Monday, June 22, 2009

Bracing for Change - An Update on Dealing with Tumultuous Times

In November I blogged about a presentation given by Todd Polyniak of Sax Macy Fromm, an accounting firm in Clifton, NJ. That article "How Can We Possibly Stay Afloat in These Tumultuous Times?" is one of my most read blog articles and it is in the Nonprofit Good Practice Guide database.
Sax Macy Fromm

How Can We Possibly Stay Afloat in These Tumultuous Times?

NonProfit Good Practice Guide

Last week I attended another breakfast presentation and heard Todd give his update entitled “Bracing for Change.” This article provides a summary of Todd's preentation with some editorial comment by me along the way.

Todd started out with highlights of change over the last 24 months including political milestones, highpoint and lowpoint news stories and some economic indicators bringing us to where we are today with 9.4% unemployment and corporate meltdowns. He comes to the conclusion that many others are coming too… some things have changed permanently and require us to take a fresh look at how we face the world. He expressed concern about a leadership crisis among nonprofits with leaders feeling directionless and scared and employees having low morale. This is not different than at many for profit businesses. Todd offers 6 steps for a “new way of seeing normal.”

Respond with a Plan
Doing nothing and doing something rash will both be risky. So for the first step, Todd advises planning. You’ll always find me in agreement with this approach.

Assess Exposure
•Consider alternative scenarios and not just two all or nothing options*
•Quantify the impact of the various scenarios
•Assess the vulnerabilities of your competition
*(I highly recommend David LaPiana's new book, "The Nonprofit Strategy Revolution" for assessing alternatives)

Damage Control
•Protect your financial fundamentals (Remember Todd is an accountant)
•Protect your existing core programs
•Understand and maximize your value and competitive advantage (If Hildy Gottlieb is reading this she is screaming but David LaPiana is cheering)

Gain Long Term Advantage
•Invest for the future – Perhaps hire some great talent now in the job market
•Pursue opportunistic and transformative mergers and acquisitions
•Rethink the way you do business

Take Action
•Strategically focus on the most important things – Set Priorities
•Don’t get caught fighting the last war instead of this one

Break Roadblocks
•Address lack of commitment by the Board
•Address the need to take action quickly

Todd went on to reference Guidestar’s 10/08 survey citing decreasing contributions and increased demand for services. There was nodding heads in the audience with these comments. He noted the budget cutting happening in nonprofits but encouraged, as he did in November, that the best approach is to defend your top line. He strongly advocated for contacting donors by phone, thanking them, asking how they are doing and asking for support for an emergency fund (optional). He suggested setting numerical goals to make these contacts. I find this refreshing and basic sound advice.

Todd recommended that nonprofits review their Investment Policy Statement as it may make sense to update it. He made a powerful plug for reviewing the approval process and content of your 990 calling for you to “bulletproof you image.” (I’ll be writing more about that in a subsequent post).

Todd shifted gears and discussed human resource strategies you should embrace if you are downsizing including care for survivors, provide predictability, increase understanding, yield some control, and show compassion. At my son’s employer they reduced the factory workers to a 32 hour week and found that some working mothers preferred a shorter day, eliminating childcare hours at one end of the day to a four day week. Being willing to adjust workers hours according to their desired schedules helped morale quite a bit.

Todd then quoted the Fred Factor principles. He dove into the need for individuals to build relationships, continually create value for others and regularly re-invent ourselves.

Well this post is long enough and so I’ll call it a wrap. Thanks, Todd for providing the material for another important post.

Wednesday, June 10, 2009

Giving USA 2009 Report - What’s the Impact of the Economy on Giving in 2008 and Some Thoughts for 2009

Giving USA released its 2009 report today and I participated in the online discussion with the researchers hosted by the Chronicle of Philanthropy at Noon today. Like other bloggers, I am blogging today about the report. First of all I don’t see any surprises here. The Giving USA Report is like the bible of giving data and really gets a lot of press attention but the findings are really similar to lesser status studies done in the last six months. The scope and credibility of this report confirms what we thought we knew (Just in case that was important to you.)

