Incredibly Helpful Financial Management Toolkit

Image-the-Wallace-FoundationTime for us to practice what we preach and deliver a little stewardship to an organization that is truly building capacity in the not-for-profit sector.  A huge thank you to The Wallace Foundation for their leadership in creating strong education in the United States – and most particularly for their newly unveiled financial management toolkit:  I admit that I haven’t personally discovered the Foundation’s motivation, values and philanthropic preferences but I think it’s not a wild guess to say that they value creating useful, practical tools for the non-profit sector.

They have done exactly that.

The financial management toolkit brings together resources in four key areas:

offering links to free-standing tools and resources from other websites (like another of our favorites: Blue Avocado) to help support best practice in a variety of areas where non-profit leaders – or Board Chairs, like me – may be looking for addition support.

Among my favorites:

  • A Non-Profit Dashboard and Signal Lights for Board:  this terrific resource from Blue Avocado has strongly influenced how my board reports and reflects on our progress in our strategic plan.  It’s mighty useful too in identifying the most important metrics to be reviewing monthly.  As Judy Vredenburgh, CEO of Girls Inc., reminds us: “We do what we measure.”
  • Also in the Monitoring section:  “Understanding Auditing Financial Statements” and “Understanding Indirect Costs”
  • From the Governance section, one of the many valuable tools in this section:  “Maintaining Operating Reserves: An Organizational Imperative for Non-Profit Sustainability“.  This one wins no awards for catchy title but given the Kellogg Foundation’s findings in 2009 about on the “Quiet Crisis” that found that the vast majority of organization have fewer than three months cash reserve, this white paper is imperative.
  • The Operations section is so chock-a-block with great resources, I couldn’t choose just one:  accounting basics, choosing accounting software, internal controls, fiscal management activities calendar, and a program budget template – these are just a few from this section.
  • From the Planning section:  who would not welcome a “Five Step Approach to Budget Development” from Fiscal Management Associates?

My favorite of all?  An interactive tool called “Go or No Go” –  a tool that walks you through the steps to decide whether a contract or funding opportunity is a wise, strategic choice to pursue.  This one also comes from the good folks at Fiscal Management Associates.

Wallace Foundation:  you have done a great service with this fiscal management toolkit.  You identified exactly what’s on our minds and delivered.

Everyone:  go share this with YOUR board and use this!

Working in the New Normal: Annual Fund Strategies for Today

As you read this I have probably already sat down to meet with my very first boss, who is hiring me for the second time: first as her annual fund assistant, and this time as her consultant for her school’s annual fund.  As I prepared for our visit, I have been reflecting on how the annual fund that she and I built back in 199…whatever…  has changed from the practices we see our clients implementing today.

thenAndNowFrontHere is my running list of Annual Fund Strategies:  Then and Now (Add a big, booming voice as you say “Then and Now” in your head for added effect… Nice, right?)   What would you add to your list?  How has your annual fund approach changed in the last ten years?  Or the last five?  What happened before 2008 that is just not coming back?  Post comments here or leave your ideas on our Facebook page.  We’ll collect them all and post in a future blog entry.

Then…  Segmenting your mailing was enough.  I will admit to having a 32-segment mailing once, each with their own slightly parsed difference between one letter text and another.  Everyone got fundamentally the same message and everyone was just asked to “give, give, give… trust us and we’ll do the rest.”  Unrestricted dollars that could slop around to every corner of the budget were the only thing to do.

NOW:  There are few programs today who don’t see a higher level of engagement and more inspired giving when donors are given the ability to be activists.  CFOs (and I) still need unrestricted dollars: that will always be the heart of a strong annual fund, but making tangible the impact of giving to the annual is mandatory.   No more “margin of excellence”; annual fund dollars help provide things like the manipulatives underpinning the mathematics program in the after-school experience.  Gone is “bridge the gap” talk about other revenue sources and the annual fund; the annual fund helps ensure that mission staff have the iPads and tech training they need to collect and evaluate data on the efficacy of your program in the field.  These dollars all need to hit your budget directly, but need specifics around them that make it clear and concrete what they accomplish.

