Social pressure seen as curb on giving

Altruism and social pressure both affect door-to-door charitable giving, with social pressure playing a greater role and reducing giving, a new article says.

Written by economists at the University of California at Berkeley and the University of Chicago, the article is based on a study that designed a door-to-door fundraiser among 7,668 households near Chicago.

The fundraising drive was for a well-respected local children’s hospital and an out-of-state charity unfamiliar to most people being solicited.

A flyer on the doorknobs of some of the households informed them about the exact time of a solicitation.

Households that received the flyer opened their doors at a lower frequency, indicating they were, on average, trying to avoid solicitors as a result of social pressure, says the article, which was published in The Quarterly Review of Economics.

The flyer reduced the share of households opening the door by 9 percent to 25 percent.

And if it allowed checking a “do-not-disturb” box, the flyer reduced giving by 28 percent to 42 percent, a decrease that was concentrated among donation smaller than $10, while donations above $ 10 grew slightly.

The experiment showed no effect on donations by mail or the Internet, with only one household among the entire 7,668 giving through those other means.

The findings suggest that “social pressure is an important determinant of door-to-door giving,” the article says.

“The lower frequency of households opening the door indicates that households are, on average, trying to avoid solicitors, consistent with social pressure,” the article says.

“The decrease in giving after a flyer with opt-out box supports the role of social pressure,” it says. “When the cost of avoiding the solicitor is lowered (a simple check on a box suffices), giving due to social pressure decreases.”

That interpretation is consistent with the reduction occurring almost exclusively among small donations, which “are more likely due to social pressure than large donations,” the article says.

That social-pressure interpretation also is consistent with the lack of donations using mail or the Internet, it says.

The authors estimate that the “social-pressure cost” of saying “no” to a solicitor is $3.80 for an in-state charity and $1.40 for an out-of-state charity.

And their calculations suggest that their door-to-door fundraising campaigns on average “lower the utility of the potential donors.”

Charles Collier’s therapeutic fundraising

By Todd Cohen

The ancient Greek philosopher Socrates famously likened his job to that of a midwife.

Just as a midwife works to help women bear children, Socrates saw his role as helping people give birth to their own answers to life’s questions.

For over 35 years, Charles Collier served as a philanthropic midwife, helping donors create gifts that would make an impact on causes they cared about, while at the same time protecting the financial security of their families.

Collier, who was diagnosed two years ago with Alzheimer’s disease, retired in December as senior philanthropic adviser at Harvard University, where he worked for 25 years and advised the school’s wealthiest donors.

His illness, now in the early-onset stage, may have slowed his speech a bit but not his thinking.

Reflecting on his career, Collier sees two key abiding strategies for generating major gifts and planned gifts, regardless of the size of the charitable organization or the gift.

The first is to understand donors and their connection to the organization, and the second is to understand the problems and concerns facing donors’ families.

Fundraising for the Ivies

Collier spent most of his career raising money for higher education, including four of the Ivy League’s eight schools.

After majoring in religion at Dartmouth and receiving a master’s degree in divinity from Harvard, Collier initially worked as a teacher and coach at Proctor Academy in New Hampshire before embarking on his fundraising career.

His first fundraising job was at Dartmouth, where he worked for a year for the annual fund before serving for three years as a major-gift officer at Phillips Academy in Andover, Mass., his alma mater.

He then spent two years at Brown as a planned-giving officer, and five years at Princeton, where he was head of planned giving, before joining Harvard in 1986 as director of planned giving.

Five years later, Harvard named Collier to the new post of senior philanthropic adviser.

Gratitude as motivation

The length of time it takes to engage a donor and secure a gift typically is shorter for a university, college or independent school than for a nonprofit “because people either went to the schools or their children have,” Collier says. “And this has been important to their life story, and so gratitude is a huge motivation.”

So a major-gift officer can “go straight to talking about what the organization did for you or your family,” he says.

That is an approach that a fundraiser at any nonprofit can use, he says.

“Find out their life story, and what was meaningful to them,” he says, “and build on the things that were really important to them.”

