Dr. O on Funding

The news is out this week and it is not good for non profits.  The Chronicle of Philanthropy released its annual corporate giving study and reported that most firms and corporate foundations surveyed plan to cut back grants. Target Analytics published its 2009 survey of annual giving  which showed a sharp drop in giving in the first quarter of 2009 – 13% – and  a decline in the number of new donors.  This followed Giving USA's report of a 5.7% drop in giving last year, which had dipped slightly from 2006, a record year for NPOs.

In the UK, A survey by Leap Anywhere, a new London-based organization that links donors to events and charities, found that British people have significantly exaggerated  the amount of money they have been telling researchers that they donate to charity. The Church of England reported a  £30million fall off in contributions last year and is appealing to its wealthy members to prevent further losses this year.

A recent Bridgespan group survey found that 75% of NPOs have seen cuts in funding and for the first time, cuts are universally affecting large as well as small organizations.  Theaters and arts groups appear to hit especially hard.

This is underscored  in a new survey  by Johns Hopkins Listening Post whose findings show that:

• 83% of responding organizations reported some level of fiscal stress  from September 2008 to March 2009.
• • Close to 40 % of the organizations considered the stress to be “severe” or “very severe”.
• A third or more of child-serving and elderly-serving organizations reported “severe” or “very severe” fiscal stress.
  

So, what does an NPO/NGO do? My suggestions, drawn from my recent blogs fund raising experience nd conversations with development and executive directors include:

• Consider going hybrid.  Develop a for-profit revenue stream through service or products your organization can provide in the marketplace.
• Bring in a new generation of donors with new technology.  The first wave of Millenials are now donating, but they use different technologies to give.
• Examine your mission and how you implement it.  Does it match current needs and current donor interests?  Read Forces for Good -a book that can help with mission upgrade and match to donor desires..
• Examine your costs.  Can you save significant money by virtualizing your staff and operations or by sharing space and back office operations with other NPOs
• Engage with the new "crowdsourcing" and online giving organizations like Care2
• Is your website and effective fundraising machine?  If not, here is how to upgrade.
• Look beyond your historic and even current donors.  For every foundation and corporate grant you lose, you need to find a replacement.  Maybe by re-tooling your projects you can fit the criteria of foundations that you currently don’t qualify for.

A new family of websites and social entrepreneurs is emerging, crowdfunders, which enable social entrepreneurs, politicians, NPOs and micro lenders to collect money from many people without having to build the infrastructure and in some cases, enable the crowd to decide where the money should go. ChipIn, a free service from a start up company in Hawaii, allows an NPO to create a fundraising widget  - a flash application -and embed it in  web pages that can collect funds and viral the cause out to other sites – all without fees when the  NPO uses its PayPal account.  

CreateaFund has taken the for-profit route, charging monthly fees to provide NPOs with fund raising websites, credit card and other payment fulfillment services, tracking tools and marketing that focuses on signing up donors for monthly payments.  CreateaFund fees range from US$19 to US$495 a month , depending on the organization size.  While these may be pricey for small NPOs,  CreateaFund's full range of services are exactly what many NPOs need for online fund raising, but often lack the expertise to operate.

Other services include firstgiving.com, which allows fundraisers to create online person-to-person fundraising pages for any US NPO,  greedyorneedy.com  (formerly the Robin Hood Fund) which seeks to fullfill wishes through the wisdom of crowd, and Twollars which allows donors to reward positive actions on Twitter by benefitting benefit good causes.  In the US, ActBlue  allows progressive donors to choose candidates to support and ask for funds by providing the technical, financial, and legal compliance systems to campaigns.

 For FPO social entrepreneurs, a number of film makers and musicians are using crowdfunding, and sites are now poping up that offer crowdfunding investment services for start- up businesses.  For a detailed run down of both NPO and FPO sites see an article published last fall in Time Magazine by Khristina Dell,

On the June 3 blog I said I saw demonstrations of mobile fund raising at  the N2Y4 competition on social entrepreneurial cell phone ideas . While the idea is exciting and appeals to the Millennials around the world who use mobiles like their parents and older siblings use laptops, it can be an expensive and complicated experience for all but the largest NPOs.