Here are the major findings:

Giving did decline in 2008 by -2% or -5.7% adjusted for inflation –that’s over $6 B, not a small piece of change. This is the first decline since 1987 and the biggest percentage decline since 1974. The biggest percentage decline was in corporate giving followed by individuals and bequests. Foundation giving actually increased by 3%. Some foundation giving is really individual giving as foundations set up by living individuals is becoming more popular. Before we get too alarmed lets note that it is only the second year ever that giving topped $300B.

Two thirds of charities experienced a lower level of donations in 2008 but the only surprise was that this included human services. Previously we thought there would be increased giving in this sector. Giving USA did a separate analysis of the Human Services Sector sector this year and here are the key findings:

•54% of human services organizations reported an increased demand in 2008
•60% of these charities are cutting staff and budgets for 2009-06-10
•74% of youth development charities report being underfunded or severely underfunded and unable to meet current demand – this was the largest hit group
•53% of those serving basic needs (food, shelter) report being underfunded
You can read the full press release for more details or buy the full report at:
Giving USA 2009 Press Release

The Chronicle of Philanthropy discussion was concentrated on what to do in 2009 and there was lots of common sense, down-to-earth advice. For example, concentrate on individual giving and building relationships. Engage Boards in being involved with individual giving. Ted Druat of Convio answered the question about trends in online giving quoting a recent Convio study. First quarter 2009 is up 8% over first quarter 2008 and up 5% over fourth quarter 2008. Although its still small this is one more reinforcement that online giving cannot continue to be brushed off as not relevant.

There was good advice about general operating support. Donors want to give to something specific, and nonprofits are packaging the GOS as part of the cost of projects/programs. This makes sense to me and I think it is what should have been done all a long. The ED and payroll processor are part of the cost of the program and the relative amount of overhead should be part of the program cost. Recent studies all previously discussed in this blog were referenced in the discussion including the e-benchmarks, American Express, and Target Analytics studies.

Sean Stannard-Stockton at the Tactical Philanthropy blog made the best summary I’ve seen of the report: “the contraction was less than many people feared and the total amount given was within the range of the level of giving seen over the past few years...... Charitable giving behaved more or less as it normally does when the economy sours. This is, by most measures, the worst recession in a very long time and so we’re seeing charitable giving get hit. But it is only declining in line with the way it normally behaves.

Things are tough, but there was no apocalypse."

You can read Sean's whole post at:
"How Much Did Americans Really Give in 2008" at Tactical Philanthropy

Monday, June 01, 2009

Hiring Trends (That’s Right – Hiring) in the Nonprofit Sector – An Informative New Report

Although nonprofits just like other employers have had layoffs and part timing of previously full time employees there are still 24,000 expected openings for senior management jobs in the nonprofit sector this year.

This blog post provides a summary of the findings of a study completed by the Bridgespan Group and commissioned by the American Express Foundation on this topic. When I stepped back to look at this objectively I realized that I am working with three nonprofits who are planning to hire senior management staff – even as two of them face budget cutting.

The study provides an update to one completed in 2007 identifying the impending impact of retiring baby boomers on nonprofit leadership. This updated study confirms that the leadership deficit has become more pronounced in the past few years. The findings are based on interviews with 433 EDs of organizations with revenues of $1 Million or more and they are grouped into four key messages. The report includes the factual results of the survey and Bridgespan’s interpretive guidance. The guidance is directed at nonprofits seeking new leaders and individuals seeking to make a change from the for profit to the nonprofit sector.

Here are the highlights organized per the four messages :

Message No. 1: The leadership deficit in nonprofit organizations
remains large

The 2007 study estimated that there were 77000 senior level opening in the nonprofit sector in 2008 and that even with the bad economy there will be 24000 in 2009. Importantly, 22 percent of the positions filled in 2008 were newly created, largely due to growth and increasing organizational complexity.

Message No. 2: Functional skills matter (and are transferable across sectors)
Specific functional experience is the most highly rated criteria for hiring, with 79 percent of respondents rating it as “very important.” General management skills that are highly valued include multidisciplinary project management skills, experience of doing more with fewer resources, and flexibility/adaptability. These are skills especially transferable from the for profit sector. Participants responded that 50 to 75 percent of the roles they will need to fill in the near future require traditional business skills (finance, general management, marketing/communications, planning, evaluation, operations, technology, and human resources).

