Not too long ago, I had dinner with a professional fundraiser. Neil has been in the business for decades. Earlier in his career, he worked with large organizations, but after about a decade he decided to become a consultant. Neil became a fundraising consultant and strategist and worked with organizations large and small with digital fundraising. And, for the sake of confidentiality, I changed his name, but I’m able to bring you some insight from the 40,000-foot view of things.
What do you think of the current state of the philanthropic environment?
I think there are a lot of changes happening. There are always changes, but like everything else things are evolving at a quick pace. I think there’s a lot more opportunity for nonprofits. And, due to technology, giving has become a lot more democratic. In the old days, you might have had a millionaire making a difference with a big gift. In today’s world you can have a twenty-something-year-old in his apartment tweeting away to his hundreds of thousands of followers and ask them to support whatever cause.
Do you think most nonprofits fully understand the changes?
I’m not sure. I think the larger ones with all of the financial resources get it. Most of the time, they’re dealing with sophisticated donors who are on the leading edge of philanthropic change. These are the so-called “philanthro-capitalists”. These are the donors who have millions to give and what they want in return is to treat nonprofits as a business in the sense of metrics, results and philanthropic return on investment.
You then have the other end of the spectrum and those are the vast majority of nonprofits. They’re the small nonprofits that operate with 1 to 10 people on staff. They probably have budgets of less than $1 million. I think they’re struggling a lot these days.
Why do you think the smaller nonprofits are struggling?
Well, I think there’s a lot of change. And change is great, but it takes money. High-level major donors are looking for metrics, as I mentioned before. And this, inevitably, trickles down to donors on the lower end of the giving scale. Now you have a lot more donors saying they want more transparency, results and quantitative results.
All of that takes money if you want to do it right. You need to have the capacity to have the right type of statisticians and program people who understand how to extract that sort of information. In addition, today’s world does require technology. Although you do have quite a number of organizations that still operate without technology, in other words, they focus on events or grants, that’s going to become difficult. So, you do need an investment in technology.
And I think you also need an investment in the right people to work with you. In other words, nonprofits need more people with a growing set of expertise and skills.
Finally, you also have a growing reality that nonprofits are not the only way to make a difference. You have social enterprises. You have businesses that are also effectively making a philanthropic difference as part of their overall business objectives. And, you have a mix of social good with consumer “feel good.” So, you have people buying shoes or coffee to contribute to charity, which many consumers feel is a “win/win.” In other words, this could lead to more fragmentation with regard to giving.
Why do you think nonprofits are going to have to become engaged more with technology?
There’s a continuum to giving. The older generations give the most because they have the most disposable income. But it’s a mistake not to engage the younger generations. Since technology has democratized giving, you have nonprofit organizations that were making, say, $100,000, but with a concerted investment in digital fundraising, they’ve been able to triple or even quadruple their income.
The reality is that all generations are now responding to digital fundraising, which includes email and increasingly calls to action via social media. We’ve entered the age of technology and nonprofits that want to stay current have to figure out how to stay with the times.
Come back next week and I’ll share the rest of my conversation with Neil. In that part, you’ll hear more of his thoughts in relation to leadership and management within the nonprofit sector.
Author of “Not Your Father’s Charity: How to Dominate Your Fundraising to Create Your Success” (Free Digital Download)
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