Tue, June 16 2015
Filed under: Nonprofit leadership •
(Editor’s note: Today’s post comes from our friends at the National Council of Nonprofits. Jennifer Chandler, Vice President and Director of Network Support & Knowledge Sharing, offers insight on new legislation that will allow nonprofits to own their true costs.)
How the Fundraising Game Has Changed Forever – and Four Steps Your Nonprofit Should Take to Benefit
A “game changer.” It will “transform the landscape ... for generations to come.” No, these aren’t ads for a new car or reviews for movies coming to a theater near you. They are descriptions of the impact brought about by new federal rules for many grant awards—impact that just may make life less stressful for nonprofit fundraising professionals and development directors everywhere.
For the first time, the federal government is acknowledging what nonprofits have known all along: to deliver effective services in our communities, nonprofits must incur basic costs to keep the doors open and the lights on. The federal government, through the new Uniform Guidance issued by the federal Office of Management and Budget (OMB), now requires that any government using federal funds—whether local, state, tribal, or federal—to hire a nonprofit to deliver services must pay its share of indirect costs (sometimes called overhead or administrative costs).
For fundraising and development professionals, this reform can mean less stress and urgency chasing down private donations and grants to fill in the large gaps left unfunded by governments. With government now mandated to pay for these “indirect costs” when the initial funds flow from the federal government, it will ease pressure on private philanthropy to fill all-to-common gaps left unfunded by governments. Not only that, but with this historic acknowledgement from government that indirect/overhead costs are essential to service delivery, some private funders are revisiting their policies and coming to a similar logical realization.
To put the impact of this new rule in perspective, consider the size of the gaps that governments historically have left unfunded. According to a recent Urban Institute survey, 53 percent of nonprofits reported that governments capped reimbursement for indirect costs. Of those, 76 percent reported that governments imposed caps of 10 percent and below – and 24 percent reported zero reimbursement for indirect costs. Just imagine the effects on the fundraising climate if all of these nonprofits received just the 10 percent minimum mandated by the Uniform Guidance, much less the full amounts that far exceed that floor.
Steps Your Nonprofit Can Take to Transform the Potential into Reality
Although the Uniform Guidance is now law of the land, it will take further action to realize its promise. State associations of nonprofits and others have invested countless hours of advocacy over the last three years to secure these reforms. Yet the journey still is not complete. Here are the steps your nonprofit needs to take:
· #OwnYourOwnCosts: It is essential for your nonprofit to have financial management systems in place that track your indirect costs so you can negotiate your federal indirect cost rate and receive more than the 10 percent minimum.
· Protect your rights: If a state or local government tries to deny your nonprofit the reimbursement rates guaranteed by the Uniform Guidance, stand up for your nonprofit’s rights. Among the many safeguards put in place by OMB, pass-through entities may not ask your nonprofit to sign a waiver of its right to this reimbursement. Our quick guide, Know Your Rights … and How to Protect Them, details your nonprofit’s rights, highlights potential compliance challenges, and explains how the Uniform Guidance should be properly interpreted.
· Stay informed: The laws in many states and localities will need to be adjusted to comply with the Uniform Guidance. Join your state association of nonprofits for information on how to help make these needed changes, and sign up for our free e-newsletters to stay up-to-date on the latest developments.
· Report back: As you enter into new grants and contracts, share your experiences—positive and negative—using the confidential Uniform Guidance Implementation Report Form on the National Council of Nonprofits website. The information that nonprofits share will help the network of engaged state associations of nonprofits monitor compliance, compile data and patterns that can be addressed at a government-wide level, and identify good processes and solutions that can be replicated to help nonprofits across the country meet their missions.
Tue, June 02 2015
If you missed our webinar with Rachel Muir, vice president of training at Pursuant, I highly suggest you download the archived version and get ready to take lots and lots of notes. Rachel gave us some amazing insights on how to motivate your board and how to turn them into fundraisers. Because we had such a great Q&A with her at the end of the webinar, I wanted to share some highlights and ask a few more questions that we didn’t have time for.
How do you motivate/engage a board that is appointed?
Rachel Muir: Identify what motivates each board member. What do they love about what they do? When do they feel the most alive? What part of your work are they the most passionate about? Find out what are they best at: speaking, networking, being a thought leader, etc., and how can you leverage that talent to best serve your cause. That might look like a cultivation event, a press conference, or the board member playing a behind-the-scenes role supporting your organization.
If you have not made board giving clear from the start, how do you approach it after the fact?
RM: Take responsibility that you failed to make this requirement clear. Own that, and apologize for it. Next, explain why board giving is critical. It is a healthy sliver of organizational revenue, but perhaps just as or more important, how can we ask someone else to give when we have not? Point to grant applications demanding that 100% of the board has given in order for the organization to be eligible for support. Explain that funders do not want to give if the leadership of the organization has not also given. It’s important to note that giving is not limited to the board. Staff members can and should make their own gifts to the organization at a level they feel comfortable giving.