Message No. 3: Cultural fit is the deal breaker
75 percent, gave “fit with the culture of our organization” as very important to the hiring decision and Bridgespan says that from its experience this is indeed very important to the success of a person in a nonprofit job. They recommend that any candidate considering a move to the nonprofit sector be thoughtful about their own values and management styles, and about how they will integrate into a nonprofit culture. Working in the nonprofit sector will usually mean accepting a lower compensation and lack of meaningful career growth opportunities within the organization. If those conditions are important to an individual then the nonprofit sector is not the best place to look for a career change. The report recommends that when assessing candidates, nonprofits take a look at where the candidate has spent his/her discretionary time in the past and how that may matter for a cultural fit.


Message 4: Job boards, networks and search professionals most effectively connect talent to jobs

A surprise was that 49% of organizations are using job boards versus 44% using external networking to identify their candidates. Respondents said that print advertising was the least effective tool. Only 13 percent used executive search firms, but found them highly effective. When employers scan job board applicants without nonprofit experience, they want to see nonprofit board and volunteer positions on a resume as a way to communicate readiness to bridge to the sector and a candidate’s alignment with the values and/or mission of the nonprofit.

In summary, Nonprofit leaders are interested in candidates from the for profit sector but will be looking closely at critical skills, cultural fit and sincere interest in working for the organization. They are wary of candidates who appear to just be looking for a job.

Marion’s Comments
Based on my work and my personal journey from a Fortune 50 company to a second career working with nonprofits I agree completely with the report and I think it offers great advice both for nonprofits to broaden its search considerations and to those in the for profit sector seeking to make a change to the nonprofit sector. If this topic is relevant to you, I suggest that you look over all the resources at Bridgestar and download the full report. There is an excellent resource/toolkit section on this website.

Visit Bridgestar - an Initiative of Bridgespan

Monday, May 18, 2009

Council on Foundations – New Report on Foundations and the Economy and a Quick Annual Conference ReCap

The Council on Foundations has released a 24 page report on how Foundations are coping with the economic downturn. Some of the data we have heard anecdotally before but this report provides the results of a survey with 430 foundations of all sizes participating. Here are some key highlights:

Asset and Grantmaking Statistics
73% had assets decline by more than 25% in 2008
67% had an additional 10% or more loss in assets in Jan-Feb 2009

62% will reduce their total grantmaking in 2009
25% will reduce their 2009 grantmaking by more than 25%
92% are making grants in 2009 to aid low income families
60% are cutting their 2009 operating budget

The Silver Lining Is Funding Operating Expense
83% reported funding operating expense for nonprofits
8% said funding operating expenses was a new area for them
20% plan to increase operating funding in 2009

How Foundations Will Reduce their Grantmaking
The most common responses were smaller grants (63%) and not making multi year grants (46%). It will be much harder this year to be a new grantee at many foundations.

Innovation by Grantmakers
The economic downturn is also inspiring innovation and developing new approaches by grantmakers. 72% of funders say they are collaborating with other funders. Collaboration has long been a favorite idea of funders for nonprofits and now they are stepping up by setting the example themselves. 62% of funders are convening meetings - sometimes with other funders and MSOs – to develop strategies for dealing with the economy. I personally participated in one such conference last month as a speaker on “Social Networking and Fundraising.” 30% of foundations are helping nonprofits to merge operations.

Foundations Approach to Cutting Their Own Expenses
Foundations are also taking steps to reduce their own expenses. Over 60% say they are limiting attendance at conferences and reducing travel budgets. This was evident by the smaller crowd at the Council on Foundations conference this year. 45% have implemented salary freezes and 5% have actually reduced salaries. 27% have a hiring freeze and 15% have eliminated positions. 11 percent have reduced staff hours. Other steps being taken to reduce expenses include reducing professional development and paid professional memberships expense and reducing staff benefits. Only 13% report not taking any of these actions.

