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Key Takeaways from Dr. Rooney’s KC Presentation of Giving USA 2017

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JB+A was proud to join U.S. Trust and Nonprofit Connect in hosting Giving USA 2017: The Annual Report on Philanthropy for the Year 2016 in Kansas City on June 16 at the Kauffman Foundation Conference Center.  2017 marked JB+A’s 12th year of bringing Giving USA to Kansas City, and this year’s report was presented by Dr. Patrick Rooney, Associate Dean for Academic Affairs and Research and Professor of Economics and Philanthropic Studies at Indiana University’s Lilly Family School of Philanthropy.

Here are some Key Takeaways from Dr. Rooney’s presentation of the Giving USA 2017 report:

Philanthropy and Politics
“More people donate each year than vote,” explained Dr. Rooney, “and the issues most spoken about in 2016 political dialogue were the recipients of the most giving: arts/culture/humanities, environment/animals, health and international affairs.”  Dr. Rooney stressed this may or may not be a “causal” relationship, but pointed out the correlation was hard to ignore. And we may see more clearly the true impact of this “politically-motivated” type of giving in 2017 data.

Giving by Foundations and the 5% Payout Rate
While giving by all three types of foundations – independent, operating and community – increased, the growth was more moderate in 2016.  “Giving by Foundations is more predictable, because of the 5% payout rate*,” said Dr. Rooney, “And independent foundations provided the majority of grantmaking in both 2015 and 2016.” This moderate rise in giving may be attributable to a two-year lagged effect from S&P 500 performance.

But in the midst of ongoing scrutiny and debate about whether private foundations distribute a big enough portion of their assets, Dr. Rooney shared his analysis on increasing the payout rate: “We ran some numbers, to see if increasing the payout rate to 10% would bankrupt foundations.  It would take more than 100 years for that to happen, so in short, the empirical evidence is that increasing the payout rate would not bankrupt foundations.”

*Refers to the payout requirement that is the minimum amount private foundations must spend each year for charitable purposes. By law, private non-operating foundations must distribute five percent of the value of their net investment assets annually in the form of grants or eligible administrative expenses.

Public-Society Benefit and Donor-Advised Funds
Dr. Rooney recognized that “not everyone understands the composition of the Public-Society Benefit subsector.” Organizations within this category include those related to voter education, civil rights, civil liberties, consumer rights and community/economic development as well as free-standing research institutions (for the sciences and public policy.)  This subsector also includes organizations that raise funds to distribute to nonprofits, such as the United Way, Combined Federal Campaigns and Jewish Federations.

National donor-advised funds (such as Fidelity, Schwab and Vanguard) are also included in Public-Society Benefit, and Dr. Rooney noted we are seeing strong increases in contributions to these types of giving vehicles.  “For only the second time since The Chronicle of Philanthropy initiated the Philanthropy 400 in 1991, United Way Worldwide was not listed as the top charity,” explained Dr. Rooney. “Fidelity Charitable took the top spot. In 2015, contributions to Fidelity Charitable grew 20% over 2014, while United Way saw a 4% drop in charitable receipts.”

Dr. Rooney offered that being able to continue to disaggregate donor-advised funds data in this category will shed more light on this topic.

Individual Giving and its Share of the Pie
Individual giving has declined from 84% of total giving in the five-year period ending in 1981 to 72% of total giving in the five-year period ending in 2016.  But Dr. Rooney reassured us individuals/households are still giving, they’re just doing so in more formalized ways (such as through private foundations and donor-advised funds) and reminded us that the single largest contributor to the increase in total charitable giving in 2016 was the increase of $10.53 billion in giving by individuals. He also pointed out the “democratization of philanthropy in 2016,” explaining that “The strong growth in individual giving may be less attributable to the largest of the large gifts*, which were not as robust as we have seen in prior years – suggesting this growth may have come from donors among the general population.”

