At long last coverage

It will be interesting to see how things develop at the Washington Post’s new On Giving section.  Self-described as a “conversation about philanthropy and social entrepreneurship,” it at least aspires to talk about the nonprofit sector in more depth than the conventional scandal-or-gala approach.  (The Nonprofiteer has long complained about the mainstream media’s coverage of the sector, which manages to be both narrow and shallow; in fact, those shortcomings account for the launching of this blog.)

But is a focus on mammoth gifts and efforts to up-end the nonprofit model really any better?  Maybe those are the dog-bites-man stories.  Maybe the day-to-day struggles of the majority of good-deed-doing agencies simply don’t lend themselves to the conventions of daily journalism—but the Nonprofiteer would give a lot to see someone try to find out.

What a difference a syllable makes

More about the troubles of the do-well-by-doing-good gang, this time in the financial services sector.

Which raises the question: when does “profiting” turn into “profiteering”?

The 5 Ws of Individual-Gifts Fundraising

As all budding journalists know, every story can be told through judicious use of the 5 Ws: Who? What? When? Where? Why?  Here the Nonprofiteer employs this efficient system to tell the story of how reluctant volunteers can become enthusiastic and successful individual-gifts fundraisers.

For most small- and medium-sized organizations, everything about this story is a blank.  So here’s a primer on how to fill in that blank.

WHO to ask?: Only two types of people should be asked individually for gifts: people who’ve given to your group before, and friends of your Board members.  With anyone else, it’s sheer impertinence: “Hi, nice to meet you, open your wallet.”  Ask friends (of the agency and the Board), and ye shall receive.

What to do when your Board members say, “I don’t want to ask my friends for money”?  Reply: “You don’t have to ask your friends.  Just ask each other’s friends!”  So Angela asks John’s friend, and John asks Angela’s.  All they ask of their own friends is to come to a meeting, and all they have to do at that meeting is wax enthusiastic about the group and listen while the other one solicits the gift.

WHAT to ask for?: If they’ve given to the agency before, you’re asking for more.  You have to make the leap of imagination (from $250 last year to $1000 this year) before the prospective donor can think about making it.

Don’t worry about being too ambitious in your monetary goal.  Very few prospective donors are offended by being mistaken for rich people.  (Women, though, are more likely to be taken aback than men, so ask for slightly less from women.  They’re more likely to say ‘yes,’ so it all evens out.)

If you’re asking a Board member’s friend, ask for slightly less than the Board member gives him/herself, because the first thing the prospect will do is turn to his Board friend and say, “What do you give?”  If the Board member doesn’t think the agency’s worth $500, the friend is unlikely to think it’s worth anything.

What if your Board member’s friend is a gazillionaire?  (We should all have this problem.)  Then prime the Board member to say, “I give $200, because that’s what I can afford.  We’re hoping you’ll likewise consider a gift based on your capacity.”  Again, few people mind being suspected of success, so if your Board member is prepared to say, “Listen, I know you made a killing last year when you sold your Google stock . . .”  his friend is unlikely to want to correct him!

WHEN to ask: The Nonprofiteer is a prompt—some might say premature—fundraiser.  As a cautionary tale, she offers the story of how her alma mater took her out for coffee repeatedly to soften her up for an ask, despite her saying, “Guys, I’m a fundraiser.  I know what we’re doing here.  Just ask me for the money!”  By the time they were ready to ask her, she’d been reminded that the school’s investment philosophy would have permitted owning shares in slave-ships, and did permit investing in companies propping up genocidal regimes; and therefore she declined to give, though she wouldn’t have reneged on a preexisting pledge.  So don’t delay; get the yes!

“What about cultivation?” you ask.  The Nonprofiteer believes that lots of what passes for “cultivation” in individual-gifts fundraising is nothing more than stalling.  Don’t hold “cultivation” events and plan to ask for money later; if you hold an event, either get contributions through the ticket price or ask forcefully that night.

All you need to do to “cultivate”  people is to demonstrate that you’re thinking about them on a regular basis, and you can do that by forwarding something you think they’d like to read.  Better yet, send them invitations to your activities, whether performances or client graduations or river cleanups.  People give where they feel they belong, so be on the lookout for “belonging” opportunities.  For this purpose, the less special the event, the better.    If you do something special for a donor, make it an ask.

One word of caution about WHEN: don’t ask too soon after the last gift.  May and June may be two separate fiscal years to you, but your donors probably think (and give) on a calendar-year basis.  So they’ll think you bizarre and ungrateful if you respond to their May gift with a June ask.

