Archive for the ‘Research’ Category
Posted by Jon Howard on January 31, 2012 in Effectiveness, Fundraising, Research
A collaborative capital campaign created an entire new arts and business district in Cleveland. Photo: Gordon Square Arts District
Collaborative fundraising takes time and trust. That’s what we heard over and again in our interviews with seven nonprofit executives in Rhode Island, Boston, Cleveland and Spokane, each of them successful collaborative fundraisers.
We looked into the topic at the prompting of our friends at New Roots Providence and presented our early findings at a New Roots workshop on January 19.
The short version of what we learned from our informants:
- Successful collaborations flow from a deep process of trust-building among the partners. The right partners may take years to self-select, discover their shared goals and commit to combined action.
- Detailed legal agreements help establish trust and smooth functioning by exploring and resolving the partners’ deepest worries in advance. (These also take time)
- At the same time, good partners must be ready to make commonsense adjustments to agreements when they create unfair or unproductive results for some partners.
- Long-term and permanent collaborations need to form an independent organization to fundraise and distribute revenues. (Another time-consuming process.)
- The collaborative case must promise more than the sum of its partners: new funders respond to a transformative vision.
- Truly successful collaborations can reach more and larger funders and generate more income at lower cost than the two partners could achieve separately.
Our cases covered five forms of joint fundraising: grants, workplace campaigns, events, capital campaigns, and, finally, our elusive ideal of truly integrated annual fundraising. We’ll tell you more about three very interesting cases in future posts:
- The YWCA and YMCA in Spokane, Washington created a fully integrated capital campaign to build new shared buildings in two locations.
- The Gordon Square Arts District in Cleveland, Ohio brought two theater companies together with a community development organization to build not just theaters, but a whole theater-oriented arts district with major economic benefits for the city.
- The Central Square Theater in Cambridge, Massachusetts began by building new shared performance space for the the Nora Theater Company and the Underground Railway Theater. The partnership then went on to take on all fundraising, business and back office operations, leaving both groups free to focus on their artistic missions alone.
If you have had a good – or bad – experience with collaborative fundraising that you think could help others, please send me an email. We’d love to hear from you.
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Posted by Jon Howard on December 9, 2011 in Fundraising, Research, Tidbits
One of my all-time favorite bumper stickers was this one: “I am an animal. I brake for no one.” (A cynical comeback to the once-common “I brake for animals.)
However, it looks like our basic animal nature actually includes a generous dollop of do-goodism, judging from this NPR Morning Edition report. Lab rats at the University of Chicago have now proven to the satisfaction of scientists that they will sacrifice themselves to spend hours of persistent effort to free another rat trapped inside a small tube within the larger cages.
Not only do helper rats selflessly devote themselves to comforting their stuck buddy, they also work urgently to find the hidden button that springs the trap. They’ll do this even when the other rat gets released to a different cage, removing any social benefit. They’ll even help a pal when they could be working on liberating chocolate instead!
The scientists were thrilled to have discovered such pure altruism in another species. (I guess they never read Old Yeller.)
Let’s take this as a reminder to give our left brains a break as we compose our year-end and other funding appeals. Before you start to pile up facts and arguments, seek out your organization’s deeper appeal to our basic natures as creatures on earth: ”Here’s another person in pain. Here’s how you can make it better.”
And then there’s this: Even though I really do brake for others, I am still an animal.
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Posted by Gayle Gifford on August 8, 2011 in Fundraising, Research
In the Summer 2011 issue of The Nonprofit Quarterly, you’ll find an intriguing article, “Fundraising Education: A Fork in the Road?”.
The authors, both professors at Indiana University, home of The Center on Philanthropy, lament the depressingly statistic that giving in the US has been static for decades at just 2% of GDP. They suggest that more robust interaction between academic research and practice — and more academically educated fundraisers – is a potential solution to lifting us out of this giving doldrums.
We can talk more about this at another time.
But what particularly caught my eye was an assertion, that if true, every fundraiser should be aware of now.
The authors stated:
“… by simply changing the words in their solicitation to provide donors with social information, [fundraisers] could increase the value of giving by an average of 10 percent.” (Emphasis added)
WOW! What fundraiser wouldn’t want to increase solicitation returns by 10%?