An extra idea, building on this one?  Look for three to five “big buckets” within your budget toward which your annual fund gifts can be designated (not restricted!  This makes your CFO happy!).  For schools these categories are often:  financial aid, faculty salaries, library and technology, spaces for learning, athletics, etc…  What would those big budget areas be for your organization?  Allowing your donors to vote with their dollars for the things that most resonate for them not only provides one more good reason to step up giving, but also gives you a clear road map for how to steward these donors.

…which leads to “Then and Now” #2…

Then… Stewardship was something you did for endowment donors, donors of Chairs, building naming, scholarships when they became fully funded and probably only did once:  put the plaque up, name the new Chair holder, have a dinner, and wash your hands of it.

NOW:  That pig isn’t going to fly for even one second.  Not only must stewardship be a year-on-year institutional value that is woven throughout your relationship building with your donors, it is a universal.  All annual fund donors deserve WORLD CLASS stewardship.  Getting used to talking about the annual fund in tangible, specific ways is the first step.  Understanding your donors’ motivation through their gift designation is a second step.  Getting people to help you take on this project – even with its enormous value add – is the third.

Try this:  rather than just asking volunteers to “please make 10 (or 20 or 30) calls” to past donors, thank-a-thon style, let your volunteers know that you have $75,000 (or $500,000 or $5M) worth of thank you calls to make and would they be willing to take $12,000 of that.  Then keep reporting back:  “Your thank you calls valued at $75,000 last year turned into repeat gifts of $83,000 this year.”  Who wouldn’t feel great and motivated to do more?

Finally, a NOW and NOW:

Maybe you saw these two incredible stories about focused giving contests – one at Columbia that raised $7M in one day (ONE DAY!  CloEve Demmer, who spearheaded this is a friend of ours and, no kidding, one smart lady!) and the other that may have helped inspire and guide Columbia’s efforts:  Giving Days.

Among the reason these two focused campaigns worked is that they borrowed the “vocabulary” of gaming to bring fun into the annual fund.  (C’mon.  I had to.  Put the FUN back in the annual fund? A classic knee slapper.  To development officers only.)

  • These initiatives had a near-term, reachable goal for which everyone was responsible.
  • They had a clear beginning, middle and end to their quest.  A 365 day campaign is the AF Director’s reality but soooooo long for a volunteer.
  • They had rules of engagement:  certain volunteers could use any of a variety of outreach tools, but had to do it themselves and accounted back to “home base” with their results.
  • They knew what winning was going to mean:  dollars, new donors, repeat donors.

We play games because we love taking on tasks that are exactly hard enough.  How can you use today’s tools – email, social media, video, podcasting, blogging, etc… to make your annual fund volunteers’ job more fun and more of a game?  And, how about using this to jump start a monthly giving program?  Europeans envy our culture of giving in many ways, but are befogged by why we don’t embrace monthly giving programs more fully.  Deploy your volunteers on a quest for new monthly donors!

Another Now:  these campaigns were terrific, engaging, generated great excitement and energy.  But what do we do the other 364 days a year?  Once upon a time, we mailed a lot of letters, made slightly fewer phone calls and almost never left the office.  Today a robust annual fund program must be anchored with personal visits to top donors in conjunction with the major gift staff (we have a great resource on boosting annual giving in a campaign here.), to leadership donors to explore their passion and focus for their giving, to new potential leadership donors, to lapsed donors and to volunteers.  If there were one more position everyone could add right now, I would vote for a solid individual giving officer who LOVES being on the road, closing $1,000, $10,000, $50,000 annual gifts three days out of five.

Are the fundamentals of annual giving the same?  Yes.  I agree that they are.  Are there so many more ways to be creative and innovative in reaching your community of supporters?  Absolutely.  The annual fund is more fun.

We Can Create Our Own Best Fundraising Leadership

Jerry Faces 11_10_2005_nonamesI admit it. As a fundraising professional, I am probably a mix of Pollyanna and Sherlock Holmes. My inner Pollyanna made me believe we could achieve even the most audacious of fundraising goals while my inner Sherlock Holmes propelled me into action for the desired results.  I think all in fundraising leadership need to blend these two characters to be successful.

