Overhead Matters

March 19, 2016 § 1 Comment

Well, it has happened again. A high-profile charitable organization has come under fire for questionable spending, putting the entire charitable industry on alert. Earlier this year, the Wounded Warrior Project (WWP) was hit with allegations of lavish spending on travel and and organizational events. Sadly, but predictably, this story has caused some journalists to scrutinize overhead expenses for all nonprofits.

As Dan Pallotta, founder of the Charity Defense Council, says, “Overhead expenses are necessary for raising funds for maximum program impact.” The preliminary response by the Charity Defense Council to the Wounded Warrior WWP story shows that, while the percentage of overhead expenses to fundraising results is higher than some other comparable organizations, the amount of money that they raised is so much greater, it is clear that the programmatic impact of that funding is huge. The data visualizations in the report bear this out.

Fundraiser Grrl speaks my mind:

When someone talks about how wasteful nonprofits are and how they spend too much on “overhead.”

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This is about as articulate as I can get, sometimes.

If you’re in the nonprofit world, you should really be reading Fundraiser Grrl. It’s very cathartic. But I digress.

It’s unfortunate that the anecdote of questionable actions on the part of one organization will call into question the overhead spending practices for the entire nonprofit world. Certainly, the optics for the executives of the WWP are pretty bad, but in fairness, that should not shine a negative light on the rest of us.

But this is also an opportunity to bring to light some things about charitable work and fundraising that are often misunderstood.

Prospect Development Pride Month was started, in part, in response to situations like this. I could go on here about the value of prospect development, and the importance of overhead expenses to a successful nonprofit, but I have already done that, and my colleagues are doing it so much better. Just follow the #ResearchPride hashtag on Twitter, or search for it on Google, and you’ll see what people are saying, and you’ll find some really wonderful blog posts.

Also, check out the mission and “Five Functions” of the Charity Defense Council. Their work is helping me to better articulate the value of what I do for a living.

#IAmOverhead #ResearchPride

 

Philanthropy Readings – May 2014

May 12, 2014 § Leave a comment

Fundraising numbers look good so far for 2014! This is great news!

Meanwhile, some very funky things are happening in the world of philanthropy:

World Vision’s Flip-Flop on Hiring Married Gays Shows a Stunning Lack of Foresight. I quite agree, and I can’t really imagine that changing the organization’s position will be good for its image over the long term. I’m disappointed by its decision to cave to the pressure of vocal evangelicals with extreme views. I’m even more disappointed that the same religious zealots who lift their voices so loudly to oppose same-sex marriage remain silent about the new anti-homosexuality law in Uganda, a country where World Vision has a strong presence. The new law makes homosexuality a crime punishable by imprisonment, and it has created a climate of violence and fear for gay Ugandans, their family, and friends.

On ethics and gift acceptance, UCLA has rejected a $3 million pledge from Donald Sterling after revelations of his truly despicable, racist remarks that were recorded and later released in the mainstream press. This is a big gift to turn away, but it’s a good decision by UCLA. They would have a hard time justifying publically acknowledging a gift from such a notorious donor. The other remarkable part of this story is that the Los Angeles branch of the NAACP was going to bestow a lifetime achievement award on Mr. Sterling later this month. Needless to say, that award has been rescinded, and the president of the NAACP chapter has resigned. How on earth a man like Sterling could even be considered for such an honor is hard to understand.

More philanthropy news of the weird: Google CEO Larry Page Has a Weird, Troubling Definition of Charity. The fact that this guy seems to be proselytizing his confusion of capitalist investment for charity is troubling. The article rightly points out that the problem with this confusion is that a corporation is motivated first and foremost by staying profitable, and a nonprofit organization’s first priority is its mission. Let’s hope this is an idea that doesn’t get popular traction.

On a related topic moving in another direction, the “effective philanthropy movement” was dealt a blow last month when the Flora Hewlett Foundation decided not to renew funding to support research on nonprofit financial performance. “Philanthrocapitalists,” as they are called, believe that nonprofits should be run more like businesses, with specific performance benchmarks and metrics. Holding nonprofits to the same standards as a corporate model isn’t often an appropriate measure of an organization’s efficacy, and it sounds like the Flora Hewlett Foundation has come around to this opinion, as well.

