Archive for December, 2014

December 24, 2014

I Get By with a Little Help from My Friends

This week, legendary British singer Joe Cocker lost his fight with cancer and died. At Woodstock in 1969, he famously covered the Beatles song “With a Little Help from My Friends”:

What would you think if I sang out of tune

Would you stand up and walk out on me?

Lend me your ears and I’ll sing you a song

And I’ll try not to sing out of key”

As I reflect back on my own battle with cancer in 2014, I know I won, in part, because of the help I received from my friends.

Wordle_Merry_ChristmasMy personal friends were always there for me whenever I needed a distraction, supportive conversation, a joke, a ride, a dinner, a hug, etc.

My professional friends around the world always stood by me as well. Folks kept reading my old blog posts and returned once I resumed fresh blogging. Clients returned. My professional friends checked-in with me with cards, calls, visits, and prayers.

My wife and I were touched deeply by the support we both received from all of our friends.

You never walked out on me. As I continue my recovery, I’ll try not to sing out of key. (Okay, I’m being figurative here. In reality, I can only sing out of key. 🙂 )

So, my friend, thank you for your ongoing support. I appreciate it.

I hope you and yours enjoy the holiday season with health and happiness.

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December 23, 2014

#GivingTuesday Has NOT Made a “Huge Difference”

Earlier this month, I expressed my concerns about #GivingTuesday. Now, the Lilly Family School of Philanthropy at Indiana University and the Case Foundation have announced the results.

Guess what? Despite all the hype and self-congratulatory headlines, #GivingTuesday did not accomplish much.

The official #GivingTuesday website  proudly displays this message:

#GivingTuesday Thank You

However, are the good, well-intentioned folks at #GivingTuesday correct? Did the occasion really make a “huge difference”?

#GivingTuesday 2014 inspired $45.68 million in charitable giving, according to an infographic prepared by the Case Foundation.  The final tabulation is expected to be even greater. Over 15,000 charities participated, representing 68 countries.

#GivingTuesday Full Infographic-Dec 2014The numbers look great at first glance particularly when recognizing that donations grew by more than 63 percent over #GivingTuesday 2013.

But, let’s look at the numbers a bit more closely.

Last year, total philanthropic giving to the nonprofit sector in the USA totaled $335.17 billion. For our discussion here:

  1. Let’s assume that total giving in 2014 increases by four percent to $348.58 billion.
  2. Let’s assume that the initial reports that were shared were only half of the actual results. This would mean that donations on #GivingTuesday totaled $91.36 million, likely an overly generous estimate.
  3. Let’s assume that 100 percent of the reported donations were made in the USA.
  4. Let’s assume that the more than 15,000 participating charities are all based in the USA.
  5. Let’s assume that no donations would have come in on that day if it were not for #GivingTuesday.

With those assumptions in mind, let’s look more closely at the #GivingTuesday results:

• #GivingTuesday generated 0.026 percent of donations for the year despite the day itself accounting for 0.274 percent of the calendar. In other words, despite the big promotional push, #GivingTuesday produced a disproportionately low volume of giving.

• With more than 15,000 participating organizations, #GivingTuesday generated an average of just $6,091 per organization. While it’s nice to have the $6,091 of income, it’s hardly a transformational amount especially considering that that amount includes money that would have come in anyway.

Beyond the numbers we do know, we do not know how much money would have come in anyway. We do not know how many new donors were inspired to give. We do not know if organizations are able to retain #GivingTuesday donors. We do not know if larger organizations are simply siphoning support from smaller organizations. We do not know if #GivingTuesday simply shifts when people give without inspiring more people to give, more people to give more often, and more people to give more.

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December 19, 2014

Is Spelman College Unethical?

Spelman College has announced that it is suspending an endowed professorship in humanities that was funded by Bill and Camille Cosby. Spelman issued this one-paragraph statement:

December 14, 2014 — The William and Camille Olivia Hanks Cosby Endowed Professorship was established to bring positive attention and accomplished visiting scholars to Spelman College in order to enhance our intellectual, cultural and creative life; however, the current context prevents us from continuing to meet these objectives fully. Consequently, we will suspend the program until such time that the original goals can again be met.”

The Cosby family donated $20 million to Spelman in 1988. In 1996, Spelman opened the Camille Olivia Hanks Cosby EdD Academic Center. At that time, “an endowed professorship named for Drs. Cosby was also established to support visiting scholars in the fine arts, humanities and social sciences as well as Spelman College’s Museum of Fine Art,” according to a November 25 written statement by Beverly Daniel Tatum, Spelman’s president.