Not satisfied, I researched the topic and found one organization, mGive - a part of Mobile Accord, that has has attempted to simplify the process and make it cheaper. It involves responding to an ask or an ad requesting the user to text to a shortcode to enable a donation. I talked to officials at mGive and was impressed with their effort and their understanding of the NPO world - they are social entrepreneurs themselves. But even after their work, mGive's prices range from several hundred dollars a month to over $1000 a month depending on the size of the NPO – plus banking and telephone company fees that are not trivial. mGive works with the Mobile Giving Foundation, which collects the donations and forwards them every 90 days to registered NPOs - also a problem for small NPO cash flow.

However, another technology is now in development that may eleminate the middlemen and the high monthly fees.  Giveabit iPhone app, chronicled by Laurel Angelica on the TakePart blog.  Giveabit – which is being developed by Jake Stolarski and Justin Kazmark – who are now trying to raise $3,100  will be downloaded for free  to  donors iPhones and each time they open it they can either pick from a list of charities to give to or name their own charity and donate $5, $10, etc.

By removing the shortcode/text requirement of the present system and substituting a free app, as well as the middlemen and some of the fees, Giveabit dramatically reduces the cost and complexity of mobile fund raising.  Giveabit won't facilitate large scale "texting" campaigns like those operated by United Way or Unicef, but if it rolls out all the different mobile platforms (Blackberry, Nokia, Palm Pre, etc) it could create a new and significant steady stream of  funds and be the key to Millennial fund raising.

Talk about using cell phones to raise money is now bubbling up at conferences and development list serves.  I am not convinced thatmobile fund raising is ready for prime time – the systems are in place but because of high fees and middlemen I don't see them as within reach of small to medium sized NGOs, and thus not yet scaleable.  But I do think that innovative uses of mobile technology are exciting to donors as we have seen in recent competitions for innovationand mobile technology.  One example I saw recently at the N2Y4 conference in San Jose, CA, I think is a predictor of things to come.

The project is Handheld Human Rights, which provides a secure hub for groups around Burma’s borders documenting human rights abuses and getting information out to the world about the atrocities the junta running Burma commit daily. Mobile phones are not allowed in Burma and there are no cell towers (that I know of) in the country.  But, HHR takes advantage of cell tower signals that bleed over from bordering countries by smuggling phones into local operatives, who log onto the bleed over signal and text out information on what the government is doing.

This allows users to submit data directly from their mobiles to HHR allies in border towns – many of whom are Burmese refugees in local organizations who be turn data on abuses into action. Once abuses and alerts are channeled through the hub and mapped, this information is used to raise international awareness and support advocacy campaigns to bring gross human rights abuses to the International Criminal Court.

How does it work?  Suppose a woman is raped by Burmese soldiers in Northwest Burma – not an unusual happening. HHR allows this incident to be reported via SMS to a cell phone in bordering India. This abuse is then databased, mapped, and relayed onto the cell phone of a an advocacy organization that is building a case against the Burmese government.

HHR works with  60 partners that operate from Burma’s border areas to use a simple, cheap and flexible mobile phone network that allows users to send information and messages over SMS that can: 
• Disseminate key information and messages to field workers. 
• Facilitate communication between groups working on these issues. 
• Collect data that can be mapped on the site. 
• Rapidly spread news of human rights violations to the international community and advocacy groups.

HHR is a component of the Virtual Community Center (VCC), an online hub that Digital Democracy (D2) is developing in Thailand, India and Bangladesh. But it can work anywhere a dictatorship has clamped down on communications and there are neighboring countries with cell towers.  And, like the internet, when cell phones and SMS diffuse through a nation, regardless of its government, there is often an increase in democracy and an up tick in entrepreneurship and grass roots development. 

That is what may excite donors, who are often looking for the next big thing.  Cell/mobile technology is now ubiquitous around the world, especially in developing countries.  It enables farmers to get better crop information and better prices, it offers village women business opportunities, and, as we are seeing in Burma, it may be able to promote democracy, or at least expose abusive governments.   I plan to keep tabs on the NGO uses for this technology and report on it here from time to time.  I would love to hear about other projects ….log on and tell us in the Comments.

