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We all stay. Except maybe the donors. Where are they going?

April 27, 2023 by Ted Fickes

The other day I had a conversation with a colleague who works on building and implementing community software. He asked about my take on community in nonprofits. It was a “why is this interesting to you?” sort of question.

I thought I’d take a minute to share a bit about why this intersection of community, membership and organizations is so important now.

We live alongside trauma, uncertainty and a fraying fabric of norms and expectations. We’ll skip the litany of what’s going on. You all work in it every day.

A wall mural in A mural in Kotti, Berlin, that shows people marching and protesting. One is carrying a sign saying "Wir Bleiben Alle" which translates in English to "We All Stay."
A mural in Kotti, Berlin. “Wir Bleiben Alle” translates to “We All Stay.”

All this change and pain is sometimes good. You want to topple white nationalists and abolish poverty? Fuck yes. Let’s do it. But it’s often painful and, when constant, this work through change is exhausting, isolating and maddening.

Most people have a sense of all that’s going on – and going wrong – and want to address it. But they don’t want to wade into that exhaustion. They give their $50 to charity and sign a petition. But even that can be frustrating. What happens next, they ask? Does anyone else care?

I believe that campaigns, local groups, nonprofits and certainly businesses engaged in building audiences and communities have a much bigger role to play in how people engage in civics, politics and systems change.

As nonprofit leaders – and marketers, community builders, fundraisers and membership directors – we have a responsibility to our organization’s mission and finances.

We also have a responsibility, usually unspoken, to community – those who support our work with money and time as well as the broader community of people who put food on tables, teach us, clean streets, care for children and so many more. Amidst our lists of activists, customers, donors, volunteers, subscribers are people from whom we expect attention and to whom we promise a better world, a happier existence, a cleaner countertop or a healthier pet.

We in fundraising, membership and organizing are the front line of civic engagement, community power and system change. Whether we like it or not we can and should take seriously this space for rebuilding trust, teaching people about their power, and delivering solutions, not just products or promises.

How that’s done – the future of community – is roughly the theme of this blog, newsletter and the work that I do with organizations. Get in touch if this sparks ideas, you have questions or ideas.


Where did they go?

The Chronicle of Philanthropy last week reported that Giving to Nonprofits Fell Nearly 2 Percent in the Last Quarter of 2022. This echoes other reporting on drops in giving to nonprofits.

More important than a small drop in overall giving is the drop in the number of people making donations. Individuals making small gifts saw a sharp decline:

There were fewer donors over all at the end of 2022, but the decline was sharpest for the 83 percent of donors who gave $500 or less. At the end of 2022, 15 percent fewer people gave $100 or less than at the end of 2021. Likewise, the number of people who gave $101 to $500 in the last three months of 2022 declined more than 8 percent from 2021 levels.

Philanthropy News Digest shared the same data in January along with an Independent Sector report that retention was down 4.2% but fundraising overall was up 6.2%.

The reasons for this decline are debatable. Economic pressures loom large. Inflation and corporate profiteering, job loss and pull back on government stimulus has been a shock to the system for people who make those $50, $100 or $250 dollar donations.

Organizations tend to talk about the connection between community and fundraising in either transactional or vague terms. You’re offered access to events, updates or a premium (tote bags, anyone?). You may sign a petition and immediately become a subscriber, member or part of the community.

There’s no doubt that giving rose during COVID. There are a couple reasons for this. One, things were awful. You had more time to look around and what you saw was crisis: death and sickness, businesses closing and jobs lost, and, after a few weeks of coming together, anger about our collective response. Second, people were more engaged in direct aid to their community. In some cases this showed up as giving to mutual aid groups. This was money directed at addressing visible trauma in the community. Other giving went to smaller charities to address hunger, homelessness and disasters.

Donors know that repair isn’t a one-time act

Saying that donors are leaving due to the economy may be correct but it ignores a couple problems:

  1. We often (usually) have no idea why someone gave their first donation.
  2. We don’t acknowledge the emotional investment people are making with their support.

What if a desire to engage in long-term repair of communities was (and is) on people’s mind?

Sociologist Viviana A. Zelizer wrote about the rise of giving in 2021 as a response to collective trauma.