WHERE?: Over breakfast, lunch or dinner (or possibly bedtime snack).  The Nonprofiteer is a firm believer in the power of food to facilitate fundraising.  In any case, the advantage of a meal is that it requires the prospective donor to sit still for about an hour, during which time you can a) learn about her; b) educate her; and c) ask her.

WHY?: Why bother with individual gifts?  Why not just write some more grants?  (asks your Board.)  Three reasons:

• Because grants come and go.  Institutional funders have the attention span of fruit-flies: this year they’re interested in AIDS but next year it will be architecture.  If you’re not the fad, you’re out of luck.
• Because even if they continue to embrace your work, very few foundations or corporate giving offices will give money to support your operations.  They want to support programs, the newer the better, often leading agencies to elaborate their programming beyond what their infrastructure can sustain.  If you need to pay your light bill—or your employees—you need individual gifts.
• And finally, even if they love you to pieces, most institutional funders want to sustain you while you find broader support.  They’re not interested in being your permanent sugar daddy.

By contrast, most individuals give because they’re asked, and what they’re asked for is support for a cause or an agency (not a single program), and once they’ve agreed they keep giving out of habit.  So you have to actively offend them before they stop.

So that’s the story of successful individual giving.  And if who-what-when-where-why merely piques your interest, you can learn how right here.

An appraising stare down the gift horse’s gullet

Jane Mayer’s excellent piece in this past week’s New Yorker about the brothers Koch, oil billionaires who’ve donated hundreds of millions to nonprofits promoting right-wing causes, finally clarified for the Nonprofiteer her unease at Bill Gates’s campaign to persuade billionaires to donate half their estates to charity.  It’s not a question of who has or hasn’t taken the pledge, though that’s an entertaining parlor game.  Nor is it the fact that the generosity of extremely wealthy people may not be what the rest of us have in mind when we hear the word “charity.”  (The Kochs’ “charity,” for instance, is a term of art encompassing donations to all kinds of institutions, predominantly think-tanks churning out rationales for the economic interests of wealthy people and front groups to make it appear that defending those economic interests is the political will of the non-wealthy majority.)

What’s troubling about the billionaires’ pledge remains so even when the receiving causes are unexceptionable.  Gates, for instance, has very generously underwritten substantial efforts by the Global Fund to Fight AIDS, Tuberculosis and Malaria.  Good for him, and for the world.

But.

Even the best-intentioned best-directed private donations are a way for moneyed people to work their will on the public, while the rest of us have nothing but the vote.  And when the level of contributions is discussed in fractions of $1B, it’s no longer charity within a democracy: it’s benevolent dictatorship.

Maybe our country should be giving less to treat AIDS et al and more to eradicate infant and maternal mortality through the UN Population Fund; maybe not.  That’s a decision to be made by the people of the United States, through our government.  It’s really not a decision for a single person.

Why not?  Well, for starters, the “single person” in question is a billionaire, and thus always a man.  That means almost by definition that the highest levels of charitable giving will overlook women, though we constitute more than a majority of the population.  And if that’s the case—if society’s needs are met by individual whim instead of collective decisions about the greatest good for the greatest number—then what, actually, is left of self-government?

Of course, billionaires have plenty of assistance in the task of allowing economic power to trump political will.  The Supreme Court’s decision in Citizens United, holding that corporations are “persons” with First Amendment rights violated by limits on their campaign spending, already put the nation quite a way down that road.  But somehow it’s worse when something that sounds so benign—“half my estate to charity, because I’ve been so fortunate”—actually translates as “I set the agenda for the future of this country, because I’ve been so fortunate.”

What we really want from billionaires is for them to pay a lot more in income taxes: say, the 87% of taxable income paid in 1954,  or even the 70% paid at the start of the 1980s.  And then we as a group can decide where our group’s money goes.  All contribute, all decide.

And what we really want from billionaires’ heirs is for them to pay the 77% estate tax rate in effect in 1941, or even the 70% estate tax rate in effect in 1976.   (And let’s not hear any nonsense about “death taxes.”  The dead aren’t the ones paying.)  Why shouldn’t people who get money by inheritance have to pay taxes on it, just like people who get it by working?

Merely to ask that question is to answer it: no democratic society decides that people who don’t work should be privileged over those who do.  Societies like that are called “aristocracies,” and all those so-called Constitutional Originalists running around hijacking elections by screaming about excessive taxation should take a moment to remember that our Constitution was designed precisely to interfere with the establishment of a government by inheritance.