Collier says major gifts and planned gifts, regardless of how a nonprofit measures them, take longer to develop, and require more work with a donor.

“That means you want to have a relationship which in my view should be deeper than money,” he says.

Family wealth, anxiety

In Wealth in Families, a book he wrote that Harvard published in 2001, with over 114,000 copies distributed, Collier talks about a family’s human and intellectual “capital.”

Taking that perspective is “not just a way to be with donors,” he says, but it also is a way “to help them make important decisions.”

A big question and concern for many wealthy people is how much money to give to their children or spouse, says Collier.

A son or daughter still may be in college or facing personal problems, for example, and his or her financial future may not be clear.

A parent also may want to make sure not to give a child too much money, or too little.

For many donors, Collier says, concern about finding the adequate level of support for children or a spouse can be the major obstacle to making a major gift, or making it significantly larger.

“Family comes first,” he says.

In the face of those concerns, he says, many fundraising professionals simply may push the donor to make a gift immediately.

But his advice is to think about a major gift as a long-term process.

That requires having a “difficult” conversation, but that kind of conversation “builds a bond with the donor,” he says. “If you ask good questions, they will figure it out for themselves.”

Collier credits his study of family-systems theory as helping to engage in those tougher conversations with donors.

Once described as a “financial therapist,” Collier says he is not a therapist.

“But I ask therapeutic questions,” he says.

“A lot of money in a family is an object of anxiety,” he says. “So you have to address that anxiety and think about it.”

Fundraising trends

Collier has seen several trends in major-gift and planned-gift fundraising, including an increasingly more complex aspect to the technical side of creating a gift, the importance of collaboration on the part of the fundraising professional, and a desire on the part of the donor to want the gift to make a big impact.

Those trends reflect what is happening at nonprofits of all sizes, regardless of what they consider a major gift, he says.

Donors want to know who will be responsible for developing and carrying out a project they are funding, for example, as well as the reason and aspirations for the project, the logic and evidence behind it, what its impact will be and how that impact will be measured.

That effort requires a team approach, including not just fundraising professionals, but also program staff, a nonprofit’s legal advisers, and the donor’s professional advisers, including lawyers, accountants and financial planners.

“When you’re doing bigger gifts, a lot of people are involved,” Collier says. “It’s a team.”

Making a difference

He says his career gave him the opportunity to “work with colleagues and donors who are wonderful people” in trying to help make a difference.

“It’s really meaningful that you can make the world a better place,” he says.

And his focus on planned giving gave him a chance to engage in “a little bit deeper conversation” with donors about their personal and philanthropic aspirations, and their families, he says.

Collier now is helping to raise money for a gift to Andover from his class, which celebrates its 45th reunion in June.

He also is volunteering for the Cure Alzheimer’s Fund.

“What I’m doing is probably not much help for them,” he says, “but just being with them has been really helpful to me.”

Smaller funders give bigger share of assets

Small to mid-size private foundations give more than twice the amount they are required to distribute, and the smallest foundations give away significantly more, new research shows.

While private foundations are required to pay out 5 percent of their assets each year, foundations with endowments of less than $50 million generally paid out more than 10 percent in 2011, according to preliminary findings from Foundation Source.

And foundations with less than $10 million in assets increased their giving by 20.6 percent, while foundations with assets ranging from $10 million to $50 million reduced their giving by 7.8 percent, according to the data, which are based on actual grantmaking among 719 private foundations with assets under $50 million.

“Small to mid-size private foundations are the silent majority in the philanthropic sector,” H. King McGlaughon, CEO of Foundation Source, says in a statement. “These donors are comfortable granting larger percentages of the corpus because many are still financially productive and are pumpting new assets into foundations each year.”

Private foundations with less than $50 million in assets represent 98 percent of the roughly 80,000 private foundations in the U.S., and assets of the vast majority range from $250,000 to $5 million.

Yet most reporting on private foundations focuses on the largest 1.5 percent to 2 percent of all foundations, Foundation Source says.

