What can fundraisers do to address systemic poverty?

SingleStop USA was called "The Best Poverty-Fighting Bet" by Slate Magazine, which also said that they hosted "the Google IPO event of the nonprofit world" here.

Today, my CEO's blog -- Larry James' Urban Daily -- addresses an amazing fact that is rarely discussed in our community:

Over 90% of the children in the Dallas ISD live at or below poverty.

Reread that.

There are 160,000 public school students in Dallas. Fewer than 16,000 are not living in poverty.

What can we, as fundraisers, do to address this? By arguing for more funding for our little organization? By shunning collaboration in favor of competitive grant-seeking?

Or should we start to realize that our jobs should not exist?

Should we start to think globally about the fact that we are here to meet needs, but most of us just raise funds to feed those needs rather than kill them forever?

Here is a question for the day:

How much better would your clients be if you could almost guarantee the majority of them an additional $5,000 in income per year?

Think I am dreaming? Perhaps. But take a look at this organization, SingleStop USA:

The Google IPO event of the nonprofit world. - Slate Magazine

SingleStop developed a quick one-stop shop at 59 sites across New York. In 15 minutes, the organization's software tools calculate a family's eligibility for a host of benefits—public assistance ... SingleStop counselors then provide families with tailored legal and financial advice...

The average family in a SingleStop program recouped $1,800 in tax credits and $5,000 in benefits that they weren't previously receiving

For every $1 invested, the program gives clients $3 in benefits, $4 to $13 in legal counseling, $2 in financial counseling, and $11 in tax credits.

This looks like an amazing organization. My hope is that they begin thinking collaboratively about how to work with the rest of us to roll out their product across the country.

Until then, remember that we are NOT marketers: we are not in the business of selling people things. We are in the business of securing and effectively deploying resources to address the root causes of the most intractable problems facing our society.

We are here to close gaps in the system.

We cannot do this by begging for dollars.

We can only do this by fighting for change.

Good Capital / Social Capital Index

The latest eNewsletter from Good Capital reports:

Two months ago the Good Capitalist released the first edition of the Social Capital Index, a timely tracking of investments in the social capital market. Through the DealSpace feature, the Index tracks capital movements in social enterprise (health, education, and workforce development), fair trade, digital inclusion, and some clean tech and microfinance investments. This month the SoCap Index returns with a new feature: Deals in Play.

The DealSpace section of the Index lists investments already made, while Deals in Play presents investments waiting to happen. The companies and funds listed in Deals in Play are actively seeking capital to either get their enterprise off the ground or expand an already proven business model. Through an initial screen, Good Capital has identified these companies as promising social enterprises. Good Capital has not conducted due diligence on the entities listed and makes no claims about their viability, but it presents them here in an effort to make it easier for worthy enterprises and investors to find each other. As with the rest of the Social Capital Index that tracks funds and companies that have received money, Deals in Play will eventually be incorporated into a searchable online database.

Learn more here:
http://www.xigi.net/

or

http://www.goodcap.net/

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Donor Power Blog: Seven steps to a relevant fundraising offer

Along the lines of cultivating relationships with donors, the Donor Power Blog offers some great advice in their article, "Seven steps to a relevant fundraising offer."

Imagine using "asks" as a form of cultivation. What would this look like?

Some additional thoughts on the article's seven points:

• Problem/Opportunity: It is critical that the donor know that they have been specifically sought for this opportunity because of their particular interest in the topic (not simply their giving capacity).
  
• Solution: Use this as an opportunity to show the donor the particular impact of their gift -- and let them know that giving works both ways, and does not end when the funds are deposited. If their funds are buying something, show it to them after purchase. If it's used for program, send them a picture of the program in operation. Let them know that their gift made a difference.
  
• Cost: Ensure the donor that their funds will be invested as requested.
  
• Urgency: There is a big difference between urgency and emergency. Organizations that are good stewards of donor relationships/investments can face urgent needs; organizations that are poor planners and bad stewards often face emergencies (i.e. catastrophes like hurricanes not included, obviously). Be sure to convey both need as well as capacity.
  
• Context: Be sure that the donor has the ability to explain what they invested in to their friends. If the financing is so complicated, or the impact is so removed that the donor cannot share the good news with their contacts, then you are not using this as an opportunity to turn your fund-donors into fund-raisers.
  
• Donor Benefits: Be clear about the reciprocity of the giving relationship. Let your donors know that you care about them, not just their money.
  
• Emotion: Don't be afraid to share your own emotion with your donors. Let them know that they really matter to you.

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If you had Google's ear.... would you whisper or scream?

Over at Tactical Philanthropy, Sean Stannard-Stockton has taken a very difficult task onto his shoulders by asking the question:

What to Measure and Why in Philanthropy?

(Continued thanks to Phil Cubeta for pointing us to interesting things like this... does the man ever blink, let alone sleep?)

Sean's question comes as he works to prepare for a "meeting with someone from Google.org next week to talk about what kind of information I think they should make available about nonprofits in Google Finance and other ways that Google.com’s mission statement to “organizing the world’s information” can be directed at the Third Sector."

Here are my thoughts...

As we approach the elections, I am reminded of a similar question: What makes a good country?

Is it simply GDP growth? % of electorate who participate in elections? Average income? Average lifespan?

I think it can be very difficult to gauge a good non-profit organization. In fact, I think that we have a problem with the way that we gauge all organizations.

The over-reliance on financial measures for evaluating a for-profit company is a problem, as well. I am in the minority with this idea, but I do not believe that the purpose of a company is to make money. I believe that it is to provide a needed service or product to the community.

