Bright+3

Bright Ideas Change the World

Bright Ideas

Failing the Spam Test

by

Earlier today I happened across my reading notes from Seth Godin’s Permission Marketing:

“Permission marketing is anticipated, personal, relevant.

Anticipated – people look forward to hearing from you.
Personal – the messages are directly related to the individual.
Relevant – the marketing is about something the prospect is interested in.”

I also received a solicitation today from a capacity-oriented nonprofit organization I happen to admire greatly and which also happens to have a highly-regarded nonprofit marketing expert on its staff. Their email failed on every count: I wasn’t expecting, much less was I looking forward, to receiving their solicitation. While they got my name right – that’s worth something – the letter pitched to me the organization’s expertise in helping nonprofits fundraise. Given that they sent the email to my Nooru Foundation address, they should have at least wondered if a fundraising and donor communications pitch would have any personal or organizational relevance. At a minimum, given the name of our organization, they might have at least gone to the trouble of asking if we raise funds from donors before making the pitch rather than assuming we did. After figuring out that we don’t raise funds from donors, asking if we provide support to our grantees for their own donor fundraising would at least have had some chance of sparking my interest. Instead, their solicitation constituted the very same sort of spam that Godin argued against in 1999 (and that he hasn’t stopped railing against since).

Jumo’s Tough Road Ahead

by

Jumo launched yesterday with much fanfare, and NonProfitTrends, Amy Sample Ward, and Beth Kanter are among those with useful observations. I love the idea – “Jumo is a social network connecting individuals and organizations who want to change the world” – but it seems like a tough move to build an entirely new platform when so many people are already embedded elsewhere (Facebook, Change.org, and Idealist are obvious examples). Just offering a better, more social sector-optimized version of Facebook (despite Facebook’s mediocre execution) may not be enough to overcome the gravitational pull of 600 million users or even the established communities at other nonprofit-oriented sites. And offering largely redundant functionalities with a wide range of reported problems isn’t going to make it any easier. I suspect for Jumo to earn a critical mass of credibility and user loyalty they’ll need to clean up their implementation issues (obviously), but I suspect they’ll also need to offer a platform that does something dramatically different and better than its many competitors.

For the record, I don’t yet have a Jumo account because it’s rejected every attempt I’ve made to create one. I’m sure I’ll get in eventually.

Nonprofit Fundraising Improves in 2010

by

The Nonprofit Research Collaborative released its first report today, a survey of 2,349 charities, 163 foundations, and 386 grant makers on fundraising so far in 2010 compared to 2009. The NonProfitTrends blog has a good summary of the findings, but the punch lines seems to be this: like many other parts of the economy, fundraising in the nonprofit sector seems to have bottomed out and is starting its presumably long climb back up. We are a long way from the even four or five years ago but the trends generally point in the right direction. That’s great news, of course, but it’s not clear just how much rethinking – community engagement, governance, business models – the sector has done in the past few years, and I wonder if a steady diet of good (if incremental) news will diminish the opportunity and motivation to probe deep and ask hard questions about improving the capacity and effectiveness of the social sector.

Why Annual Reports?

by

Earlier in November, a coalition of outfits including the Communications Network, the Philanthropy Awareness Initiative, and the Williams Group published a really interesting report questioning the value of the annual reports produced by philanthrophic foundations: Talking to Ourselves? A Critical Look at Annual Reports in Foundation Communications.  The good: the study was motivated by a terrific question (are annual reports worth the effort?) and they nailed some important insights.  The bad: a little too much straw man in the study’s actual research questions, even though their conclusions all seem pretty sound.  What do I mean?  One of the key questions they asked: how many people actually read the annual reports published by foundations?  The answer, predictably, is not many.  They get points for not assessing readership among the entire American public, and instead measuring it among an “engaged public.”  But this narrower “engaged public” audience was still made of up tens of millions of people, and it hardly seems fair or useful to judge recall or brand awareness of any particular foundation against an audience of that size.  The issue seems to me like a classic communications challenge: identify precisely who your audience is and what you hope to accomplish, develop a strategy for accomplishing those specific outcomes with those specific audiences, measure effectiveness, and adjust.  It’s tough to see why very many foundations, if any, would see their strategically targeted audience as including 12% of the American population.