The data show that foundations gave 40.6 percent more in the area of arts and culture than in 2010, while funding declined 3.1 percent for education and 52.4 percent for science and technology.

Foundation Source expects this summer to publish its complete Private Foundation Index 2011, including information on investment management and grantmaking activity of small to mid-size private foundations.

Footpath Pictures makes videos for causes

By Todd Cohen

RALEIGH, N.C. — New Voices School, a Raleigh nonprofit that works to help children with significant communications and mobility problems reach their academic potential in mainstream classrooms in local public schools, is the focus of a one-hour documentary that has been screened at five film festivals from Wilmington, N.C., to Seattle.

The video, “Certain Proof: A Question of Worth,” has been a labor of love for Raleigh filmmakers Ray and Susan Ellis, who wrote, directed and produced it.

The experience also marks a turn in their career, which has evolved from commercial video work to promoting nonprofits to advocating for causes.

The couple, who are married, both graduated from the University of North Carolina at Chapel Hill and worked in the video-production department at SAS Institute in Cary, where they met in 1992.

While they loved their jobs at SAS, which was co-founded by her father, Jim Goodnight, corporate work “doesn’t necessarily feed your soul or the whole of you,” Susan Ellis says.

The 9/11 terrorist attacks “changed our perspective on what was important,” she says. “We thought we could be doing more and make a difference in some way.”

Seven months later, the Ellises took a “volunteer vacation” through CARE International, volunteering for three months at a community center in a small village in Peru, working with kids and elderly people.

Because they did not speak Spanish, the couple suggested to CARE they might produce a video about the organization’s work as a way to encourage volunteers from the U.S. and abroad.

CARE used the 15-minute video the Ellises produced in ways they hadn’t expected.

The organization used the video as a volunteer-recruitment tool on its website, for example, and Delta Air Lines used it as part of its in-flight entertainment.

“It occurred to us that nonprofits don’t always have the resources that are needed to produce really helpful tools,” Susan Ellis says.

So in October 2002, the Ellises founded Footpath Pictures, initially planning to produce short videos for nonprofits to promote volunteerism, fundraising, awareness and education.

Charging below-market rates by keeping overhead low and doing most of the producing, directing, camera work and editing themselves, Ray Ellis says, Footpath now has produced over two-dozen videos of roughly 10 minutes each for groups such as The Nature Conservancy in Arlington, Va., Meredith College, North Carolina Children’s Hospital, Salvation Army of Wake County and WUNC North Carolina Public Radio.

In 2006, while working on a video for a capital campaign at Meredith, the Ellises met Elizabeth Benefield, a consultant to the campaign who also was advising New Voices.

Footpath made two short videos for New Voices and also agreed to produce a long-form documentary on the issue that the nonprofit initially agreed to pay for.

But after the economic crash in the fall of 2008, the Ellises realized they would have to fund the project themselves.

Now, while looking for ways to get national broadcast and greater distribution of Certain Proof, they are making another documentary about the breast-cancer gene, and looking for a new cause-related project.

“We started with the mission of trying to reach targeted audiences based on nonprofits we were working with,” Susan Ellis says.

But eventually, Footpath “wanted to get beyond just the fundraising, and take that social message to a broader audience,” she says. “What we’re doing is facilitating advocacy.”

Agency serves as voice for children

By Todd Cohen

CHARLOTTE, N.C. — In 2010, Mecklenburg County was home to over 233,000 children, 21.2 percent of them living in poverty, up from 13.9 percent just two years earlier.

Fueling the surge in child poverty, experts say, was the economic plunge that began in fall 2008 with the collapse of the capital markets.

Still, total investment in programming for children in the county in 2010 totaled roughly $1.6 billion, or about $6,700 per child, according to a new study by the Council for Children’s Rights.

That investment is less than some states spend on education alone per pupil, says Brett Loftis, executive director of the Council for Children’s Rights.

Better understanding and addressing the needs of children in the county through services, research and advocacy is the job of the council.