Can you provide tips on “retraining” an existing board and setting new expectations for veteran board members?
RM: Your board chair plays a critical role in setting new expectations for board members. The chair sets the tone for how the rest of the board responds. If fundraising expectations for board members were not properly set, the chair needs to own that and apologize for it. They should share that they have stepped up to embrace the role philanthropy plays in supporting the organization by making their own gift. Ideally this is a stretch gift, and they can share that they’ve “dug deep” because of how much they care and believe in the cause. They need not share the amount of their gift. The idea is just that they make a gift that is personally meaningful to them. Some organizations set the same minimum “give or get” gift amount for all board members. Others ask that board members make a gift that is meaningful to them. Still others might target board members for unique gift amounts based on their individual capacity. It is not “one size fits all.” Decide which works best for you.
Additionally, your chair should share the other ways she or he is stepping up to the plate to support fundraising, whether that be hosting a cultivation event, bringing in key individuals to the organization for a private tour, going on donor visits, writing thank you notes, and/or calling donors to thank them.
My advice is to be humble and apologetic. You and your board chair are setting the tone for how the organization embraces philanthropy. Giving is the lifeblood of your institution. It’s your donors who make your important work possible. Supporting a meaningful cause is a joyous experience. Be thoughtful and respectful in how you recognize not setting expectations properly. Giving to the cause should not feel punitive to your board. It should feel like a personal, thoughtful, exciting, and rewarding expression of their love for your cause. You are not “hitting someone up” or taking something away from them. You are inviting them to share in a meaningful opportunity to move the organization forward, to be significant and solve the problem your mission serves.
Do you suggest scripting your thank you calls, or would you simply let the board member engage in a more organic conversation?
RM: I recommend providing a script for thank you calls to board members. Include the donor’s name, gift amount, history of giving—for example, is this their first gift, or have they been giving every year for five years?—how or why they first got involved (if you know), and a couple lines of copy they might use (see below). Most board members will not get the donor on the phone; they will get voice mail.
If they do get a donor on the phone, prepare them with a few sample discovery questions to take the conversation further. The board member might ask the donor what inspired their first gift to your organization (if you don’t already know), or what interests them most about your organization.
If the donor is responsive, the board member could go a step further to ask broader questions about their philanthropy. I like “What was the best gift you ever gave and why?” Or “What are your philanthropic priorities?” Start by asking the donor’s permission to ask questions. It shows respect for the donor, gets their buy-in, and, as long as they agree, it instantly gets them saying yes to you! Just a simple “Do you mind, [name], if I ask you a question?” will suffice. It also helps tee up more personal questions. It could feel awkward to just come out of the gate and ask a new donor, “What other causes do you support?” Introduce it with a question. Ask permission. “In order for us to get to know you better, [name], we’d like to learn more about your interests. Would you mind sharing what other causes you support so I can understand this better?”
Sample board member script for a donor thank you call:
“Hello, Greg. I have the pleasure of serving on the board of ______, and I want to personally call you to thank you for your generous first-time gift. [Introduce that you are a board member] We are so grateful. [Gush. This is a time for rejoicing.] Boy, if you could have heard the screams and squeals from the kids when they found out that, thanks to your generous gift, they would get to tour the nation’s capital, they were positively deafening! [Strive to describe how the gift was received or is important using descriptive language that makes a donor feel like they are there. Think virtual field trip!] I’d love to learn more about what inspired your gift. Can I ask you a question? What made you write this generous check? I’d love to learn more about your interests. Would you mind sharing with me which philanthropic causes are near and dear to your heart?”
What advice do you have for “managing up” to convince/inspire an executive director to see the importance of involving board members in fundraising?
RM: Shameless plug alert: Hire me to come do a training and get your executive director and fundraising team inspired! I would share the research with the board on how board engagement increases donation amounts and donor retention rates. According to a study by leading fundraising expert, author, and researcher Penelope Burk, first-time donors who received a thank you call from a board member within 24 hours gave 39% more than those who did not. Fourteen months later, they were giving 42% more than those who did not get a call. Plus, these donors had a 70% retention rate! Penelope’s 2012 report, The Cygnus Donor Survey: Where Philanthropy Is Headed in 2012, U.S. Edition, compares the impact of thank you calls from staff members versus board members on donor retention. Thank you calls from staff members increased the likelihood of donor retention by 10%. Thank you calls from board members increased it 25%!
If the positive impact of these results does not motivate them, then consider the consequences. Not having board members engaged in fundraising is a roadblock to your growth. Is a capital campaign in your future? In a capital campaign, very few foundations will donate if you do not have 100% board participation.
Some board members are participants, advocates, or great volunteers, but not connected to higher-end donors. Should they be replaced?