The November statement also explained:

The academic center and endowed professorship were funded through a philanthropic commitment from the Cosby family made more than 25 years ago, and at this time there are no discussions regarding changes to the terms of the gift.”

Just 19 days later, Spelman reversed its position and suspended the professorship. When contacted, several Spelman officials refused to comment. A representative for Cosby also declined to comment.

Bill Cosby by remolacha.net via Flickr

Bill Cosby

For the past several weeks, Bill Cosby has been the target of a large number of sexual assault allegations. However, no criminal charges have been filed against Cosby. Spelman knew this in November. It’s unclear why the College abruptly suspended the endowed professorship now. While additional allegations have been made in the intervening weeks, Cosby still has not been charged with a crime.

To paraphrase Tyler Perry, if Cosby did commit the sexual assaults, it’s a terrible situation. If Cosby did not commit the sexual assaults, it’s a terrible situation. I won’t comment on the Cosby situation beyond that. However, I do want to explore the Spelman news because it has broader implications for all nonprofit institutions.

Nonprofit organizations are ethically required to use a donor’s contribution in the way in which the donor intended. The applicable portions of the Donor Bill of Rights “declares that all donors have these rights”:

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

V. To receive appropriate acknowledgement and recognition….

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

The relevant passages from the Association of Fundraising Professionals Code of Ethical Principles state:

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December 16, 2014

Special Report: Congress Passes the Charitable IRA Rollover

At 7:32 PM (EST) this evening, Dec. 16, 2014, the US Senate passed HR 5771, the bill that retroactively extends several tax provisions, including the IRA Rollover. The law will expire on Dec. 31, 2014, without any grace period. However, it’s important to note that the measure will not become law until signed by President Obama, which is expected.

While approval of the IRA Rollover is good news, it unfortunately comes extremely late in the year. This means most nonprofit organizations will be unable to fully take advantage of the provision. Nevertheless, there are a couple of simple actions you can take:

  1. Look at your donor file to see which individuals have made gifts from an IRA in the past. Then, call those donors to let them know of the opportunity for 2014, assuming President Obama signs the measure. At the very least, email those donors.
  2. Email all of your older donors to alert them to the opportunity for them to give from their IRAs. Even if they don’t take advantage of the IRA Rollover, they’ll appreciate that you informed them about this late breaking news.

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December 12, 2014

Is the American Red Cross Hurting Your Fundraising Efforts?

The American Red Cross regularly touts how responsible it is with donors’ money. ‘We’re very proud of the fact that 91 cents of every dollar that’s donated goes to our services,’ Red Cross CEO Gail McGovern said in a speech in Baltimore last year. ‘That’s world class, obviously.’

“McGovern has often repeated that figure, which has also appeared on the charity’s website.

“The problem with that number: It isn’t true.”

That stunning revelation was made in a recently released investigative report by ProPublica and NPR.

National Red Cross HQ by NCinDC via Flickr

American Red Cross National Headquarters

The Red Cross is a great organization. My wife and I have been donors. I even did a blog post highlighting the effective stewardship practices at the Red Cross and encouraging readers to support the organization. The American Red Cross does not have to “serially mislead” the public.

Yet, that’s exactly what it has been doing according to the reporters. While the organization has told the public that 91 cents of every donated dollar goes to services, its fundraising cost to raise a dollar has been 17 cents on average. And that does not include organization overhead expenses. Clearly, the Red Cross has not been as efficient as its leader has claimed.

When reporters contacted Red Cross officials for more information, those officials were uncooperative. However, the organization did change the claim on its “website to another formulation it frequently uses: that 91 cents of every dollar the charity ‘spends’ goes to humanitarian services. But that too is misleading to donors,” states the investigative report.

Sadly, this is not the first time that the Red Cross has been accused by the media of misleading the public.

As a Red Cross supporter and a fundraising professional, I’m alarmed and disappointed by the behavior of the Red Cross. Misleading the public, either through lies or the clever manipulation of language, is unnecessary, unethical, and unacceptable.

Such inappropriate behavior erodes public trust, which makes fundraising more difficult. Perhaps this is one reason that the Red Cross has had trouble consistently raising more money. In 2009-10, the Red Cross raised $1.1 billion. In 2012-13, the Red Cross again raised $1.1 billion.