Created through the 2006 merger of the Council for Children, an advocacy group formed in 1979, and the Children’s Law Center, a nonprofit law firm formed in 1984, the agency serves as an advocate for individual children and as a think-tank that studies and promotes systems change.

Operating with an annual budget of $2.6 million and 31 employees, the council serves roughly 2,500 individual children a year.

It is the only specialized public defender for juveniles in Mecklenburg County, for example, representing about 1,500 kids a year through a contract with the state to provide all legal representation for children in juvenile court.

It also represents about 150 kids a year caught in high-conflict custody fights, plus another 300 kids on issues involving special education, school discipline, mental health, disability services and immigration services.

Serving as the council’s think-tank is the Larry King Center for Building Children’s Futures, a program that was created in 2008 and grew out of the United Agenda for Children, an initiative spearheaded by Foundation for the Carolinas, The Duke Endowment, Duke Energy and the John S. and James L. Knight Foundation.

A big lesson from that initiative, which aimed “to try to get the community engaged in setting priorities for children,” was that the community needed an “infrastructure” to push for change, Loftis says.

“There need to be people whose job it is to compile research, to do that data analysis, to work with the community to build plans for implementation, and then to drive the implementation of those plans,” he says.

A group of funders agreed to fund the new center for the first three years, and then help it raise funds to support its operations.

The Duke Endowment now has agreed to provide $300,000 a year for two more years, and Foundation for the Carolinas has agreed to provide $75,000 a year.

In October, the King Center released the first-ever Charlotte-Mecklenburg Children’s Budget that shows total public investment in children in the county, along with funding from United Way of Central Carolinas.

Through research, community planning and policy work, all available at its website, the center wants to help the community understand the problems children face and make decisions about how to those problems.

“Too often, we continue the services that we give to children and families without stepping back and looking to see if they are designed to give us the outcomes we are looking for,” Loftis says.

While parenting has the “single greatest impact on a child’s life,” for example, “we do very little as a community system to support parents to be good parents,” Loftis says.

Among 7,000 births every year to low-income mothers receiving federal Medicaid assistance, for example, only 250 mothers receive home visits by nurses and social workers.

So the center is working with local providers of home visits “to increase their capacity and their connection with each other to build a continuum” of parenting services and target those services to neighborhoods where they are most needed, he says.

“We exist,” Loftis says, “because the community believes that children need a voice.”

Blackbaud posts revenue growth

Blackbaud, a provider of software and services for nonprofits, posted higher revenue for the final three months of 2011 and for the full year, and reported lower net income for the quarter and higher net income for the year, compared to the same periods last year.

Net income for the company, based in Charleston, S.C., fell to $6.4 million for the quarter, or 14 cents a share, from $7.2 million, or 17 cents a share, a year earlier, while revenue grew to $95 million from $85.8 million.

For the year, net income grew to $33.2 million, or 75 cents a share, from $29.2 million, or 75 cents a share, a year earlier, while revenue grew to $370.9 million from $326.6 million.

Tony Boor, Blackbaud’s chief financial officer, says in a statement the company has “identified several areas for improvement” and planned to make “some targeted investments in our back-office operations.”

He also says the company is planning for “double-digit to low-teens revenue growth for 2012.”

The company also says it recently closed on $325 million in credit for its pending deal to acquire Austin, Tex.-based Convio in a deal it estimates is worth $275 million.

Blackbaud recently extended the expiration of its cash tender officer for Convio to give the U.S. Department of Justice more time to review information about the deal.

The company’s board of directors also approved a first-quarter 2012 dividend of 12 cents a share payable on March 15 to stockholders of record on March 5.

Blackbaud also said it had identified “certain prior period errors” in its financial reporting that resulted in a decrease in net income of $600,000, $900,000, $1.6 million and $2.1 million for the years ended Dec. 31, 2010, 2009, 2008, 2007 and 2006, respectively, and an increase in net income of $600,000 for the nine months ended Sept. 30, 2011.

Blackbaud says it works with over 26,000 customers in over 60 countries that raise over $100 billion a year using its technology.

