Girls Can – Plan Finland

Great innovative campaign. Financially not a winner yet, but they are doing something to fix a problem and embracing new technology. I imagine they are on to a winner here in the longer term.

The Plumpy Nut Challenge

ImageBrilliant idea from Merlin UK. Simple, relevant and engaging (really nice looking site too). Well done. Sign up here

Plumpy’Nut is the last resort for many children in East Africa. We’re challenging you to live off Plumpy’Nut for just one day. Once you sign up, we’ll send this beautiful box of deliciously nutty goodness. For one day, this will be all you will eat. You can choose any day before March.

Why Can’t We Sell Charity Like We Sell Perfume?

Dan Pallotta‘s shook up the Fundraising/Non Profit world with his book Uncharitable and he is back now with a new book “Charity Case” which is “a blueprint for a brave national leadership movement to change the way the public thinks about charity”

In piece on the Wall Street Journal titled “Why can’t we sell charity like we sell perfume” Dan outlines some of his thinking. I hope that Dan can shake things up a bit and that some of the lazy comments that aren’t thought through by journalists and politicians get less airtime than these well thought through arguments. Below are some highlights from the Wall Street Journal piece, but click here to read the entire article:

Today, Americans are the world’s most generous contributors to philanthropic causes. Each year, we give about 2% of our GDP to nonprofit organizations, nearly twice as much as the U.K., the next closest nation, according to the Chronicle of Philanthropy. Some 65% of all American households with an income of less than $100,000 donate to some type of charity, according to the Center on Philanthropy at Indiana University, as does nearly every household with an income greater than $100,000. These contributions average out to about $732 a year for every man, woman and child in America.

Yet we cling to a puritan approach to how those donations are spent: Self-deprivation is our strategy for social change. The dysfunction at the heart of our approach is neatly captured by our narrow, negative label for the charitable sector: “not-for-profit.”

It’s time to change how society thinks about charity and social reform. The donating public is obsessed with restrictions—nonprofits shouldn’t pay executives too much, or spend a lot on overhead or take risks with donated dollars. The conventional wisdom is that low costs serve the higher good. But this view is killing the ability of nonprofits to make progress against our most pressing problems. Long-term solutions require investment in things that don’t show results in the short term.

He outlines 5 key areas of change:

First, we allow the for-profit sector to pay people competitive wages based on the value they produce. But we have a visceral reaction to the idea of anyone making very much money helping other people. Want to pay someone $5 million to develop a blockbuster videogame filled with violence? Go for it. Want to pay someone a half-million dollars to try to find a cure for pediatric leukemia? You’re considered a parasite.

A second area of discrimination is advertising and marketing. We tell the for-profit sector to spend on advertising until the last dollar no longer produces a penny of value, but we don’t like to see charitable donations spent on ads. We want our money to go directly to the needy—even though money spent on advertising dramatically increases the money available for the needy.

A third disadvantage for charities is the expectation of a home run on every at-bat. If Paramount Pictures makes a $200 million movie that flops, no one calls the attorney general. But if a nonprofit produces a $5 million community fundraising event that doesn’t result in a 70% profit for the cause, its character is called into question. So, naturally, nonprofit leaders tend to avoid daring new fundraising endeavors that might put them at risk.

A fourth problem is the time frame during which nonprofits are supposed to produce results: immediately. Amazon.com went for six years without returning a dime to investors, who stood by the company because they understood its long-term goals. But nonprofits are expected to send every donation immediately to the needy.

Finally, the for-profit sector is allowed to pay investors a financial return to attract their capital. The nonprofit sector, by definition, cannot.

Read the full article in the Wall Street Journal

5 seconds to change behaviour

This would work really well with a donate call to action I think

Money Words (guest post)

By Perry Esler, Childrens Miracle Network Hospitals:

Tell a story – give the number. That’s the simple, best-practise, message we share with hundreds of radio people every year at stations across North America. It works. $450M raised since 1998 for our partner children’s hospitals. Great stories with a great pitch means lots of calls to the donor hot line.

Now there’s research that shows we might be able to increase pledges off those calls by how we greet the donor. Philanthropic psychologist Jen Shang has released a study that shows five words tied to moral qualities prompt larger donations.