The Constitution prohibits not once but twice the granting of any title of nobility; but the Framers didn’t rest there.  They fought to cripple and ultimately abolish entail and primogeniture, the primary devices by which English law kept family fortunes together.  Why?  Because they realized that, if you’re founding a republic, it’s really not a good idea to let money keep piling up generation after generation in the same few pairs of hands.

Self-governing societies can’t operate on noblesse oblige, and societies that do aren’t truly self-governing.  As Dr. Franklin said, “A republic—if you can keep it.”

Chase: What matters?

[An excerpt of this posting appears on the Huffington Post, in the Impact section.]

The Chicago Tribune’s Chris Jones notwithstanding, the problem with the Chase Community Giving program isn’t that it lets “civilians”–non-expert non-critics–decide which theater companies deserve a $20,000 one-time no-strings grant.  The problem is that it pretends to do that–Let the People Decide!–while actually turning theater companies into marketing satellites of Chase Bank.  Institutions poor and weak enough to be moved by a $20,000 carrot–to which the competition was explicitly restricted–recite the bank’s name relentlessly to their audiences.  That’s a lot of advertising for very little money.  Of course, all corporate giving is advertising–but this is of a special, insidious kind.

The Nonprofiteer doesn’t believe in “crowd-source philanthropy,” because it’s not philanthropy at all: it’s “crowd-manipulation marketing.”  Chase has gotten hundreds if not thousands of little charities to demand that their audiences provide contact information to the bank and subject themselves to commercial targeting for the good of the cause.

These crowd-manipulation marketing programs (pioneered by Pepsi and American Express, doubtless with many more corporate behemoths yet to come) also set up a system which rewards the nonprofits with the greatest Internet presence or savvy, which is not the same as giving the money to the neediest, or best, or most diverse, group of people doing important work in society.  Again, the issue isn’t who gets to define “best;” it’s whether the agencies competing for that designation have a fair and equal opportunity to receive it.  Upper-middle-class people may imagine that “everyone” has access to the Internet, but in fact if you reward clicks and responses to e-mail and Facebook postings, you reward organizations with wealthy white audiences and disadvantage those whose audiences are nonwhite and/or poor.  Way to magnify the digital divide.  Way to make sure that the rich get richer and the poor have babies.

This lazy and manipulative approach to corporate giving diverts nonprofit attention from real fundraising–which involves relationships over the long term–to point-and-click fundraising, which costs “donors” nothing and therefore gives them no stake in the institution.

The argument about who’s entitled to judge art is a side-show, doubtless one Chase would be happy to have theaters and critics debating from here to eternity.  Meanwhile, the bank laughs all the way to–the bank.

[Unable to resist, the Nonprofiteer dons her critic’s hat and argues that, though she believes her opinions about theater are better-informed and therefore more useful than those of the guy standing next to you on the train, she’s also open to the possibility that her prejudices and blind spots make this false in a significant number of cases.  In any case, if she didn’t believe theater was the essential human art form–because it involves words, the very thing that separates us from all other species–and therefore belonged to everyone human, she wouldn’t spend so much of her life seeing and reviewing plays.  So she refuses to concede that others’ engagement with theater–in whatever form, and without any credentials whatsoever–is unwelcome or inappropriate.]

“Crowd-source philanthropy” doesn’t mean the people get to decide; it means they get the illusion of deciding while actually being used to serve someone else’s commercial purposes.  We know that’s a bad thing when the issue is what corporations give to, and get from, politicians.  Let’s not fail to notice when the issue is what they give to, and exact from, us.

See also Barbara Talisman’s posting on the subject, which links to an entire discussion of the pros and cons.

Where’s the beef?: Big projects swallow up all the money

Hey, Nonprofiteer, here’s my beef:

I read (Crain’s Chicago Business, March 16, registration required) that the Chicago Olympics 2016 committee has a corporate sponsorship goal of $1.8 billion.  Isn’t that going to cut into corporate responses to nonprofit funding requests?  Is that going to make things worse for nonprofits than they already are?  I remember hearing a nonprofit Executive Director grousing about how much money was diverted from regular charitable donations to go to [naming opportunities in the city’s new downtown] Millennium Park, and the Tribune recently mentioned the same possibility in connection with the Olympics.

Should I worry about who will pay if the Olympics go over budget?

(This guy sounds a little worried:

http://behindthebid.blogspot.com/2007/03/crains-olympic-challenge.html)

Signed, Bean Counter

Hey, Bean–

You’re asking two separate questions.  Second one first: you shouldn’t worry about who will pay for inevitable Olympic cost overruns, because it’s all settled: you’ll pay, if you’re a Chicago taxpayer.