Once again my Pollyanna and Sherlock personas emerge after reading the recent article in the Chronicle of Philanthropy, Half of Fundraisers in the Top Job Would Like to Quit and the report from which the article is based:  Under Developed: A National Study of Challenges Facing Nonprofit Fundraising.pollyanna

We’ve all heard it time and time again that fundraising is a revolving door: it’s hard to find good people and that fundraising goals and expectations are nearly impossible to achieve.   This is not news to many of us; but it should be a wake up call and one that drives us to immediate action.

The study’s authors suggest ten actions to address this issue including setting realistic goals for development; sharing accountability for fundraising results, and elevating the perception of fundraising as a worthwhile and rewarding career.

I offer some additional actions specific to fundraisers as they approach a new work situation.

  1. Be sincerely passionate about your organization’s mission.  The test I use is if the organization and cause doesn’t personally inspire me to give then it’s not the place for me to give of my time and talent. Being internally committed to your cause can help you get through those tough days when the nights are long and the to do list is even longer.
  2. Get a feel for the organization beyond the interview visit.  When I looked for a new home, I visited the neighborhood day and night and also the weekends to get a feel for the area and to see the people. It’s the same when looking for a new workplace. Take the time to walk around before and after the interview, visit their website and social media pages; learn what their clients and donors are saying about the organization.
  3. Ask the tough questions.  Inquire about your predecessor and the history of the fund development program.  Ask for examples of how leadership and the board is involved in fundraising.  Ask about resources and support for the fund development program, and before making your decision spend some time with your potential boss both inside and outside of the office.

Even the PollyAnna in me knows that this shift won’t happen overnight and my inner Sherlock Holmes is committed to help in the national effort to figure this out.

By Yolanda Rahman, CFRE

Glaring At Each Other Over the Divider: Fundraising Leadership in Crisis?

This one dropped like a ton of bricks, didn’t it?  When you saw that headline in the Chronicle of Philanthropy this week that half of the top fundraisers in a survey of 2,700 (!) organizations are actively contemplating leaving their post, did you think: “Yup, that’s me.”?  Or did you think, “Geez, I wish ours would…”?  This story and the survey results themselves paint a pretty bleak picture about the state of fundraising leadership nationwide.

Before even getting to the introduction to the survey results themselves, one of the underlying issues emerges.  In her preamble, Linda Wood, representing the study underwriter – The Evelyn and Walter Haas Jr. Fund – says, “While familiar to fundraising professionals, the term culture of philanthropy is not yet well understood nor commonly used across the sector.”  Amen to that, Linda Wood.  If we’re being honest with ourselves, I’m not sure we would all say that the term “culture of philanthropy” is well understood and commonly used within the fundraising profession.


So why are we glaring at each other?  Why are organizational leaders so dissatisfied with their fundraising leader – and vice versa?  (And why is this mutual disregard even stronger among organizations with budgets under $1 million?)  More importantly, what can we do to fix this crisis in fundraising leadership?

Solution?  We need to get over the idea that one staff member makes a fundraising shop.  Maybe, but not in the way that both this survey and the Chronicle’s coverage seem to be suggesting.  It is folly to expect that a highly-skilled, externally facing fundraiser who is passionate about being out with donors will be good at – or satisfied with – database maintenance and the detailed planning of special events.  A gut check on performance metrics is in order.  However, the additional reality is that many, many organizations are going to have one or maybe 1.5 team members to devote to development.  Simply hiring a bigger, more specialized shop isn’t the answer if it is years from reality for many.

Three other results from the survey suggest the resolution:

  • 75% of executives say that they don’t have a board meaningfully engaged in fund development
  • 25% of these executives will admit that they aren’t very good at fundraising
  • And 20% will cop to not enjoying this task very much.

There’s a whole lot of finger pointing in the headline of this survey, but there’s the heart of the matter:  nurturing a culture of philanthropy is everyone’s job, not just the chief development officer, not just the CEO, not just the board… And, not just these three entities working together.  A real culture of philanthropy exists when EVERYONE on the staff, among the volunteers, among the donors understands the role that philanthropy plays in the organization and what role they must play in creating resources.  