Another example: the report assembles all of the annual report objectives noted by their survey respondents and then criticizes foundations for trying to do too much.  I suspect that many foundations really do try to accomplish too many objectives with their annual report, but I might have approached this question a little differently.

That said, it requires some guts to to take on a deeply established practice, these folks did a lot of work in asking the question, and they a good starting a valuable conversation.  One particularly interesting finding is the internal value of the annual report process that many foundations identified.  Creating an annual report resulted in “significant internal benefits for their foundation, prompting a regular chance for reflection, creating a communications discipline, and generating new content that can be repurposed in other vehicles.”

Research question quibbles aside, the report does ask a tough, important question – is it worthwhile? – about a widespread, inertia-bound foundation practice, and their conclusions are spot-on: foundation communications tools  should be targeted and strategic rather than broadband, foundations should measure impact of those tools, most people don’t find annual reports valuable, and skipping the annual report process can save a foundation substantial cash, time, and environmental impacts.  And the report generated some good – and ongoing – online chatter, including Philantopic‘s comments and a post on the Public Policy Communicators of New York blog highlighting the upcoming “no-holds barred online conversation” about the report.

They clearly mean for their report to be the beginning of a conversation.  Hats off to them for asking the question, doing the research, and inviting the engagement.  You can learn more and plug in to the conversation at the WhyAnnualReports.org website.

Recipe for Success

by

The Harvard Business Review blog posted a couple of weeks ago on some findings from a massive ten-year study of management practices, and identified three in particular that seem most associated with successful mid-sized companies:  a) ruthless monitoring and continuous improvements across their entire process, b) establishing challenging performance targets for their employees, and c) energetically incentivizing and rewarding high performers and weeding out underperformers.  It’s interesting but not surprising that – as far as we can tell – not one of these practices is pervasive among nonprofits.  It’s easy to come up with excuses for why these practices don’t easily apply to nonprofit organizations.  It’s much harder, and I’ll wager a lot more useful, to figure how they do apply.

Charity Navigator: A New Evaluation System

by

Among the hottest of the hot topics in the philanthropy world these days is nonprofit evaluation, and all eyes are on Charity Navigator in particular as they move from a narrow focus on financial measures to a much broader assessment of organizational effectiveness.  This is good news for the sector, no doubt.  We’ve long believed that a narrow focus on metrics like overhead ratios and program expenditures (core elements of Charity Navigator’s methodology) is not only misguided but really damaging, encouraging nonprofits to focus on how their expenditures look to external eyes rather than on how much they get actually do with those dollars, and creating huge disincentives for nonprofits to make critical capacity investments.  Even worse, those metrics probably don’t tell us anything consistent about an organization’s actual impact or effectiveness.

As Tactical Philanthropy noted in a nice write-up earlier this week, “Charity Navigator is the 800lb in the charity rating space,” so watching them lay out a path for major changes in their rating system over the next couple of years really is a big deal.  Charity Navigator, ironically, probably gets more credit than anyone else for making overhead ratios so important, but under new leadership and increasingly sophisticated thinking in the philanthropic world about evaluating nonprofit performance, they will play a large role in shifting the paradigm.

As they reported at the SOCAP10 conference last month, their new system will consider overhead ratios, working capital (cash on hand), and a liabilities-to-assets ratio but will also focus heavily on third party reviews of organizational effectiveness.  Accountability and transparency will also figure in the rating system.

Charity Navigate presentation on Slideshare.

There’s plenty of opportunity for missteps, but watching an industry giant like Charity Navigator lead this critical cultural change in the philanthropy community is a welcome sight.

A Course They Ought to Teach in Your Nonprofit Management Degree Program

by

Do any nonprofit degree programs teach this?  They should.

How to Manage Your Board:

  • Guiding your board toward the questions you want them to ask and away from those you don’t want them to touch.
  • How to make sure your board feels like it was their idea.
  • Preventing your board from making really dumb decisions.
  • Enabling your board to push and challenge you.