Hint of optimism for giving sector

By Todd Cohen

The recession has been tough on the giving sector but a glimmer of optimism is peeking through the gloom.

First, the bad news: Eighty percent of over 100 nonprofit leaders surveyed by Bridgespan said their funding had been cut, compared to 52 percent a year ago, while the percentage of nonprofits that had laid off staff grew to 43 percent from 28 percent, and the percentage of nonprofits dipping into reserves grew to 48 percent from 19 percent.

The good news from the study is that 42 percent said funders were stepping up support, up from 11 percent a year ago, while 69 percent said redesigning programs to achieve outcomes in a less costly manner was part of their plan, up 10 percentage points from a year ago.

Also reporting greater optimism among fundraisers is a new giving survey by the Association of Fundraising Professionals.

Based on 291 responses to an online survey conducted Dec. 7-11, 34 percent of charities were raising more money this holiday season than the same period last year, when only 23 percent were raising more than the same period a year earlier.

And while fundraisers are split on whether they will raise more in all of 2009 than they did in all of 2008, 59 percent expect their organizations will raise more funds in 2010 than they did in 2009.

A third study, by the Association for Healthcare Philanthropy, says businesses and individuals hit hardest by the recession have shifted their giving to long-term pledges and gift commitments rather than not giving.

The most effective fundraisers, the study says, use a mix of “well-rounded programs and activities” to raise money, “shattering the myth that big-ticket galas, golf tourneys and telethons are the only way to attract donors.”

The most successful fundraising programs have a “sustained emphasis on building relationships and cultivating major gift donors,” the study says.

While it has led to greater demand for nonprofit services, higher nonprofit operating costs and greater stress on givers, the recession also should be prompting nonprofits to rethink the way they raise money and stick to the basics.

What works best is to invest the time and effort to better understand, cultivate and engage givers so they will understand the needs of charities and want to be part of the ongoing effort to better serve their clients.

Volunteers big opportunity for nonprofits

By Todd Cohen

While volunteers are indispensible to them, nonprofits are failing to fully tap the pool of potential volunteers or to fully engage them and the know-how and other resources they can contribute to their organizations.

That is the message of a new study by the Fidelity Charitable Gift Fund and VolunteerMatch.

The study reinforces a recent report by the Corporation for National and Community Service that called for nonprofits to do a better job giving volunteers jobs that match their skills.

The challenge of involving volunteers in the work of nonprofits in a way that is fulfilling for volunteers and productive for the organization is more urgent than ever in the face of an economy in collapse that has increased nonprofits’ operating costs and demand for services while making it tougher to raise money.

The new study, which conducted in October by Harris Interactive and surveyed 1,005 respondents age 18 and older, found 72 percent of Americans that age have volunteered at some point in their lives, with 43 percent of Americans volunteering in the previous 12 months and 28 percent having never volunteered.

“Most Americans are motivated to volunteer to support a cause they care about,” says Sarah C. Libby, president of the Fidelity Charitable Gift Fund. “Yet, three in 10 can’t find an organization that matches their interest.”

Americans who volunteered in the previous year gave $2,593, on average, to nonprofits, compared to $230 donated by people who had never volunteered.

Sixty-seven percent of those who volunteered in the previous 12 months said they generally made donations to the same charities where they volunteered.

And 32 percent of active volunteers said they were more likely to increase their charitable giving in 2010, compared to 26 percent of people who have never volunteered.

The survey found the main reason people do not volunteer is a lack of time, a lack of interest in volunteering, pressure from organizations to give more time than people want to give, and the inability of people to find the right organization to match their interests.

The survey also found 60 percent of Americans say charities have become too much of a big business, and 56 percent believe many charities have disorganized management.

Thirty-eight percent said they wqant to see immediate results when they volunteer, and 44 percent indicated if an organization cannot take advantage of their specific skills, they likely will volunteer elsewhere.

“There’s a tremendous opportunity for nonprofits to build greater awareness and understanding of how they manage their organization by sharing insights into their funding structure, project management and volunteer coordination,” says Libbey.

“Transparency through open and frequent communication with current and prospective donors should always remain a priority.”

Volunteers can be a huge resource for nonprofits.

First, though, nonprofits must work a lot harder to make volunteering truly matter to volunteers.

That will require treating volunteers as an integral part of their organization and giving them jobs that let them put their actual knowledge and skills to work.

Policy work critical in giving sector

By Todd Cohen

The collapse of the economy has underscored the need for the giving sector to invest more in raising its voice on public-policy issues.