Dr. Rooney stressed the power to increase giving is in our hands: “If every American household reallocated $5 a day of frivolous consumption to philanthropy, that would double household giving overnight.”  Dr. Rooney added, “It’s up to us as donors, but also as nonprofits – we need to make the case for philanthropy.”

*Giving USA refers to very large gifts as “mega-gifts” and sets that threshold every year.  In 2016, gifts of $200 million and above were tracked as mega-gifts.

Be sure to check out Jeffrey Byrne’s Top Five Ways Nonprofits Can Use Giving USA to improve their fundraising and JB+A’s recap of Giving USA 2017  findings.

Download the two traditional pie charts illustrating 2016 source contributions and recipients and share with Board members, your CEO and development staff.

Top Five Ways Nonprofits Can Use Giving USA

By | All Posts, Boards + Leadership, Capacity Building, Commentary, Current Events/News, Donor Cultivation, Fundraising, Giving USA, Insights, Stewardship, The Giving Institute | No Comments

Giving USA is a powerful tool:  it is the most trusted annual report on the sources and uses of philanthropy in the U.S., but it’s also a valuable resource in helping us improve philanthropy.  Nonprofit organizations can (and should) use Giving USA to help identify trends as well as opportunities to strengthen resource development efforts.

Here are my Top Five Ways Nonprofits Can Use Giving USA to improve their fundraising:

5. Understand the correlations between giving and economic factors
The stock market, personal wealth, personal income, GDP, corporate pre-tax profits and unemployment rates impact giving by all four sources (individuals, foundations, bequests and corporations). Trends are closely monitored by people “inside” and “outside” the philanthropy sector.
Be aware of changes in these indicators, anticipate how changes will impact donors and adjust fundraising strategies accordingly

4. Confirm or dispel myths about giving
Economic and political scenarios, complex societal issues, diverse giving platforms, wealth and capacity are just some of the drivers behind philanthropy.
Understand the context of these drivers, help manage expectations about giving and set realistic and achievable goals

3. Educate Board members, volunteers, donors and staff about the broad context of philanthropic giving
Help stakeholders better understand your organization’s funding patterns and potential

2. Be nimble in your fundraising and stewardship
Nonprofit fundraising must evolve as philanthropy evolves.  We are seeing an increase in the popularity of non-traditional giving vehicles (such as donor-advised funds and non-cash assets) and donors want more evidence of the impact of their gifts.
Listen to your donors and prospective donors – and tailor your strategies to match their needs and expectations

1. Recognize the “individual giving effect”
An estimated 87% of total giving in 2016 came from individuals, bequests and family foundations.
There are human beings involved in every gift; focus on developing and maintaining meaningful relationships

And remember:

Strengthen your case for support:  the best cases are realistic, relevant and compelling while being supported by the facts and clearly communicating the purpose, programs and financial needs of your organization.

Celebrate your impact: Americans give an average of more than $1 billion a day to help others.  Nonprofits and donors are doing great work.

Giving makes a difference, to both giver and recipient, but we can do more.  So spread the word about the good philanthropy has done – and the good it will continue to do.

I encourage you to download the two traditional pie charts illustrating 2016 source contributions and recipients and share with Board members, your CEO and development staff.

View JB+A’s recap of Giving USA 2017  findings here.

Check out key takeaways from Dr. Rooney’s 2017 Giving USA presentation in Kansas City.

About Giving USA
For over 60 years, Giving USA: The Annual Report on Philanthropy in America, has produced comprehensive charitable giving data that are relied on by donors, fundraisers and nonprofit leaders. The research in this annual report estimates all giving to all charitable organizations across the United States.  Giving USA is a public outreach initiative of Giving USA FoundationTM and is researched and written by the Indiana University Lilly Family School of Philanthropy. Giving USA FoundationTM, established in 1985 by The Giving Institute, endeavors to advance philanthropy through research and education. Explore Giving USA products and resources, including free highlights of each annual report at its online store at www.givingusa.org for more information.