 The winners:

The Microsoft Mobile Development Challenge.  46 submissions , 3 winners, Honorable Mention

- $1000 prize (honorable mention) Agricultural market Services Project

- 3rd place, $5000. Help is Only an SMS Away Project

- 2nd Place, $5000.  Face the Change Project

- 1st place, $5000.  FrontlineSMS Medic project

Final N2 Prizes were:

Vozmob:  $10,000

Extraordinaires:  $15,000

FrontlineSMS Medic: $25,000

Public Stuff is an application that enables people to submit and check the status on service requets, gather community data, and connect with community leaders.  The application is designed to help governments that can't afford to increase online participation.  Informtion submitted through the Public Stuff app feeds to the Public Stuff portal where data is aggregated.  Public Stuff prfovides local governments with software to manage communications from citrizens coming through the web.  They have partnerships with a number of cities now.

Emily Jacobi, quiet, serious, very poised young woman takes the micorphone and introduces the situation in Burma under the junta - forced labor, torture, rape and the recent jailing of Aung San Suu Chi.  Burma has only 1% cellphone pemnetration and cell towers on the Bangladeshi border with Burma reach into Burma.  Handheld Human Rights has developed a network of 13 organizations around the Burma border who have smuggled cell phones into allies inside Burma to taked advantage of this situation, and have developed a system of reporting to keep the world informed of  the the rfepression inside the country and help; protect its people.

They use these phones to warn of impending army raids and other threats so people can leave their villages or hide.  Those inside the country can use the phones to report on government atrocities inside Burma that the junta wants to keep quiet.  The phones allow the volunteers working around the border and those inside the country to remain anonymous.

Emily, now joined by her colleague Mark Belinksy, draws a diagram of how this a unique and powerful use of mobile technology works - the network her organization has built has created a cellphone army, training on the ground reporters through a train the trainers.  A side note -  this team has a depth of knowledge and a dedication that is very impressive.

Most interesting is that this project may also be creating conditions for commercial pressure on the junta  to open the country to cell phone sales.  With only 1% penetration, Burma represents an opportunity for cell phone companies to open a rare new market.  In doing so, they would  bring inthe kind of information that helps build democracy - using mobile technology to accomplish something diplomacy has not been able to achieve - tghe topling of the junta.  This may also open up a funding source for Handheld Democracy to be funded by cell phone companies.

 FrontlineSMS Alerts is an information tracking and delivery tool that empowers poor people by providing alerts of available online work - micro projects or micro jobs - for the emerging talent pools in developing countries.  It is  version of e-lance or top coder for developing world. The system is free software that turns a laptop and a mobile phone into a central communications hub - after installation, it enables users to send a receive texts messages with large groups of people through cell phones.

FrontlineSMS also serves as an alert tool for disaster warnings, genocide attacks, information on medical supplies, diseases and other information needs. It is also used for micro-scholarships; offers, grants and other opportunities.

They have run trials in Pakistan and El Salvador and are preparing projects in Sudan, Gabaon, Sri lanka.

 A panel of three activists is discussing.  One of the most interesting is HandHeld Human Rights which is organizing a "cellphone army" around the borders of Burma to report on human rights violations and warn residents of tactics and actions by the junta.  Cellphones ae smuggled into Burma and these phones can connect to cell tower signals near the Thai and Bangladeshi borders.  Mark Belinsky, the HandHeld Human rights spokesperson, details how an incident in Burma the government thought was secret, gets transmitted across the border, then to national capitals where activists can database it and take action.  

 I am sitting at a small table with a group of people testing mBlox mobile marketing on cell phones.  We take an online survey that links our phones to a Zoomerang survey and then read out the results.

Our presenter, Madeleine Funes of mBlox, takes us through a slide show she has posted on slideshare.com, which promptly goes down so we can't see it.  Fortunately, she had printed copies with her (you can find the presentation on slideshare by searching for "N2Y4 Conference:  Mobile Marketing when the site goes up again.)

She takes us through the slides, shows us a video of a campaign (you can't see it on the slide share slides).