At a time of excruciating social distancing, when quarantine rules separated us from one another, money became a tangible social connector, bridging the physical gap by allowing us to express concern for intimates and strangers. Notice the paradox: cold cash, the ultimate transactional medium, alchemized into a warm social currency, strengthening multiple social bonds and affirming community solidarity.

What Zelizer observed was people’s struggle to cope with the trauma in their community. Our grief heightens our interest in support not just for ourselves but for others who struggle.

But, in a generalized state of isolation (only heightened by COVID), our systems offer few outlets for materializing our empathy and support. We might volunteer or knock on doors. But for many money is easier to come by than time so we donate.

The longreads on grief that filled my feeds in 2020 and 2021 have moved to the background as we seek to normalize living with collective, society-level trauma. Perhaps nothing is more traumatic to society than living through it without acknowledgment.

Organizations who talk about community are missing is the language to talk of community trauma, solidarity and, more productively, the collective work of repair.

This is where community and membership appear. Charity is an act and an entity. But our modern messaging and the structure of our organizations is highly individualized. Giving is a singular act. You are asked to donate. You have given $100. You can have an impact. Organizations position themselves in competition to one another. They brand themselves to set them apart. They speak of their work, their unique process, their wins.

But creating and sustaining impact is a collective effort. That’s the case whether you’re securing food or housing or working for systemic changes to policy, politics or economic structures.

We often position and manage community in either member or organizational terms. I’ve advocated in this space: create value for members if you want them to stay with you over time.

Yet we live in a time of existential crisis – be that climate change, guns, pandemics, white nationalism, war, creeping autocracy or something else. We have video and endless analysis on our phones 24/7 if we choose.

Are people are seeking signs of progress, of repair and solutions? I think so. And they want to play a role in that kind of work. The question before us is how can we engage people in creating community that creates change? What does that look like? What do community, membership and organizing leaders need to prioritize, plan and try?

There’s no one answer. It means investing in community and civic engagement, in media, journalism and democratic and deliberative work. It means building community across interests and policy topics, meaningful communications not just petitions and fundraising, community-based news and voices, collaboration, clarity of purpose, and honesty about how change happens.

Filed Under: Membership Tagged With: Fundraising

About that stupendous fundraising match in your inbox

April 12, 2023 by Ted Fickes

Recently I wrote about why people stay with a group. We looked at relationships, trust and delivering value to people. Keeping people on your list, in your community and donating, buying and engaging isn’t just helpful. Retention is a must. Inactive subscribers are costing you money. And disengaged supporters are telling you something about the quality of your communications, fundraising and overall value.

Conversations and questions about retention and reactivation keep popping up in my feed and among friends. I think it’s sign of economic and political uncertainty.

Folks are taking a hard look at how to optimize their email and other lists. Or they’re being told to by their bosses. It makes sense. Email lists aren’t free to build or maintain. A bigger list is not necessarily going to raise you more money, turn people out to events or develop activists, leaders and supporters. But a bigger list is going to cost more to host and send to. A bigger list may also increase inbox problems (aka more spam) and send the wrong signals about community power to your organizing and fundraising directors.

A barrel of monkeys approach

The world of powerful CRMs, big data and fast internet lets us find, label and reach people with amazing speed and volume. It also leads us to believe that we know people. We have email, name, location and their giving and engagement history. We may get the voter file, census data, buying history and all the sorts of things that come with consumer data files (income, home and car ownership, marital status…it goes on and on).

This isn’t much more than putting colors on monkeys in a barrel if you’re sending countless emails with countless asks for donations, actions, purchases.

The other day a colleague linked to an episode of a podcast for Republican politicos. The Business of Politics Show had a conversation with John Hall of Apex Strategies. Hall is credited with raising over $1.5 billion from 48 million individual donors. There’s perhaps nobody who knows more about shady methods of buying/renting lists and pitching 76X match gifts (an actual pitch in political fundraising) or any number of other lies (that’s what they are) to “subscribers.”

Hall isn’t seeking absolution for past acts. But he made a clear case for the need to shift perspective. Build donor lists, he says, not just big lists. It’s better to have a million subscribers than one but most million subscriber lists are failing to raise money for Republican candidates. Democratic and nonprofit lists are similarly underperforming if they’re optimized for size not community and impact.

