Joi Ito on Fundraising for Nonprofits

Reposted from: Joi Ito / CC BY 3.0

Yesterday I attended a meeting called "The Future of Fundraising" organized by Jennifer McCrea with the Hauser Center for Nonprofit Organizations at Harvard University. It was at the Harvard Club in New York.

It was a small group with a bunch of heavy hitters including some of the best fund raisers in the world. I learned a tremendous amount and was very energized after the meeting.

Some notes from the meeting.

Good executive directors (ED) were also the main fund raisers and they generally loved fund raising. In fact, there was a strong opinion of many that any ED who wasn't excited about fund raising, shouldn't be the ED.

Fund raising is about relationships and building relationships and is very different from sales and marketing in normal for-profits.

In a non-profit, you're not selling some good or service to a customer. What you're doing is helping the donor fulfill or pursue a dream or a cause. In order to be successful you have to have a understand the donor and become part of their world view.

Many non-profits think of donors as a funding source to pay for programs that execute on their mission. In fact, donors should be part of the mission. Good non-profits integrate the funding model directly into the mission. Churches are usually MUCH better at raising money than the natural history museum because "giving" is an integral part of the church-going experience whereas the natural history museum usually tries to collect money from the outside to allow them to run their mission internally.

When trying to understand a world view of someone, it is useful to try to categorize their world view and there may be seven basic world views.

The following "Seven Philanthropic World Views" were presented by Gunther M. Weil.

World View	Philanthropic Values & Motive
Alien/Threatened	Survival & Security
Family/Social	family tradition, care/nurture, status/image
Organizational/Transactional	financial metrics & accountability, productivity, efficiency
Self-Actualization/Service	self-discovery, empathy, altruism, service
Collaborative	social justice, innovation, collaboration
Symbiotic	society transformation, prophetic vision, wisdom & spirituality
Global Transformation	global transformational human rights, global ecology, macroeconomics

Once you understand someone's world view, it's much easier to try to understand why they would give and whether there is something in what we do that helps them advance their world view.

Another key point in all of the stories about successful fund raising was that good fund raisers loved their work. Their work was to get to know people. How are their kids? What's their dogs name? Do they have extra tickets to the ballgame? Do they need extra tickets to the ball game? The feelings have to be genuine, respectful and they have to care. You need people who LIKE people. You never ask for money in the first meeting, but you never leave a meeting without asking for SOMETHING. Also, you should offer something too. Always have a followup action. But most importantly, walk away knowing the world view of the person and begin developing trust. The partnerships with donors is a long term relationship involving lots of dialog and exchange where the giving to the organization is only one piece.

All of the top fund raisers took two vacations. One with their families and another with their families and their donors. Working with donors means becoming part of their private lives. It's not just a day job.

One organization sent a message to all of their donors during the Haiti crisis asking them to give to an NGO that they had vetted. They didn't ask for any money for themselves. This had a hugely positive effect and the donors trust in the group increased. Wallets aren't zero sum.

Long term donors and their relationship with the organization is a partnership. This is true of individuals, government program officers and foundation program officers.

One thing to keep in mind is that the world view of the organization that they're in (or family) and the person themselves can sometimes be different and teasing all of this out and helping them solve for this is also key. It's important not to try to force our story and lead with what we need, but rather to understand what the donor needs and see how we fit into the solution.

A key term that kept coming up was "tribe". We're trying to make a tribe of donors and supporters and they all need to feel like they're participants, not just funders for some group of people who go off and do stuff.

Having said that, there is also a lot of analysis. One non-profit would somehow get all of the names and annual incomes of targeted high-net-worth individuals and do a 3 hour call with the board to figure out who would approach who and strategize the approach to each person.

In most cases, board members developed relationships directly with the donors and rarely did the development person successfully email "on behalf" of the board member. A good development staff member usually provided support, analytics and tracking.

The message is very important. It's important to evoke an emotional and visual idea of what we do, rather than the detailed explanation of what we do. The metaphor that resonated was "what is in the frame" no what is written on the plaque below the picture.

