Good news, Bad News: Nonprofits and Politicians May 18, 2007 By Steve Fafel

When nonprofits and politicians mix, great things can happen. The pols can shake down the state or fed for grants, attract press and publicity, and inspire large donations toward projects of their liking. The downside is when Pols are on the take from nonprofits they start themselves.

In Philadelphia, Vince Fumo had his "own" nonprofit, through which he funneled millions of "donations" from "generous" donors like Verizon, which frequently had legislation to push through the PA State Senate. One of its infamous bills was the Telecommunications Act of 2004, which (get this) bans municipalities from providing wireless internet access to citizens. That's right, you have to ask Verizon for permission.

Fumo had his nonprofit buy things for him, like a tractor for his farm, and renovations to his office. And just Wednesday we learned of the Detroit Mayor's own nonprofit profiteering, where he has apparently had high-priced vacations paid for by a nonprofit run by his sister-in-law.

You work too hard on missions too important to let this sort of stuff go on. Between exorbitant executive salaries at large nonprofits and outright fraud, the nonprofit world continues to get smeared. I'm thinking a lot about this lately. I think we need to establish greater accountability, transparency, and oversight.

Any thoughts on this?

Graduation Day May 15, 2007 By Steve Fafel

Maribeth Swarr works as Marketing Coordinator. Last Saturday she graduated from college. Pictured with her are son and husband.

Millersville University is a pretty good school, but they charge for cap and gown, which is a bit crass after 4 years, eh? So the MR team covered the cost. MB--we're happy for you!

FEP Needs You May 15, 2007 By RussBurke

Hi Folks:

Did you ever feel you were flying blind? You may know it as the feeling fundraisers get when they realize that evaluating what we do is often way too subjective. I hope you already know, help is available in the Fundraising Effectiveness Project (FEP). This nationwide program administered by the Association of Fundraising Professionals and the Urban Institute’s Center for Nonprofits and Philanthropy, and a galaxy of other notable idea leaders* will help you better understand your organization’s fundraising performance.

So much more than “did we raise more this year over last year”, FEP helps you get deep inside your fundraising data. Here’s what they say: “The FEP Survey is the first to compile fundraising performance data from nonprofits that not only shows the overall percentage of growth in gift dollars and donors from one year to the next but also breaks down the data in terms of the percentage gained from new, recaptured and upgraded donors that year as well as the percent of revenue lost from downgraded, lapsed new donors and lapsed repeat donors.”** That’s some very critical data that many nonprofits simply have no way to gather easily.

But that’s what FEP is all about. They’ll gather the information for the nation and share it broadly. All they need is your cooperation in sharing your experience. Mission Research is committed to helping you participate. A Charter member of the Donor Software Workgroup, Mission Research is committed to FEP by making sure all GiftWorks users can participate. It won’t cost you a dime. Every year, we will create the software needed to produce the FEP report and offer it to you as a free download for your GiftWorks installation. Once installed, you’ll be able to click a button to generate the report (for you to see and print), then click to upload your report to FEP (or to Mission Research and we forward to FEP) so that you can participate in the national reporting. FEP plans to improve the report in subsequent years to bring you even more critical measures of fundraising effectiveness.

You’ll finally be able to see into your data to a degree not formerly possible. It will tell you lots about your actual experience, perhaps helping you refocus or re-allocate your fundraising efforts. Even more advantageous, as a participant in FEP national, you will be able to get truly comparative data, i.e. what’s the experience of other nonprofits your size, with similar total and fundraising budgets, or with a like complement of fundraising staff, etc. Information like this, before FEP, was just about impossible for any of us to get.

So, we hope you will join the effort to improve fundraising performance. If you want to get started with your FEP reporting, just visit http://www.missionresearch.com/fep/ to download your FEP tool (note: you need to have GiftWorks and 2004-2005 data already in place). The new FEP reporting tool is projected to be released in August, 2007. You also can see the survey instrument and read about it by visiting: http://websurveyor.net/wsb.dll/33613/fepsurvey.htm. You can obtain addition information by contacting Bill Levis, FEP Project Manager at The Urban Institute (grlevis@aol.com) or Cathlene Williams, Ph.D., CAE, Vice President, Research at AFP (cwilliams@afpnet.org).

*Other FEP sponsors include the Council for Advancement and Support of Education (CASE), the Council for Resource Development (CRD), the Center on Philanthropy at

Indiana

University

, and the National Committee on Planned Giving (NCPG).

**Source: FEP paper introduced at the AFP National Conference,

Dallas

, March 2006:  Download FEPpaperAFPconference.pdf .

The Sustainable Nonprofit May 14, 2007 By Steve Fafel

Last time I posted about excessive compensation in large (and some not so large) nonprofits. On my mind this morning is inadequate compensation and what sustainability means for smaller nonprofits.

So a few questions, starting with your personal sustainability:

• Is your pay market rate, and can you pay the bills with it?
• Do you have adequate health insurance?
• Are you developing your professional skills?