RM: Even without a fat Rolodex full of high-powered connections, a board member can support fundraising. Board members with few connections can support fundraising. Board members who are terrified of doing a solicitation can support fundraising. They can thank donors, join you for an ask, make an ask, host a donor cultivation event in their home and share their personal story of why they are involved in your organization, get assigned to cultivate two to three donors, write an article on why the organization is important to them, name your organization in their will, or take on a project to share client testimonials, or share how money makes an impact at your organization, or raise awareness about the organization.
I need to replace my board. Where should I start looking for new board members?
RM: Look at who the great board members are at other agencies and start cultivating them to consider your organization when their current term ends. As a trainer, I am shocked by how little organizations invest in providing board training. You want someone with prior board experience, who knows how great boards function, and what is expected of service. I am not saying you shouldn’t prohibit newbies to board service from serving, but if you do permit them to serve, you must invest in properly training them.
Rachel, thanks so much for sharing your knowledge with us. And again, if you haven’t downloaded the webinar that inspired these great questions, download it now. (It’s free!)
Rachel Muir, CFRE is Vice President of Training at Pursuant where she transforms individuals into confident, successful fundraisers. When she was 26 years old, Rachel Muir launched Girlstart, a non-profit organization to empower girls in math, science, engineering and technology in the living room of her apartment with $500 and a credit card. Several years later she had raised over 10 million dollars and was featured on Oprah, CNN, and the Today show.
Thu, April 02 2015
How does a small nonprofit go viral and capture attention on the national stage? I set out to learn the answer from a Network for Good customer that has achieved the biggest exposure opportunity any business, organization, or individual could hope for: a commercial spot during the Super Bowl.
Estella’s Brilliant Bus was featured in Microsoft’s Super Bowl ad this year. And the Super Bowl was just one appearance from the past 18 months: Estella has appeared on Dr. Oz and Oprah and was named a CNN Hero of the Year.
I talked with the organization’s founder and sole staff member, Estella Pyfrom, to understand the story behind the exposure. Going in, I thought I might find a replicable strategy around networking, PR, and elevator pitches, but after talking with Estella, I realized what I should have been expecting all along: It starts with mastering your nonprofit basics.
Find your special sauce.
Estella started with an idea, a bus, and her life savings. As she started researching how to make her organization operational, she found that she wasn’t the only one delivering technology or education to underserved communities—but her delivery mechanism was completely unique. Estella’s Brilliant Bus was the only self-sufficient mobile technology teaching facility in the world! It’s important for your staff, constituents, donors, and volunteers to understand what’s unique about what you do. To be noticed, your work must be noticeable.
Tell your story to others.
At first, Estella was suspicious of the media. Local and national networks approached her several times after people in her community starting talking about Estella’s Brilliant Bus, but she turned them away. It wasn’t until she turned to some resources at a local college that things changed. Estella’s contact at the college told a friend about Estella’s work, who told her husband, who happened to be a producer for CNN. The producer got in touch with Estella right away. With the promise that she could review the story before its broadcast, Estella agreed to some media exposure. After the CNN spot, Estella was booked for more media appearances, and the passion and excitement around Estella’s Brilliant Bus grew. Small nonprofits like Estella’s can be hesitant to relinquish control over something that feels so personal out of fear of judgment or providing misinformation. But when we arm our supporters with the right to tell the story, that’s when “viral” happens.
Be a business.
When I asked Estella about the keys to success, her immediate answer was that planning has made all the difference. The past two to three years have been about refining the model for delivering technology in a mobile facility to children in underprivileged areas. She knows where the bus will drive each day and how many kids they’ll serve, and she has backup engagements if a school or community has a last-minute cancellation. Delivering unique services with flawless execution has ensured that Estella’s Brilliant Bus maintains its positive reputation. The message is clear: Over-deliver your mission’s promise.
Continue to do good work.
Estella never stops moving or gets caught up in her own success. When we discussed how she feels about all the attention, Estella quickly responded, “I haven’t had a chance to be nervous or realize how big this has become. I’m too focused on achieving the vision I have for this business.” Her actions are true to her words: When presented with the 5,000 Points of Light award, she refused to fly cross-country to accept the award and drove her bus instead. Along the way, she stopped in cities to provide services to children. To date, Estella has served more than 61,000 children. She has no plans to slow down until Estella’s Brilliant Bus is a movement that puts a bus in every major U.S. city, and then worldwide. It’s a good reminder that landing big media attention is not the goal—it’s a means to touch more people and expand your reach.
So, the next time your executive director asks you how to land that big media attention, reply:
We need to find what’s unique about our organization and let our work, communication, and story revolve around that concept. Let’s make sure everyone understands why we’re different.
After that, let’s encourage and empower everyone we know to tell our story far and wide.
