Is It Dangerous to Cut Back on Fund-Raising Costs?

Our tendency is to cut back where as the right direction might be to start a new initiative in order to energize our donors!
December 18, 2008

Many fund raisers are facing pressure to cut costs as donations drop. But Jeff Malloch, a direct-mail consultant, warns that cost-cutting mania can lead to really bad decisions.
Writing in a letter posted on The Agitator blog, he tells nonprofit officials to remember that reducing expenses only makes sense if it contributes over the longer term to higher (or more stable) revenues.

Mr. Malloch takes on several fund-raising ideas in a recent Chronicle article, saying they focus too much on cutbacks and not enough on innovation. For example, he says that the Mint Museum of Art’s decision to combine three solicitations into one year-end mailing, which saved $5,000.
Writes Mr. Malloch: “This is a dangerous move without any testing to back it up. She may have saved $5,000, but she needs to consider how much revenue she potentially loses by combining three entirely different messages and appeals into one, likely now a disjointed and confusing mailing?”
He also takes issue with Catholic Charities USA’s decision to replace its traditional year-end letter to donors with a postcard bearing photographs of people in need.
The postcard idea may have been cheaper to produce, says Mr. Malloch, but it ignores research that longer letters do work and, by not including a return envelope, doesn’t provide donors with an easy way to give.

In another post on The Agitator blog, Roger Craver writes about a friend’s “contrarian approach” to fund raising during the recession.
The friend, Jerry Huntsinger, a freelance writer, tells fund raisers not to “go silent” with donors simply to save some money. He also urges charities to be aggressive in their fund raising during the recession, so they don’t miss the recovery; to mention the word recession frequently, so donors are aware of the difficulties they’re facing; and to “reduce your staff instead of reducing your mailings.”
Perhaps his boldest advice is to “launch a new program,” which he says will energize donors.

The Black AIDS Institute Presents the 8th Annual Heroes In The Struggle Gala

A bi-coastal celebration Honoring Leading Black Women in the Fight against HIV/AIDS December 1st in New York City and February 4th in Los Angeles

The Black AIDS Institute, a leading organization dedicated to fighting HIV/AIDS in Black communities is hosting its 8th Annual Heroes in the Struggle Gala Reception and Awards Presentation. In recognition of the recent opening of the Institute’s New York offices, this year’s event will be bi-coastal and open with a special performance by award-winning actress Sheryl Lee Ralph. In line with this year’s theme, Black Men Honoring Black Women in the Struggle, each of this year’s honorees are pioneering women who have demonstrated incredible commitments to ending the AIDS pandemic in Black communities.

The first of the two celebrations will be held on December 1st, World AIDS Day, in New York City at The Allen Room, Frederick P. Rose Hall, Home of Jazz at Lincoln Center. Hosted by AJ Calloway, EXTRA TV’s Entertainment Correspondent, the New York event will honor the work of Dr. Marjorie Hill (CEO of Gay Men’s Health Crisis Center), Bev Smith (Host of the Bev Smith Show), the Honorable Barbara Lee (U.S. House of Representatives), Sonya Lockett (Vice President of Public Affairs, BET Networks), Andrea Williams (AIDS Activist) and will include a special posthumous tribute to New York City Councilman and AIDS Activist, Philip Reed. In addition to honoring nine extraordinary women, the Black AIDS Institute will also honor the M.A.C AIDS FUND as this year’s Corporate Hero with a special presentation by Vogue Editor at Large, Andre Leon Talley.

The annual event unveils the year’s inductees into the Heroes in the Struggle traveling photo exhibit that honors Black people who have made outstanding contributions in the fight against HIV/AIDS, and raises desperately needed funds to fight HIV/AIDS in Black communities.

Recently, the U.S. Centers for Disease Control and Prevention (CDC) released a study confirming our worst fears: the American epidemic is at least 40% worse than previously believed. This sad news serves only to dramatically underscore the point the Black AIDS Institute has been making for years.

