Friday, April 29, 2011

We've got a long way to go

I started reading Jeff Brook's blog this morning, Donor Retention tells half the story and admit to getting a little excited...

70% retention rates for one organization, 90% second gift rates. I was scratching my eyes wondering if my morning caffeine fix hadn't yet hit me.

It continued to get better as I discovered both net income and organizational growth.

And then it hit.

Comments about stopping acquisition for five years, and how its unethical to tell a donor their (small) gift will make a difference when in fact its going to postage, printer bills etc..

This is not a dig at this organization who made the comments, it's a sector/society wide concern.

I actually wondered if time had stopped still. It was over two years ago I blogged about this very matter in Imagine a World whereby...

Citing Dan Pallotta's game changing book Uncharitable, I provided three practical recommendations for charities to control what they could control and flip the following dreaded question on it's head.

"How much of my dollar goes to the cause"?

The first suggestion was this:

1 Stop apologizing to donors for $ spent on overheads, administration, fundraising. These are genuine costs that are actually necessary and part of the work you do to fulfill your mission.

Enough said.

Finally, it reminded me of listening to Bob Geldof talk about his experiences and his response to the question "Don't you feel the scale of the problem is too big and you aren't making a real difference"?

His response: If I've helped one person, one child, then I've made a difference.

The same can be said for a donors gift, regardless off the size.

If you haven't done so already, please go and buy Uncharitable here at Amazon now. Send a copy to each board member, your boss, all your colleagues.

Because we really do have a long way to go to educate ourselves, as well as punters on the street.



arnie draiman said...

jonathan -

you wrote: "Stop apologizing to donors for $ spent on overheads, administration, fundraising. These are genuine costs that are actually necessary and part of the work you do to fulfill your mission."

well....yes and no. under 15% total expenses is certainly acceptable for total admin costs and many many non-profits do it for less. but, unfortunately, many do it for more. lots more.

and then, you see, your statement is no longer true. that type of percentage is NOT necessary and just robs the recipients of the charity shekels being given to THEM via the non-profit.....

arnie draiman

Jonathon Grapsas said...

Hi Arnie

Thanks for your comments. It's certainly an interesting and contentious topic.

I happen to believe firmly in charitable impact, being exactly about that, impact. Outcomes, not outputs.

Which means that org's should be measured on the real good they do, not simply on the allocation of their expenditure.

As Ive blogged about before, it's easy to think about it this way.

Charity A runs a homeless shelter. Spends just 5% on "admin" costs. Houses just 10 people a night, as the other 20 beds are rat infested and decrepit. They don't serve hot meals.

Charity B down the road spends 17% on "admin" costs. But they sleep 50 people a night in warm, comfortable beds and serve nutritious, hot soup each night.

Which one has a greater impact?

And what is the threshold for spend on admin costs? What's deemed universally acceptable?

Having had the fortune working in 4 countries over the past few years and seeing the transformational growth - and subsequent impact - of many org's, the reality is those invariably that invest the most in that growth end up seeing the fruits of their labor. Through increases in net income, and ultimately charitable impact. I.e. more people., dogs, trees etc helped.

In fact if you looked at the top 50 fundraising charities in every developed country they almost all share one thing in common. They've spent significant funds on fundraising/admin to get where they are. Without it their impact would have been far less. And that would be a shame.

Thanks again for stopping by and sharing your views. Great to get some healthy dialogue going.