The Chronicle of Philanthropy reports that nonprofit organizations are at a disadvantage because there are few women in leadership positions. Thus, they tend to overlook opportunities to engage with more women philanthropists. I work at a women’s college, and as such, our primary constituency is women. Among our highest-capacity donors, so many women have been virtually ignored by other organizations, paying primary attention to their husbands. It’s indeed a lost opportunity.

The May 8th Chronicle of Philanthropy has several pieces about how organizations are working with data to identify likely donors. It seem that statistical analysis (though those of us in this business have been busily establishing these best practices for years) is taking the spotlight in fundraising. The lead article quotes Josh Birkholz wisely advising readers not to give up the tried and true practices of peer screening and prospect research, but that data analysis “should be a voice at the table.” The same issue has an article that is basically a case study about the Human Rights Campaign, and how the organization used statistical analysis to convert activists into donors. Subscription required.

What are you reading?

What I’m Reading — February 2014

February 24, 2014 § Leave a comment

Philanthropy Trends: The more things change, the more they stay the same

In the readings that I have focused on this past month, what I have been seeing is new trends in philanthropy, and yet more of the same.

Following on last month’s analysis of mega-gifts and increased philanthropy, there have already been numerous announcements in 2014 of huge gifts. This includes Harvard’s largest gift from a single donor, Ken Griffin gave the University $150 million, announced on February 19. Since the beginning of the year there have been many gifts of $50 million or more. You can receive weekly news alerts for these gifts by subscribing to NOZA.

Additionally, the Chronicle of Philanthropy reported in February that in 2013 there was a “surge in giving” from America’s wealthiest, including notable gifts like Mark Zuckerberg’s $1 billion (with a B) to the Silicon Valley Community Foundation, $750 million from Texas oil tycoon George Mitchell to his family foundation in support of sustainability, and $500 million from Phil Knight to support cancer research at Oregon Health & Science University.

Is the mega gift actually back? This article from Forbes says that it will not be long for this world, according to a new survey of young beneficiaries.

According to Chronicle of Philanthropygifts to colleges and universities are trending upwards, with a ten percent increase over 2012. Alums are giving larger gifts, though the number of individual donors is trending down. Personally, I’d like to see what we in the business call higher participation levels. Everybody: give to your alma mater! It’s important.

This article from Spear’s (a magazine about wealth management), supports transparent philanthropy. That is, it opposes anonymous giving. I found this to be a refreshing piece in the way it shines a light on the complications and administrative burdens to a charitable organization that are required by anonymous gifts. Though the article doesn’t focus on this, I do support non-anonymous giving if only for the fact that standing as an example to others in the community and may encourage others to be more philanthropic.

More from the Chron of Phil on philanthropy trends from the One Percent: Some are criticising the signers of The Giving Pledge for not giving towards the world’s most urgent problems. Donors gave more in 2013, but some say that many are joining more for public relations purposes, and some sign but are not giving to capacity right away, making their philanthropic plans for later in life. Defenders of The Pledge say that it influences more effective giving, and encourages philanthropy in general. Additionally, there is a focus on recruiting international donors.

Talking of which…

USA! We’re Number One!

But just barely. Forbes analyzes the 2014 BNP Paribas Individual Philanthropy Index, concluding that American donors give more that other countries, but by a slim margin. The article notes:

This is particularly striking given that the U.S. is the source of the Giving Pledge, a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropy.

Spear’s has some interesting analysis on the results of the study, too.

This month in “Duh!”

So, about that up tic in philanthropic gifts? Yes, it does signal economic recovery, I suppose, but also, it requires trained professionals and strong, positive organizational culture. While the focus is on health care, two new studies by the Association of Healthcare Philanthropy conclude that there is a direct correlation between investing in fundraising professionals and increasing fundraising revenue. You can read about it in the Chronicle of Philanthropy (subscription required).