One of the CEOs at a Big Brothers Big Sisters agency with whom we worked puts it this way,  “When I interview anyone – from a match support specialist, to a member of the finance team, to a member of the partnership development team – I say to them ‘We are all fund developers here at Big Brothers Big Sisters. So what role do you see yourself playing in that?'”  He asks that during the interview process and sets a powerful tone for anyone coming aboard.  If this happens at all staff levels, imagine how much more intensive the expectations setting is for board members!

(Bob and I talked more about the process of setting expectations in the podcast called, “Take this Job and Shove it“… a podcast with more positive recommendations than the title betrays!)

Solution?  We just need to become “donor-centric”.  Again, maybe.  I certainly believe that donor-centric organizations are stronger than those who view and treat their donor base as a “mass of revenue to be acquired”.  (That’s a fun meeting to take: “Hello, revenue generator.  What transaction might we offer you to most quickly and efficiently get you to cough up more bucks?”)  Just as “culture of philanthropy” means as many things as the number of people you ask, “donor centric” is in danger of being a term in search of a definition.

This survey by CompassPoint is excellent – it really is.  But I think it misses one critical point:  being donor-centric and focusing on building a sophisticated, investment-minded, collaborative approach to philanthropy doesn’t solve the underlying crisis:  lack of shared bold vision.

  • A culture of philanthropy exists not when everyone can recite the case for support, but when everyone embraces the vision for what this organization is doing in the world.
  • A culture of philanthropy that encourages fundraisers to stay happens not when everyone is involved in relationship-building (though that’s really nice too!) but when everyone building relationships is guided by a desire to find others are are inspired by the ability to transform the world.
  • A true culture of philanthropy exists when everyone attached to the organization shares in boldly – but not rashly – staking a claim about “Here is the problem; here’s the role we play in creating a solution; here’s what happens when we make a mistake; here are the outcomes we’re aiming at achieving in the world.”

We are passionate about moving the needle on this challenge – creating a practical, “lived” approach to creating a culture of philanthropy – and helping solve this fundraising leadership crisis.  Here’s resource from our “Most Requested Tools” to help you get started.

What A “Logo Bag” Taught Me About Donor Engagement.

157906_187585961371380_1407222229_nJoanie will tell you – insist, profess, and swear – that she is only just learning the most basic things about raising money.  Joanie also raised more than $50,000 for the organization where she serves on the board last year.  How did this happen?  Yes, Joanie is way more humble about what she knows than she needs to be, but Joanie is also, innately, masterful at donor engagement… whether she knows to call it that or not.


Joanie carries her “Logo Bag” everywhere.  No, not a designer logo, Joanie carries her organization’s bag with their giant, easy to read logo on the front everywhere and she flashes it around – on the train, in line, at meetings.  And of course, she gets asked, “Oh, what’s that?”  Here’s where the important part comes in:  Joanie has a story – her own, easy-to-tell story about what her organization does and why she thinks that’s so important.  She doesn’t recite statistics; she doesn’t fumble for a business card with the FAQs she’s supposed to share on it.  She tells her story about why she got involved and why she invests.

Would you trust the friend who says, “I love this product; you should get one too…” and then recited a bunch of facts to you?  “This toothpaste makes my teeth 20% whiter than the leading brand!”  Geez, no.  That friend is a nut.  You trust the friend who says, “I really like my new toothpaste; it solved the pain I was having in my teeth.  You should try it…”

Joanie has options.  Once she tells her story (and it’s really a story, with characters and funny parts, emotional parts, personal reflections), she can pull out a bunch of options that we would call “deepening donor engagement and motivation”.   Joanie just calls it “options”:

“Come with me to see our program in action – we have a great program coming up on Friday.”  (Or, “Give me your card; I’ll email you with the best times to come see us in action!”)

“I’d love to bring our Executive Director (…or board chair… or program leader…) to tell you more.  Would you take a meeting?”

“Here – you can read this about us and the work we do.  And, would you also pass one along to someone else you know who might be interested in this?”