 

United Way expands funding eligibility

By Todd Cohen

MORRISVILLE, N.C. – Starting in 2013, any nonprofit in the four-county Triangle region that addresses priority needs targeted by United Way of the Greater Triangle will have a chance to seek United Way funding.

The change is expected to increase competition for a pool of funds that this year totals $5.23 million and until now has been limited to United Way’s 78 partner agencies.

Driving the change is growing demand from donors to see the impact of their contributions, says Angie Welsh, senior vice president for resource investment at United Way.

United Way wants to “be responsive to that new generation of philanthropists who care that the money and the treasure they’ve shared has really helped change somebody’s  life,” she says.

While United Way is “proud and supportive” of its partner agencies and their 150 programs that it funds, Welsh says, it also recognizes that addressing the region’s most urgent needs in health and human services will require “a more open view of all the nonprofits” providing those services.

The Triangle is home to over 5,000 nonprofits, she says, and many of them provide health and human services.

United Way also wants other nonprofits in Wake, Durham, Orange and Johnston counties to understand that the process for applying for funding will be rigorous.

That funding already is under pressure: Funds available for partner agencies this year are down 10.5 percent from last year as a result of last fall’s annual fundraising campaign.

For the rest of 2012, United Way will evaluate the past performance of agencies that it currently funds, as well as the priority needs their programs address, and how well their proposed services and activities show the impact they will have.

Information sessions

Nonprofits that are not United Way partners and want to apply for funds will be required to attend one of six two-hour information sessions it will hold in March, April and May at its offices in Morrisville.

At the sessions, United Way officials will talk about what United Way requires for agencies to be its partners and to account for their programs that receive its funding.

Agencies with annual revenues of $300,000 or more, for example, must have an annual audit, while those with revenues under $300,000 must have a financial review.

And agencies must provide a “logic model” for their programs that spell out what is needed to support activities and services to achieve the “outcome” the agency is promising in order to address goals from three “action plans” United Way has developed that focus on priority needs in the region.

Those priorities reflect urgent problems in the areas of income, education and health.

Agencies also must show how they will measure the impact of their programs, identify the “indicators” they will use and the systems they have in place to track those indicators, and provide evidence to show why their programs will work, as well as a “theory of change that makes sense,” Welsh says.

“And they have to be accountable for the results they promised they would deliver with the money they’re asking for,” she says.

United Way makes two-year funding commitments, with the second year of funding contingent on agencies delivering the outcomes they promised.

An after-school tutoring program seeking funding, for example, might promise to improve academic performance by increasing the number of students testing at or above grade level on their end-of-year tests in a certain subject area.

At the information sessions, Welsh says, agencies will be “fully informed about how realistic it is” for them to apply for United Way funding.

Letters of intent

Following those sessions, agencies will be able to submit “letters of intent” to seek funding.

After a review of those letters by United Way volunteers, agencies “that seem to fit our vision” will be invited to submit a full program proposal, which is a fairly extensive process,” Welsh says.

Organizations seeking United Way funds will need to define “how they have in the past achieved program outcomes,” she says. “We have specific program outcomes they must address, as well as indicators they must track for those programs.”

She says United Way is not looking for agencies that want to create new programs.

“We want demonstrated success in a program that this organization has been delivering,” she says. “We’re trying to invest in the strongest results possible in the areas of financial stability, opportunities for young children and youth and adults to have successful lives, and in health programs.”

And if in reviewing funding requests it sees agencies that might be offering programs that overlap or duplicate efforts, Welsh says, United Way will look for opportunities to encourage those groups to work together.

“We do see ourselves as growing in our role of collaborator, convener, as someone who has a unique ability to see the big picture as a region,” she says.

As United Way works to develop closer relationships with individual donors in a generation that increasingly cares about the impact of its giving, Welsh says, United Way also will be using social media and other digital technology to keep donors informed about community needs and the impact of the programs their dollars support.

“We understand that loop needs to be closed,” Welsh says, “of helping individual donors understand the power of their contributions.”