WHEN: World AIDS DAY, Monday, December 1, 20086:30pm--VIP Reception, Special Performance by Oscar-nominated choir Impact7:30pm – Awards Presentation, Special Performances

WHERE: The Allen Room, Fredrick P. Rose Hall, Home of Jazz at Lincoln Center, Broadway at 60th Street, New York City

WHO: Actor Danny Glover, BET Network’s CEO Debra Lee, Power 105FM radio personality Ed Lover, Miss USA 2008 Crystle Stewart, Miss Universe Dayana Mendoza, Actress Gloria Reuben, Actor Hill Harper, Actress Vanessa Williams, New York Knicks forward Malik Rose, BET correspondent Jeff Johnson, Brenda Braxton from Broadway revival Chicago, President and Urban League CEO Marc Morial, and Actor NaShawn Kearse. Special performances by Sheryl Lee Ralph, Platinum selling R&B artist Case, the Oscar-nominated Impact Repertory Theater and Evidence Dance Company.

Los Angeles Event: In commemoration of National Black AIDS Awareness Month, the Los Angeles event will be held on February 4, 2009, 6 to 9 pm, at the Walt Disney Concert Hall. Actor/activist Hill Harper will lead the celebration to honor the following Heroes: Sandra J. Evers-Manly (President of the Northrop Grumman Foundation), Dr. Kimberly Yvette Smith (HIV/AIDS Researcher, Rush University Medical Center), Cookie Johnson (Philanthropist) and Gloria Ruben (Award-Winning Actress, ER, Raising the Bar).

For more information about Heroes in the Struggle or the Black AIDS Institute, log onto http://www.blackaids.org/

For event and ticket information, contact Michelle Huff, HUFF Events & PR, http://us.mc6.mail.yahoo.com/mc/compose?to=michelle@huffent.com , 212.239.1732.

Happy Thanksgiving!

Model Chanel Iman, actress Nia Long and former Spice Girls singer Mel B distribute turkeys to residents in South Central, Los Angeles, November 24, 2008.
Photo: Bezjian/Wireimage

Great fundraising IS possible during tough times.

Gail Perry MBA, CFRE
Let's face it. With the global economy tanking, philanthropy is taking a back seat in many people's minds. Whether donors are experiencing a cash crunch or not, the real problem is that many people are simply not feeling like giving right now. It's their attitude that has changed as much as anything.

Here is what smart fundraisers need to do now.

Focus on your core supporters. This is not the best time to seek new friends and donors for your organization. One of my great mottos is: "When you need funding, always go to your current donors first."

Why? Current donors are already "pre-sold" on your mission and your great work. They are already on your bandwagon because they have already invested in your organization.

Above all, don't let them drift away during this economic turmoil. Donor attrition is a terrible problem in our industry - we are losing our donors because we never spend enough time on them.

For the rest of my article, please click here:
http://www.philanthropyjournal.org/resources/fundraisinggiving/successful-fundraising-tough-times


www.gailperry.com

Outlook for Foundation Giving Into 2009

Steven Lawrence, senior director of research at the Foundation Center, explains in an October 2008 research advisory that the Center still expects foundation giving to grow ahead of inflation in 2008.

Foundation assets grew faster than inflation between 2003 and 2007, which enabled grant makers to replenish their endowments after the downturn of the early 2000s, Lawrence explains. For foundations that determine their annual grants budgets based on a rolling average of their asset values, this growth should help to mediate the impact of possible asset losses in 2008 on their giving in 2009. Some foundations will also benefit from new gifts and bequests, and the sector as a whole will benefit from the continued establishment of new and sometimes quite large foundations.

What does this mean for 2009? Should the stock market recover some of its losses by year's end, the various factors cited above may help overall foundation giving to remain roughly unchanged next year. This would be the best-case scenario, Lawrence explains. “However, if the market fails to rebound from its current low or sinks further, the asset losses may be so pronounced and touch so many foundations that an overall decrease in funding becomes inevitable.”

Fund raising in a recession: how fast, how soon.

By Alexander, G. Douglass
Recovery from the current recession is about as predictable as the weather. Forecasts for an end to these hard times range anywhere from two months to two years. But, like the weather, we know things will get better. What then are the implications for fund raising? Are people still willing to give? Should fund-raising campaigns go on hold? Or should you proceed, but with much more modest goals?

The better question to ask is: Can you afford to put your needs on hold? Most executive directors and development officers I know would answer an unequivocal "no." In fact, some non-profit organizations, especially social service agencies, report that their funding requirements are even greater in this soft economy because more and more people need help. And many non-profits are also feeling the pinch of cutbacks from federal, state and local governments, which are dealing with their own financial crises. Actually, a case can be made that the third sector is even more important during a recession because of the inability of government to respond expeditiously and effectively to rising social and health problems.
Recession In Perspective

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Where Do Nonprofits Fit in Obama’s Plans?

