A blog by Grant Montgomery, co-founder of Family Care Foundation, a 501c3 that provides emergency services and sustained development for communities, families and children on 5 continents. Articles and commentary on Philanthropy, Global Aid and Development.
For more traditional nonprofits, targeting millennials is an investment in the future instead of a tactic to immediately generate funds.
The Salvation Army, one of the nation’s oldest charities, recently increased its focus on involving young people after a series of focus groups showed that few students in high school and college knew what the organization did.
“It was a hard slap in the face,” says Major George Hood, the Salvation Army’s national community relations and development secretary. “It said to us we’ve got to go to work on this or there’s going to be a day where we will not have any donors left.”
Now the organization hosts an annual concert featuring teen favorites like Owl City and sponsors Red Kettle Clubs for philanthropy in high schools around the country. It also debuted an online Red Kettle for people to launch online fundraisers, which Hood says are popular among their younger donors. All are attempts to help Millennials personally identify with the Salvation Army brand.
“They want that relationship and they want to believe that they’re really making an impact on someone’s life,” he says. “If you can come up with that ingredient, you’re ready to go.”
Charity: water, Scott Harrison’s nonprofit organization, is at the fore of a tough task for the nonprofit sector: convincing the Millennial generation, underemployed and often dubbed apathetic compared to their predecessors, to give some of the little money to charity. For a sector overly reliant on generating money from an aging Baby Boomer population, getting young Millennials donating to nonprofits early is a key to long-term sustainability. That’s why many charities are working to develop a more interactive, customizable, and transparent giving experience.
“The Millennial generation is about identifying with a cause,” says Marc Chardon,the CEO of Blackbaud, a software developer for nonprofits that tracks giving trends. “[Donating] has become very personal and local.”
In charity: water’s case, that means encouraging supporters to be not only donors but also fundraisers. Half of the funds generated by the organization come from an online fundraising platform in which individuals create their own personal fundraising campaigns on behalf of the nonprofit. Often, people use the platform on their birthdays and ask others to donate their age in dollars instead of providing gifts. Sometimes the fundraisers are more inventive—in September a woman raised $30,000 by promising to swim across the San Francisco Bay naked, while an 8-year-old generated $15,000 by eating rice and beans for 25 days and promising her family would donate the savings made from buying cheaper groceries.
“Many charities go out and just ask people for money,” Harrison says. “We ask people for their voice.”
It’s an approach that seems to resonate with Millennials. The average age of mycharity: water’s users is 33. The fundraisers have generated almost $20 million total since the platform was launched in 2009, mostly through small donations of less than $100. The organization’s pledge to use all donated funds on fieldwork (private donors fund organizational costs) also assuages young people’s tendency to distrust formal institutions. In a post-recession environment where charitable giving has shrunk, charity: water has increased its donations each year since its founding.
‘Tis the season to be jolly — and for many Americans, to give to charity. A seven-year study of online giving found that a third of all charitable donations in a given year come in December, with the giving rate increasing as the New Year approaches:
Of all giving in a year, 22% of online giving takes place on the last two days of December.
When the W. K. Kellogg Foundation set aside $100 million in 2007 to invest in companies that could produce both social and financial benefits, it was considered revolutionary. Historically, major foundations had used mainly stocks, bonds, real estate and other traditional asset classes to build their endowments.
In 2010, the Kellogg Foundation invested $5 million in Wireless Generation, a tiny educational software maker working to improve public education in New York City. Just 219 days later, it made a 25.9 percent return after Rupert Murdoch’s News Corporation bought Wireless Generation for $360 million.
Philanthropy is taking its cues from Wall Street and Silicon Valley. The language of finance is so common that it is sometimes hard to tell the difference between an investment conference and a fund-raiser. Grants are referred to as investments, and public-private partnerships as innovations. Money used to buy vans, computers and buildings is called growth capital.
“It’s not just the language that is changing,” said Antony Bugg-Levine, chief executive of the Nonprofit Finance Fund. “The actual distinction between the two sectors, for-profit and nonprofit, is starting to collapse.”
The shift stems from a new generation of philanthropists, like Bill and Melinda Gates, Pierre and Pam Omidyar and Steve and Jean Case, hoping to stretch their dollars. As they see it, the pool of philanthropic assets — even at a whopping $4 trillion-plus — is too small to make a dent in seemingly intractable social problems like malnutrition, chronic homelessness, water quality and sanitation. So they are trying to find ways to reuse existing financing and to attract new types of capital.
At the peak of the shopping and giving season, consumers are increasingly combining both activities. They are buying products that have charitable tie-ins, shopping through Web portals that send savings to nonprofits, and donating at the registers when they check out at stores.
These charity-linked purchases might give consumers a good feeling, but are they good for charities? Maybe so, but only if those shopping decisions aren’t taking the place of other charitable giving, say some specialists.
Charitable shopping “undermines the philanthropy of a nonprofit through diminished charitable donations,” said Sondra Dellaripa, principal consultant for the nonprofit consultancy Harvest Development Group. In fund-raising development for charities, she said, it is important to build a relationship with a donor — something that doesn’t happen in these transactions.
So, how can you make your shopping turn into giving while keeping in mind how much you’re really giving to charity? Not all products with charity tie-ins are created equal.
For those shopping online, there are pass-through sites where a charity gets money every time a consumer makes a purchase. The donated percentage of the purchase price varies from 1 to 25 percent.
Some deliver no money to charity at all; they’re just for awareness. Consumers can check this, before they buy, on the product’s website or by reading the tiny print on the product’s packaging.