My apologies for these rambling style of these notes, but I thought I'd get them out while they were fresh on my mind. I wanted to share because fundraising is a key component to success for non-profits and it is one of the things I get asked about the most.

Reposted from Joi Ito.

Holding Charities Accountable

When author Michael Conroy spoke at the Carnegie Council recently about his book on the certification revolution that is changing the way corporations behave, I asked him a somewhat controversial but nonetheless pressing question in the nonprofit community: Governments are elected, corporations have stockholders, but to whom are NGOs accountable?

Conroy gave a thoughtful answer, referring to democracy and the markets. In an ideal world, he said, governments that are democratically elected would listen to civil society and the initiatives that this part of civil society is advocating.

Second, these initiatives are calling consumer and business-to-business preferences on a set of values. If civil society pushes for something that the population as a whole doesn’t support, it won’t have much impact. If these advocacy campaigns don’t ring true with consumers, it won’t have impact. It speaks to the democratization of information, he said.

I would add that nonprofits have other effective stakeholders as well: Their funders, their boards, and public opinion. If they aren’t doing good work, their funding will dry up, their boards will force change, and public opinion will exacerbate the first two phenomena. To be sure, as nonprofits become more powerful, it is important to make sure they live up to the values that they espouse.

You can listen to the conversation with Michael Conroy here.

This week, The Wall Street Journal published an insert devoted to the growing philanthropic sector worldwide, focusing on the effectiveness, the power, and the accountability of this happening. On the front page of the insert, Sally Beatty cites some sobering polls taken by NYU scholar Paul Light. Based on a 2006 survey of 1,000 respondents in the United States, the following percentage agreed with these statements: About 71 percent said that charities waste a great deal or a fair amount of money; 44 percent said that directors of charities are paid too much; and only 18 percent said charities do a good job running their programs and are fair in the decisions.

Beatty suggested a three-prong approach to improve charities: 1. provide more information about the challenges and successes of charities; 2. adopt higher standards and better ways of measuring results; and 3. adhere to those standards. She suggests that charities should be more open about the problems they have encountered and publish their travails online.

Speaking of the power of the individual, a chart derived from Giving USA 2007 shows that 75 percent or about $223 billion of giving in 2006 came from individuals. Foundations come in second at 12 percent, bequests third at about 8 percent, and corporations last at 4 percent. But companies are becoming more adept at stepping in to help charities when needed, for example in the case of disasters.

Where does the money go? According to the same article, about 33 percent goes to religion, 14 percent to education, and 10 percent to human services. International affairs, our sector at the Carnegie Council, gets only 4 percent of the pie.

I would like to take this opportunity to show you our new donations web page for our program at the Carnegie Council here. We try to be as open, transparent, and accountable as possible. Please consider giving generously.

(Photo by TW Collins.)

From Hybrid SUVs to Hybrid MBAs

All the world loves greener, more socially-responsible hybrids.

Now Harvard Business School is following an emerging trend among graduate schools of offering a hybrid degree incorporating parts of an MBA with a public affairs degree--to prepare students for careers in the ever-overlapping private, public, and nonprofit sectors. The Harvard degree will launch in 2008.

The Fletcher School at Tufts earlier launched its Master of International Business (MIB) as another public-private-nonprofit degree:

"How is the Fletcher MIB different from an MBA?

The Fletcher MIB is a hybrid international business/international relations degree. It was founded on the principle that business professionals today must be well-versed not only in business management and strategy but also the complex reality of external governmental, legal, social, and environmental factors that influence business."

Johns Hopkins SAIS and University of Pennsylvania Wharton School have for 20 years offered a dual MA-MBA degree to prepare students "to lead in today’s globalized environment, in which both managerial acumen and international comprehension are essential, and in which knowledge of both business and public policy are vital for success."

The premise behind these initiatives is that the world's problems encompass all sectors. Harvard's Kennedy School Dean David Ellwood put it this way:

"Every interesting public problem in the world today crosses the boundary between business and government. Frankly, I think that for too long there have not been enough connections."