I think the Olympics are a bad idea on about six different dimensions, but the first one you raise is discussed least often: the tendency of big projects like the Olympics (or, before it, Millennium Park) to sop up huge volumes of corporate and foundation funding, leaving less for ordinary operating nonprofits.  But of course it’s impossible to determine what those funders would have spent on education or health care or social services had a sexier alternative not been available.

Fundraisers for high-profile projects always advance the argument that, as George W. Bush would have it, we “make the pie higher”–that donations to the Olympics constitute additional private money being put at the service of public purposes.  The notion is that glamor projects magically produce the fresh generosity necessary to sustain them.

But if Great Depression II teaches us anything, it’s that private firms actually don’t have limitless sums of money, and that if they put it in one pot (say, credit-default swaps) it’s not available for inclusion in another (say, mortgages).  By the same token, if they put the money into naming the Ronald McDonald Memorial Olympic Village it’s going to be mysteriously missing when the local food pantry comes to call.  And it stands to reason that given the option corporations (and even foundations) will choose to invest in shiny things on which they can engrave their names.

At least in Chicago, the ordinary lack of transparency in philanthropies (“It’s our money; why should we tell you what we’re doing with it?”) is complemented by an equal lack of transparency in government (“It’s your money; why should we tell you what we’re doing with it?”).  So we can only speculate that money spent on circuses will not then be forthcoming for bread.

*******************

Readers: What’s your beef?  What drives you craziest about trying to manage your agency or serve on its Board?  Is it the bully who won’t let anyone else speak?  The budgeting that features revenue everyone knows you won’t get?  E-mail your problems to the Nonprofiteer, subject line “Where’s the beef?” and she’ll solve them for all the world to see.

Multiplication* beats division+

Here’s an intriguing development in the ongoing process of trying to connect residents of deep-poverty nations with the resources of the Internet and, thus, the world economy: a computing device and software that enables up to 30 people to use a PC at one time, as if each person had a computer of his/her own. While this may sound like the sort of triumph only a gearhead could appreciate, what it really means is computer access costing less than $70 per person–all the world’s knowledge in a form approaching the affordability level of bednets and clean water.

The Nonprofiteer is rarely enthusiastic about e-this or cyber-that; but making information commonly available to people who have been deprived of it is an unalloyed Good Thing, and even she’s not churlish enough to withhold her thanks and praise from people who’ve figured out how to accomplish it while making a profit at the same time. Excerpts from the company’s press release appear below.

REDWOOD CITY, CALIF., July 15, 2008– NComputing, the leading provider of desktop virtualization software and hardware, today announced it is working with leading non-governmental organizations (NGOs) worldwide to help reduce the digital divide between developed and developing countries. The company has already deployed successful partnerships with such leading NGOs as U.S.-based Save the Children, France-based Ateliers Sans Frontieres (ASF), Bangladesh-based BRAC, Latin America-based Organization for American States (OAS), UNESCO, and India-based Azim Premji Foundation to name just a few. NComputing further announced special discounts and programs to help NGOs on every continent reach their goals for digital inclusion in emerging markets.

[snip]

The NComputing solution is based on a simple fact: today’s PCs are so powerful that the vast majority of applications only use a small fraction of the computer’s capacity. NComputing’s virtualization software and hardware tap this unused capacity so that it can be simultaneously shared by multiple users. Each user’s monitor, keyboard, and mouse connect to the shared PC through a small and very durable NComputing access device. The access device itself has no CPU, memory or moving parts so it is rugged, durable, and easy to deploy and maintain – especially critical in developing nations. The NComputing software and hardware costs as little as $70 per seat. With NComputing, people and organizations around the world are maximizing their investments in PCs.

[snip]

No other attempts at bridging the digital divide have been as successful. Low-priced laptop solutions, such as the $188 OLPC XO, carry very high hidden costs—like maintenance and support—that far outweigh their benefits.

[snip]

[S]aid Medhy Davary, director of DSF[,] “The virtual desktops are extremely affordable and durable, require very little maintenance, and use only one watt of electricity. This allows users in even the world’s poorest countries to benefit from computer access and the Internet.”

“Almost one billion users around the world who would benefit from access to computing have been unable to afford it—until now,” said Stephen Dukker, chairman and CEO of NComputing. “It is only by fundamentally changing the economics of computing that our industry can bridge the digital divide. We are going to deploy more than a million virtual desktops in the coming year and are honored to work with such prestigious NGOs to improve the daily lives of hundreds of thousands of people around the world.”