60% report making non-staff related expense reduction including institutional memberships, significantly reducing use of consultants (Editorial comment - Ouch!), using email to send Board materials and reducing investment management expense.

Interestingly, larger foundations have been even more aggressive in taking these steps than smaller ones. Foundations seem to be paralleling steps by corporations in reducing expenses across a broad spectrum.
Council on Foundations Report

Council on Foundations Annual Conference Featuring Bill Clinton
The Council of Foundations held their annual conference in Atlanta in early May. You can read excellent articles about the conference at Sean Stannard-Stockton’s blog, Tactical Philanthropy. 12 guest bloggers provided reports on international organizations, foundation storytelling, next generation grantmakers
dealing with the economic crisis, communications and more. Attendance at the conference was way down this year because of budget cuts, but that did not dampen the excitement of the big event - closing keynote by President Bill Clinton.
Tactical Philanthropy Annual Conference Guest Blogger Posts

Council of Foundations website - See Bill Clinton's Address

Wednesday, May 06, 2009

How to Use Twitter, Facebook and LinkedIn for Advocacy and Fundraising

In March and April I discussed the boring stuff you should do before starting with Social Networking and getting started/how to develop a network. Now here is the part that everyone wants to know about – fundraising and advocacy on Twitter, Facebook and LinkedIn.

Facebook
The previous post is an excellent slide show about fundraising on Facebook by Mike Ames. I totally agree with Mike – You can use Facebook to fundraise but don’t waste your time with Causes. You can see the statistics in the slide show and make your own decision. There are a few success stories with Causes but the fact is that those campaigns were run by top social media experts with very deep networks. If you have one of those people working with you then by all means consider using Causes. Otherwise, follow Mike’s step by step advice to build relationships and then go for fundraising using your Facebook page as a base. You can use the same approach to build awareness and advocacy.
See Mike Ames Blog


Twitter (and Facebook)
Once you have followers, then you are ready to begin fundraising on Twitter. The first and easiest way to use Twitter is to promote your events with a link to the information. This is especially useful for Arts events and informal drop-in no advance reservation needed type events. Have just one or two tweets a couple of days before the event but have 3 or 4 the day of the event. In addition to the basic information on the website change up or add a story every day for a few days and then your tweet can have something new to say. “Creating Buzz” is an essential skill for effective social networking.

Younger people give less and like to give to smaller campaigns that provide a sense that their donation matters. Structure your campaigns to them if they are your Twitter followers. Remember the whole campaign is 140 characters. So the Tweet would be something like “For every 100 people who donate $20 this week we can send 10 kids to summer camp In July see pics on website (link to website donation page).” Promise and deliver the feedback.

Use Twitter to encourage what I call “Celebration Giving.” Twitter people sometimes ask for donations to a particular cause to celebrate their birthday or other major milestone among their Twitter followers. Then they post whenever someone contributes. This also works with Facebook pages. The link on Twitter can be to a Facebook page – it does not have to be to your website. Check out some sample Facebook pages that you can recommend as examples and Tweet about them. This is the real power of social networking - not just what you do but what you get others to do for your organization.

A good way to promote advocacy on Twitter is to follow the major national organizations who provide leadership in information and advocacy and retweet their key messages to your followers. This is simple, not time consuming and effective. I follow a number of individuals and organizations with excellent advocacy messages and my knowledge, interest and likelihood to give to those causes has been greatly increased.

LinkedIn
There are two important features to remember about LinkedIn. You must join as an individual – not an organization and fundraising is against the terms of service. However, you can build an impressive network on LinkedIn and also reach out to those not in your immediate network. You can send a message to your whole network (Be very careful to not abuse this – LinkedIn does monitor reports of problem members) and you can post in Events. My favorite way to reach people on LinkedIn is to join groups (You can start one too) where you can start and participate in discussions. You can use groups for advocacy, to promote events and to find volunteers and Board Members. LinkedIn can be a valuable networking resource.

This is just a getting started article. Please leave a comment and share how you are using Social Networking for fundraising and advocacy. Follow me on Twitter and invite me to join your network on LinkedIn. This completes this series of articles and next week I’ll be blogging on a different topic.

