Every once and a while I finish a book. I start several, but finishing one can be a challenge. It’s a time management issue that is an entirely different blog post. I heard Dan Pallotta speak at the Center For Nonprofit Management‘s Bridge to Excellence Conference and met him briefly. He is sincere about his concern that restraints on nonprofits undermine their potential.
When I entered the nonprofit sector about four years ago I was surprised that marketing and long term development of ideas were so difficult to place into budgets. (That, and the 42% pay cut I took for the pleasure of leaving the corporate workforce) I found out the hard way what Pallotta describes in his book as one of the errors nonprofits face.
The Third Error – Discouragement of Long-Term Vision: The Need for Immediate Gratification Institutionalizes Suffering
In business we encourage long-term thinking and investment, In charity we encourage the opposite. When donors give money they expect their donation to go immediately into a program of the nonprofit. A study from Princeton that Pallotta references indicates that a total of 63% of Americans have such expectations- including nearly half ( 46%) who assume that all of the contribution will be used for current work. (p 90)
If a nonprofit were to work for long-term change instead of shot-term deliverables it may be impossible to raise the money that they need.
I believe in the power of effective communication marketing – nonprofits have stories to tell and when they are effectively told they will motivate people to action. In business, we know that the ROI (return on investment) of advertising is very difficult to measure. Advertising creates demand. Demand creates revenue.
For a nonprofit to spend as little as possible on marketing and expect different results on the demand is ludicrous.
Pallotta’s research tells us that American charitable giving hovers at 2.1% of gross domestic product – it has done so for the last 35 years. (p.125) It is clear to me that if the funds do not change and the needs increase, we will have more nonprofits folding, their missions discarded and more people suffering.
Pick up Pallotta’s book to read about his interesting notion that American business and the free market may be the answer to true new growth and survival in the nonprofit sector.
Visit Uncharitable.Net
Just this past week The Nashville Business Journal reported:
… according to the latest annual Metro Market Study by Charity Navigator, the country’s largest evaluator of 501(c)(3) charities.
Nashville dropped 11 spots to No. 26 in this year’s study, which scores the largest charities in the top 30 metropolitan markets on how well they spend money today and manage their operations for tomorrow. In large part, those dollars come from corporate and business donations.
While Nashville beat the national median in areas such as revenue and total assets, it falls below the bar in fundraising expenses and fundraising efficiency. The area’s 30 largest charities together spend nearly 12 cents to raise $1 in contributions, compared to the national median of 10 cents. Read more: Nashville nonprofits get low marks for efficiency – Nashville Business Journal
uh… okay … .$.12 on the dollar .. that’s bad? Don’t most business to consumer businesses smile at anything under $.50 on the dollar spent on overhead to raise that dollar bill?
I for one, am worn-out over the notion that the people serving the need are “overhead” and that the tools needed to tell the stories to motivate action are “not program related.” I want nonprofit organizations judged on their EFFECTIVENESS.
If it takes you .50 to raise $1.00 and then you take that $1.00 and cure cancer with it, or see to it that a student gets an instrument to play, or provide support to a family that just heard their child has autism, I really don’t care about the other .50. A healthy, efficient, properly compensated staff is never ever a problem to be slashed away.
How do you decide what nonprofit(s) to give your time and money to?
(for more: check out the CoolPeopleCare Nonprofit Resource Blog)
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Hi Nancy, thanks for that! It is an interesting thought.
We have found many of the clients we work with do indeed have increasing budget challenges, and indeed budgets are being cut in these times of austerity. But where an organization has decided to invest in a campaign or fundraising strategy and the objective is clear i.e. fundraising, influencing government policy, attracting investors, submitting a grant application etc – we have received feedback that the objectives have been met, even exceeded and indeed we have had the pleasure of working with some struggling organizations to reclaim their stability and grow, and/or have managed to influence government policy on their campaigns.
In all cases, targeted, focused, planned approaches seem to work well. We work with these notforprofits to a specific aim relating to the above, and work closely with them to ensure the objectives are met and efficiencies are achieved where possible. Where budgets are constrained we offer innovative payment structures, or cost-effective solutions: At the simplest level – multimedia, rather than full video solution may work well as, once the audio and visual documentation is collated, multimedia allows multiple uses from the raw footage, audio and photography and creative commercial solutions can be negotiated around this – but at least the footage is captured and available for use. From our perspective, connecting with the viewer, bringing notforprofit or corporate responsibility organizations’ passion and objectives onto the screen, computer, and now the ipad, is an exciting moment. Receiving the feedback that the combined team met funding objectives, influenced government policy or won a new grant award is just great. Of course it may take time to achieve these, but again there’s every reason both short term goals and long-term goals be built into a visual approach, the commercial approach and the rollout plan.
I agree with you, as it does puzzle me when responsible corporate organizations and notforprofits are trying to be seen and heard above everyone else that the budget for communication is savagely cut – where our clients have phased the budget, against specific objectives and usage, and explained this us – we have worked out a creative solution – not just on highlighting the challenges of service users, celebrating the achievements of the organization, and bringing a call to action – but also we have provided clients with creative project plans and payment solutions that ensure both the notforprofit and the supplier can practically and effectively phase budget spending as the campaign grows. Indeed, the payment structure is often an added motivation for us to get the communication tools we develop right for both the client and the viewer! It is often said that times of austerity bring creativity, in our times, we may just need to be efficiently creative with the budgets as well – hence with effective and efficient communications now, organization will ensure they remain strong into the future.
Thoughts and comments appreciated
Kindest
Morag
http://www.livingstonesphotos.com
http://www.nutmegcommunications.com
Posted by Morag Livingstone Nutmeg Communications
Thank you so much for your comments. Connecting with people is what all successful, meaningful work is about.
No digital copy from http://www.twitter.com/nashvillebiz yet but hats off to http://www.twitter.com/cnmmidtn ‘s Lewis Lavine Guest Opinion in this week’s issue! “Nonprofit Outcomes Key”
Here is the link:
Center for Nonprofit Management Responds to Charity Navigator Study:
http://blog.cnm.org/cnm-retorts-charity-navigator-study/