your financial success is kicked out. Those who could not do the job remain on staff. The logic of this assumption is questionable. Some nonprofits are also unaware that after building tremendous energy and enthusiasm for a cause, they can frequently keep on going and raise even more. Missed opportunities abound in these cases.

“The economy is in terrible shape and we should stop fundraising!”

This is a tough decision to be sure, and it should be considered thoughtfully. I have seen more than one persistent nonprofit with calm and determined leadership attain their seven-figure fundraising goals during very difficult financial times. I have also seen donors one thought would be gun-shy of tanking stock markets, make extraordinary leadership donations. One of my favorite foundation executives, the late Valleau Wilkie Jr. of Fort Worth, Texas once said to me, “if you get out of line, there will be dozens of other nonprofits stepping in to take your place.” Keep going.

“We must read the news to find donors for our project.”

More than once, I have visited with nonprofit Board members convinced someone in the news not affiliated in any way with their nonprofit is a natural candidate for solicitation. But most are not. Research online is essential to gain as much background information as you can about prospective donors. But simply because someone appears in the news often (and they appear to be “rich”), this does not qualify them to be your donor. If you read my article on high tech research, you will understand how sophisticated research can be game-changing, if and when you need it. But also, take time to review your own donor records, mailing and email lists. I have found “hidden gems” in those lists often, people well worth cultivating who have been receiving information from your nonprofit over time, but who have never been cultivated for a larger gift. One organization I worked with turned a $25 annual membership into a $5 million donation, for instance. Dig deeper.

“We have tried and tried. These prospects will not give. Don’t bother.”

This is a favorite. I have visited with prospective donors prior to submitting a grant request, discovered an issue about which they are concerned, addressed that issue head-on (often it is simply an honest report about prior activities, and the resumption of regular communications), and I have secured a grant. Sometimes, I have expedited more than one grant from the same source within a single fiscal year. But other staff members were vehemently convinced I was wasting my time. Never say never.

I have a positive, can-do attitude when it comes to nonprofit fundraising. I have seen the worst and turned around several “impossible” campaigns (by hand). The advice I share comes from, “the trenches.” While my two college degrees helped me learn how to conduct research, develop a convincing argument and write coherently, real life experience provided these insights. For those new to the profession, I suggest you attach yourselves to a seasoned professional as I did at the start, to gain more in-depth knowledge along these lines.

And I urge you not to fear challenges. If you believe in a cause but there are problems, fix them and raise the money you need. Think smarter. Anything is possible.

Nonprofit Fundraisers’ Bill of Rights

Bill of Rights
Click to reach ethical fundraising resources from the National Council of Nonprofits.

I have been a respectful adherent of the Donor Bill of Rights since entering the field of nonprofit fundraising back in the 1980s. The Association of Fundraising Professionals (AFP) notes:

“Philanthropy is based on voluntary action for the common good. It is a tradition of giving and sharing that is primary to the quality of life. To ensure that philanthropy merits the respect and trust of the general public, and that donors and prospective donors can have full confidence in the nonprofit organizations and causes they are asked to support, we declare that all donors have these rights.”

But after many years working in the trenches of nonprofit fundraising, I believe a Nonprofit Fundraisers’ Bill of Rights is also in order.

Nonprofit Fundraisers

Below, I have listed the Donor Bill of Rights along with commentary about the nonprofit fundraiser’s point of view and “rights.”

I. To be informed of the organization’s mission, of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes.

Nonprofit development staff are sometimes asked to solicit donations but over time, they may discover the funds they solicited are not being used as originally discussed. The nonprofit may be unable to effectively carry out the project as intended.

Development staff can be tremendous allies in this situation. They should be informed and given the opportunity to translate changes to the donors they solicited, thereby ensuring an honest relationship and retaining personal, professional and organizational integrity.

Sometimes nonprofit organizations fear a negative reaction from donors if a change of direction with an important project is necessary. But I have found if changes and challenges are aired in a forthright manner, donors appreciate the candor and often continue to give more.

II. To be informed of the identity of those serving on the organization’s governing board, and to expect the board to exercise prudent judgment in its stewardship responsibilities.

This is good protection for fundraising professionals as well. Development professionals need to be able to learn about, meet and interact with those serving on the Board in order to function properly in their jobs. But sometimes senior executives prevent interaction between development professionals and staff and Board members. This is a mistake.

Most Board members welcome the advice and support of development staff. If they do not interact, problems may ensue. Development professionals are donor advocates and allies. When allowed to do their job properly, the better the reputation of the nonprofit, its Board, and each and every donor with whom they work.

I once heard a foundation staff member arrogantly proclaim they would only be “friends” with donors, not “development officers,” as if being a development officer is a lowly office. Beware: oftentimes the development officer is one of the most knowledgeable staff members at the nonprofit organization, one who cares about the organization’s donors the most. They will fight for you if you allow them to do so.