In a study that examined the relationship between trust and philanthropy, researchers Adrian Sargeant and Stephen Lee found, “there would appear to be a relationship between trust and a propensity to donate.” In addition, “there is some indication here that a relationship does exist between trust and amount donated, comparatively little increases in the former having a marked impact on the latter.”

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December 7, 2014

Special Report: House of Representatives Approves IRA Rollover

[Publisher’s Note: “Special Reports” are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. “Special Reports” are usually not widely promoted. To be notified of all new posts, including “Special Reports,” please take a moment to subscribe in the right-hand column.]

 

On Wednesday, Dec. 3, the US House of Representatives passed a short-term tax extenders bill. The bill extended certain tax provisions for 2014, including the IRA Rollover, a provision long supported by the nonprofit sector. The package would cover 2014 but NOT apply to 2015 or beyond. The bill now goes to the Senate.

US Capitol by Glyn Lowe Photoworks via FlickrSen. Harry Reid (D-NV) has questioned whether the Senate will have time to pass the House bill before the end of the year. However, Sen. Ron Wyden (D-OR), Chair of the Senate Finance Committee, and the White House have shown a willingness to move forward with this one-year retroactive fix, according to Jason Lee, General Counsel at the Association of Fundraising Professionals.

For more information about the bill, click through to:

The Hill“House Approves Slate of Tax Breaks”

The Hill“Reid Indicates Senate Might Not Pass House Tax-Extender Bill”

The sad reality is that even if the tax extenders bill passes the Congress and is signed by Pres. Obama, there is precious little time for charities to take advantage of the IRA Rollover provision in 2014.

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December 2, 2014

Have You Made This #GivingTuesday Mistake?

I have serious concerns about #GivingTuesday. Recently, the Context with Lorna Dueck Canadian television show invited me to share some of those concerns. My interview begins at about the eight-minute mark.

Context with Lorna Dueck television show.

Click to watch Context with Lorna Dueck.

I also shared some of my concerns in two prior blog posts: “#GivingTuesday: Hype or Hope?” (2012) and “No Evidence of #GivingTuesday Success” (2013).

I have many issues with #GivingTuesday.

Nevertheless, I continue to hope it will ultimately prove worthwhile for the entire nonprofit sector. Time will tell. Meanwhile, I want to make sure you do not commit a serious #GivingTuesday mistake that can hurt your organization.

If #GivingTuesday attracts new supporters and successfully inspires increased contributions from current donors, you can’t just operate as you normally would and expect to retain such support. Business-as-usual would be a big mistake. You need to do more to retain support.

We have Black Friday immediately following Thanksgiving. We also have Small Business Saturday and Cyber Monday. Thanks to the folks at New York’s 92nd Street Y, we now have #GivingTuesday. The 92nd Street Y served as the catalyst and incubator for #GivingTuesday. Early on, the United Nations Foundation joined as a partner, bringing its strategic and communications expertise to the project. #GivingTuesday has now attracted participants from around the world.

To be worthwhile, #GivingTuesday will need to encourage:

  • more people to give,
  • more people to give more often,
  • and more people to give more.

In other words, to be good for the entire charity sector, #GivingTuesday must significantly increase the philanthropic pie. Helping some organizations do better at the expense of others is not a beneficial outcome for the entire nonprofit sector.

Unfortunately, most nonprofit organizations are poorly equipped or motivated to do what is necessary to secure gains made through #GivingTuesday. While charities might be able and willing to leverage #GivingTuesday promotions to attract new donors, those same charities are doing little to ensure those donors continue their support. Sadly, it’s not a problem unique to #GivingTuesday donors.

In the USA, donor retention is a real problem. Seven years ago, the average donor-retention rate was just 50 percent. While that’s not good, the retention rate has become far worse, falling to 39 percent!

In Canada, the pool of philanthropists relative to total tax filers has fallen in recent years, from 30 percent to 23 percent. In other words, the donor-pie is shrinking, rather than growing, relative to the total population of tax filers.

If your organization has participated in #GivingTuesday, I hope you have developed a creative strategy for engaging and cultivating all new and increased donors. By properly stewarding these individuals, you just might be able to hang on to them. If not, what’s the point of investing in #GivingTuesday?

So, are you doing anything special to retain your #GivingTuesday supporters as well as your other donors? At the very least, I hope you:

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