Happy Birthday, Clara Miller!

My mother turns 85 this week. How did that happen?

When we were growing up, Mom told us about her mother giving food to the unfortunate out the back door of their modest home in Highland Park, MI during the Great Depression. My mother became a nurse. She did “charity work”. She passed this sense of caring and community and the satisfaction that comes from doing good on to her children and we have passed it on to ours.

My mother has a generosity of spirit worthy of emulation. What if everyone embraced the social responsibility movement, not just government tax dollars or corporate responsibility, but individually? Could we bridge the giant chasm between rich and poor? What changes would we see in the world? I wonder....

INCOME PIE

What does your source of support chart look like?

Do you have all the fundraising food groups?

Need to diversify your income stream? 847.227.7174 for more information. (Click on chart to enlarge.)

GIVING USA

The Giving USA report findings released last week weren’t a big surprise.

- Individuals donated $229.3 billion to charity last year, a decrease of 6.3 percent. Giving through bequests also dropped: $22.7 billion was contributed through wills, a 6.4 percent decline. Gifts from individuals, including bequests, accounted for 82 percent of all charitable giving in 2008.

- Foundation grants decreased only slightly, 0.8 percent, totaling $41.2 billion. Grants from private, community and operating foundations made up 13 percent of the total contributed last year. But, there are reasons this drop will have a more long-term affect on grantmaking.

- Corporate donations totaled $14.5 billion in 2008, an 8 percent decrease. Half of that was in in-kind contributions and half of that was pharmacological. Corporations provide 5 percent of all giving.

The big take away: diversify your income streams. Tall order, I know. What are you most reliant on? Note that individuals not only provide the lion’s share of gifts, they are the most loyal.

The days of drive-by donor relationships are over. Learn how to massage your supporters with a series of effleurage and petrissage (stroking and kneading) to keep them copacetic with the changes at your organization. If you need a road map on donor relations, call me: 847.227.7174.

NOT IN KANSAS ANYMORE

Wednesday’s Giving USA 2009 report on last year’s charitable contributions put hard numbers to that sense of "We are not in Kansas anymore”. Although charitable giving exceeded $300 billion for the second year in a row, charitable giving fell by 2 percent. Adjusted for inflation, total giving was down 5.7 percent, the largest drop recorded since the group has been keeping track of America’s charitable donations. Those of us invited to hear the statistics interpreted by Jimmie Alford at North Park University were urged by a lovely nonprofit board member on the panel to be even “more rigorous” in cutting back our organizations. We washed down the harsh reality with strawberries, chocolate and a toast to The Alford Group’s 30 years in business.

The U.S. stock market was the wealth-generating engine for many, including nonprofit organizations. The plunge of stock values from when the Dow Jones Industrial Average hit its’ high of 14,164 on October 9, 2007 to one year later, in the midst of the newly coined "cascading crash," when they closed at 8579, a 40% decline, has had dire consequences for nonprofit groups, particularly social service organizations serving the most needy among us. Charities are faltering as demand for services skyrockets.

“Researchers who compile Giving USA said that today’s recession most resembles the one in 1974, and it took three years after that downturn ended for philanthropy to return to the same levels of donations as before the economy soured,” according to The Chronicle on Philanthropy.

Charities weather downturns when they have solid fundraising programs, compelling cases for support and good governance. Now is the time to pick ourselves up, dust ourselves off and find the best ways to help our organizations weather this storm! Feel free to call me to hear my ideas.

WILD GIFTS

I am blessed with knowledgeable friends who are willing to answer questions -- which came in handy after a topsy-turvy discussion about prospects for planned giving. My suggestion to go beyond the pool of mature major gift donors and consider frequency of donations was left on the cutting room floor.

I turned to Payson Wild, President of Wild Associates (doesn’t that sound like a fun group?) and Executive Consultant at The Alford Group (which is a fun group) for some pearls of current wisdom:

“To address your question, my experience that consistency of giving is a very good predictor of the potential of planned giving. Consistency of giving indicates identification with an organization's mission. The size of a gift can be a predictor as well but a one time major gift may, or may not, indicate a real passion for mission. Of course, if you have a planned giving prospect who has given consistently and made a major gift or two, you have the best of all worlds.”

So, listen to Payson; look beyond your large donors. Further, rather than run a nice little box in your newsletter touting the benefits of planned giving, take the same pro-active approach as with cultivating and soliciting major gifts. Visit them.

IT’S WHAT YOU KEEP

Nonprofit organizations are like Alice Through the Looking Glass, running madly beside the Red Queen and being reminded, "it takes all the running you can do to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”

Since we do not know what the future may hold, we must figure out innovative strategies to make and save money. One lap in this race is cost reduction.

Just as we fundraising professionals know that it is more cost effective to retain a donor than to acquire a new one, in the corporate world it has been said that every dollar saved in expenses is equal to 50 - 100 times as much in new revenue because of the costs associated with generating new revenue. It is just as important to keep what we raise!

My friend Joe Szuba, a fellow former Board member of Victory Gardens Theater, is President of National Cost Reduction Corporation (NCRC). He and his partners have cut their teeth on saving money for corporations and are turning their attention increasingly to nonprofits because of the dire need in this economy. NCRC offers a free analysis of expenses and a free projection of savings on non labor expenses (not HR or producing goods). This year they saved one Chicago nonprofit $100,000! They have an impressive list of references – Fourth Presbyterian Church, Gilda's Club of Chicago and Lawrence Hall Youth Services among them.

Nonprofit managers face constant pressure to maintain cost effectiveness and reduce expenses. You may feel you already do this. In my opinion, the most important aspects of using specialists like NCRC is to take advantage of their connections with vendors, who have reduced prices before or seen business go elsewhere; what is, thus, their aggregate buying power; and the fact they do the job and the only cost is sharing the first year savings...they only get paid out of savings.

Joe appreciates sensitive donor relations and the need for confidentiality. He’s a nice guy. Contact him or call me, if you’re considering checking this out for your organization: 847.227.7174.