Fundraising, Part 7: International affairs group aims to show impact

By Todd Cohen

[Note: This article is from a report written for Blackbaud, which asked me to look at fundraising strategies that nonprofits have found to be effective.]

In the face of natural disasters like Hurricane Sandy, donors increasingly expect international relief charities to show “your work is actually accomplishing something,” says Bob Ottenhoff, president and CEO of the Center for Disaster Philanthropy in Washington, D.C.

Helping to fuel that expectation of seeing the impact of a charity is the fact that the tough economy has made money tighter.

“We’re still down about $25 billion from where we were at the peak in philanthropic giving in 2007,” says Ottenhoff, former president and CEO of GuideStar, which publishes online financial and tax data on nonprofits. “There’s less money, also less government money going into nonprofit activities.  At the same time, there’s increasing demand for services.”

International nonprofits, along with all nonprofits, also have seen an increasing number of  donors making gifts that are restricted to particular programs or to addressing particular needs, he says.

Donors’ growing expectation to see the impact of their giving and to restrict the use of their gifts has prompted nonprofits to try to do a better job measuring the results of their work and making those metrics available.

“Nonprofits first of all need to demonstrate that they’re aware of this issue, and demonstrate they’re a data-driven organization,” Ottenhoff says, a goal that also helps the organization improve the way it operates and the programs it delivers.

If a nonprofit maintains a “dashboard” of major metrics about its operations and impact, for example, it should make that dashboard available to its board and make elements of it available to the public, he says.

“These are signs of a data-driven organization committed to measuring impact,” he says.

A growing number of international organizations also are making greater use of technology to “engage program or service recipients in the field, where they can collect data, share that data with others, and then respond with changes in their programs based on the analysis of that data,” Ottenhoff says.

“Knowledge workers” armed with a cellphone might gather information from farmers about the seeds they are using and diseases and other challenges to crop growth they are facing, for example. That data would be collected, analyzed, organized and then returned to the farmers to help them answer questions, change their behavior or try new techniques.

“Technology is now helping nonprofit organizations to improve their performance,” Ottenhoff says. “It’s a way of answering donors’ questions: Are you a learning organization? Are you improving? Are you measuring impact? Are you better this year than last year?”

To address donors’ growing interest in making restricted gifts, he says, nonprofits need to move beyond a one-size-fits-all case statement.

“What you need is a case statement and a business or philanthropic strategy for each one of your programs, and each one of those programs is going to have its own set of donors,” he says.

“What fundraisers have to understand,” he says, “is that different donors come to the organization with different interests and priorities, and you have to organize your fundraising strategies around those different types of donors.”

Equally important, he says, is branding.

With over one million charities in the U.S., nonprofits need to recognize that “your organization is not the center of the universe,” he says. “There are too many organizations doing too many big things. To think everyone knows what you do and why you do it is totally unrealistic.”

Branding, he says, “is your promise to your potential donors. It says, ‘This is what we stand for, this is how we’re going to to do work.'”

A nonprofit’s brand, Ottenhoff says, “is what gives a donor understanding of why you’re unique and distinctive and worthy of support.”

Next: Faith-based groups count on direct mail

The series:

Fundraising, Part 1: Basics key as economy starts to recover

Fundraising, Part 2: Health care groups invest in development capacity

Fundraising, Part 3: Human services groups focus on direct response marketing

Fundraising, Part 4: Museums aim to diversify donor base

Fundraising, Part 5: Major gifts a focus of environmental group

Fundraising, Part 6: Direct marketing a key for public society benefit group

Fundraising, Part 7: International affairs group aims to show

Fundraising, Part 8: Faith-based groups count on direct mail

Fundraising, Part 9: Independent school partners with parent volunteers

Giving remains sluggish, survey says

Slammed by an erosion in giving by individuals, over a third of nonprofits are raising less money this year than last year, a new survey says.

Thirty-seven percent of 500 public charities and public foundations surveyed online in October by GuideStar said contributions fell in the first nine months of 2012, compared to the same period last year, while 34 percent said they grew and 28 percent said they were flat.

Seventy-seven percent of respondents said gifts from individuals were smaller, and 75 percent said fewer individuals gave.

Nonprofits also were hit with rising demand for services, with 38 percent reporting demand grew modestly, and 26 percent reporting it grew greatly.

The pattern for 2012 was similar to 2011, GuildStar said, “suggesting a nonprofit sector where things are not getting much better or much worse, at least from a financial perspective.”

Twenty-nine percent of respondents expect year-end giving will decline compared to last year, while 37 percent expect it to stay flat, and 30 percent expect it to grow.

Forty-two percent of nonprofits surveyed plan to increase their budgets in 2012, while 32 percent will keep them flat, and 24 percent will reduce them.

Thirty-eight percent of nonprofits said freezing salaries is the way to cut budgets, the method cited most often.

Todd Cohen