“In response to increasing interest from NGOs, NComputing is developing programs to help them better leverage their skills and funds,” said Ms. Lindsay Petrillose, Government Liaison for NComputing. “We offer seed units and special NGO discounts that multiply the impact of an NGO’s limited funds.” Interested NGOs and governmental institutions seeking NGO assistance can contact Ms. Petrillose at lpetrillose@ncomputing.com, (650) 454-4991.

————-

*of computer access

+as in “the digital divide”

Habit creation, consumers and charity

An unexpected version of cooperation between for-profit companies and the public health establishment yields life-saving results in Ghana. What’s exciting about this project, in which the question put to the companies was “How do you change behavior?”, is that it suggests a whole series of possible cooperative efforts.

If Unilever et al. could help health officials determine why people pursued unhealthy habits–and, more important, how to prompt them to pursue healthy ones–why couldn’t we ask those consumer giants to help us figure out how to make a habit out of giving? Instead of tying charity to purchases–which teaches people that the only way to donate is to have twice as much money to spare as you’re willing to give–we could identify the triggers for genuine charity and figure out how to insert those into people’s daily lives.

The Nonprofiteer is often skeptical of the notion that foundations should invest in research about social problems rather than in their solution; in many cases, the solution is already available and research is beside the point. Likewise, she’s often moved to snort when she hears philanthropies describe themselves as “convenors” of all those who might have something useful to say about a problem, as though the act of bringing people together were all that might be required to spur them to useful action.

But we don’t actually know as much as we need to about how people give, which is likely to be nearly as important as why; and bringing together consumer companies (with their habit-forming expertise) with philanthropies and charities (with their sector-specific experience) might really produce a valuable new synthesis.

So who will take the lead in strengthening the sector by asking consumer companies to contribute their survey-research and marketing smarts to determine how people can be made more responsive to charitable appeals? Maybe the answer is different for different parts of the nonprofit sector–people give to the arts if they’re reminded of their importance to children, but to health-care based on threats to themselves–but just knowing that (instead of speculating) would be a huge boon to everyone–especially those of us whose livelihood depends on separating people from their money.

Advocacy and its costs

Rent-a-Center, which offers payday loans, announced it would withdraw its contribution to America’s Second Harvest unless the group’s Ohio affiliate resigned from the Ohio Coalition for Responsible Lending, which opposes the loans. In response, the chair of the Ohio chapter told the Wall Street Journal that her group should never have joined the coalition to begin with because it “would never support anything that isn’t directly hunger related.” The affiliate then quit the Coalition.

This is a hobbyhorse with room for everybody to ride: the people who think 501(c)(3)s shouldn’t engage in advocacy; the people who think donors’ rights are routinely trampled on by charities and are glad to see them asserting themselves; the people who think taking money from corporations means nonprofits are selling their souls; the people who think charities shouldn’t meddle in policy issues not central to their mission; even the people (like the Nonprofiteer) who think nonprofits spend too much time seeking grants from big institutions (a/k/a short-term support) and not enough time soliciting gifts from individuals (a/k/a long-term support). But the real battle seems to be between those who think the Ohio Second Harvest was foolish when it joined the anti-payday loan coalition and those who think it was cowardly when it quit.

The Nonprofiteer throws her lot in with the latter group. To argue that payday loans, which cost their borrowers 5- and 6- and 700% interest and are taken only by people who are desperate, are not “hunger related” is to be willfully blind.

The situation also highlights a fact the nonprofit sector seems organized to conceal, namely, that most of the problems we address are a single problem: people don’t have enough money. Instead of running food banks and free medical clinics and free day-care and scholarship programs, maybe we should spend our time a) arranging for the government to provide all the services we think people should have and/or b) arranging for employment to pay people so they can buy all the services we think they/we should have.

Anyway, if you doubt Rent-A-Center is the heavy in this picture–if you think the company is just defending the interests of donors whose concerns are too often overlooked by big bad charities–that’s certainly your privilege. But let’s not forget that the most notorious “donor intent” cases are the ones in which the donor restricted his largesse to “white men of good character,” and later on somebody thought that might be a bit too restrictive. If Rent-A-Center wants to restrict its largesse to “tame charities of good character,” that’s certainly its privilege, but the rest of us are equally entitled to be appalled if Ohio’s Second Harvest decides to rush to be at the head of that particular bread-line.