Immediately intrigued, I wanted to know how to do this. First, I had to decode what the authors meant by social information. (You might have been asking yourself that same question.) Read More >>
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Posted by Jon Howard on May 3, 2011 in Big ideas, Research
In my last post, I cited the Grameen Bank and LISC as two outstanding examples of successful program-related investment (PRI). Both of these revolutionary institutions got essential growth funding from Ford Foundation PRIs in the 1980s.
Yet three decades later, PRIs remain rare. According to Doing Good With Foundation Assets, a 2010 Foundation Center study, only 173 out of 75,000 U.S. foundations made any PRIs at all over the two-year study period of 2006 and 2007. In dollar terms, PRIs accounted for just $734 million out of $91.9 billion in program disbursements over the two years.
What’s the problem?
“The limits really are our own core capacities,” says Owen Heleen, Vice President for Grant Programs at The Rhode Island Foundation. The Rhode Island Foundation has been making PRIs since 2002 and was listed by the Foundation Center as the 14th largest provider of PRIs in 2006 and 2007, with investments of nearly $12 million in those two years. Despite their above-average experience, each new PRI brings fresh challenges to the Foundation’s program officers.
“When you’ve seen one PRI, you’ve seen one PRI,” Owen tells me. “Each one has been unique.” The knowledge and skills needed for due diligence, financial workouts and regulatory review change depending on the project, the sector, the number and type of partners and the financial tools used. That’s one reason why the Foundation doesn’t aggressively solicit PRIs.
“The best ones come to us.” says Owen. Read More >>
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Posted by Jon Howard on April 26, 2011 in Big ideas, Research
We think of social enterprise as a new trend. So, would you be surprised to be reminded that two of the nonprofit world’s most successful and transformative social investments were made more than 30 years ago? Muhammad Yunus started The Grameen Bank project in 1976. The Local Initiatives Support Corporation (LISC) was founded in 1980.
Both new enterprises got key early funding from “program-related investments” (PRIs) by the Ford Foundation. Both used familiar financial tools in creative ways to benefit people who were otherwise unable to access financial services. In both cases, that seed funding, given as loans, helped attract many millions more in public and private investments.
Grameen launched a new and profitable global financial services industry serving very low-income people. Mohammad Yunus won the Nobel Prize in 2006 for this achievement. LISC played a pivotal role in creating a powerful national network of local community development corporations (CDCs) in the United States. The CDC movement has transformed devastated and endangered neighborhoods in the United States by restoring millions of homes as well as commercial centers and public amenities.
Program-related investments (PRIs) by charitable foundations, have been around since the Tax Reform Act of 1969. The Act allows foundations to include loans, equity investments or financial guaranties for mission-related purposes (program related investments) to be counted toward their asset disbursement requirements just as they would count a grant.
PRIs can launch revolutionary innovations in meeting social needs and they have clear financial benefits for foundations. Yet, only 173 out of 75,000 U.S. foundations made PRIs in 2006 or 2007, according to Doing Good with Foundation Assets, a 2010 study from the Foundation Center. Why are they so rare? I’ll take a look in my next post.
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Posted by Jon Howard on March 4, 2011 in Communicating, Helpful sites, Research
Hi! How are you? Actually, don’t tell us. At least not on Twitter, because Twitterfolk just don’t want to know, according to Dan Zarella’s excellent 60-minute presentation on video, The Science of Social Media.
Self-referential tweets aren’t just boring – they drive people away. Zarella calls his blog The Social Media Scientist and he has the data to prove that too many tweets about yourself can lead to fewer followers. He’ll even sell you the T-shirt.
So, what’s left to tweet about? Tweet about me. (That’s “you” to you). Zarella’s research shows that the word “you” is the most common word used in retweets. That’s a reassuring link to our ancestors. “You” has been the number one most motivating word for direct response messages since they were being carved in stone.
For that matter, messages solely about our institutional selves in any medium have always been boring, and worse, unproductive.
Other quick takeaways? Be positive – tweets knocking others don’t get lots of retweets. Fill “information voids” with news people don’t have. And don’t be too smart – tweets with short words get shared far more often than tweets showing off your Ph.D.
You’ll find tons of other insights, surprising findings and useful advice in Zarella’s video as well as on his blog. The video alone is worth any two webinars I’ve taken in the last year. Set aside 60 minutes and check it out.
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Posted by Gayle Gifford on January 21, 2011 in Fundraising, Research
I just discovered Grassroots Civil Society, the Scope and Dimensions of Small Public Charities, released in 2010 by the Urban Institute.
