Focus, people!

Image by Truthout.org via Flickr

Watching the nightly news recently, I saw a sweet story about a private school where the students were helping the homeless by contributing new sheets for a shelter. The reporter was interviewing adults about how important is was for children to learn about those in need and to contribute. I totally agree. But is it really about giving things that don’t really help?

I don’t mean to pick on just the sheets for the shelter campaign. Let’s talk about food banks. People rush to empty their cupboards of cans they haven’t used in years or go to the grocery store and snap up two for one items to contribute. Yes, the thought is appreciated but food banks would rather have the money. That’s because they have access to purchase lots more food with $1 then a contributor can buy at the local grocery.

Yes, cash is always king for a nonprofit but there are times when nonprofits could use help from the general public through advocacy. Emails, letters, tweets to elected officials about government funding or changing a law can be just as valuable as the dollars to create the campaign.

It may sound like I’m griping but it really is more about focus. People don’t take the time to really investigate an issue and find out what they can do that will really help. Nonprofits are not good at prioritizing what they need and making the case for it. And most nonprofits don’t want to offend anyone or turn away anything even if it doesn’t work well with their goals and/or mission.

As for the homeless, please advocate with your elected officials about concepts like daycare facilities and permanent affordable housing with services. There are many organizations that desperately need cash donations. As for the food banks, remember cash is king and they can stretch a dollar in more ways than you can.

But does it really help?

Recently I heard about a local business that wanted to help tsunami victims by donating shoes to an organization called Soles4Souls. Sounded like a great idea – helping people out by donating goods. Then soon after I read a story in USA Today about nonprofits such as Salvation Army and Soles4Souls that actually sell these goods to for-profit middlemen who then sell them to vendors in other countries. It creates money for the nonprofits and jobs through microenterprise they say. But does it really help?

I don’t mean to pick on the local business that wanted to help or any individual who comes up with an idea to donate goods for those in need but it does beg the question. Does the nonprofit actually need what you are going to give? Whose responsibility is it to explain what the need is and should nonprofits accept in-kind donations that don’t fit with the mission?

Every nonprofit should have an acceptance policy about gifts – whether they be time, treasure or talent. But every donor should know upfront where their gift is going.

I do find that nonprofits in today’s economy are so desperate for donations that they won’t turn anything down. I believe that they need to do a better job explaining the need and why they may need cash vs. in-kind. A recent campaign by a local homeless shelter explaining that the $5 you spend on a coffee can provide five meals is just the kind of communication nonprofits must do in order to generate much-needed funds.

 

Rethinking the charitable deduction

A recent New York Times business section article probably put fear into the heart of every nonprofit executive director. The headline in the Richard H. Thaler article was “It’s Time to Rethink The Charity Deduction.” This is certainly something to consider as it is the end of the calendar year when people might be thinking about how to reduce their taxes by making a charitable donation.

But is that really why people give – to lessen their tax burden?

The article goes on to explain why the current system of tax deductions isn’t fair because it amounts to a subsidy for the rich since many people who donate to charity don’t itemize their taxes and can’t take the deduction.

While I sympathize with the concerns of many nonprofits about funding, I don’t really believe that people give a significant amount of money because of the tax burden. They may give some but they really give because of the connection they have with the nonprofit’s people and the nonprofit’s cause.

Changes in the tax code will mean that nonprofits will have to revise some of their campaigns but it is an opportunity to look seriously at a marketing plan that achieves brand awareness and makes the all important emotional connection.

It’s graduation season

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My son is set to graduate from a top 15 university this weekend. His sister and father graduated from the same school. I, however, went to a state university. This is the tale of two very different schools with very different endowments and how one botches the ask for donations. No, it’s not the state university.

University with the lofty ranking has a BIG endowment (think billions) and it never misses a chance to ask students, parents, alums for money. But what it doesn’t do is establish a relationship with these target audiences first – a relationship that shows knowledge and sensitivity about the potential donor. It also doesn’t do a very good job of explaining exactly what all those billions are doing in the endowment at the current time and why they need billions more.

Lowly state university keeps in touch. Sends information about the school’s successes. Also details the plight of financing based on lack of state funding and money needed to endow scholarships for the underprivileged.

The lesson here is for any nonprofit. Communicate about your needs in a way that resonates with your target. Don’t just keep asking for money blindly because people will not give unless they understand why.

Leveraging dollars

The current economic downturn has affected everything from government revenues to nonprofit donations. With demand for services on all fronts up but revenues down, what’s an organization to do? Actually, there may be a solution in governments and nonprofits working together to leverage dollars and provide services.

An example of a great public-private partnership is the work of LISC (Local Initiative Support Corporation). LISC works nationally to garner funding from foundations, individual philanthropists and through government grants. It then sends that money to its local LISC organizations, such as LISC Jacksonville. LISC Jacksonville in turn raises funds through grants, individual philanthropy and city government support. So, what was a local $500,000 donation is leveraged to create a pot of over $12 million to help neighbors create sustainable communities in underserved neighborhoods. Wow, any nonprofit would love to “grow” money like that.

So while money doesn’t grow on trees, it can be made to grow into a substantial pot that will have a better chance of achieving goals through leveraging a public-private partnership.