Habits of highly effective giving

 

Like in business, charitable organizations require revenue to not only exist, but to provide support, growth, and opportunity to the beneficiaries they serve.

Billions of dollars are contributed to organizations each year. Some donors may question is this enough or is their contribution needed? However, the more appropriate questions might be “Am I giving to the right organization” and “How effective is my donation”? The answers lie within each donor’s personal path to philanthropy.

For the most part, when donors make a charitable donation, they want to know that they are giving to a good thing and that the money will be used the right way. But, how do donors know this? How can they be assured or satisfied that their donations will be well spent? In our opinion, effectiveness equals donor satisfaction combined with impact and utilization of each gift.

No matter the size of the donation or from whom it is being contributed (business, foundation or community resident), here are our habits of highly effective giving.

Identify the ideal organization

When looking for the right organization to support, start by taking a good look at your interests, connections, goals, and influences. These will help narrow the list of local, national, or global organizations from which to select the one(s) you’ll eventually support. If you need help, contact a nearby leader (such as NPcatalyst), who has access to multiple directories.

Understand the organization’s needs

When you have narrowed the search, take a good look at each organization’s reason for existence, mission, programs, and goals. As you do this, you’ll become more familiar with the organization and, more importantly, identify and understand their needs. If you’re having a difficult time identifying their need for donor and volunteer support, give them a phone call or send an email.

Assess the organization

A critical step of the process is analyzing each organization’s operations and performance. This is where you determine the soundness of their best practices. Be sure to assess the percentage of funds being allocated to programs or services; take a look at the strength of their leadership; and check to see if their policies, procedures, and management practices are up to par. If you would like assistance, contact companies like NPcatalyst, which analyze and rate charities on a regular basis.

Establish a relationship

There’s no finer way to understand an organization than by direct contact. This can be accomplished by sending an email or calling a staff or board member to ask questions, request a meeting, register for a special event, or offer to volunteer. As in business sales, the ideal “transactions” take place as a result of mutually-beneficial relationships. It is a great way to watch the effect of your donation.

Leverage the contribution

Once you have made the donation(s), the fun does not need to end there. No matter the size of the gift, sharing your goodwill should help compel others to duplicate your act of kindness, as well as create greater awareness of the organization. For businesses, it is a great way to illustrate a business’s role in community growth, not to mention its effect in generating new business. By simply updating your “status” via social media (Facebook, Twitter, etc.) or sending a press release to media or mailing a letter to friends, there is a good chance your gift will keep giving.

Measure the contribution

Similar to assessing the organization (Habit #3), be sure to confirm how the money was allocated within the organization. Whether the contribution was unrestricted or restricted (given for a specific purpose), it is vital that you recognize that the donation was distributed toward its intended purpose.

The significance of each charitable donation is escalated when a donor has a deep understanding of the cause, the organization, and the program(s) being supported. In a very similar approach to building personal relationships, the more familiar a donor is to the beneficiary of the contribution, the more significant and rewarding the gift.

If you have not applied these habits to past contributions, imagine how your giving could have been different. By applying these habits, your future donations will have far greater impact, making your community, country, and world a better place.

 

Things to consider when making donations

Making donations to charitable organizations can be a very strategic, methodical, and evaluative process. For many, the donations are more than mere “gifts”, they’re actually investments in causes, organizations, needs, and beneficiaries. A key component of the donor-decision process is quality information. When working with our clients on their giving strategies, we advise an analysis of organizations in five functional areas of charitable operations.

Data & Efficiency

Be sure to look at the organization’s finances to determine such things as proper allocation of funds between administration, programs, fundraising, etc. We recommend using Guidestar to review the organization’s 990 provide sufficient data for an initial screening, enabling donors with a good look at financial performance.

Finance & Fund Development

Non-profits have an obligation to act as responsible stewards in managing their financial resources. This includes compliance with financial requirements, sound accounting principles, and fiscal responsibilities. Since non-profits act as the intermediary between donors and beneficiaries, they have an ethical obligation to ensure proper handling of funds to carry out their missions.

Governance

A non-profit’s leadership, represented by its staff and board of directors is responsible for defining the organization’s mission and for providing overall leadership and strategic direction to the organization. Strong boards strive to ensure that their organizations have adequate resources, provide direction for the executive director and key staff and, evaluate their own effectiveness as governing bodies.