This is the case for non-profit and for-profit companies. Their distinction should be limited to tax designation.

Is it a profitable company a good company if it causes social ills? Is a company that provides social benefits a bad company if it operates at a deficit?

These are the larger questions that we must ask ourselves.

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Great News for Non-Profits, from Google... but some Caveats

For the past few days, I've wanted to blog about the most recent news from Google, which is now offering free checkout services to non-profits (i.e. 100% of donations come to your organization) as well as an expanded YouTube for non-profits, including a non-profit. But as I gathered my thoughts, I came across this blog that does a fine job at explaining the upsides and potential risks of using these two new "boons" for the charitable sector:

Katya's Non-Profit Marketing Blog: "Tips for Google Checkout, YouTube freebies"

I am very thankful that Google is leading this charge towards a sensible for-profit/non-profit collaboration that enhances both entities' work. I have wanted this for some time, as I blogged about it here on February 18, 2007:

The Raiser's Razor: Open Letter to Venture Philanthropists

Thank you, Katya, for your excellent work.

DISCUSSION: Is this development a good thing for non-profits? Are you going to use these tools to help your non-profit?

The Changing Philanthropy Scene

I recently discovered the "Inside Philanthropy" blog of the Philanthropy Journal. They seem to have some interesting articles that are not the typical "look at how great it is to be in philanthropy!" articles of other blogs. This one really grabbed me:

Inside Philanthropy: Nonprofits need investment capital

I was also impressed by their blog "Foundations need to get real." Hopefully, they will continue to challenge our sector to think about its funding models and business pracatices.

A similar discussion is going on at the Foundation Center's "Philanthropy News Daily." Here is a recent articke that they wrote about SeaChange Capital Partners, "an organization founded by two former Goldman Sachs partners, is applying Wall Street methods to help charities build their capacity, the New York Times reports." Here is the article:

PND - News - SeaChange Capital Partners Employ Wall Street Methods to Assist Charities


The article includes an interesting presentation on how College Summit and Teach for America both used these tactics to raise significant "growth funds." I wrote about this some last week in a blog, Raising Venture Capital for Philanthropy, about how some NPOs are using IPO-type strategies to raise funds.

One thing is certain: this is a very interesting time to be a fundraiser. Indeed, one of the core aspects of our basic reporting functions is under review:

Proposed Changes to the Form 990

In addition, there are many ongoing discussions about how we hold ourselves accountable to a high level of transparency and stewardship. Check out this blog:

NONPROFIT EYE: DON'T TELL THE DEVELOPMENT DEPARTMENT

In fact, some people are talking about changing the name of the non-profit sector:

Philanthropy.com: What's in a Name?

What else is in the future for non-profits/social enterprises/community-owned organizations/charities/___(insert your favorite alternative here)___?

Raising Venture Capital for Philanthropy

I previously wrote about Homeward Bound's IPO -- not an Initial Public Offering, as it is known in the corporate world, but an "Immediate Public Opportunity ... to end homelessness." Up to 200,000 "fundraising shares" have been made available at $32 each.

The first share was famously purchased by Warren Buffet.

They are calling this the "first-ever charity IPO" . . . but this actually builds on efforts previously launched at other organizations, such as College Summit. For example, see this April 2006 story in Fast Company about a "private placement" that raised $15 million from 10 investors to support the organization's growth:

Next: A Nonprofit IPO?

Locally, you can read about the efforts of George Ellis in a recent Philanthropy World Magazine. Ellis helped "introduce venture philanthropy to Dallas." He has been critical in the growth and expansion of the Entrepreneurs Foundation of North Texas, led by one of the strongest Executive Directors in our community (Pam Gerber). Ellis and Gerber are working to help companies "do well by doing good," and their perspective on philanthropy builds directly on the work of the venure capital markets.

In fact, you can hear an interview with Pam Gerber here:

Philanthropy World on MN1 [feeds.mn1.com]

At CDM, we've been discussing how to apply these principles to our work. We've made a great deal of progress over the past year, thanks in great part to the work of Karen Waller, Teresa Hiser and our friends at the Dini Partners (who have been advising us on the development of our ongoing capital campaign).

These concepts are not new for such campaigns. However, we are now thinking beyond the simple construction of the building, and to the significantly expanded operations that we will inherit once the buildings are complete. We find ourselves asking:

• How can we possibly ramp up our revenues by 50% over the coming years simply to handle these expansions? (not including the other organic growth that will occur in our other programs)
  
• We do not currently have an endowment -- is there a role for such a funding vehicle within our organization? How could we build it, while the demand for funds is so tight and the organization continues to grow at 25%+ per year?
  
• Instead of an endowment, is there a way to amass a large amount of "working capital" that we can use to fund our existing operations while refocusing our fundraising energies on the capital campaign?
  
• How much will our social enterprise program be able to contribute through its resale operations and car auction program? Will these efforts even be generating a positive cash flow by the time these expansions arrive?
  
• What do our donors -- particularly donors to our capital campaign -- expect of us in terms of expanding our annual fundraising? Are their own commitments going to grow along with their expectations, or are they simply wanting us to find new sources of support?
  
• How can we move beyond the day-to-day, keep-the-lights-on mentality towards a longer-term, strategic perspective on fundraising?
  
• What would a donor need in order to consider a sacrificial, major gift to be used in an unrestricted way to expand our work?
  
• Is there a way to build a case for significant, multi-year commitments from donors?

We are not sure if this is venture philanthropy or simply effective fundraising. Whatever we call it, we understand that our current practices must change and we must adapt to the changing needs of our high-impact investors.