(Nov. 10, 2008)
During the U.S. presidential campaign, Sen. Barack Obama shared his plans to stimulate public service and build the capacity of nonprofits, including initiatives to encourage new and more effective nonprofit programs.
Obama, now U.S. president-elect, put forth a three-step plan to increase public service. The first component is a large expansion of the size and scope of America’s federally funded volunteer programs, such as AmeriCorps and the Peace Corps. The second part is moving these volunteer service and “service-learning” programs into schools and colleges. The third aspect is leveraging public and private sector investment to “incorporate higher levels of competition, innovation, and accountability” in the nonprofit sector.
Obama’s plans for nonprofits themselves were not very specific, but do call for the creation of an agency within the Corporation for National and Community Service called the Social Entrepreneurship Agency for Nonprofits. The agency would make grants to build the infrastructure of the nonprofit sector and capacity of nonprofit organizations, including their ability to ensure accountability, manage volunteers and improve outcomes.

Barack Obama’s plan to increase public service and improve nonprofits can be found on his campaign website. For more about Barack Obama’s proposed plans affecting the nonprofit sector, see this campaign coverage on The Chronicle of Philanthropy‘s website.

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Fundraising Tips: Do’s and Don’ts in a Troubled Economy

(Sept. 22, 2008) Greeted every morning with news of falling stocks and debates on whether the U.S. economy is in recession, charitable spending right now is likely not on the top of many donors’ priorities—a daunting thought for fundraisers looking for strong fourth-quarter income.
“This is a big enough ripple that major donors are looking around and asking themselves where this ends,” said Melissa Berman, president and CEO of Rockefeller Philanthropy Advisors, a New York firm that counsels donors on charitable giving. “And as the financial crisis bleeds onto Main Street, ordinary folks are feeling less comfortable donating money.”
In what will likely be an uphill battle, fundraisers in the final months of 2008 say they are not making drastic changes, but rather going back to basics and focusing on need.
“Donors may not give as quickly or as readily, so you need to make a really compelling case,” says Brian Bonde, ACFRE, president of Children’s Care Hospital Foundation. Bonde advises nonprofits not to back down on marketing; instead redouble the effort. “If there is any doubt of real need, the donor may not give right now. This is not going to work if you are doing things the way you do them in better times. In tough times, we really need to communicate the hurt.”
“It’s like a football team. When you’re down, focus on fundamentals,” Bonde continues. “Go out and talk to your donors. Try to identify people who can be opinion leaders to the rest of the constituency—create a bandwagon effect. Prepare your boards for what may be the worst and try to make it the best.”
Last Quarter Critical
How important is the last quarter of each year for fundraising? According to AFP’s Holiday Giving Survey, conducted in December 2007, more than 40 percent of charities raise on average between one-third and one-half of their entire annual contributions from October through December. In addition, almost three in 10 charities raise more than 50 percent of their annual contributions during that time. Nearly two in 10 respondents receive more than 40 percent of their annual contributions in the month of December alone.
Despite the urgency of the situation, members agree that keeping the general program moving forward, focusing on the bigger picture and NOT panicking are critical to success.
“Look at your donors case-by-case, some are being hit hard by the economy, some are doing okay,” advises Matthew Haag, senior director of major gifts and regional programs at the University of Rochester. “And with all your donors and prospects—don’t stop communicating. Now is an opportunity to show that you are interested in them beyond the financial, because you know some just don’t have it to give right now. Don’t lose sight of the long-term relationship you are building.”
As for what not to do, Bonde says fundraisers should not move away from long-range strategies and long-term cultivation in order to fulfill annual goals.
On his blog, The Fundraising Coach, Marc Pitman writes that the three deadliest mistakes a fundraiser can make in a bad economy are to spend less on fundraising, become pessimistic and apologize when asking for money.
“Timidity is a sure-fire way to not raise money,” Pitman says. “We need to continue getting out from behind our desks and inviting donors to give.” It is important to show that you are aware that these are tough times, he adds. “But there’s nothing compassionate about not asking.”
How is your organization faring during these times? What are you doing to reach your fundraising goal through the last quarter of this year? Send Rowlan your thoughts. Info@RowlanHill.com