Community and Impact

You probably don’t have the time and money to drag around a list that’s 50%, 60% or 75% inactive.

Instead, what does optimizing for community and impact look like. A few ideas:

Be much clearer and more honest about what you expect from community members, subscribers and supporters.

If you need donations then hone in on who gives, why they give, when they give and how they’re being retained over time. Recruit from places where you’ll find donors and have clear budgets and strategies for turning new people into donors.

Likewise for activists, volunteers and other categories of engaged supporters. Bring your communications and content, organizing, education and training staff into the planning for supporter engagement and its metrics.

Be brutally honest about subscriber value. If a new subscriber doesn’t open, click on or donate in the first 4-6 weeks after coming on board perhaps they’re already targets for reactivation. And this is a signal that their origin (list, event, lead gen activity) isn’t working.

You may be able to carry inactive people for months. It’s possible some will re-engage. And a community-driven organization should show some compassion for its community. But understand the costs associated with holding onto them. And recognize the signals that their inaction sends. What can you offer that increases their responsiveness? What obstacles do they face when engaging with you? Are your emails even landing in the inbox (or just spam)?

AI and that barrel of monkeys

John Hall, in the conversation linked above, spoke about the potential for AI to revolutionize how we customize subscriber, donor and supporter engagement. When you carry around a lot of data about supporters it makes sense to give an AI app the responsibility for turning that data into personalized content to motivate donors.

We’ll see a lot of this in coming months. Especially with the 2024 campaign. You can expect nonprofits to use these tools (and consultants and vendors to talk a lot about them).

But the potential for AI to leverage more donations isn’t community. All the data in the world isn’t community. Be clear about what you want with community, what people need, where those people are and how they’re living. Know that and you’ll know how to engage, retain and perhaps use the tech that’s here (and coming).

Filed Under: Community, Email Tagged With: Fundraising

Risk tolerance and recklessness among nonprofits

October 5, 2012 by brightplus3

TechCrunch posted an Andy Rachleff piece a couple of weeks ago on the odds that an angel investor or venture capital investor will make money. The conclusion: pretty darned unlikely.

The vast majority of venture capital funds, for instance, either barely break even or actually lose money.

Why does this matter to nonprofits?

The “what can nonprofits learn from technology startups” theme has picked up steam in recent years in concert with the current technology startup boom, and is regularly a topic on this blog (see, for example, our recent exchange with Jon Stahl: “Should grantmakers be more like VCs” and “Should grantmakers act more like venture capitalists?“).

A grantmaking investment model that assumes an 80% failure rate among grantees may not be our best option. What I find most interesting about the Rachleff piece, however, and potentially most useful in the social sector context, is the risk tolerance that permeates the private investment landscape. Even the most optimistic of the experienced investors know that most of their investments will fail. They are willing, to varying degrees, to invest in organizations each of which only has a small chance of succeeding.

Fostering a Nonprofit Culture of Risk-Tolerance

Fostering a culture that genuinely encourages and supports risk-taking, within organizations and between organizations and their funders, is a real weak spot among nonprofits. Doing this means that the price of a failed project can’t be very steep. It means that organizations and funders have to provide positive feedback for smart risk-taking. Claiming to support experimentation and risk-taking but penalizing people and organizations with experiments don’t work out as planned fosters a culture of risk-aversion, not risk-tolerance.

Risk-Tolerance Doesn’t Mean Reckless

Risk tolerance shouldn’t mean encouraging reckless gambles. In fact, a smart risk-oriented strategy will include explicit expectations: clearly identifying the assumptions underlying any particular risk, having a clear process or tool for explicitly testing those assumptions and learning from the experience regardless of the outcome, ensuring that effective feedback loops use this learning to improve strategy and execution.

Innovation – both the incremental and the huge-leap-forward varieties – require people and organizations to take risks, and that only happens in a significant way when the rewards for taking those risks are high enough and the penalties for failure are gentle enough.

Jacob Smith is the co-author of The Nimble Nonprofit: An Unconventional Guide to Sustaining and Growing Your Nonprofit, the former mayor of Golden, Colorado, and a nonprofit consultant.