Human Resources

The ability of an organization to make effective use of the energy, time and talents of its employees and volunteers is essential to accomplish the organization’s mission. Exercising fair and equitable practices that attract and retain qualified volunteers and employees is just one best practice. Nonprofits have an obligation to adhere to all applicable employment laws and to provide a safe and productive work environment.

Public Information

Non-profits that provide information to prospective donors and other constituents promote informed and responsible philanthropy. This works to their advantage as donors are better able to make decisions when they can learn a nonprofit’s purpose, who governs it, how it manages its financial resources, whom the nonprofit serves, and what progress it has made toward achieving its mission.

Ideally, donors placing their “investments” with organizations are doing so through strong existing relationships. However, whether donors are already engaged with these organizations or have yet to meet their leaders, taking an in-depth look at these five areas will help solidify the receipt, usage, distribution, and recognition of financial contributions.

 

 

Seven tips for fundraising success

 

Raising funds for charitable organizations can be difficult; certainly time-consuming. It’s a patient process, requiring considerable research, planning, and organization. The word “development” is a perfect fit to the process an organization goes through to generate a meaningful contribution.

When it comes to raising funds for your organizations, here’s a handful of tips to consider adding to your overall fund development strategy. They have represented the centerpiece of our success. They’re not listed in any specific order, but you’ll quickly recognize where and how they fit in your strategy.
   
Identify strengths and weaknesses

Understand the organization – from operations to personnel to policies to financial management. Recognize the causes and implement solutions to each. Be sure to dot every “I” and cross every “t”.

Offer innovative giving

The one constant between most non-profit organizations is the ability to accept cash contributions. Every donor knows this. However, savvy donors (charitable investors) seek greater information, transparency, accountability, and results from their contributions. A strong percentage of them seek unique and innovative giving methods.

Create solicitation strategies

Know your constituents. An engaged leader is a gem and, as nonprofit leaders, it’s our obligation to strive for their full potential. One great way to really get to know supporters is to design solicitation (or engagement) strategies for each. Start by creating a Prospect/Donor Profile for each, used to document their interest, involvement, willingness, and capability. Mapping a solicitation strategy will force you to be strategic about cultivating each constituent’s involvement. This one act involves and is influenced by the other six tips offered here.

Engage constituents

From prospect identification to board leadership to donor stewardship, your benefactors are your organization’s greatest vehicles of success. Engage them through key steps of the fund development process. You’ll be amazed at their ideas, insight, and perseverance.

Generate active awareness

Tell your story to the world. Shout it regularly through local media and through your social media avenues. Be sure you focus on strengths and opportunities and that any weaknesses are addressed. Distribute clear messages and keep your messaging timely. Encourage staff, volunteers, and donors to share the messages through personal, personable, and electronic means.

Network

It’s a seven-letter word that, for many non-profit leaders, is more like a four-letter word – work. There’s no better way to prospect new supporters, whether they’re future volunteer or donor leaders. It involves stepping out of your routine, forces you to fine-tune your 30-second elevator speech, and smile even if you’re having a difficult day. Ask any business leader, networking produces results. Get out there and make friends and share your organization’s story, needs, and opportunities.

Steward donors

Perhaps the most detrimental cause of recent organizational failure might not have been solely the economic crash. Is your organization at fault for not properly recognizing donations and, more importantly, developing strong relationships with its donors? Stewarding donors strengthens the lifeblood of non-profit organizations. Pick up the phone, send an email, direct a tweet, say hello in the store, high-five at a ballgame, and send a card. These are the little ways that magnify the “engage constituents” tip into truly rewarding alliances. Make each donor feel as if he/she is in the middle of the game.

 

Perhaps one that should be listed is “have fun”…development and non-profit leadership should be exciting, rewarding, meaningful, challenging, and fun. Make the most of it!

 

Donors have much to consider when supporting charities

As the calendar year nears its close, well-organized charities will be orchestrating year-end fundraising campaigns. These initiatives are used to fulfill wish lists, meet annual goals, and fund special projects. As these organizations launch these campaigns, it’s important that they understand donor thinking and strategies during this time of year.

During the holidays, typical donors…

  • Respond to public, promotional, emotional appeals
  • Prefer easy access to make a contribution
  • Make donation amounts of their choice
  • Seek well-managed organizations
  • Wish to not be the only donor
  • Want to know how the money will be used
  • Choose to support a well-regarded and/or well-managed organization
  • Expect proper acknowledgement

Saavy donors make informed donation decisions.