Joanie uses her team.  The culture on this board promotes each member having a personal fundraising goal that they raise WITH each other, not FOR the organization.  (Though, of course, it’s for the organization…)  Joanie is fearless about involving others in the act of donor engagement; she’s more successful because her Executive Director and Director of Development (and fellow board members) are all ready to go on meetings, get introduced, help her close these gifts.  So often, we’ll meet folks from great organizations who are struggling to get their board “activated in fundraising” but have set the tone where every board member (or volunteer) is on their own… “Here’s the tools, here’s the rules, go raise some money.”, but don’t really approach this as a team sport, where everyone has a role to play in developing passion in others or demonstrating the difference that giving makes.  And that – no surprise – is important!

Earlier last fall, Blackbaud published a study that focused on the modes of giving preferred by different donors.  Embedded in this study was quantitative confirmation that Joanie’s approach has been right all along (and could even take it on the road to the UK or Australia):

Top Three Reasons Cited by Donors (in the United States, the U.K. and Australia) Who Become Regular Contributors to A Favorite Organization:

  1. They achieved an improvement in their personal financial situation
  2. They find passion about an organization’s mission
  3. They gain access to information that proved the impact of their

Joanie can’t do much to change the fortune of others… but she does a lot to kindle passion and provide information (herself and through her team) on the impact that giving has on an organization.


  1. Think about how you are using your “promotional products”: use them to inspire specific action.  Do you treat your as “gifts”, that you gift in thanks for generosity?  That’s nice, but you know what?  I have enough mugs, stickers, magnets, whatever else you’ve got with your logo on it to last a lifetime and a half.  However, give me a mug – or one of Joanie’s “logo bag”s – and ask me to carry it where others will see it and talk about my involvement… now we’re getting somewhere.  A client recently asked everyone attending a gala to use the stack of note cards in the goody bag they were receiving on the way out the door to write to three people they knew who would have loved to have heard what they did at that event, that night.  And, they took the added step of dropping in some suggested language that could be used to write those cards…  Website traffic spiked from first time visitors.
  2. …which leads to… Don’t be afraid to prompt action.  Think about Facebook and the insidious “hey, your friend likes this product, service, page…”  or the unceasing  advertisements you see, all prompting you to take action.  This Christmas, Santa gave me a gift to DonorsChoose and when I helped Mrs. Hranzanek get e-readers for her Kindergarten, DonorsChoose prompted me to share that on my own Facebook page.  THEN, they sent me an email I could forward to others.  THEN, Mrs. Hranzanek sent me a personal (two lines!) thank you note… and prompted me to post this to Facebook and/or forward it to my friends via email.
  3. … and then… Redefine engagement.  Engagement isn’t board service (though board service had better be engaging.)  Engagement isn’t volunteering in a formal way (necessarily).  Engagement needs to be a lot of different things… Joanie’s “options”, but all of them needed and all resulting making a difference.  Sometimes it’s signing a petition… sometimes it’s making snowflakes to decorate school hallways as kids in Newtown, CT return to class… sometimes it’s judging a competition of young entrepreneurs… sometimes it’s just asking someone to join you in giving too.

Having that kind of relationship with an organization keeps donors happy and giving…

Measuring Social Impact: Does Anyone Get It?

As the fiscal cliff…curb… slope…ravine… whatever… looms large, and calls increase to look to cutting or trimming tax deductibility of giving, I have found embedded in these “conversations” (often turning into diatribes) an undercurrent of judgement about what counts as having social impact.  Which organizations “deserve” tax-advantaged status for donors because they do real good for society?  What I have found is that these articles, posts and opinion pieces (here’s a link to just one of many)  betray much more about the writer’s own philanthropic motivations – what do they consider valuable “social good”? – but also points to the dearth of good, common practice in how we measure social impact.

The “elder statesman” of this world is clearly Guidestar, that was founded to be the arbiter of good practice, setting standards for cost to raise a dollar, the percentage of budget dedicated to program, the main conduit to organization’s 990 form.  What has ended up happening for so many is a massaging not of their programs but of how data will be reflected on the 990 to “rate” better in the Guidestar world.  Additionally, there is no room in this world for organizations at different phases of their development – who need to invest more in infrastructure to get off the ground and do well as they do good.  Does it benefit anyone to penalize organizations for wanting to create a solid foundation?  Must we rush to throw programs out into the world, while keeping overhead painfully low?