Filed Under: Advocacy, Cultivating Your Staff, Foundations, Innovation, Kicking Ass, Management Practices Tagged With: Fundraising, innovation, organizational culture, risk

Should grantmakers act more like venture capitalists?

September 27, 2012 by brightplus3

Should philanthropic foundation board members and staff act more like the venture capitalists who fund internet startups?

That’s the question our good friend Jon Stahl posed a few weeks ago. Jon’s focus was on the high level of involvement that venture capitalists often have with the companies they invest in. Lead investors typically have a seat on the board and often participate actively in the company, at least at the strategic level. Jon points out that foundation program officers, with portfolios that often run in the dozens, simply don’t have the bandwidth to engage much with their grantees.

I think it’s a great point; maybe there are ways we could refine the philanthropy model to offer grantees more support from their funders.

But the venture capital investment model has some other qualities that may or may not fit our social sector goals very well. For one thing, the VC model is designed to foster blowout success at the expense of everything else. In financial terms, a 2x ($2 returned for every 1$ invested) or even 5x return isn’t very interesting; the VC model is designed to produce 10x and 100x or even larger returns.

In fact, VCs have a lot of incentive to actually kill companies in their portfolio that don’t knock it out of the park. You probably won’t get funded in the first place unless you’ve got a great idea, a great team, and a great market, but if you don’t show aggressive growth in users or revenue pretty quickly, and then sustain that growth, the odds are decent that your VC will actually be part of shutting you down. A typical venture fund might see half or more of its companies fail outright, thirty percent performing modestly enough that the fund can get its investment back or perhaps make a small return, and only twenty percent doing really well. (The actual numbers are tough to come by, and there’s a lot of disagreement about exactly what they are, but we know that the huge hits are pretty rare and that lots of venture capital funds actually lose money).

The model might make sense on issues where our most desperate need is for a few blowout successes (and where we are comfortable killing off the groups that don’t achieve this level of success). For example, it might be perfectly reasonable for the Gates Foundation to fund malaria eradication programs using a VC-style approach, hoping that one of their high-risk-high-reward investments comes up with the solution we’ve all been waiting for.

But on lots of social sector issues, activists and funders are happy – and reasonably so – with moderate, sustained success. If a VC-style approach on malaria eradication comes at the cost of stable, sustained funding for effective malaria prevention efforts, it’s probably a much less appealing strategy. In fact, those “moderate” successes only look modest by comparison to absurdly high Google-style returns.

And on many issues there probably just isn’t a knockout punch waiting to be uncovered through high-risk entrepreneurial style investment by philanthropic donors. Preventing extinction and recovering endangered species is just hard work, politically and ecologically; there almost certainly isn’t a fantastically successful strategy just waiting to be discovered. We ought to have more sophisticated ways of measuring outcomes, and more effective ways of rewarding nonprofits that craft and implement successful strategies, but success across lots of fields won’t look like the 1,000x return that early Facebook investors walked away with. There may be some radical advocacy innovations waiting to be uncovered, but odds are good that most of our success will come through philanthropic investments with returns that look more like the equivalent of 2x, 5x, and 10x outcomes in the investment world. And even though these numbers look small compared to the superhits, they are still huge success: anytime a foundation invests $50,000 in a nonprofit and gets $100,000 or $250,000 worth of social change value out of the deal we all ought to celebrate.

The VC model also shifts enormous control over the company itself to the investors. It’s one thing for a social sector funder to have detailed expectations about how their grant will be spent, and perhaps to use the size of their grants to influence organizational decisions about staffing and strategy (which itself is enough to make many nonprofits very uncomfortable). It’s something altogether different when the funders actually control the organization itself.

Finally, the idea that funders might play a more active role in managing the organizations they fund carries as many risks as it does benefits. The best program officers offer real expertise about the issues they fund, they can draw on wide experience working with the nonprofits they fund, and can offer a higher-level strategic vantage precisely because they aren’t in the trenches on a day-to-day basis. But even the best are still at a distance from the day-to-day work, they often don’t have much experience on the other side of the funding equation, and they can be very prone to a favorable results bias.

