The second finding that Sargeant and Shang suggested in
their whitepaper, Growing Philanthropy in
the United States, is the necessity to develop public trust and confidence
in the fundraising sector. They state, “Organizations are the conduit by which
donors fulfill their own aspirations. Donors don’t give to organizations but
through organizations.” The disconnect that Sargeant and Shang see is that, as
charities become more focused on removing financial risk, enhancing
effectiveness, and employing more proven fundraising techniques, the process
becomes more mechanistic. The donor can be viewed as, and feels like, a “piggy
bank” rather than a partner in the cause. I believe some of this is the result
of a rather corrosive, if initially well-meaning, emphasis by industry watchdog
organizations on the percent of funds spent on program versus fundraising
costs. I believe this puts undue pressure on nonprofits to squeeze as much
revenue out of each transaction as possible.
Sargeant and Shang propose that nonprofits must see
supporters as more than simply donors, but they should be regarded as
“individuals with their own philanthropic aspirations and goals.” They suggest
that donors may not even be aware of what their goals truly are and that it is
the responsibility of the organization to “find new and creative ways through
which individuals can discover and express their own philanthropic identity and
thus experience the joy of giving.” They admit that this sort of identification
on the charity’s part would require a greater degree of donor research and
necessitate additional staff time, expertise and cost. All at a time when the
aforementioned “program vs. fundraising” metric is being put forth as a litmus
for what is a “good charity” worthy of donor investment.
Additional recommendations include:
Empower regulators to
enforce 100 percent filing of Forms 990 and increase their utility. Include more narrative that would focus
on the outcomes achieved by the nonprofit thus shifting the emphasis from
efficiency to effectiveness.
Blow the whistle on
organizations claiming to have zero cost of fundraising. Recent research
found that 59 percent of organizations did not claim any fundraising expenses.
Come on! How can you believe anything a charity reports with this sort of
blatant info manipulation?
Fund the development
of a website in the United States to educate the public, boards, and other
stakeholders. “There is gross misunderstanding in the public as to how
nonprofits work. Many Americans still believe the sector is populated largely
by volunteers, that managers are paid poorly (if at all), and that income can
be generated at zero (or close to zero) cost.” It is critically important to communicate how nonprofits really work.
Encourage nonprofits
to develop complaint schemes.
Many organizations are hesitant to create complaint schemes for fear of
raising false expectations about their ability to resolve issues. Good
complaint handling boosts loyalty. In fact, there is some indication that
resolving a problem successfully creates greater loyalty than being problem
free.
Fund the development
of a website to facilitate peer-to-peer evaluations of nonprofits. Much
like the comments and ranking sections on commercial online sites such as
Amazon, providing a forum for donor commentary and evaluation may well inspire
more people to give.
Develop new and more
appropriate measures of performance. Watchdog groups such as Guidestar,
Charity Navigator and Charity Watch place far too much emphasis on charities
demonstrating what tends to be stifling efficiency standards rather than
organizational effectiveness. Nonprofits need to be proactive and help define
what is effective and better articulate the investment needed to achieve
mission outcomes.
Develop the self-regulation of fundraising. The key concerns
of the public appear to be:
- A perception of an “excessive” volume of communication
- The quality and tone of that communication
- The use of enclosures in mail
- The use of inappropriate or shocking imagery
- Data errors in the communication
- A sense of intrusion, created by the media employed for the
message
Sargeant and Shang claim no one has yet addressed these
issues properly. They recommend a greater focus on the development and promotion of
professional standards or the creation of a body that would accredit good
quality fundraising in a similar way that the Better Business Bureau accredits
good business practices.
Wow! We have a lot of work to do. And we're not through all of Sargeant and Shang's recommendations or themes.
Next post I'll review their third theme, Identifying New Audiences, Channels,
and Forms of Giving with Strong Potential for Growth.