 The Extraordinaries is smartphone software (iPhone, Blackberry, and more) that allows millions of people to perform brief micro-volunteer tasks on their smartphones in a few minutes of spare time. People login to our system from any place on Earth within cell reception, and constructively use small windows of spare time for science, medicine, nonprofits, government, and more. Tasks are accessed on-demand, from anywhere, at any time -- while riding the bus, waiting in the doctor’s office, standing in line at the post office, and more.

Some of this is being done now - volunteers for NASA who scan photos of Mars, people downloading software that allows them to scan radio signals from space to locate patterns, others.  The revenue stream is through subscription.

The Extraordinaries is a start up raising funds to launch a pilot that determines the value of micro minutes of volunteering.  Interesting- the example he gives of assigning your members to makethank you calls to your members for donating is interesting.

 After a very good conference lunch outside, we are back in Cisco's Vineyard Center (breakout rooms are named after vineyards and wines).  I in a wine room with Equobility, a hybrid social organization designed to give very poor people access to global markets, solar and bicycle charging for their phones, and a revenue stream for the users who can sell or rent the charging equipment.

The system allows users with access to a cell phone to access banking, market information, customers and cash transfer/transactions.  It comes with a solar and/or bicycle-powered charging system, which can be built locally and sold for under $20. The system's most important feature may be its ability it gives small farmers and artisans the ability to remove the middleman in price setting.

It will require adoption curves in cellular access, cellular banking and cellular cash transfer that does exist universally, but which is growing.   The sustainability aspect is quite interesting:

- Eqobility is a for profit entity that makes money on the sales of the chargers and licensing of the system to local users, ad sales in the messaging

- users can build and sell the charging equipment, charge phones for other people or lease chargers

Eqobility sees their system as a job creator - they will set up an agency system of local agents or franchisors who will hire people.  

Brooke Partidge of Vital Wave Consulting shows us a map of the world with penetration rates by natgion.  In many countries, cell phones are the only way for common people to access services andin some cases to participate in politics.  She shows us examples from Uganda, Nigeria, Kenya, Venezula, Thailand and other countries where phones were used to make major political or economic change.

She uses uses of mobile technolgies for health care:

- health education

- compliance/monitoring

- data access

- trackiong

- health information

- remote diagnositics

She notes that there are many innovative social entreprenuerial uses of mobile technolgies, but there are serious barriers to scaling innovation ranging from laws to competition, to lack of leadership.  It is difficult to get funds for pilot projects that demonstrate scaleability of mobile social innovations.

Strategies she recommends:

- avoid scaling through international expansion

- transition pilot programs to formal organizations

- conduct rigorous ROI analysis

- keep it simple

- support good regulations that promote scale

She  notes that many cellular comapniesand foundations, like the Vodaphone Foundation, are looking for the next large organization tht uses

We wrap up with a presentation on how to use cellular tech to increase volunteering in the US through ap and connections.  Justin Massa, our moderator from NetSquared, TechSoup introduces Marisa Chancellor of Cisco.  Chancellor points out that we are at an inflection point in history where there is an explosion of content both in the public square and in the corporate world.  The challenge for companies is not more content, is how to find the next nugget that will change the world and the market.  She uses a PowerPoint to lay out the way Cisco does it - how it integrates its workforce communication and connection process to drive productivity and growth.  She notes that Cisco's connection community includes customers, suppliers and others outside the firewall.  Her challenge is to lear from them.

The Cisco process involves essential elements of communication:

- video communication and interaction

- web 2.0 tools and technologies

- personalization and relevancy

- apllications and services

Cisco combines these elements to create a personalized and relevant integrated workspace whose heart is the user.

I am at Cisco Systems in San Jose with about 100 people at the 4th annual N2 Mobile Technology Conference - a two-day meeting that brings together the minds of unlikely allies from different professional fields including: leaders in philanthropy, corporate philanthropy, engineering, media and world-class innovators driving the development, distribution and use of social technologies for progressive change.  This year's conference features a competition for over $125,000 in development money for orfganizations that have developed applications for mobile technology to improve the world - true social entrepreneurs.

Wer are starting an excercise involving ice cream.  Back later

The Non Profit Technology Network recently released its 2009 eNonprofits Benchmarks Study on email and social media fund raising and activism, conducted by M+R Associates.  The study covers data collected from 32 nonprofit organizations through

2007 and 2008 and  presents a four-year snapshot of nonprofit email, fund raising, and advocacy results.  The report shows that, despite the tanking economy, online fund raising actually increased.

