The Annswer Blog

Now for something completely different - football

2009-10-22T20:09:00.002-04:00

Among the many writing projects I have on my plate, one of my new favorites is being a contributing sportswriter to my friend Cody's online magazine. My first story was published today -- it's the ABC's of football so women who don't know the game can learn enough to follow it, and maybe even enjoy it.

It's a nice break from the heavier subjects I'm writing about these days -- palliative care, public health, nurse licensing, youth development, and infectious diseases.

Here's the link: www.omfgstyle.com

The Big Event - An Alternative

2009-05-05T07:58:00.003-04:00

The arrival of May in New York means that gala season is in full swing. Every Sunday I open the Times "Styles" section and look at the photos of the week's events. This morning the local news did a piece on the Met Museum's annual Costume Institute gala. Everyone was there -- Madonna, Rhianna, Isaac Mizrahi, and so on. The goal was to raise $7 million. The report did not way whether that goal was reached.

But all is not well in gala paradise.

Along with all these party photos, this Sunday's Styles section also included an article saying that non-profits are having trouble finding corporate honorees -- often going with third and fourth choices. Even worse for the organizations, the honorees are giving less money and sharing fewer contact lists, often not even wanting to approach their company's vendors for support. Some organizations are lowering their fundraising goals for their events, others are canceling them.

Full disclosure, I am not a fan of galas as a fundraising tool for smaller organizations. Yes, I understand they have pr and visibility value. And if a board is both committed to the event and well-connected, they can be successful. However, if the cost/income statements for these events included not just the venue, food and entertainment, but also the amount of staff time spent planning and executing the event -- and the opportunity cost of those staff members not having time for other fundraising -- in most cases the events wouldn't be worth it.

Those organizations that raise a good portion of their annual revenue through big events should continue to have them. Those that don't have an established annual gala might want to wait a year or two to hold the first one.

Organizations that see diminished revenue or are struggling to find an appropriate honoree could should consider taking a break this year. One option to keep some of the event momentum going is to have a "non-event."

Pick a specific project or need, put together a "non-event" committee if you have people who want to help, send out invitations to all prior event contributors and other donors letting them know that this year, in order to save costs, you're not having a big gala, instead you're asking for gifts to support a specific project or organizational need. Instead of spending money on the place, the food, the entertainment, you're going to use all of the money raised to support your organization's programs. Just like you would with your gala, have a follow-up plan to secure donations.

That way you've communicated with your supporters who like to come to events so that if the economy bounces back, you won't have to start again with them. And, even if you raise less money than you would have with a gala, your costs are much lower, so in terms of the net, you might come out ahead.

Foundations to Cut Giving in 2009

2009-04-28T08:22:00.001-04:00

In this week’s news, Crain’s NY Business published an article entitled, “Large foundations plan to cut back giving. Move comes on heels of big losses in their endowment funds: nonprofits to feel the pain”

According to a survey of 1,243 foundations conducted by the Foundation Center and released yesterday, nearly 2/3 of the largest foundations say they expect to either cut the number of grants they give our or reduce the dollar amount of those grants. Many will have to reach into their endowments to pay out grants, instead of just spending income, which is the usual practice.

The article talks about foundations trying to find other ways to help their grantees through meetings, conferences, technical assistance and help with advocacy.
My sense is that most nonprofits would really prefer the money, and while it’s nice to offer that extra assistance it won’t keep the lights on or preserve jobs for staff and services for people in need.

Link to research advisory put out by the Foundation Center:

http://foundationcenter.org/gainknowledge/research/econ_outlook5.html

As the survey reports, “As the ongoing economic crisis reaches a scale and duration not seen in the post-war period, foundation behavior during past downturns may become a less precise predictor of how funders will cope with current reality. In other words, right now no one knows what the future looks like. So the more diversified a non-profit’s revenue sources can be – this means both contributed and earned revenue – the better they will weather the economic storm.

Endowment Spending

2009-04-24T07:56:00.001-04:00

On April 16, the Times has an article called “Colleges Ask Donors to Help Meet Demand for Aid.” In it the writer, Stephanie Strom points out something important that many people don’t know. “Laws in roughly half the states prohibit charities from spending out of endowed funds that have fallen below their initial value, which has crippled many charities at a time when money is scarce.”

It’s really important for the public to understand this stuff so they realize that it’s not as simple as spending the endowment to make up for shortfalls. Not only are endowed funds given for restricted/specific purposes, almost always with an agreement in writing about the use of the funds, but in many cases these days, organizations can’t even spend the money they have because the value of the initial investment has dropped.