Excerpts of an opinion on the question “Are charities more effective than Government?”, by John Briscoe, professor of environmental engineering at Harvard University, and a former World Bank official:
The priorities of charities are appropriately set by those who finance and manage those charities. But it seldom stops there. [Apart from non-governmental organizations that focus on health and education,] governments typically and necessarily see things like jobs as overwhelming priorities and sectors like infrastructure as critical for creating jobs and reducing poverty. I know of not a single nongovernmental organization that focuses on job creation, the provision of electricity at scale, or transport.
As a senior official in the World Bank I saw this dynamic at work every day. NGOs would lobby their governments for more attention to health, education and the environment. Rich country governments would then use their position on the board of the World Bank to push for these priorities.
Over the last 20 years this has led to a profound distortion in the priorities of the bank, with the social sectors becoming dominant and, for a long time, infrastructure lending – the original mandate of the Bank – falling to less than 10 percent of total lending.
An interesting evolution over the last decade has been the rise of countries like China, India and Brazil that give high priority to things like infrastructure, and as their weight in the global system has increased, this has led to somewhat of a rebalancing of priorities at an institution like the World Bank, but, more important a rebalancing in options for developing countries.
These countries, having recently emerged from poverty, know that it is not by putting the social cart before the economic horse that development and poverty reduction happen. They have little patience for the pleas of philanthropists rich and poor to deny poor countries the option of following the only known road to poverty reduction.
The so-called “fiscal cliff” that’s looming over the United States will significantly impact nonprofits and the work they do if not addressed by Congress before year’s end, the cliff referring to the combination of tax increases and budget cuts hitting the country concurrently on January 1.
Legislators are also talking about removing some of the benefits to charities in the tax code. One example: eliminating or capping the charitable deduction.
So for many nonprofits, these spending cuts and less disposable income really means standing at the edge of a gravesite. And in many cases, people live or die by some of the services nonprofits provide.
Consequently, demand for the social safety net services that nonprofits provide will rise even higher than the sustained, elevated level it’s been at since the recession.
To reach people in their 20s and early 30s, the most important thing nonprofits can do is to make sure their Web sites are easy to read on a mobile device and not overly cluttered, says a survey of more than 6,500 young people released today.
About 65 percent of respondents said they liked to learn about a nonprofit through its Web site, compared with 55 percent who said they turned to social networks, e-mail newsletters (47 percent), print (18 percent), and face-to-face conversations (17 percent).
When young adults turn to a Web site, the “about us” section draws their attention most. Nearly nine in 10 young people said that’s where they go to seek information, according to the survey, conducted by two consulting companies, Achieve and Johnson, Grossnickle, and Associates.
Other information young people want on a Web site:
• 43 percent said they look for proof about the ways their donations make a difference.
• 41 percent seek volunteer opportunities.
• 41 percent look for an events calendar.
• 30 percent gravitate to videos and photos.
Beyond the information on a Web site, young people also scrutinize the design. “Even if you are a small, scrappy nonprofit, your Web site should look professional,” said one young person quoted anonymously in a report on the survey results. “I judge the character of the organization with its presence on the Web.”
Among the study’s other findings:
• Two-thirds of young people said they interacted with a nonprofit on Facebook, and 92 percent of those respondents “liked” at least one nonprofit’s Facebook page. Three-fourths of people said they would be willing to share an interesting nonprofit event on Facebook.
• About 28 percent of young people said they have interacted with a nonprofit on Twitter. Focus-group members said Twitter is especially useful when nonprofit leaders have their own personal accounts and share their views.
Friday’s Hurricane Sandy telethon, presented by the Red Cross and NBC Universal, and featuring performances by Bruce Springsteen, Bon Jovi, Christina Aguilera and others, raised $23 million to support victims impacted by Hurricane Sandy.
“We are incredibly grateful and humbled by this outpouring of support for those who are suffering as a result of Superstorm Sandy,” American Red Cross Chief Marketing Officer Peggy Dyer said in a statement. “Our preliminary results of nearly $23 million raised are an extraordinary example of how the American people pull together in times of disaster. Their generous donations will go directly to those in need, and we urge the public to continue to give.”
Hosted by Today show anchor Matt Lauer, the telethon also featured performances by Billy Joel, Sting, Aerosmith and Mary J. Blige. Kevin Bacon, Jimmy Fallon, Tina Fey, Whoopi Goldberg, Jon Stewart, Brian Williams and Danny DeVito dropped by to lend support.
The Evelyn and Walter Haas, Jr. Fund … believe strongly in the critical importance of unrestricted general operating support because it provides nonprofit leaders with the flexibility to direct spending toward strategic priorities facing their organizations.
However, the Haas, Jr. Fund also believes there are times when general operating support may not be the most effective capacity-building strategy. Over the past seven years of the Haas Leadership Initiative, our experience has been that executive directors are often reluctant to allocate unrestricted funds to strengthening organizational leadership for a variety of reasons:
Executive directors almost always find it difficult to prioritize longer-term staff and leadership development work when confronted with short-term programmatic needs and tight budgets.
The “selfless” culture of nonprofit leadership discourages leaders from dedicating resources to their own development.
Some executive directors fear that choosing to invest general support funds in leadership development could be perceived as a sign of weakness—a sign that a leader, or the board, isn’t up to the task of managing an organization and “needs help.”
John Harvey, Managing Director of Global Philanthropy with the Council on Foundations, recalled his own time as a nonprofit ED and the struggles he went through as he sought to convince himself and his board of the value of investing discretionary funds in leadership development. “A restricted grant would mean that no one—not a frugal board nor a prudent (or un-self-aware) nonprofit leader—could say no to professional development,” Harvey wrote.
The bottom line: many in philanthropy, including the Center for Effective Philanthropy, agree that large, multi-year operating support grants are critically important for nonprofits. But it seems that an increasing number also see that there are times when dedicated funding is an important complementary strategy for strengthening organizational leadership.