Key fund raising findings:

• The number of online gifts increased by 43 % over 2007.
• Total dollars raised online increased by 26 %.
•  Response rates for fund raising messages remained at 0.12 percent .
• Average gift size (AGS) was $71, down $15 from the previous year
• Gifts of under $250 accounted for 97% of all gifts but only 59% of total dollars.
• The percentage of gifts over $1,000 was down by half in 2008.
• Fund raising emails received over 3x response rate from previous donors than new prospects.
• Email lists grew at 17 % in 2008, down from 19 % in 2007 and 21 % in 2006.

What does this mean for NPO's seeking funds online.  My take is that online fund raising will become a growing segment of donations as more and younger people turn to the computer for their giving.  This means that:

• Overall, the percentage of funds raised online will continue to rise as gifts continues to grow.  Size of gift should stabilize in one to two years as the economy stabilizes.

• For the foreseeable future, email will remain the primary online fundraising tool in terms of amount of giving because it is will remain the most direct and efficient way of reaching people with money to give, primarily Boomers and Gen-Xers.

• Large donations will continue to decline and then go back up as Millennials, who are more comfortable with online grow in the percentage of population and then rise in terms of income .

• Millennia's will turn to mobile phone applications (apps) as a their way of connecting to NPOs and giving money, making donation apps an important area for NPOs to develop.

What should NPOs do to make the most of their email fund raising and take advantage of these findings and the changes in online giving.

Be more strategic: segment  your lists based on prior donor behavior and target  fund raising appeals to audiences most likely to respond, usually previous donors.

Focus your messages: especially for end of the year and spring appeal mailings.  Tie them to current events, not current needs, to convince people to click the donate button now.

Make your schedule more dollar-efficient: substitute appeals for newsletters so you send the same amount of email, but more asks.  Tie the asks to current events or critical needs.

Supercharge your homepage for online giving: tightly link your home page, donor landing page, email asks and newsletters, but make them dynamic with rotating boxes, videos, etc.( see my blogs on turning your website into a fund raising machine).

Supercharge your landing pages:  as online search and interaction grows with more computer /social networking comfortable audiences, online giving will grow.  These net-savvy visitors demand high quality, high interaction sites – on every page.  And they are used to activity and asks on every page like videos ending in donate now buttons, or profiles of donors, or giving thermometers, comment blocks, evites, etc.

This is shaping up to be the year of online competition and contests for NGOs and maybe for social entrepreneurs. Vodafone Foundation recently announced its three Wireless Innovation Project winners who will share $700,000 in prizes for their innovative ideas for using wireless technology for the greater good. The innovations - Active Networked Tags for Disaster Recovery applications to use wireless devices to locate catastrophe survivors;  the CelloPhone, an imaging platform on a cell phone;  and the CellScope, a way to use cellphones for mobile diagnostic microscopy - were selected from nearly 100 applicants from U.S. universities and nonprofit organizations for wireless innovation to address a critical global issue.

In another online competition, the actor Hugh Jackman challenged Twitter users to explain why he should support their favorite charity with the most convincing “tweet” and win $100,000 for their charity.  And the Case Foundation launched its latest  Giving Challenge, a contest conducted through Causes GlobalGiving, giving US NGOs the chance to win up to $6,000 and be part of  GlobalGiving’s programs. And coming soon, the Target Corporation will launch a contest through it’s Facebook page for visitors to vote for  a list of 10charities to win part  of $3 million in prizes.

The online NGO contest prizes are not all money.  CommuniCause, offers a “social media makeover” as a prize, which it values at $25,000.  The site offers social media tools to NGOs to generate enough votes to get themselves listed as a contestant.  Then, there is Ashton Kutcher's offer of 10,000 bednets if more people followed him on Twitter than follow CNN.  He won and so did  Malaria No More, which received and distributed the nets.