About The Giving Institute
The Giving Institute, the parent organization of Giving USA FoundationTM, consists of member organizations that have embraced and embodied the core values of ethics, excellence and leadership in advancing philanthropy. Serving clients of every size and purpose, from local institutions to international organizations, The Giving Institute member organizations embrace the highest ethical standards and maintain a strict code of fair practices. For information on selecting fundraising counsel, visit www.givinginstitute.org. Jeffrey Byrne has the honor of Chairing The Giving Institute Board of Directors (2015-2017).

Women in Philanthropy: Where Are We Headed?

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By Katie Lord, Vice President

What are some of the complexities, challenges and contradictions you see in women’s philanthropy today? What do you want this narrative in the 21st century to include?

On March 14th and 15th more than 300 women congregated in Chicago to address these very issues, and I was one of them.  My participation in the 2017 “Dream. Dare. Do. Women, Philanthropy and Civil Society” Symposium made me very aware of the diverse array of women participating in philanthropy, and even more committed to strengthening our role in the sector.  This event is hosted by the Women’s Philanthropy Institute of Indiana University’s Lilly Family School of Philanthropy, and sponsored by the Bill and Melinda Gates Foundation.  Dr. Deborah Mesch was the chair of this year’s event. Dr. Mesch presented “Women in Philanthropy” last year at the JB+A-sponsored Nonprofit Connect 501 (c) Success National Speaker Series.

Held every three years, this two-day symposium brings women philanthropists, fundraisers, funders and organizations together to discuss advancing women-related fundraising causes, women working in the field of philanthropy and raising the profile of women donors and philanthropists.  As part of this year’s focus, attendees were exposed to ways women can dream, dare and do more to advance women at all levels of the field through specific channels of change.

As part of the “dream” section, discussions centered around organizational flexibility to change, including addressing gender and generational differences head on with our donors and constituents, embracing risk-taking in our organizations through venture philanthropy, innovative programming and collaborations with other nonprofits as well as public organizations.

Next, participants were asked to “dare” to think outside the box of traditional philanthropy through emerging nontraditional verticals, including pursuing social entrepreneurship partnerships in business and startup communities, social impact investing partnerships within the financial sector, and the rise of giving circles and collaborations through community foundations and special interest/affinity groups.

Finally, we were challenged to go back home and “do more.” This includes bringing women philanthropists and organizations to larger audiences and making sure we are having a seat at the table at all levels of organizational involvement.  Women still are underrepresented on nonprofit boards, in executive positions within foundations and nonprofit organizations and are often left out of the donor cultivation process, even though most are the key decision makers for financial and philanthropic decisions within their households.

This conversation is timely. With access to more wealth than ever before—some say as much as $13.2 trillion in North America alone—women’s voices, leadership and resources are needed more than ever to address the pressing challenges in our country and around the world.  I know the conversation will continue with this Symposium attendee.  I am grateful for the support of the Women in Philanthropy Institute and the research it provides to help cultivate women donors and to help move the needle.  If you would like additional information on the topics discussed at the Symposium, or are interested in moving the needle, please contact me at klord@fundraisingjba.com or at 816-237-1999.

The Customer (Donor) Is Always Right!

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Nonprofit professionals will tell you that nonprofits exist to meet the needs of our constituents. While that is absolutely true, we also have to maintain strong relationships with our donors who fund the programs that serve our constituents. When you think about it, customer service and donor stewardship are not so different. So how can we utilize the key principles of customer service to develop better relationships with our donors? Here are JB+A’s “Top 5 Customer Service Tips” to make every donor feel like your only donor.

1. Communication is Key
In the for-profit sector, effective and regular communication ensures that customers come back. Why should the nonprofit sector be any different? In fact, there’s an added challenge for nonprofits in that their donors do not directly experience the services they are paying for. For-profits can sometimes get away with a lack of communication through effective branding, word of mouth, etc., but nonprofits don’t have that luxury. The promise of the next gift can only be cultivated through effective and regular communication with your donors.