Let’s focus on every part of our process to deliver programs. Are our programs easy to understand? Where are the risks? Let’s spend time making ourselves a well-organized and program-focused delivery machine. We owe it to our constituents and those telling our story to be the best we can be.
Finally, remember that big media attention isn’t the goal. It’s an opportunity to get more volunteers, donors, and supporters, and the by-product is awareness about our organization.
Thu, February 19 2015
Filed under: Nonprofit leadership •
Surprising, distressing, but all too true! According to findings released in the 2015 Nonprofit Communications Report, one of your greatest challenges to fundraising effectiveness is the difference in priorities and perspectives held by you (a fundraiser) and your key colleagues—your executive director and communications colleagues.
Just take a look at these startling differences in goals and preferred tactics:
- Seventy-two percent of development staff versus only 12% of communications staff feel directly responsible for fundraising goals.
- Forty-four percent of development staff versus 65% of communications staff feel responsible for community engagement goals.
- Development staff (along with communications directors) value YouTube more than EDs do, while EDs value LinkedIn more than you and your communications directors do.
As a consultant who’s been the fly on the wall in so many organizations, I’ve come to see such disconnects as the norm. But in most organizations, the existence of the gap and what the conflicts are—must-knows for organizational success fundraising and beyond—remain hidden and dangerous. Because each of those players (fundraising, communications, and your ED) assumes the others are on the same page and acts accordingly.
If you proceed in planning and implementing your fundraising campaigns based on the assumption that your communications partners and ED share your take, you’re likely to be surprised. When they don’t—and launch messages, campaigns, and/or programs that are different from yours—that’s confusing (if not totally contradictory) for the folks you hope will give or take another action.
Like you—and me—your people hate feeling confused. Confusion is a greedy grabber of time and attention and makes us all feel like something is wrong with us (“Why don’t I get this?”). Ugh. Worst of all, confusion undermines your campaigns.
Instead, dare to be different!
- Make sure you have a clear understanding of key organizational goals and have shaped your fundraising goals (plus campaigns and tactics) to best support them. Document both elements.
- Ask your communications director and ED to share the same.
- Include all three inputs on a simple chart and use it as the focal point of an initial “let’s make sure we’re working together” meeting.
- Ask the others to commit to quarterly reconnects and ongoing chart updates.
- Start to close the gap and motivate more of the actions you want.
Go get rid of your devil! I’m eager to hear where you get with this. Let us know in the comments.
Wed, January 28 2015
Filed under: Nonprofit leadership •
Yesterday Network for Good was honored to host a group of delegates from 10 countries as part of the U.S. Department of State’s International Visitor Leadership Program. The group included the Executive Director of the Icelandic Youth Council, the Program Director for the Russian Red Cross, the Community Manager from the Office of the Mayor of Athens, and a grassroots organizer from Saudi Arabia, among others who work with local governments and community groups to mobilize volunteers and social giving around the world.
As we gathered to talk about leveraging online technology to mobilize volunteers, raise funds, and communicate with supporters, it was clear that the challenges these international organizations face are nearly identical to those of nonprofits here in the United States. Here are a few themes that rose to the top during our time together:
- Diversifying funding sources: Organizations that are highly dependent on government contracts or grants look to shift their funding sources to reduce the vulnerability of relying on one source of funds. In some cases, this shift to individual giving is new territory and these organizations are sorting out how to prioritize individual donors and the resources needed to support a successful strategy. Sound familiar?
- Finding (and retaining) the right donors: The universal challenge, but also a wonderful opportunity to learn from one another. For some international organizations, most individual donors are coming from outside of the country, so connecting with and expanding the donor base can be difficult. This is where new networking tools and storytelling venues will continue to make a big impact.
- Communicating with donors: We all agreed that the key to retaining individual donors is regular and responsive communication. Some organizations are trying to find the right balance of interaction and dedicated time to responding to donors and listening to their feedback.
- Collaboration vs. competition: With many organizations working to solve similar issues, these NGOs identified a need for more collaboration and stronger networks to pool resources, and make a bigger impact. This is a challenge. One way we can all encourage knowledge and resource sharing is to commit to supporting and participating in roundtable discussions and gatherings just like the IVLP sessions.
- Getting the story right: From attracting supporters to inspiring gifts to retaining donors, compelling stories are critical. The delegation discussed the challenges of competing with more “media friendly” stories or causes, and the opportunities to connect the right story with the right audience segment. Organizations are made up of multiple stories, which provides a wonderful chance to line up the perfect story with the right segment of a cause’s community.
Do any of these strike a chord with you? What would you add to the list? Please share your thoughts in the comments below!
We offer our gratitude to the Department of State and the IVLP delegates for spending time with our team and sharing their experiences. We wish them well as they continue their tour of the U.S. and look forward to learning more from our nonprofit colleagues around the world.