Appropriately stated by Charity Navigator, “Smart givers generally don’t give reactively in a knee-jerk fashion. They don’t respond to the first organization that appeals for help. They take the time to identify which causes are most important to their families and they are specific about the change they want to affect.”

Nearly two years ago, NPcatalyst launched a program called HealthCheck, which analyzes charities in five distinct areas of non-profit management and effectiveness. The five areas are:

  • Institutional Data
  • Governance
  • Human Resources
  • Public Information
  • Finance & Fund Development

As the holidays are upon us, non-profit directors should consider what drives donors.

Donors say appeals that put a face to the donation (either human or animal) and remind them to help those who are less fortunate at this time of year, are most persuasive. A few thoughts to consider…

  • Holiday giving is emotional.
  • Donors are thankful for what they have and give to those who need it.
  • Donors tend to give more when the online experience is intimate and emotionally coherent.

Stats to consider about major donors…

  • One-third of donors with $100,000 or more in annual income, indicate all or most of their charitable giving for this year has not  been planned ahead of time.
  • 42 percent of households with over $100,000 in income, said receiving a tax deduction was a significant influence on their giving.

Year-end fundraising campaigns are smart strategies used by well-organized charitable organizations.

 

Click here for a guide designed to help charities orchestrate year-end giving campaigns.

Donors – if you’re looking to create a strategy for giving, contact us.
Charities – if you’re looking to make strong connections with donors, contact us.

Amazing community opportunities in the Old Pueblo

Summer has been extremely busy for the NPcatalyst team. Rather than spend the warm months surfing waves in the Pacific or backpacking along the Tahoe Rim Trail, we’ve been serving clients and connecting with corporate and charitable leaders across the country.

This past weekend was spent in Tucson, where we met with numerous non-profit officials, social entrepreneurs, and new strategic partners. Here’s a brief list of our new friends:

  • Beads of Courage – an incredible organization which distributes beads to children being treated for cancer throughout the world.
  • TreeHouse Farm – an organization which provides an unforgettable experience for children recovering from cancer treatment, serious burns, and congenital heart issues.
  • The Haven – extraordinary organization which provides substance abuse treatment and housing for men and women.
  • Arizona Oncology Foundation – a new organization which provides support programs for cancer patients and survivors.
  • One-on-One Mentoring – an organization which matchs caring adults with at-risk youth.
  • Pima Prevention Partnership – provides practical solutions to address both individual and community problems, particularly substance abuse related.

They were all introduced to our services, particularly our online gifting tool, GiftingWishes, and our BoardCheck assessment resource.

Saturday was spent in a retreat with one of our new strategic partners. This soon-to-be-launched company will provide job recruitment, leadership development, and career development opportunities to both college students and employers. Much more to follow soon.

It was just another amazing weekend. We hope it leads to many opportunities to continue helping enhance the philanthropic culture in the Old Pueblo. Plus, we may have even landed a new job for a Tucson resident!

Thank you, Tucson, for your hospitality, heat, and spectacular sunsets!

An incredible first year for NPcatalyst

Athough we’re already in the third month of the year 2012, we haven’t really taken an opportunity to reflect upon the first year of NPcatalyst LLC. Like any new or innovative idea, there are many twists and turns and unforeseen obstacles. However, with the right team, positive outlook, and extreme passion, the good far outweighs the uncertainty.

We took a few minutes last night to test a new tool to paint a picture of our initial year of operation.

Here’s to an even more amazing year in 2012.

Yours in Community,

Pete

HealthCheck rating tool gathering attention

 

The charity rating and best practice tool, created by NPcatalyst this past January, is becoming increasingly popular with non-profit donors, volunteers, and job-seekers.

The tool was designed to address two distinct, yet critical needs. First, it’s designed to rate charities in five management and performance areas, giving organizations an objective instrument from which to guide their goals and strategies. Second, it’s used as a research mechanism, providing donors with “insider” information, which they can’t immediately or easily find online or through non-profit manuals.