In the report, authors Elizabeth Boris and Katie Roeger hoped to shed a bit more light on the smallest reporting public charities. Accounting for three out of ten of all public charities, these small organizations weighed in with total revenues, expenses and assets below $100,000.
I’ve written a lot about the special role these tiny organizations can play in our social fabric. (Eg. See Hope Dignity and Quality of Life are also valuable outcomes, even when measured in hours.) While this report wasn’t designed to look at social impact, any nod toward this large segment of nonprofits is welcome as all attention lately seems to be focused on being or getting big.
What particularly struck me was the difference in the revenue types of these small organizations. Small public charities rely heavily on private contributions ( 52.7%) while the sector as a whole depends largely on fee for service revenues (67.1%).
Small charities also receive 16.8% of income from “other revenue” which includes net income from special events, gross profit from sale of inventory and other revenue (my guess is that those special events make up the bulk of this income) — the percentage for the category overall is 2.1%. According to the report, these patterns have been pretty consistent over the 10 years studied.
I’m infinitely interested in understanding how organizations grow. While an article like How Nonprofits Get Really Big helped shed a lot of light on nonprofit growth, it doesn’t address the path between start-up and reaching that qualifying $50 million in revenues.
I think it would be very interesting to understand how these revenue patterns shift by size of organization and also whether the numbers are consistent within particular types of organizations (arts, environment, social service) regardless of size or if the revenue proportions hold as size changes.
Why bother with all this data? I don’t think we do nonprofits a service by prescribing remedies that ignore the huge differences among us and act instead as if the sector were a monolith. I welcome more research that can help us better understand the similarities and the vast differences in the sector.
P.S. Check out other studies at the Urban Institute. You might want to start with Nonprofit Governance in the United States, an exhaustive look at our boards.
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Posted by Gayle Gifford on October 22, 2010 in Research
A recent report by the Nonprofit Finance Fund confirms what I’ve been saying about the need for significant investments in nonprofit revenue development for some time. In their words,
“Many nonprofits with strong programs and great results fail to thrive. One reason is the way the sector is currently financed. Nonprofits are rewarded for keeping margins tight, and few have access to the type of capital needed to explore better business models, scale impact, and create lasting change. In contrast to the money needed to fund “business as usual,” philanthropic equity can radically improve our ability to address society’s critical needs.”
What’s philanthropic equity? It’s big high stakes, high risk “investments” which are designed to enable nonprofits to make significant leaps forward in their program delivery and/or their business model. The report calls these kinds of investors “Builders.”
The report distinguishes Builders from “Buyers” who support the ongoing programs or operations of a nonprofit. As I read the report, Builders understand that there are no guarantees, that they are taking a risk to help the organization undertake significant change. The payoff, if it arrives, is vastly scaled or improved program impact and sustainable growth.
The Nonprofit Finance Fund was able to collect multiyear data on nine organizations. The payoff: program delivery grew 3.1x and business model revenues grew by 2.0x in the organizations that received this philanthropic equity.
Here’s my layperson’s take on the report.
If you pump a lot of money (underscore “a lot”) into nonprofits over a few years, and they use it to make smart investments in transforming programs or business models, you might just get a big payoff in social impact and revenue enhancement.
To everyone thinking about replicating this out there, note that the amount of philanthropic equity invested in these organizations was pretty significant, ranging from a low of $3 million to upwards of $22 million (though not all of that money was spent by the receiving organizations at the time of the report).
For nonprofits: Here’s a great report to help you justify a growth campaign to prospective Builders that will radically improve your business model and/or transform your social impact.
For institutional funders: If you want to see significant increases in an organization’s philanthropic revenues, you’ve got to think at a much larger scale. Funding just one development director, with no other support, doesn’t really help organizations make the big leaps, in my opinion. But funding an entire staff in development, that would be a great take-away from this study.
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Posted by Gayle Gifford on October 2, 2009 in Effectiveness, Good reads, Research, Strategic Thinking
Here’s a new must read if you care about small nonprofits: “Outsourcing back office services in small nonprofits: Pitfalls and Possibilities.”
Thank you so to my colleague and friend Jane Arsenault of FioPartners for forwarding this report. (If you are interested in nonprofit alliances and haven’t read through Jane’s 1998 book Forging Nonprofit Alliances, you’ve been missing one of the pioneering works on this topic).
“Outsourcing back-office services…” is a study conducted by the Management Assistance Group for the Eugene and Agnes E. Meyer Foundation of Washington, D.C. It confirms through a study of Meyer grantees, industry experts and other literature what many of us have been thinking about, wishing for and experimenting with for a number of years.