These contests are part of a larger movement, dubbed the "Facebook Philanthropies" (no connection to Facebook),  which uses the vast numbers of the internet to raise funds, much like Kiva and Nameste-Direct Foundations have been doing for microfinance loans.  The Vodafone competition, while not unique, raised the stakes for social entrepreneurs – stimulating innovation and possibly new social businesses.  However, although online giving to the nation's largest charities grew 37 percent in 2006 and Network for Good and JustGive.org saw sharper increases in cash flow, online contests were a small fraction of giving and will likely stay that way. I think that they are a growing trend, however – not one on which NPOs can rely for operating or even project funds, but one that will kick off new NGOs and new social entrepreneurs. Because of this, I recommend social entrepreneurs to be on Twitter, Facebook, and set up Google alerts to clue them in to online contests that could stir up excitement in the organization and lead to some prize money that launches an innovation.   There is nothing like $700,000 to stimulate innovation, even if the odds of winning are only 3%.

Instead of just trying to convert everyone to email, approach the two lists strategically because:

·        Some members or donors may not respond to email, but do respond to snail mail

·        Some requests can actually generate more money through snail mail than thru email

·        Email solicitation has become so prevalent that a personalized snail mail request may get through where an email ask may not

·        You may not have email addresses for all your donors

·        The lists you bought or traded for are not generating enough to justify the cost, even over time

 So, think strategically. Here are some actions you can take to combine the two for a few more dollars.

 Analyze your snail mail list.

Look at the giving histories of your snail mailers, filtering for the long term, regular high donors.  You don't want to touch them, except to move them up. Then look at the snail mailers who don't respond or respond erratically with small amounts.  Determine if you are losing money on them;  if so, shift them to email.  If you don't have their e-addresses, segment them in your next snail mailing and tell them you are trying to save money and tress by shifting to email and  ask them to go to your website and give you their email address.  Those that don't you may want to analyze for a reduction in mailings.

 Use snail mail to move your snail mailers to email.

Send a personal request, laying out the costs of snail mail, how their donations will go farther with email, and what the environmental impact will be for a shift to email.   

 To get the addresses, set up an online petition or contest that requires an email address and send snail mail to your snail mail list asking recipients to go to the website and take part – thus collecting their e-address for a follow up request to opt-in for email.

 Query your donors –ask why do they prefer one or the other.
This is another opportunity to interact with your donors and to send the snail mailers to your website.  Set up a survey on your website and ask 3 - 4 questions about why your donors/members prefer one or the other.  Automate the survey so that those who answer questions indicating they are determined to get paper receive a closing page saying we will continue to send you hard copy; those that indicate flexibility get a closing page asking them to enter their email address to try email instead of snail mail.

Simplify snail mailers' lives - Encourage offline supporters to move their relationship with you online where they can access tools to check for events, download information, link up with like-minded people, talk with you, etc. Make your email and website a convenience for them, as well as for you.

Develop an email recipients bill of rights and include it in your snail mail when you ask recipients to shift. Many people refuse to opt in for email because they are afraid of being spammed or having their email address traded or sold. Draw up an email bill of rights that pledges you won't engage in the behavior that scares many of them away.

Use snail mail for very special asks.  Some things work better on paper, like an invitation to the annual $500 a ticket gala, or a reception for a Nobel Laureate who is on your board, a thank you for the $10,000 gift you received from them online.  Be strategic about who you send these to, but you would do that anyway.   

Mike Hannigan, Give Something Back

• our business is based on reducing the consumption of office supplies
• but, this market is turbulent – we are getting smaller orders but more customers - we are now invited in to bid on deals that we would not have been in before
• we use the power of the market to create wealth- and use it for stakeholders and the community
• we focus on the banality of good – people buying our products because they are high quality and priced right – they may not even know that we are sustainable
• this is the best time to be a socially responsible business – we are all in a fundamentally different space now 

 Joel Bashevkin, Taproot Foundation

• Taproot makes competitive grants to NPOs and gives them volunteer business executives to work with them
• we work with 1000 NPOs and many thousands of businesses
• we are seeing a confluence of people with time and the administration calling for public service – ideal for us
• we can’t meet the NPO demand for help, but we have a 170% increase in the business professionals  - 4000 people – who can help

• trends we are seeing – employees and interviewees are asking about CSR and what opportunities are available to contribute to the larger good