Posts Tagged ‘nonprofit revenues’
Posted by Gayle Gifford on February 3, 2010 in 100 Things We've Learned, Fundraising
Back in the 80s, I was director of development and communications for the US affiliate of an international child sponsorship organization.
Keeping the advertising, invoicing, fundraising, and donor stewardship running was an expensive investment for an organization that relied primarily on monthly giving from tens of thousands of donors.
While that funding model was clearly our strength, it also lost us donors who determined which organization they chose to support solely on the basis of overhead ratios. Because we didn’t have lots of low-fundraising-cost government grants and commodities passing through our books, our overhead costs were already slightly higher than our colleague agencies that did.
(Note: Why overhead ratios tell only a tiny part of the story).
In particular, we had our eye on “development education” grant funds awarded by the US Agency for International Development (USAID). Those funds supported programs that taught US audiences about global issues, especially those facing the world’s most poor and vulnerable people. We wanted to expand our outreach in this area but those tight overhead ratios were stopping us.
We also saw that those agencies that received USAID development education grants seemed to have a “more favored” status than those of us who didn’t. We wanted to be in the “in crowd.” Being “in” often led to more media exposure, more opportunity for partnerships with our colleagues, and, ultimately, more donors and more funding to support our programs overseas.
But year after year (before I arrived), our proposals kept getting rejected. And we couldn’t understand why.
And to put the frosting on the cake, we kept hearing the funder and our non-sponsorship colleagues talk about the need to personalize international development for US citizens by sharing the stories of communities and families overseas.
But but but… each and every day, we were sending very real and personalized stories about those very same communities and families to tens of thousands of donors in the US.
What were we doing wrong?
Lesson One: Get involved with your colleagues
Luckily, my boss was determined to shift the perception of our agency in the eyes of his international colleagues. So he became very active in the US international development community. He joined committees in strategic networks. He lobbied our international program staff to participate in the US as well. He brought onto our Board of Directors individuals with international development expertise and got them involved in those networks as well.
Through those activities, he also got to work with and come to know the staff in the development education division at USAID. And that’s how we learned what was wrong with us.
Lesson Two: Find out what funders think about you.
Without getting into too much detail, suffice it to say that child sponsorship organizations like ours — the ones that invested in active communications between donors here in the US and their sponsored families overseas — were not seen by many of their colleagues as serious international development organizations. Read More >>
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Posted by Gayle Gifford on November 23, 2009 in 100 Things We've Learned, Fundraising
How often have you heard excuses for why a potential donor couldn’t possibly give to your organization or project … before they’ve even been approached!
A typical conversation might sound like this:
Volunteer 1: What about Mr. Potential Donor? I think he might be capable of a larger gift than he’s been giving.
Volunteer 2: Oh no. He’s got a son in college (or substitute another reason such as “just remodeled their house,” or “bought a new boat”) and couldn’t possibly do more right now.
I was reminded of the lost opportunity when we make assumptions of what our donors will or won’t do when browsing through my Sunday newspaper a few weeks ago.
A photo caption caught my eye:
“Home Sweet Home Gala raises $400,000”
Whoa! I had to look again. Yes. It said $400,000. I figured the newspaper must have added an extra zero.
If you live in New York City, raising $400,000 probably sounds like no big deal for a charitable event. But the paper I was reading was the Providence Sunday Journal. The organization was Crossroads Rhode Island, formerly Travelers Aid of Rhode Island, the largest nonprofit provider of homeless services organization in our state.
To put this fundraising total into perspective for you, you’ll need a bit more data about Rhode Island.
- The total state population is just over 1 million, making up just over 400,000 households.
- The largest city, Providence, has a population of just 174,000.
- There are only two Fortune 500 companies in the whole state. And one community foundation.
- The unemployment rate, at 13% in September 2009, is one of the highest in the nation.
Even in a booming economy, $400,000 is a huge fundraising gross for an event in Rhode Island. If I had to guess, it’s probably in the 10 top events in total funds raised.
Very impressed, I had to learn more. So I went straight to the top and called Karen Santilli, the Vice President for Marketing and Development at Crossroads.
“Yes, our September gala raised just over $400,000.” Karen informed me.
No, they didn’t have a Hollywood celebrity or famous speaker, which the other events that raise the biggest money often have.
Seven Years and a Winning Formula
This event started seven years ago when Travelers Aid of Rhode Island changed its name to Crossroads Rhode Island. “The event chair at the time felt strongly we had to do something unique to celebrate the name change and help people remember who we were,” said Karen.
So they put their heads together to create a truly WOW event that would keep people talking and eager to see what they’d do the next year.
Read More >>
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Posted by Jon Howard on October 28, 2009 in Big ideas, Fundraising
The genius of the subscription marketing model lies in flipping the vast power of personal inertia from “don’t buy” to “buy.” How can we in the nonprofit world convert many separate donation decisions into the one long-term commitment of subscription? How can we help our most loyal supporters make “donate” their default setting?
That’s what “Looking at Life as One Big Subscription” by Damon Darlin of the New York Times got us thinking about recently.
Magazines, gym memberships, cell phone plans, online computer backup services and cable TV all rely on variations of the subscription business model. Netflix has used this old model to transform the movie rental business. The details vary but the basic subscription model has the consumer pay (or at least commit to pay) up front for access to a product or service over a period of time.
Consumers get reliable and often privileged access to the offering, usually at a compelling discount. Providers get an assured revenue stream and reduced marketing costs. Even better, they get paid whether or not customers actually use their cell phones or gym memberships.
As Isaac Newton taught us, bodies at rest tend to stay at rest. Subscribers must get off the couch and take an action to cancel the agreement. As long as providers don’t anger them with bad service, most subscribers will sit back and let the revenues flow.
Does this powerful business model work for philanthropy? Well, symphony orchestras and museums already use the subscription model with season tickets or admission-based memberships. However, they actually provide goods and services over time directly to the consumer, more or less like a for-profit business.
What about the usual three-cornered nonprofit proposition where A gives money to B to deliver a service to C? Direct self-interest doesn’t operate here. Still, one category of non-profits have used the subscription model to support service to third parties since the 1930s with great success. Can you name that nonprofit sector? Have you adapted the subscription model to fundraising?
I’ll provide the answer and look at what that example could mean for other nonprofit fundraisers in a future post.
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Posted by Gayle Gifford on July 24, 2008 in Big ideas, Nonprofit Highlights, Research, Strategic Thinking
I joined a group of colleagues Tuesday night to talk more about Passion & Purpose, 
the recent report from The Boston Foundation.
A number of questions emerged that are worth a conversation among our colleagues and with nonprofit funders. I’d like to share those with you:
- Is this the right model for evaluating the financial health of nonprofits?
- Do we agree with this assessment and presentation of the issues and recommendations? Read More >>
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Posted by Gayle Gifford on June 11, 2008 in Big ideas, Fundraising, Research
Research from the Bridgestar group raises a question about the prevailing belief that successful nonprofits diversify their revenue bases.
The article is called “How Nonprofits Get Really Big” and was published by the Stanford Social Innovation Review. Here’s what the research found in brief:
“Since 1970, more than 200,000 nonprofits have opened in the U.S., but only 144 of them have reached $50 million in annual revenue. Most of the members of this elite group got big by doing two things. They raised the bulk of their money from a single type of funder such as corporations or government, and not, as conventional wisdom would recommend, by going after diverse sources of funding. Just as importantly, these nonprofits created professional organizations that were tailored to the needs of their primary funding sources.”
Hmm.glg
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