Among the findings:
- Outsourcing may present an opportunity for small organizations to improve their back office.
- There may be new for-profit business opportunities in providing these services.
- Because of their small size and lack of spending on any back office, outsourcing doesn’t offer immediate cost savings for most small organizations. But the report goes on to say that it could help free time for more focus on program and strategy.
- Outsourcing needs to be approached cautiously by both organizations and their funders.
Large nonprofits and nonprofit networks have been outsourcing many back office functions for years. In our experience, small nonprofits haven’t been profitable enough for for-profit businesses to service. The lack of money to be made providing these functions has been a real barrier to the development of many services from which small organizations could benefit.
And small organizations simply haven’t had the time, expertise or money to solve this problem for themselves.
Across the country, larger nonprofits are stepping up to provide some of these services. All types of creative arrangements have been developed that don’t force small organizations to merge and thereby dissolve the important, close constituency and localized advocacy work that so many of our smallest nonprofits provide.
With the current economic crisis and a renewed interest in exploring nonprofit joint ventures, the time may finally be right for a thousand flowers to bloom in this area.
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Posted by Gayle Gifford on July 14, 2009 in 100 Things We've Learned, Big ideas, Good reads, Helpful sites, Research, Strategic Thinking
Today is definitely a web discovery kind of day. It started this afternoon when I received an email from The TCC Group heralding a new study they released called “The Sustainability Formula.”
The Sustainability Formula is based on an analysis of TCC’s Core Capacity Assessment Tool.
The formula is:
Leadership + Adaptability + Program Capacity = Sustainability.
I really liked this framework (though I think there might be a few missing pieces of the definition, for example, how about something around longevity? Or resilience as in – the ability to bounce back from adversity).
I’m working on a project now with the Rhode Island Foundation’s Initiative for Nonprofit Excellence that enlists an organization assessment tool by the Marguerite Casey Foundation that is framed around the 4 Core Capacities developed by TCC. So I was particularly interested in reading this report.
But my really amazing discovery was captured in one small paragraph at the bottom of page 2. It talked about nonprofit lifecycles and offered a framework that I hadn’t bumped into before. The stages went like this:
“Stage 1: Core program development
“Stage 2: Infrastructure development for the purpose of taking programs to scale
“Stage 3: Impact expansion which is defined as community leadership that changes the systems and policies that affect an organization’s ability to achieve its mission.”
I was floored, I have to admit it. One of those AHA! moments.
Some people have AHA! moments by finding the wreckage of the Titanic on the ocean floor. I have them when I discover amazing new organizational frameworks or research nuggets that challenge our sector’s core assumptions. (Or when I eat some really fabulous dark chocolate)
This was SO MUCH MORE VALUABLE than the typical “Start Up, Growth, Maturity, Decline/Renewal” lifecycle model I see so often. This was a lifecycle framework that was MISSION-focused.
Be still my beating heart.
As someone who tries to pay attention to new literature on nonprofits, I kept scratching my head on how I could have missed this gem. So of course I went on a Google journey to find more details about this model.
After a nonproductive search on TCC Group’s own website (though there are lots of interesting publications there), I ended up on The Philadelphia Foundation’s website where I found the article “Characteristics of High Performing Nonprofits based on Organizational Lifecycle.” Which I spent time reading.
That article referenced a 2005 BoardSource publication, Navigating the Organizational Lifecyle: A Capacity Building Guide for Nonprofit Leaders I had seen the book as a subscriber to BoardSource but I never ordered it because I figured it was just the same old same lifecycle framework. That will teach me to assume!
Yes, you may be asking about now, other than alerting your readers to all these great resources, what is the point of this blog entry?
Okay, here it is.
I regularly encounter individuals, usually good-hearted souls, who have done little research on best practices about how to build a great nonprofit. Or how best to build effective programs that address the problems or needs they’ve taken on. I’m always curious, when there is such great stuff out there usually for free, why they didn’t take the time to look.
Maybe they’ve taken to heart the old adage about curiosity killing cats and been scared away?
My problem is just the opposite. I rarely have difficulty finding really valuable information – besides Google, I’ve got great colleagues and Twitter to keep me busy.
No, my problem is trying to tear myself away from the next great read.
So, a word of advice: Try some research. You can learn a whole lot by looking, to paraphrase the great Yogi Berra.
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