2. Consider the Competition
Lots of for-profits do a competitor analysis to distinguish themselves from the competition and snatch up the market share. For nonprofits, that market share is the donor pool. There are thousands of organizations for donors to choose from – so what is your organization doing to attract and retain your donors? Outstanding customer service is an effective way for for-profits to keep customers coming back and nonprofits can do the same. Consider how you can set yourself apart. Make donating to your organization more than a pleasant experience for your donors  – an experience that goes above and beyond the organic, emotional satisfaction they get from donating. Create a stewardship program that compels your supporters to stay involved and spread the message about your organization.

3. Embed Customer Service in Your Culture
Many for-profits reward their employees for exceptional customer service and satisfaction. The most effective employee incentive programs reward creativity and initiative when going above and beyond to please the customer. Make sure your organization’s staff are committed to serving your donors as much as you – the fundraisers – are. Give them the tools and space to build their own relationships with key individuals and your donors will feel loved and recognized by the entire staff, not just the fundraisers.

4. Go Directly to the Source
For-profits utilize customer feedback in order to improve their services. Approach your donors in the same way a for-profit looking to improve its services would approach a customer. Does your donor feel properly informed about where his/her donations are going? Do they understand how their gifts are making an impact on the organization’s overall goals? Are they aware of the progress and results of your campaigns? Enhancing your donors sense of access gives them a feeling of ownership in your organization’s activities.

5. Stay Organized
Some of the best fundraisers make their supporters feel like they are the organization’s only donor. Despite the fact that nonprofit fundraisers typically juggle large portfolios of major donors simultaneously, they must be encyclopedic in their knowledge of each and every one of them. A good central donor database is key to effectively managing your donors. A  good system will ensure they aren’t contacted multiple times by different departments and your relationships with them can be tracked clearly. Most of them have built-in alert systems so your fundraisers and Executive Director can stay on top of their relationships. It’s a simply step, but it makes all the difference.

Time, Talent, and Treasure: Part Three of a Three-Part Series

By | Boards + Leadership, Commentary, Donor Cultivation, Fundraising, News You Can Use, Stewardship, Volunteers | No Comments

By Katie Lord, Vice President 

In this series we have examined both “Time and Talent” as it relates to the “Time, Talent, and Treasure” paradigm in nonprofit donor management and cultivation.  This final segment of “Treasure” is often the one that we, as nonprofits, are most interested and influenced by because it affects our pressing financial goals.  It can often be to our detriment to focus too much on “Treasure” and, in so doing, approach our donor’s “treasure” in a transactional way, without respecting and acknowledging generational differences and preferences of how to cultivate the gift of “Treasure.”

When approaching our donors about giving their “treasure,” remember that in order to create lasting bonds and build solid, long-term relationships we must have conversations with our donors about their “time” and “talent,” which they may also be willing to give.  Research has consistently shown that donors who give treasure combined with time or talent are much more engaged for longer periods of time.  Through the combination of treasure, time and talent, it becomes easier to steward our donors through extended communication and demonstrations of their efforts and how it impacts the overall mission of our organizations.

What is Treasure?

“Treasure,” as it relates to the big three of “Time, Talent and Treasure,” often seems to be the easiest to define and measure by most common practices.  What is treasure, if not the dollars that our donors donate to us and invest in our cause?  Treasure is the easiest to track, as most of us have systems and processes in place to receive, acknowledge and report donations to our organizations and Boards.  It is important to note that the very experience of giving treasure can make or break repeat donations, but that is for another article.  As we take a closer look at “treasure,” the generational differences about how treasure is given are vast.  By acknowledging these differences, we are better able to meet the needs and expectations of all of our donors which ultimately benefits our organizations in the broadest and best possible way.

Generation to Generation: The Boomers

When beginning to examine the generational differences in the giving of “treasure” it is easier to look first at the Baby Boomers.  We have the most experience and data for this generation to date and their giving habits have influenced our sector greatly. However, the giving of this generation, and its long hold as our most generous treasure givers, has not prepared us for the shifts we are seeing in the giving habits of other generations.