Local News – Philadelphia

U. of Pennsylvania Official to Lead William Penn Foundation

News near and dear to my heart, Kim Cassidy was confirmed president of Bryn Mawr College. Anassa Kata!

Villanova class does good through documentaries – Students at Villanova are learning how to make documentary films that tell the story of local charitable organizations. Doing good.

Cool, Random, and Noteworthy:

Pope’s Harley goes for $327,000 at charity auction – That’s right, the Pope had a Harley Davidson, and the proceeds of its sale went to support a soup kitchen in Rome. This Pope is super bad. Like, totally sick. Just saying.

This could fit into the local category too: Local fundraising consultant Pamela Grow wrote a very nice piece on her blog about what motivates people to give: It’s personal. Amen, sister.

I enjoyed this piece from the Stanford Social Innovation Review (SSIR) by Fay Twersky, the director of the Effective Philanthropy Group at the William and Flora Hewlett Foundation. She argues against “strategic philanthropy”, and advocates for more risk, and less certainty in philanthropy. She gently and subtly presses for less focus on outcomes and metrics and more creativity, innovation, and learning from beneficiaries. How very Silicon Valley.

In a similar vein, and also from SSIR, Phill Buchanan from the Center for Effective Philanthropy writes about Five Myths that Perpetuate Poor Philanthropic Strategy.

What are you reading?

Encouraging A Culture Of Philanthropy

August 26, 2011 § Leave a comment

On thithing, philanthropy, taxation, and sharing wealth

“Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary.” – Martin Luther King, Jr.

I have been lurking on a LinkedIn discussion about Warren Buffett’s op-ed piece in the New York Times about taxing the wealthy. The posts have been within a group for fundraising professionals. Someone raised the question of what this post has to do with philanthropy, and asserted that it seems too political in nature for this group.

I do try to stay away from politics when I’m in the professional sphere, but when one tries to live an integrated life the way that I do, it’s hard to maintain a strict boundary there. Actually, this discussion presents a good opportunity for fundraising professionals like myself to state why it is we do what we do.

As a fundraising professional, I have always thought of my work as encouraging a culture of philanthropy. I believe that as citizens of the world, people have a responsibility to give back the communities where we live and create the world that we want to live in.

While they are not exactly the same concepts, I do believe that philanthropy, tithing, and taxes are similar ideas. They all relate to giving and responsibility. If we want the world to be a certain way, we need to make contributions to make it so. Whether that is time, talent, or treasure, each of us is responsible to pay into the systems that make our communities they way we want them to be.

And we all benefit from doing so, directly or indirectly. Whether it is your own child who goes to public school, or if it is the nurse who was educated in public school who is now taking care of a sick relative, the taxes that are needed to support public education benefit all of society.

Likewise, when a family is struggling to put food on the table, they go to their local food pantry to get groceries or to the local soup kitchen to get a hot meal. ABC News did some amazing coverage recently about poverty and hunger in America, reporting that more and more families who once identified as middle class are struggling to make ends meet. People who used to give to the food pantries are now turning to them for help.

Tithing is a concept that is mostly used by churches. It is a word that some shy away from because traditionally it implies an obligation to contribute at least 10% of one’s income to the church. For most people, that is more than they feel they can afford. However, when I encourage people to be philanthropic, I simply encourage them to give whatever they are able.

I like the concept of tithing because of it’s implication of responsibility. I believe that we all have a responsibility to pay in to make our communities and institutions strong. The government needs our support to maintain our schools, roads, and bridges, and to keep our communities safe and thriving.

Warren Buffett is speaking as a citizen an as a philanthropist. Wealthy and poor alike benefit from philanthropy, taxes, and tithes.

When people give, I hope that they are philanthropic out of the true sense of generosity and wanting to help make someone’s life better. When people pay taxes, I hope they think about the kids in their neighborhood who have access to public education. And I also hope that they are mindful of the fact that they benefit directly from these public services and charities that they support.

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