In fact, while investors and entrepreneurs may not (and often don’t) share the same long-term vision, they measure results in a very consistent way: how much money is this company earning and how much is it worth. Philanthropic funders and the nonprofits they support may tend to have better alignment on long-term vision, but they rarely share a consistent and unambiguous approach to measuring outcomes. And this problem is only amplified by the strange power dynamics that characterize most grantmaker-grantee relationship. Deeper involvement by program officers in the nonprofits they fund comes with some real challenges.

I’m guessing the appeal of the VC model for Jon is mostly around the opportunities for nonprofit folks to learn from the experience and vantage of the funders they work with (not to mention the potential for funders to provide other kinds of resources to their grantees), and given how weak nonprofits usually are mentoring and professional development this makes a lot of sense. The trick, as is usually the case when drawing from outside models, is making sure we understand what those external models are designed to do and adjust the ways we mimic and poach from them accordingly.

There are other models worth exploring, as well. Angel investors often contribute much smaller amounts but expect much lower returns, which means that a moderate success can still be a success, and the angel investment model includes a lot of room for investor involvement and support. Crowdsourced funding models, with Kickstarter as a marquee example, might offer some insights. In many ways these models look a lot like traditional membership-oriented fundraising in the nonprofit world, but as federal law expands accessibility to true crowdsourced investment we can expect to see rapid evolution in the mechanics and structure.

I agree with Jon’s basic point that we should look at the venture capital model for ideas about improving philanthropic funding. I do think, however, that the VC model in particular has some significant limitations in a social sector context. The nonprofit world, at times, goes overboard when it pulls from other sectors, missing the nuance and context and overdeveloping some particular element that seems important. But we can learn a lot, too, by paying attention to other sectors, and we’ve got a lot to gain by poaching, adapting, and testing whatever we think might help.

Filed Under: Advocacy, Boards, Foundations, Innovation, Management Practices, Measuring Impact Tagged With: angel investing, best practices, foundations, Fundraising, investment, venture capital

Feeling the Love

May 24, 2012 by brightplus3

I’ve been subscriber to a local cultural organization for twenty years now, and for the first time since I first joined I didn’t renew my subscription.

From the “Missed Opportunities” folder: in all those years, nearly every time the organization has ever reached out to me has been a solicitation … contribute to the organization, buy tickets for a special event, donations to special funds. No notes just thanking me for being a supporter. No acknowledgment of my long tenure as a subscriber. No invitation to offer my thoughts for the next year’s performance schedule or ideas for other events and programs. No phone calls from board members asking what I think of the organization or if I enjoyed the performance last week. No gestures of appreciation at all.

What’s so striking is how little it takes to make supporters feel appreciated. It doesn’t require fancy parties, expensive gifts, or elaborate theatrics.

For their five-year anniversary, the local cafe in a town I used to call home gave coffee mugs to all of their customers. A decade later that mug is still a cherished part of my morning coffee routine, and I eat there every time I pass thru town. Every now and again, I’ll get a call from a nonprofit staff member or board member just to thank me for supporting the organization. I’ve enjoyed the occasional “member appreciation event” over the years. After getting stuck in the dreaded “purple line” at President Obama’s inauguration and missing the event, my Congressional Representative sent me a photo of the swearing-in. It didn’t make up for missing the event, but it was a very cool gesture and required very little effort or expense.

Even more disappointing: if they couldn’t figure out how to reach out to me in some non-solicitous fashion during the many years of my support, at the very least this local cultural organization might have done so when I didn’t re-subscribe by the deadline, since retaining me as a subscriber has to be much less expensive than re-acquiring me later. Doing so would have offered them an opportunity to learn why I didn’t renew (too expensive this year), earn my gratitude if it had been because I forgot and missed the deadline, perhaps offer me a special deal because of my tenure, or suggest an alternative (“did you consider renewing with tickets in a less expensive section?”).

I’m a huge fan of this organization, but I’m not feeling the love coming back my way, which can’t help but weaken my enthusiasm for them. Even for those organizations that are the most resource constrained, you can find ways to make sure your supporters know how much you appreciate them, and that, in turn, can’t help but deepen their relationship with you.

(Photo by Flickr user candiceecidnac).