Wednesday, April 22, 2009

How facebook is both horrible and ninja for fundraising

Check out this SlideShare Presentation:

Friday, April 17, 2009

Getting Started Ways to Use Twitter, LinkedIn and Flickr – It’s All About Building Relationships

There are many social networking opportunities and you need to use your analytical and listening tools to see which ones will work for you. Do a few well rather than having a presence everywhere. Social Networking is an ongoing activity so finding what works and investing in it makes the most sense. Today I am going to discuss building relationships using Twitter, LinkedIn and Flickr.

Twitter – Like a huge party of people you don’t know*
Twitter is easy to get started with - you can follow anyone without asking their permission. You literally build your network 140 characters at a time. If you are tweeting for an organization make sure you do the following:
1. Use your organizational logo or personal picture as your avatar (No one wants to follow faceless people with the Twitter double zero as an avatar)
2. List your website or blog URL
3. Show brief (160 character limit) organizational description under Bio.
4. Post a couple of “Tweets” before you begin to build your network – an introduction and perhaps one about an event or article on your blog.

When you follow people, they will get an email with a link to your twitter profile and they will see the four things listed above. This is how they will decide whether or not to follow you. There are several easy ways that Twitter will help you Find People (click this option on Twitter) and you can begin to follow them right away. Chances are a high percentage of them will follow you soon.

Use the search feature with the # hashtag to find others you would like to follow with a similar interest –for example, search #nonprofit or #hunger.

Once you have some followers you want them to retweet (RT) your tweets and you will extend your network further. That is why so many people love Twitter - everything is short, sweet and to the point. Good ways to get a RT are:
• Announce an event happening soon - in the next few days
• Provide a link to a great article
• RT other tweets

A great way to build a Twitter network is to take advantage of #followfriday. On Friday, Twitterers post who they follow. Make sure you post who you follow and others will add you to their #followfriday post. Oh wait a minute...today is Friday...follow me today and I’ll include you in a #followfriday post....See you can get started building your network today..

Posting frequently is key to being successful with Twitter - but its only 140 characters and can be spontaneous. Remember its a huge party - have fun!

LinkedIn - Like a Chamber of Commerce mixer*
LinkedIn is an effective place to develop a professional network – both locally and further afield. You can only add people you already know so this is a much more intimate relationship than Twitter. You know more people than you think – LinkedIn will also help you find people you know who are on LinkedIn but you need to invite them to join your network. Once they accept you can see all of their connections and you probably will find more people that you know to invite into your network. If you have followers on Twitter, go ahead and invite them - they are people you know. Visit LinkedIn every day and your homepage will have connection updates of people in your network and you’ll find more people who you know and can invite to join your network. You can add applications and see a blogroll of recent posts by bloggers in your network or slide presentations posted on Slideshare. Use this app, and you can access a recent presentation of mine on Online Giving and Social Networking. I have found a great way to extend my network is to join groups and initiate discussions and comment on other discussions.

LinkedIn can be used for developing professional relationships, keeping current on issues, driving traffic to your blog, and posting job openings and events. Once you have an established network, you can post about your events, issues and accomplishments. You may even find potential board members this way – all through your existing network.

Flickr – A Picture is Worth a Thousand Words
Set up a Flickr account, upload pictures, tag each picture and make sure your pictures are under creative commons so that anyone can copy and post them. You can show a thumbnail Flickr photostream on your website and blog and anyone can click on the whole set of pictures. Encourage people to take your pictures and use them in a blog or facebook post about your organization. Having others use your pictures is the goal – make sure your captions “capture the spirit of the photo.” Have some pictures that include your name. I know a blogger that posts a picture from their Flickr Photostream with a caption every Wednesday with a blog post title "Wordless Wednesday." What a great idea - Keep your blog current in a quick, easy and wonderful way.

*Descriptions of Twitter and LinkedIn compliments of Hildy Gottlieb
Link to Hildy's article on Twitter

Link to Hildy's article on LinkedIn

Link John Haydon's(Super Nonprofit Socia Media Guru) free e-book Twitter Jump Start Guide for Non-profits


Whew! – That’s enough for now. Next up I’ll write about using Social Networking for Advocacy and Fundraising.