One of the creative ways some universities are dealing with this is going back to donors whose endowed funds have lost value and can’t be spent and asked them to make cash gifts in the amount that they would’ve spent – usually between 5 and 7% of the value of the original gift.

Survey of Non-Profit Leaders - Finances

2009-04-23T16:05:00.000-04:00

Things are tough in the non-profit world these days. A recent survey of 986 non-profit leaders conducted by the Non-Profit Finance Fund, an organization that provides loans and other financial services to non-profit groups, found that only 12% expect to operate above break-even this year and 31% only have one month of operating cash on hand.

Key findings include:
Only 12% expect to operate above break-even this year.
Just 16% anticipate being able to cover their operating expenses in both 2009 and 2010.
31% don't have enough operating cash in hand to cover more that one month of expenses, and another 31% have less than three months' worth.
52% of respondents expect the recession to have a long-term (2+ years) or permanent negative financial effect on their organizations.
93% of lifeline organizations that provide essential services anticipate an increase in demand in 2009.
The NY Times reported on the results:

http://www.nytimes.com/2009/03/26/us/26charity.html?src=linkedin

Summary of results and full results can be viewed here:

http://www.nonprofitfinancefund.org/docs/2009/SurveyResultsSummary

One of the things that jumped out at me was that half the respondents said they wanted help communicating their financial difficulties to their boards and donors.
So often it comes down to communication.

Even when money is tight, non-profits have to find a way to help the public, elected officials, board members and funders to understand what they do, how they do it, what it costs, and why it’s important.

Too many people don’t understand why non-profit staff members want to make a decent salary. They still think of old-fashioned charity and assume people will volunteer their time. Surprisingly, even people who run businesses throw out all the rules they follow every day with their own companies when they get involved with non-profits.

And yes, we all want the vast majority of contributed revenue to go to the programs that help people in need, but we have to remember that in order to do that, organizations need to be able to keep the lights on, buy office supplies, update their websites, etc.

It’s up to those of us in the non-profit world to do what we can to change these perceptions, and it’s something we have to work on especially in tough times.

Great Fundraising Pitch

2009-04-21T17:26:00.000-04:00

The Obama campaign set a new standard for email communication with donors and friends. Although the following isn’t quite as high-tech as their mailings, I thought it was a very compelling pitch. It came from a friend of mine from summer camp asking for support for a fundraising project her son’s second grade class is taking on. Sounds like a good cause too.

Dear Friends -

Recently, my son Hieu's second grade class decided that they wanted to fundraise for a cause. After looking at several ideas, they decided they wanted to do something for children in the region of Viet Nam where Hieu was adopted. I was very excited to hear about this, and started immediately to look for something that they could do. I discovered The Library of Vietnam Project, a 501(c)3 organization that has already built a number of libraries in different provinces in Viet Nam. I spoke with Chuck Theusch, the founder of the organization, about the class project, and then introduced him to Elizabeth, Hieu's teacher, so they could work out the details.

Currently, Vietnam does not have a public library system, something that we take for granted here in the US. The cost of building a small library in Vietnam can be as little as $7000-$8000. It is possible that Hieu's class alone could raise enough to build a library in Bac Giang province, where Hieu was born! Any additional funds raised would go towards buying books and supplies for the library, or could be used to buy books for a school for the blind nearby.

I am really thrilled to be involved with this project. It gently opens the door to some very constructive discussion about how adoptions happen, and how different life choices can be if you live in a place with limited opportunities. Through their connection with Hieu, the kids will learn so much about building connections with people far away.

If you are interested in learning more about the organization, you can go to the website: http://libraryofvietnam.com/

And here is a short but inspiring video about the work being done to build a library system in Vietnam: http://vimeo.com/2885217

Here is an interesting article about Chuck Theusch, the founder of the Library of Vietnam Project: http://www.military.com/forums/0,15240,101701,00.html

The class has settled on a read-a-thon to raise money. They will keep track of their daily reading starting March 23 and will read for 50 days. Hieu and his classmates will raise money by collecting pledges of dollar amounts for each hour they read. I am guessing that, between school and home reading, Hieu will probably do about 40-50 hours of reading in that time. If you would like to help Hieu to raise money with his class, please let us know what you would like to pledge per hour that he reads. If you like, you can also name a maximum amount that you would like to pledge.

Thank you so much for reading this letter. Please let me know if you have any questions. And feel free to forward this to anyone you know who might be interested in helping out.

On behalf of Hieu and his 2nd Grade class,
Vicky