New player on the scene is GiveWell, that not only wants to help donors find high impact organizations but highlight those that are under-capitalized now.  Admirable!  I’m in.  But, even a quick tour of this site finds that the folks at GiveWell – who are, to their credit, doing an enormous amount of research – have brought their own prejudices to the table about how work should be done, not just who is doing their work in their own sector well.  Is it really true that those doing work to cure blindness are objectively more important and offer a higher return on investment than those training and deploying seeing eye dogs?  Hogwash.  Of course, this overlooks the fact that not all forms of blindness can be cured, and sets aside the increased earning power of those who are able to reach higher levels of integration and productive contribution into their community with a guiding eyes dog.  This is but one example of the one-size-fits-all approach to how problems ought to be solved obscures what could be truly useful approach.

We can’t allow ourselves to be stymied by the fact that this is hard work, creating social impact take nuance, tremendous focus and strategic thought.  I feel more Scrooge than like one of the Who’s down in Who-ville on this topic… Who is approaching this well?  What is the way to solve this challenge more universally, so that when public arena needs us to stand up for our sector, we are well prepared to do so?


Board Recruitment: Are we looking for the right thing?

Sometimes I am pulled up short, reminded that the amount of time I spend thinking about philanthropy is not the amount of time that normal people spend thinking about giving…

Driving home from picking up Hanukkah candles for our dual-holiday family, I happened to catch an NPR story on year-end giving.  “Ooooo, goody!”, I thought, but then spent much of the rest of the interview shouting at the radio, as the host seemed insistent on uncovering people who were pulling back or diverting their giving to Superstorm Sandy recovery efforts.  “No, no!”, I yelled to the dashboard of the Prius, “People give ADDITIVELY when this happens!  They give MORE, not less!”  Of course, in my rational mind, I know that each person is different:  some are finding that they have much less to give, and some are using social services for the first time because of the storm, others will have to re-direct their giving, but many of us do give more when extraordinary circumstances call.  (Despite my rantings, the interview really is worth a listen.)

I was reminded of a profound observation made by the Philanthropist of the Year recipient at one of the AFP National Philanthropy Day luncheons I attended this year:  “Giving is a celebration of abundance, not of scarcity.”  This wonderful man gives and gives and gives because he experiences as a way he can honor the abundance in his life, not as something that creates scarcity in his life.

Right on.  But rare to find.  (And now we circle around to board recruitment…)

We, at The Osborne Group, love working with our clients on building a culture of philanthropy (here’s a tool on that topic!) and having a strong, strategically composed board is one critical part of that culture. (Here’s a podcast on that.)  As you think about new board members, you know you need people who:

  • are dedicated to your mission and our organization,
  • who make you a top priority for their giving
  • are wise, strategic, ethical
  • meet key criteria and bring needed skills

But how much are you listening for and seeking out those who feel about their own philanthropy the way this man (and, to be fair, his incredible wife) feel about giving.  Is thoughtful GENEROSITY on your board recruitment radar screen?

The Bank of America/ Indiana University Center on Philanthropy just came out with the 2012 study of high-net worth giving – one of my favorite studies of the year! – and one line caught my eye:  “Just 5 percent of high net worth donors reported having a mission statement for their charitable activity.”  I would bet that if the question were asked a little differently, more would see themselves as having a overall approach and belief system for their giving… and those are the people we’re look for, to join our boards:  those who not only think strategically about how to make our organization stronger, but how their own generosity – with time and with resources – can be used strategically to accomplish those goals.  The deepest level of engagement – ownership – comes when we find those people and put them to work for us.

I don’t usually promote “unicorn hunting”.  But that seems like a unicorn worth finding… and I’m not convinced that these people are as rare as that radio interviewer would have us believe…

High Impact Year-End Activities: Five (or more!) “Must Do” Activities for Every Development Officer

Got an hour?  We’ve got five big ideas (and lots of little ones) to help you make the most of your time between now and January 31…

In this webinar, we’ll share great ideas for:

  • Year-end donor relations and stewardship
  • Making the most of your December and January face to face visits
  • How you can refresh and renew your case for support
  • And take good care of yourself too!

Tuesday, December 4             3-4pm ET

To sign up, go to the RESOURCES section of the blog to find the link…