Caring

Friendly

Kind

Compassionate

Helpful

The Indiana University Professor tested her theory at an appeal of public radio station WFIU in Bloomington, Indiana. The phone volunteers answered by thanking the caller and then they would randomly pick two of the five words to describe the caller. It sounded something like this: ‘Thanks for calling. You’re a caring and compassionate donor.’ In the end female donors gave, on average, 10% more.  By contrast the use of these adjectives had no impact on men.  Suffice to say since most donors to our radiothons are women this may be worth a try.

Many events still don’t script their phone volunteers, but this study should be enough to convince you otherwise.

Here is a recent interview we at Children’s Miracle Network Hospitals conducted with Professor Shang about the study.  It concludes that a focus on the connection between moral identity and an individuals cause might create a higher ROI than focusing solely on the cause

Click here to listen to an interview Perry did with Prof. Shang.
Follow Perry on twitter here 

The cure for the non profitcrisis

This is a great article from the Harvard Business Review, well worth a read:

By Paul Leinwand and Cesare Mainardi, Harvard Business Review, Oct 11th 2011

There is a crisis in the not-for-profit sector. Since the great recession began, donations to the largest charities in the U.S. have dropped by billions — down 11% in 2010 alone, according to a recent report from the Chronicle of Philanthropy. This was the worst decline since the Chroniclebegan ranking its “Philanthropy 400” list of America’s largest fund-raising charities in 1990. Leaders of philanthropic and other non-profit organizations naturally blame the economy for this problem; and many expect things to get worse as the economic malaise drags on.

But the financial meltdown has not affected all charities and not-for-profits equally. It is the more versatile, general-purpose charities — including such well-known, diverse institutions as The United Way Worldwide and the Salvation Army — that are faring the worst. For more tightly focused not-for-profits, such as the Cleveland Clinic and the network of Food Banks around the country, the decline is not nearly as sharp.

Why the disparity? Our own research on organizational strategy and leadership more broadly suggests a reason. Since 2010, we’ve been conducting an ongoing survey of managers’ attitudes about the strategies of their organizations (click here to take the not-for-profit version of the profiler). More than 65% of the respondents from the non-profit sector said it was a significant challenge to bring day-to-day decisions in line with their organization’s overall strategy. When asked about their frustration factors, 76% (the largest group by far, and a larger percentage than their for-profit counterparts) named “too many conflicting priorities.” When asked about their organization’s core capabilities — distinctive things their association could do better than anyone else — only 29% said these supported their organization’s strategy, and almost 80% said that their association’s efforts to grow had led to waste.

All of these results suggest that, while the hit to fundraising has hurt many not-for-profits, the more fundamental core problem is strategic. These institutions lack a strategy for connecting their mission with their ability to deliver. In short, this is a crisis of coherence.

Coherence is a fundamental alignment among the elements that create value in an organization. A coherent not-for-profit has three core strategic elements fitting seamlessly together. First, there is a well-defined “way to play,” a distinctive way of achieving the organization’s mission — thus making a difference in a way that would otherwise go unfulfilled. Second, the organization backs up its mission with a system of interrelated capabilities: a combination of processes, tools, knowledge, skills, and organization, all focused on reliably and consistently delivering what is needed to create value according to that way to play. Third, all its activities relate to this strategic mix; if it doesn’t have the capabilities to perform some service, in a way that fits with its overall strategy, then it leaves that to a different organization.

The struggle to raise funds makes it more difficult to be coherent. When cash is tight, not-for-profits inevitably see themselves as competing for donors. The perpetual chase for revenue can lead an association to “help in any way we can,” following donor priorities and chasing a multitude of opportunities to serve, including those in vogue at any moment, rather than abiding by their core strategy. Many of these won’t fit with its existing capabilities or other activities, and the not-for-profit will be poorly equipped to deliver them.

For example, a donor might say to a health or educational group, “I want to give you a transformational gift, but I love community theater — so part of the gift should subsidize plays related to your basic theme.” Suddenly, the charity must muster a vastly different set of capabilities, where it has little experience. Once these incoherent services are taken on, they are very difficult to dislodge.