Boomers often give their “treasure” first and their “time” and “talent” second.  This post-war generation grew up knowing about the sacrifices their parents made for the war effort.  Sharing their “treasure” with their neighbors and country was ingrained in them from an early age.  Giving was an accepted expectation and giving on any level was appreciated.  This is a generation that does not expect major fanfare for their giving efforts, but who do value the donor acknowledgement in a timely fashion

For many Boomers the motivation to give to organizations that matter to them is “because they always have,” often to the point they may not even know why they continue to donate years later.  A perfect example of this is my own mother.  My mother gives to an organization that was important to her mother and she has kept up the tradition.  When I asked her why she still gives to them, even though her own giving priorities are different, her answer is “because it was important to my parents and I just always have.”

Boomers have been your most loyal annual fund donors by focusing their “treasure” on annual gifts.  Many Boomers are past the prime of their peak giving years, but many continue to work and still have large amounts of “treasure” to give and share.  Boomers appreciate being “cultivated” for their gifts in traditional ways with personal visits, on site tours and communication from staff.  As Boomers are starting to age and to live on fixed incomes post retirement, now is the time to focus on planned giving and legacy contributions with this generation.

The Gen Xers

Gen Xers, on the other hand, are truly in the middle between Baby Boomers and Millennials and exhibit far more balance in their “treasure” giving.  They usually have three to five causes that are important to them based on personal experiences or interests.  They give to organizations not only their “treasure,” but also their “time” and “talent.”  Gen Xers are a generation where all of their treasures and giving work together to make the biggest impact they can in areas of greatest interest and need.  They saw the giving of their parents, but want to be less passive in the giving of their “treasure.”  Therefore, Gen Xers combine their dollars with time and board service; staying longer term with their organizations than the Millennial generation.  Your Gen X givers will want to see their impact of “Time, Talent, and Treasure” in different ways through annual reports, metric measurements against goals and objectives and how it all relates to a long term strategic plan.

The Elusive Millennial

Millennials, on the other hand, give completely differently than Baby Boomers or Gen Xers.  They first like to give their “time” and then, if they see an impact, their “treasure.”  This is partly because Millennials are not currently in their highest earning years, but also because they value their “time” as a commodity and therefore part of their “treasure” to give.  Through stewarding Millennials to give “time” and then a follow-up with a small gift solicitation, you have a better chance of slowly upping their giving over time with incremental moves illustrating their impact and value immediately, while simultaneously capturing their longer-term attention.

Another unique trait of Millennials is that they are very social in their giving; supporting causes of friends and expecting their friends to support them and their causes in a reciprocal way.  Thus, Millennials are perfect for peer-to-peer giving campaigns.  They usually have large social and business networks that they are comfortable tapping into and their competitive nature is a strong incentive.  When soliciting “treasure” from a Millennial, more weight is given by them on who is making the ask of them at the beginning of cultivation and how it makes them feel versus the facts and figures of a campaign.  Due to their lower disposable income at this time and their social giving tendencies, Millennials disperse their “treasure” to many organizations in smaller gifts.

A word of caution when working with Millennials; even though they are not currently in their highest earning years, they will be at some point.  Millennials have a short attention span, but a long memory.  They often devote themselves to organizations for several years and then switch causes.  It is important to show them appreciation through acknowledgement, an opportunity to become more involved through junior board service or the achievement of higher levels of knowledge and responsibility in service to the organization.

Conclusions

In closing, as with “Time” and “Talent,” the giving of “Treasure” differs among the three current generations and each has their own unique nuances.  By understanding and recognizing that solicitations and approach for each generation should be different, you allow your organization to cultivate and steward your donors by meeting them where they are.  Baby Boomers, Gen Xers and Millennials have differing interpretations of the nonprofit paradigm of “Time, Talent, and Treasure.”  We, as fundraising professionals for our organizations, must adapt to the expectations, current economic state, and personal interests of our multi-generational donor base in order to cultivate long-term, consistent donor relationships and financial growth for our organizations.

