It has been interesting to watch leaders and staff in the nonprofit and for-profit fundraising silo of the charitable world congratulate themselves on data that showed an increase in both giving and the number donors during 2020. You can read about it here https://bit.ly/3sglcnh
It’s a good thing they didn’t get injured patting themselves on the back since healthcare, incredibly, lost the second most jobs in the sector during the pandemic, behind only education nonprofits, which lost the most jobs.
According to the Johns Hopkins Center for Civil Society Studies, more than 926,000 nonprofit jobs have been lost during the past year, down 7.4% overall. The recovery can be described, at best, as tepid.
All the extra fundraising didn’t save those jobs.
There are two fundraising and management lessons to be learned during the pandemic. Lesson number one is that Americans will respond when they see a crisis, such as miles-long lines at food banks with cars full of hungry people. Lesson number two is that the sector can’t live on fundraising alone.
There is no doubt that a handful of charities that raise an incredible amount of money from donors. Some forms of direct response fundraising put charities in the forefront of donors’ minds. But, even those nonprofits can’t live without program service fees or third-party payments. Both are the real life’s blood of most organizations. It’s a fact that sector leaders have tried to keep secret from the general public lest the organization be compared to a for-profit business.
“Transparency” has been a catchword in the sector for the past few years. It is time to be transparent with donors and the community at large to let them know there is a cost to everything. When the hair band that filled arenas during the 1980s now makes a tour of 2,500-seat venues, do you really think that those who want to see if the lead singer needs a walker to move around won’t pay an extra $5 for the experience?
The same goes for any organization that offers a service to both the community and a target population. A Spalding basketball retails for $14.95 and wholesales for a few bucks less. Do you think old guys, who don’t realize they are old, won’t pay an extra $5 so they can pull a hamstring or some other body part while making believe it’s Larry Bird versus Magic Johnson in that local gym?
Nonprofit leaders know this but like petulant children won’t take that castor oil. Anyone wearing a mask with a team logo on it or a basic KN95 understands the economic hand the pandemic has dealt not just their favorite pub but also the local theater company. They have already adjusted to a pizza costing $5 more for takeout and/or no-contact curb service. They’ll be fine with paying a few bucks more for a nonprofit’s program.
Some estimates show that fundraising is generally 25% or less of annual revenue. It is essential but so is other revenue. It’s time charity leaders insist that those who can pay shoulder more of the costs. Transparency can evolve to transition.
Speaking of time and transition, three sector leaders have hit milestones. All of them have been foundational in one form or another for the sector. And, since this is a column and opinion, I can be proud to call them friends.
It’s been 25 years since Melanie Lockwood Herman took the reins of the Nonprofit Risk Management Center. These days she is the first call when anyone needs information. She has become the face and voice of minimizing the chance something untoward occurs at a charity.
Melanie has been preaching against systemic risk at nonprofits long before a pandemic shut things down. It’s not just about protecting a nonprofit but discovering institutional capacity. Whether it is cybersecurity, removing volunteers, exit agreements or sexual harassment, wise CEOs and board members listen to her counsel.
Here’s to a much longer run for her in that position.
Kelly Browning has stepped away from leading the American Institute for Cancer Research. There are hundreds of cancer charities, most of which are effective at what they do, whether it is support or research or healthcare delivery. Yes, Kelly was pretty good in the job but that’s not why he had so much industry clout. He and the guy who will be mentioned next were defending charities against state and federal regulators before anyone else realized there was a problem.
There is no doubt that more odious regulation would have befallen the industry had Kelly not been there — with a band of brothers such as Max Hart and Geoff Peters. He has earned his time on the golf course and going to college football games on Saturdays in the fall.
And then there is Larry May, who graduated film school and somehow ended up in fundraising. He was honored not too long ago with the DMA (now ANA) Nonprofit Federation’s Max L. Hart Award for Fundraising Achievement (see the previous paragraph). One of the driest senses of humor and an understanding of how people will view something presented to them has helped raise billions of dollars for great causes. He, too, was in the anti-regulation fights before entire associations were formed to deal with state attorneys general.
He likes to say “nobody goes to school wanting to write direct mail fundraising copy.” First, a conversation with him on fundraising is like going to school. Second, Larry can do it naturally, both with his own firm and then in larger organizations such as Direct Media and Infogroup Nonprofit Solutions. Ask him a question and you’ll get the truth every single time. The sector is losing one of the greats.