When a not-for-profit becomes incoherent, its attention is distracted from the thing it needs to do most: Investing time, energy and funds to build critical capabilities to accomplish its strategic purpose. Worse still, more investment in time and cost goes toward these supposedly revenue-generating programs, thus actually hurting the bottom line and breeding more fundraising pressure and more incoherence. Nan Stone, Jeffrey Bradach, and Tom Tierney of the Bridgespan Group, a not-for-profit advisory service, call this phenomenon “scatterization,” and they link it to the way not-for-profits are organized. It’s a sign that just as catering only to Wall Street expectations can pull a company into incoherence, following the short-term demands of donors and “growth opportunities” can do the same for a foundation or association.

Another factor leading to incoherence, especially in times of tight money, is the immense pressure placed upon overhead costs. At many associations and institutions, the level of across-the-board cost reduction has become a key performance indicator. Because these cuts don’t distinguish between “good overhead” (used to build and maintain essential capabilities) and “bad overhead” (used on projects or activities unrelated to core purposes), they become a kind of pressure forcing the organization to avoid spending money on itself. This means that the building of critical capabilities is underfunded, and the association often becomes much weaker as a result. (The only area spared from cost reduction is the development group — focused on competitive fundraising.) Prominent donors give money to new facilities, programs, or university chairs bearing their name, but very few donors explicitly fund the nitty-gritty ongoing costs of capabilities: maintenance of an R&D lab, training programs to bring new people up to speed, or distribution system logistics that get food and medical supplies to people on the ground.

All of these forms of incoherence undermine the mission of the not-for-profit. Does it leave society any better when there are multiple charitable organizations trying to do the same thing in the same way, essentially investing to compete for limited funds, and ignoring the capabilities that would allow them to genuinely serve?

Fortunately, there are some examples of not-for-profits that take a more coherent road; they manage to sustain their activities in these very difficult times by focusing their efforts on a coherent group of purposes and programs. One good example is the Harlem Children’s Zone (formerly known as the Rheedlen Centers for Children and Families) – a not-for-profit originally set up in 1970 to help truant children in Manhattan’s troubled Upper West Side neighborhoods. As Bridgespan (which worked closely with this organization) tells the story, the Rheedlen Center grew steadily during the 1980s, and then dramatically in the 1990s, offering a broader range of services that included support for the homeless, and the elderly. All of these were worthy, and Rheedlen’s reputation and competence attracted donations – up to $10 million by 1999 – but they required a far more diverse operation. In 2002, director Geoff Canada led an effort to divest some of these services, not by shutting them down but by transferring them to other qualified agencies like the Jackie Robinson Senior Center. The name change to “Harlem Children’s Zone” further signified that henceforth this agency would focus on its core mission: helping children and teenagers who would otherwise be at risk. They still offer a wide range of services (including parent support and co-direction of a charter school), but all of them focus on children and teenagers, drawing upon the capabilities that Canada (a much-recognized educator and youth advocate) and the staff are known for.

We’ve seen similar kinds of focus in other successful not-for-profits. The Mayo Foundation, tied closely to the Mayo Clinic, funds and oversees medical health care research with the capabilities needed to make that research most effective. The environmental group the World Wildlife Fund, generally recognized for its global scale and effectiveness, decided in the 1990s to conserve particular types of high-risk ecosystems around the world, and has maintained that coherence in its research and activity ever since.

To become more coherent in your own association or not-for-profit, start by looking at your own differentiating capabilities. What is your organization great at doing? How do your strengths and practices fit together? How do they link, in turn, to your stated strategic purpose as an organization? Do you spend the majority of your investment in your area of strategic purpose, and are all your products and services lined up accordingly?

By becoming more coherent, you could make your own organization far more effective even at fundraising. After all, the organization that focuses its energies and investments most coherently will ultimately build the capabilities it needs to be the best at accomplishing its mission. Ultimately, it will be a much more attractive donation target, because the world will see that its work and activities relate directly to the solutions they want to see.

 

SOURCE:   Paul Leinwand and Cesare Mainardi, Harvard Business Review, Oct 11th 2011