Accounting for roughly five percent of the U.S. economy and 10 percent of the U.S. workforce, the giving sector has economic and civic clout it has not begun to recognize or tap.

The sector serves the most vulnerable populations and should be the strongest voice for efforts to address both the symptoms and causes of the most urgent social and global problems.

But the giving sector faces internal hurdles that keep it from becoming the policy advocate it should be.

A new study conducted for the Center for Lobbying in the Public Interest finds that nonprofits can do a better job advancing their causes through effective advocacy and lobbying.

The study is based on over 200 responses to a survey by Innovation Network of over 1,200 nonprofit leaders who received advocacy and policy training between 2004 and 2008 from the Center.

It found those leaders improved their policy skills and confidence, increased their nonprofits’ visibility and funding, and improved their organizations’ program service.

“With the fiscal crisis and shrinking foundation portfolios, there’s never been a more important time for nonprofits to be at the public policy table,” says Larry Ottinger, president of the Center for Lobbying in the Public Interest.

“In today’s climate, policy is an increasingly important tool in the strategic nonprofit and philanthropy toolkit,” he says. “Charities that effectively combine service and advocacy can have greater impact and a competitive advantage for limited resources.

The two biggest groups of respondents surveyed received training through capacity-building grants from the Northwest Area Foundation in St. Paul, Minn., and the John S. and James L. Knight Foundation in Maimi.

Through those grants, the study says, those funders increased their impact in their targeted communities on their priority issues, such as reducing poverty.

Of those who received training, nonprofit board members reported the biggest increases in their knowledge, confidence and motivation on policy work.

“Given the importance of nonprofit boards in governing and approving organizational direction,” the study says, “targeting more policy trainings toward board members may be an effective strategy.”

Nonprofit leaders who received training said they increased some policy activities but not others, including those related to elections or involving more time and resources, such as conducting a media or public-education campaign.

But 60 percent of more of respondents to some extent increased their efforts to contact a legislator, participate in a coalition or ask constituents to take action on a policy issues.

Nonprofit leaders responding to the survey said limited time, staff and funding were the main barriers to getting more involved in policy work, along with constraints of government funding and insufficient knowledge and skills.

Funding advocacy training for nonprofits in targeted communities “can make a real difference for affected constituents and causes,” the study says.

Increased funding and “connecting policy involvement to constituent needs and organizational mission,” it says, “are critical to deeper and sustained nonprofit involvement” in policy work.

Charities missing out on digital giving

By Todd Cohen

Giving increasingly is going digital but many nonprofits are not plugging in.

A new study conducted by Forrester’s Technographics for online provider Convio estimates online giving in the U.S. to nonprofits will total over $4 billion this holiday season, with over 111 million givers saying they plan to give over the Internet this year.

And individual charities are being more strategic and innovative in their use of technology to raise money.

United Way of Central Carolinas in Charlotte, N.C., for example, is offering givers the option of using cell phones to text donations, while the Salvation Army in Wake County, N.C., gives people walking by bell-ringing volunteers the option of swiping their credit cards to make a donation to the group’s Red Kettles.

A growing number of charities are using the “Causes” application on Facebook, which now has 350 million members, to promote their organizations and raise money.

And JPMorgan Chase recently launched a program that lets Facebook users vote on which of more than half-a-million smaller charities will receive a portion of $5 million the financial-services company is donating.

Despite those signs that givers increasingly are giving digitally, a new study by Weber Shandwick says that while 88 percent of nonprofits are trying them out, 79 percent are not sure how to show the value of social media and only 51 percent are actively using them.

Nonprofits, in short, are failing to connect with potential givers using the communication media those givers increasingly are using.

A study earlier this year from Target Analytics, a Blackbaud company, found online giving generates only about one in 10 dollars given to charity.

That same study found online givers tend to be younger, newer to charities they support and making larger gifts, compared to offline donors.

Online donors also tend to be tougher to retain.

So charities have a lot of work to do.

The recession has put charities under serious financial stress through a combination of rising demand for services, higher operating costs and a squeeze on individual and institutional givers.

But givers are indeed giving, and more of them are using digital media to give.

Charities need to do more than throw information about their organizations on their websites.

What they need to do is better understand how their givers and prospective givers are communicating, and then develop communication and fundraising strategies to connect with and engage those givers.

Givers give to causes they care about, and building relationships with those givers is critical.

Increasingly, givers are turning to digital media to communicate and to give.

So charities must work a lot harder to develop digital strategies to reach, inform and engage givers and raise money.