“Launching a new product in a tough industry, especially a product which we created, has been both exciting and difficult,” says Pete Parker, NPcatalyst’s managing partner. It’s taken a considerable effort to educate non-profit organizations as well as business, community, and philanthropic leaders to adapt this innovative tool. “I wanted to create a tool which gives donors a true and in-depth view of non-profit organizations, enabling them to make thought out and well-researched donation decisions.”

The HealthCheck tool analyzes and applies a rating score to organizations in five different operational areas. NPcatalyst publicizes the scores on profile pages create for each charity. “To promote the HealthCheck tool, I’ve been screening the financial efficiencies for organizations located in the three locations where we’re seeing the heaviest traffic of donors and leaders,” says Parker. To date, 200 organizations have been screened and featured on the NPcatalyst website.

As a result of social media marketing, professional networking, and personal connections, visits to the NPcatalyst website have tripled in recent months. “What’s exciting is that our non-profit profile pages are seeing the greatest growth…and we put very little effort into marketing the pages”, according to Parker. The profile page of the first HealthCheck client, Sierra Nevada Journeys, has seen a 205% increase in views in the last month. “My hope, and the goal of this thing, is that Jonathan (SNJ’s executive director) tells me that they’re seeing an equally impressive spike in contributions.”

The HealthCheck tool is available to all non-profit organizations with an active 501(c)3 status. While the financial efficiencies of each may be screened due to public information found online, organizations seeking the full rating and tailored best practices guide will be charged a fee. “I wish we could offer HealthCheck at no cost, but we run a business to help strengthen our clients”, says Parker. “There’s a great deal we offer in benefits, plus we’re happy to work with businesses and foundations looking to underwrite the fees.”

For more information about NPcatalyst or its HealthCheck tool, log onto www.NPcatalyst.com, email info@NPcatalyst.com, or call 775-333-9444.

Tucson charities added to ratings list

A handful of Tucson-based community-benefit organizations have been added to our charity ratings list.

Because of NPcatalyst’s connection to and long-time interest in Tucson, we have begun to screen local organizations and add them to our HealthCheck charity ratings list. The intent is to provide valuable “insider” and research-based information to potential donors, volunteers, and job-seekers, as they make their charitable decisions.

Thirteen of the initial 16 organizations placed on the ratings list have received an initial “efficiency” rating. The rating is a scoring of the organization’s finances as found in its most recent Form 990. Ratings range from Fair to Ideal. These organizations, and all other active 501(c)3 organizations are invited to participate in a complete HealthCheck process, where an in-depth analysis is conducted in the areas of Finance & Fund Development, Governance, Human Resources, and Public Information. The organization will receive numerical scores in each category, as well as an overall score. In addition, a best practices guide will be developed, providing suggestions for improvement in each of the categories.

Our HealthCheck process is very objective and has become an outstanding resource for private foundations, local businesses, and philanthropic leaders as they make their charitable decisions.

If there’s an organization missing from this list, drop a line to info@npcatalyst.com or 775-333-9444 and we’ll add it to our growing list of organizations to screen.

Bear Down!!!

HealthCheck best practice – understanding financial statements

Do you and your fellow board members know how to read and understand a non-profit organization’s financial statements?

You should, as it’s a very important function of board leadership. To help clarify why it’s so important, just Google “board financials” or “understanding board financials”. Among the many links, you’ll likely find the following.

Steven Berger, in his Learning to Read Financial Statements, share the following. 

Financial statements summarize an organization’s financial position – at a given moment in time as well as over longer periods (monthly, year-to-date, quarterly, annually). They should reflect any variances between the actual operating results and the budgeted goals that were previously approved by the board.

All board members need to have a basic understanding of the most important elements of a financial statement. They need to know why these elements are important and what actions they should take if these elements are inconsistent with board wishes or out of compliance with generally accepted accounting standards.

We also found a set of questions, as created by Tom McLaughlin, very enlightening. Here are his 20 QUESTIONS BOARD MEMBERS SHOULD ASK, as found on the Board Source website. 

Board members can’t provide financial oversight if they don’t know what to look for. The following questions address some of the most important issues board members should raise when reviewing the organization’s finances.

FINANCIAL PLANNING

1. Is our financial plan consistent with our strategic plan?

SUFFICIENT AVAILABLE CASH

2. Is our cash flow projected to be adequate?

3. Are our cash-flow projections reasonable, objective, and not overly optimistic?

SATISFACTORY RESERVES

4. Do we have sufficient reserves?

5. Has the board adopted a formal policy for the establishment of reserves?

MEETING THE BUDGET

6. Are we regularly comparing our financial activity with what we have budgeted?

7. What procedures do we use to make sure that the differences between what was budgeted and what actually happened are being appropriately addressed?