III. To have access to the organization’s most recent financial statements.

Not only should nonprofit development staff have access to Form 990s – which today one can find readily on GuideStar – they should be encouraged to review those financial documents and to become knowledgeable about them. As donors and professional advisors become more savvy (and discerning), being armed with this knowledge is essential to functioning properly on the job.

I have a case study on GuideStar that addresses this very topic.

IV. To be assured their gifts will be used for the purposes for which they were given.

Similar to the first tenet discussed, development staff should be informed if a donation is not being used for its intended purpose. Sometimes, program staff and others in positions of leadership fail to share changes with the development department. Nonprofit fundraisers should be given the opportunity to discuss any changes in terms of the project(s) funded with the donor(s) they solicited originally.

V. To receive appropriate acknowledgement and recognition.

Once a grant or gift has been awarded, and if the donor does not require anonymity, then appropriate recognition should be given in project materials and organizational publications (online and hard copy). Verbal recognition and acknowledgement on social media can also be meaningful.

Those of us in the nonprofit sector know it is often the case that volunteers help open doors and solicit gifts from individuals, families, foundations, corporations and government agencies. They deserve recognition and thanks for their efforts. But sometimes it a fundraising professional on staff who has conducted the research necessary to identify donors, and they are the one who has made the all-important introduction, and secured the gift.

Hard work and successful staff achievements should be acknowledged and recognized by nonprofit administrators and members of the Board. Yes, volunteers need and deserve recognition, but don’t forget the development staff. Retention of quality development staff is one of our sector’s greatest challenges. Although reserved when it comes to religious opinions, I like this quote by Joel Osteen:

“Praise is powerful. Praise will break chains, turn problems around and defeat enemies. Praise will give you the victory.”

VI. To be assured that information about donations are handled with respect and with confidentiality to the extent provided by law.

Sometimes development staff are not kept in the “loop” when donations are announced by organizational representatives verbally, online or in print. Fundraising staff must guide the announcement process and help the nonprofit they represent maintain the wishes of each donor regarding confidentiality, proper name spelling, announcement timing and the like.

Sometimes, marketing and public information specialists chafe when partnering with development staff. I have noted one concern is they perceive their work to be “pure” – they seek to represent the institution factually to the public and to the media, and they do not wish to be “tainted” by discussing donors. But nonprofits survive by securing charitable donations, and these two staff functions must work together harmoniously.

VII. To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.

This tenet is also true for nonprofit fundraisers. Development staff should not feel that in order to cultivate a donor relationship they must run personal errands for donors, become a personal driver or shopper, or conduct other business unrelated to the nonprofit organization and its mission.

Should a donor or prospect become verbally abusive or make improper advances, development staff should be encouraged to report such activity to their superiors, and they should expect to be protected. They should not fear being fired.

Nonprofits are hungry for charitable donations, but we as a sector must retain integrity. Nonprofit organizations should not allow improper behavior by donors or potential donors because they are desperate for funding. Of course, handling delicate situations diplomatically is essential.

VIII. To be fully informed regarding who is responsible for securing donations, whether they be volunteers, fellow employees of the organization or hired solicitors.

Nonprofit development staff may be assigned other tasks while volunteers and/or consultants assume the task of soliciting donations for special projects. A clear delineation of duties and assignments is essential. All must work together and avoid competing needlessly. Transparency across roles and teams is essential for the organization to succeed in its fundraising activities.

Yes, I have witnessed nonprofit staff attempting to sabotage the work of well meaning fundraising consultants. The reasons for this are many, from personal jealousy to sincerely believing the reason for hiring a consultant was wrong. The potential for harmful interference must be anticipated and monitored. Reduce anxiety by making sure everyone on the team understands what is going on, and why.

IX. To have the opportunity for their names to be deleted from mailing lists that an organization may intend to share.

Separate divisions of nonprofit organizations sometimes maintain their own mailing lists. To ensure compliance with donor wishes and confidentiality, development staff should also be encouraged to review the mailing lists of divisions other than their own and to request changes as necessary. This is what we call today, “breaking down silos.”

It is also true that the use of emailing platforms like Constant Contact, iContact, MailChimp, Emma and the like provide the opportunity for anyone on a mailing list to remove themselves immediately. This helps nonprofits comply with the federal CAN-SPAM Act. Knowledge of the Act should be standard for any nonprofit fundraiser.

X. To feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers.

It goes without saying, to represent a nonprofit to the public and to respond to donor and potential donor inquiries, development staff must ask questions of fellow staff in order to fully understand the current status of activities that have been underwritten by donors. Nonprofit leaders should encourage those inquiries.

My experience is the public is not aware that development staff are often as knowledgeable about the inner workings of their nonprofits as the director, senior program officers, and members of the Board. Anyone who researches and writes grants knows a comprehensive knowledge of the nonprofit is required to achieve success. Development staff are not just hired to be “nice” to donors and to organize parties. Their work is essential to the survival of the nonprofit, and to do it well requires in-depth knowledge and commitment.

#Respect

This article was originally a blog post published in 2014. I decided to update and make it available from my main menu.