Next are questions about your organization itself:

• How will your nonprofit continue in perpetuity?
• Do you have a disaster plan?
• What happens when you fall short in your fundraising?
• Does any one donor or grantor provide more than 20% of your funding?
• What negative impact do you have on the community, environment, employees?
• What positive impact do you have?

The one question that turns heads when I talk about this is about negative impact. In starting and running our nonprofits, we allow ourselves to think our mission is noble, and compromise other things like personal health and wealth, and the good of the community in favor of that. But consider this: when you buy supplies from a national chain, only 11 cents of every dollar you spend stays local, but when you buy from local stores and businesses, 44 cents stays local. 4 to 1. 400% greater impact, just by buying local! Think of the irony of a job skills nonprofit that buys from Staples instead of the local office supply store, which could grow and provide more jobs with more local business.

Other negative impact is the energy you consume, both in daily operations and in the products you buy. How do you get to work? If you drive, can you carpool? When you buy organic food (and if it's local, you should), was it shipped from Bakersfield CA or from the farm up the road? Do you leave your monitor and computer on at night? What can you do to reduce your organization's negative impact on the environment?

To some of you some of this sounds simplistic. But so many nonprofits pass on using recycled paper, and chase the lowest price possible regardless of impact on their community, employees, and environment. I know it's tough with tight budgets, but that's where planning and fundraising to the plan come in; develop the socially responsible, sustainable plan, and then fund it. I think it's part of our responsibility to the world, regardless of the mission. Agree? Disagree?

A New Tool for You 2 May 7, 2007 By RussBurke

A few weeks ago I posted a fundraising software evaluation tool designed to help folks considering GiftWorks. This simple spreadsheet put software features along the left margin and space for candidate softwares across the top. A GiftWorks column was prefilled, leaving columns for users to fill in competing products.

Well, all that had to change. The GiftWorks Free Update - April 23, 2007 meant it was time to update that tool to reflect GiftWorks new capabilities.

The improvements fell into three major categories for me: Enhanced QuickBooks Integration, batch updating, and improvements to pledge field availability and reporting. This latter modification was something I'd really been looking for...super easy to create pledge reminders. Those product managers even put a pledge reminder template in the GiftWorks Letter Library for users.

Click here for your revised Software EvaluationTool:  Download software_decision_tool_2007.04.23).xls . It can get you started on the road to due-diligence in your software selection process. And, if you're just starting that process, use the functionality/features column to check against your list of "requirements" to be sure you are covering a full range of immediate needs and some possibilities for growth. After all, you want a fundraising solution that can grow with you. 

Please don't discount the "view and do" part of the software evaluation.  Its critical to explore just how easy (or not) the processes behind those features are to learn and use.

Let us know how we can help you. 

Nonprofit Compensation May 4, 2007 By Steve Fafel

Most of our customers are small- to mid-sized nonprofit organizations. Our fundraising software, GiftWorks, is designed for them, and not for a university or nonprofit health insurance company. Enterprise software like Blackbaud Raiser's Edge is more appropriate for those large organizations, and costs $40,000 on average. GiftWorks is $299. We've democratized fundraising software for nonprofits. And we need to do more, and will.

I mention price because it correlates with compensation; organizations spending $40,000 for software are likely to spend more on other items as well, including compensation. Some of Blackbaud's customers spend well over $1 million a year; these are very large institutions with significant complexity in both their fundraising operations and organizational model.

The CEO of Highmark, a Pennsylvania nonprofit health insurance company, made $2.7 million in 2005. An Executive Director of a local nonprofit that works with the elderly that makes $70,000 per year. Most of our nonprofit executive directors, I'm going to guess, make significantly less than that. So why bring this up?

I don't think nonprofit organizations should be personally financially profitable. A nonprofit customer I visited last week in New England has family members on the payroll, perhaps up to $1 million from what I was told.That's just not right. Nonprofit executives making millions is simply not right. Is the difference in quality of leadership so great to demand such exorbitant price tags?

I want to start something right here, right now: a cap on nonprofit salaries at the top, and a plea for living wages on the bottom. As a society, we define what we value explicitly through legislation and implicitly through what we pay: our dollars our our votes. We should do both.

I will no longer contribute to any organization that pays their leadership any more than 10 times the lowest salary, with a cap at $400,000, which is a huge amount of money as it is, and 10 times the national average salary. I will also not contribute to organizations that as a policy pay below a living wage, and pledge to help nonprofits increase their capacity to pay fair wages. And to not discriminate between men and women; women in PA nonprofits make on average 30% less than men.

The war on poverty starts at home with socially responsible practices. Pay your people decently. Provide health insurance. These are socially responsible practices. Pay yourself decently. Organizations that pay grossly inflated salaries are not socially responsible, and are squandering dollars intended for their missions. If you can't find competent leadership at $400,000 per year, you aren't looking in the right places. It's wrong, and it needs to stop.

So many of you don't get paid anything. Your work is out of love and passion. You are our heroes, the angels of society, and I'd love to hear from you.