PROPRIETY OF EXPENDITURES

8. Does the board provide oversight of contractual agreements to ensure that the organization’s exempt status will not be questioned or impaired?

9. Does the board provide for internal controls over expenditures?

10. Are we fulfilling our tax-exempt purpose as granted by the IRS?

INTERNAL CONTROLS

11. Do we have the appropriate checks and balances necessary to prevent errors, fraud, and abuse?

12. Are we alert to the possibility of fraud within our organization and are we taking safeguards to try to prevent fraudulent activities?

EXTERNAL AUDITS

13. Do we have an external audit?

14. Does our annual audit have an unqualified (“clean”) opinion? If not, why not, and what is being done about it?

FINANCIAL DOCUMENTS

15. Is our financial staff providing us with accurate and timely financial statements that allow us to understand the financial state of the organization?

16. Do we regularly review the IRS Form 990? Does it accurately represent our organization?

SIGNS OF FINANCIAL DISTRESS

17. Are our key sources of income rising or falling? If they are falling, what are we doing about it?

18. Are our key expenses, especially salaries and benefits, under control?

MAKING INVESTMENTS

19. When was the last time our investment policy was reviewed?

20. Are we satisfied with the performance of our investments, given the level of risk appropriate for these funds?

    

NPcatalyst designed its HealthCheck tool, which also designs a best practices solutions guide for participating organizations, to help strengthen charities. Many topics, like reading financial statements, are analyzed with HealthCheck. Click here to learn more and register for HealthCheck.

NPcatalyst designing year-end giving campaign

NPcatalyst has designed a campaign to raise funds for interested organizations through a unique year-end giving initiative. The campaign will remind and drive support from community residents, private foundations, and business leaders as they make contributions to organizations before the close of the calendar year.

Non-profit organizations (regardless of size, scope, sector, or location) are invited to participate in the innovative campaign, but need to enlist with NPcatalyst prior to November 1st. Through a small participation fee, each organization will receive:

  • an organizational assessment (charity rating) and best practices solutions guide;
  • invitation to participate in up to three fundraising-driven webinar training sessions;
  • inclusion in NPcatalyst’s social media and traditional media messaging;
  • direct positioning with NPcatalyst’s expanding roster of corporate, foundation, and philanthropic influencers;
  • an online profile, featured on the NPcatalyst website; and,
  • a special contributions-tailored profile on a soon-to-be-announced Campaign website.

Signing up well in advance enables the participating organizations to address areas deemed as weak or needing improvement, based on the charity rating score determined by NPcatalyst’s HealthCheck tool. It’s an organization assessment (or charity rating) tool, which analyzes each organization in five different categories, then provides a best practices solutions guide for improvement in each area. Click the following link – www.npcatalyst.com/healthcheck/ – and learn more about the HealthCheck tool which the NPcatalyst team created. Best of all, it’s a great revenue-generating tool. In fact, here’s a testimonial:
“What I’m coming to understand about the value of this HealthCheck process is not necessarily the rating itself (though that’s important), but the best-practices it ends up prompting. To that end NPcatalyst is doing great work ensuring that we’re adhering to those best practices.” – Jonathan Mueller, executive director of Sierra Nevada Journeys

NPcatalyst was founded to provide philanthropic solutions to both donors and the charitable organizations they support. Pete Parker, managing partner of the firm, has helped non-profit organizations raise over $30,000,000 through appealing and innovative annual, major, capital, and online giving campaigns. Most recently, the firm create a corporate engagement campaign which connected community residents in throughout northern Nevada with over 15,000 volunteer opportunities.

The year-end giving campaign is an opportunity non-profit organizations should seriously consider. To sweeten the invitation, NPcatalyst is offering the charity rating, best practices guide, public relations messaging, and year-end fundraising campaign at $375, a heavily-discounted rate from the $450 base price. With a targeted fundraising goal of $5,000 per organization, it’s an incredible opportunity. Taking advantage of this two-week offer, which ends on August 31st, requires each organization to send an email to info@npcatalyst.com or call 775-333-9444.