Filed Under: Engagement Tagged With: engagement, Fundraising, membership

Innovation v. Effectiveness

May 8, 2012 by brightplus3

Innovation is just a whole lot sexier than do-more-of-what-we're-already-doing.
One of the peculiarities of the philanthropic foundation world is its energetic enthusiasm for supporting innovation among the organizations they support. Everyone loves innovation, for one thing, and we know that many of the challenges we face probably aren’t solvable with traditional approaches. And funders are as susceptible to the temptations of organizational ego as everyone else … what funder wouldn’t want to get credit for breakthrough innovations in providing key community services, securing a durable change in political values, dramatic improvements in nonprofit organizational structure, or solving an important social problem?

But sometimes the right answer isn’t to create something new but to scale up something you are already doing, or to copy an approach someone else already nailed. The problem: the idea of innovation can be so sexy that it comes at the expense of effectiveness. If a funder conveys through their grant application or awards process that being innovative trumps being effective, it’s not hard to see how the nonprofits themselves might slide in the same direction. If you’re trying to solve a social change, advocacy, and community challenge, sometimes imitation actually is the best solution.

(Photo by Flickr user Jules Antonio).

Filed Under: Foundations, Innovation Tagged With: foundations, Fundraising, innovation

Easing (and improving) the year-end email fundraising onslaught

November 30, 2011 by Ted Fickes

December means the end of the year is upon us and for nonprofits (or, more notably their members and email subscribers) it’s high season for email traffic. The end of the year is a critical time for fundraising. By some measures, up to 30% of donations (online, at least) come at the end of the year. For example, Network for Good has reported that over 30% of their annual online donation processing happens in December. Online gifts in December tend to be larger. These are just a couple stats in Network for Good’s recent Holiday Guide for companies partnering with organizations (worth the read – PDF).

Woman fighting email with sword - How to avoid email fatigue in December and still raise money.
Avoid email fatigue in December and still raise money.

You will see more email than ever this December, especially the last couple weeks of the month, as organizations try to cover all their bases and leave no stone unturned. It can be overwhelming for subscribers but, like political ads on TV, lots of email works. People give to organizations they love AND know about. If they don’t think of you when making those year-end donations, even if they like what you do, you will miss out.

How do we build awareness (and passion), increase the tempo of messages and make people happy, not grumpy, about all this email?

Point out Successes

You’ve had a great year and been a fabulous steward of your donors’ gifts. Remind people of that. The end of the year is the perfect time to sum up what’s happened with the investment made by donors. Your organization has a theory of change and/or business plan. Show results. [Read more…] about Easing (and improving) the year-end email fundraising onslaught

Filed Under: Email, Kicking Ass, Mobile, Online Fundraising, Social Media and Networking Tagged With: email, Fundraising, year-end

Want to Fundraise Like Charity:Water? Develop Engaged Advocates, not Donors

August 23, 2011 by Ted Fickes

I’ve always been struck by the different ways old and new organizations approach online communications, fundraising and organizing. The two groups could learn a lot by studying each other.

Charity:Water poster - 4,5000 children will die today from water-related diseases
Charity:Water poster with a focused and powerful idea.

Newer groups aren’t beholden to a certain way of doing things, entrenched hierarchies and well-established silos. They’re likely led and staffed by bootstrapping generalists that are truly passionate about an idea or mission and not much deterred by failures. Their enthusiasm rubs off on those around them and can stir up a hornet’s nest of much-needed action.

Organizations that have been around a while (and let’s say 15-20 years or more) have staying power. They have figured out how to get things done and sustain the business of running an organization. Relationship-building takes time and they have stuck to it – likely carving out strong relationships with the powerful in communities and government.

Most that work in and around nonprofit organizations these days would probably say that adapting to digital networks and online fundraising has been a challenge for older groups. A well-established way of doing things is challenged by the speed and apparent loss of control over message and action wrought by online networks.

Learning from Younger Groups

There is room in the nonprofit tent for both old and new organizations. But technical change is happening fast and the fabric of communities, environment, institutions is fraying before our eyes. Groups need to be at the top of their game. [Read more…] about Want to Fundraise Like Charity:Water? Develop Engaged Advocates, not Donors

Filed Under: Engagement, Kicking Ass, Mission, Online Fundraising Tagged With: engagement, Fundraising, membership, networks, social networking

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