 

 

 

Red Kettle Reflections

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john-marshallJohn F. Marshall
Senior Vice President

Show me an Officer’s son or daughter who has no recollection of experiences with Kettles and I’ll show you someone who has unfortunately lost their memory. Every son or daughter of the regiment could sit down and share an interesting array of stories centering around either ringing a bell or playing a brass instrument on the Red Kettle. That certainly was my experience growing up in an Army home where, once we were done with Thanksgiving, we would find ourselves the very next day standing next to a Red Kettle. I guess you could say that it was just expected. I certainly have a long history of serving on the Red Kettle and take great pleasure in sharing a few favorite recollections with you.

The Very Early Years
I couldn’t have been more than eight when I received my “baptism” into bell ringing. My father was the DYPS (the P has since been dropped) in Pittsburgh and one afternoon he suggested that I come with him downtown where he was going to “man the Kettle.” He brought along his old, beat up cornet and was joined around the Red Kettle by two others. “Here, Johnnie, take this bell and when we are not playing, ring it.” So, not really knowing what was going on, I did. The trio played some pretty interesting renditions of what should have been fairly easy Christmas tunes from the same green book and I got to stand there and watch as people threw coins and stuffed dollar bills into the pot. Now THAT was pretty neat! After we had finished, Dad packed up his cornet and we carried the Red Kettle back to the car where he placed it on my lap for the drive home. It was really heavy!

The Corps Cadet Project
“Now next Saturday kids, we are going to do a special project. So be here at the corps by noon at which time we will travel to our special Corps Cadet Red Kettle location,” stated our leader, Mrs. Mildred Hostettler. “And be sure that you dress warm: it may be cold,” she added. I looked at Don and he looked at me with an expression that said “we are in big trouble.” The next Saturday, we met in the lobby of the old Cincinnati Citadel corps and piled into the corps wagon (back in those days, it actually could hold up to 30 children) and were off to our special spot. Four hours later, and after having endured temperatures which I swear were well below zero, we returned to the corps for hot chocolate and cookies, and with a bulging Red Kettle. “Great job, kids; you have done a wonderful service,” stated the corps officer, Major Allen Weyant. I can’t recall if I had any hot chocolate but I do remember that it wasn’t until two days later that the feeling in my hands returned.

Macy’s and the World’s Largest Red Kettle
Now, I don’t really know if it was the world’s largest kettle, but we said it was. It was very likely the heaviest one as it was a 2′ high and 3′ wide cast iron monument to Christmas fundraising. It was the property of the New York Metro Division where my father was the DC at the time. It had been in operation for a number of years and every year it would receive a fresh coat of bright red paint in anticipation of being positioned just across from the main entrance of the Macy’s Department store on 34th and Seventh Avenue. It was a terrific place to have such a huge kettle given the enormous volume of shoppers going in and out of Macy’s, especially on a Saturday. That Red Kettle brought in a ton of money (literally!) and became especially full when a brass band was playing.

I was barely fifteen and just starting to get the hang of playing the tuba and my brother Norm, four years older and a trombonist, was also a regular in what was at least a quartette at Macy’s, but usually an octet on Saturdays. What was so great was that the majority of our group was comprised of younger New York Staff Band members, each a “wailer” in his own right. I cannot begin to tell you how awed I was to be a part of this group. And the music! One of the guys had a series of terrific arrangements which we would whip out and entertain the crowd with. Great stuff, but hard to play! I must admit that it was challenging to keep up with the older fellas, but I somehow always seemed to finish when they did. We would be there for eight hours and had so much fun playing and bantering with shoppers that the time just flew by.

Norman and transporting the Red Kettle
I failed to mention that brother Norm was also at that time a seasonal employee for the Division and responsible for seeing that at the end of the day the World’s Largest Kettle was placed into a van and transported the 20 blocks back to 14th Street where it was to be emptied, the money bagged and the pot stored until the next day. Well, one Saturday night, as Macy’s was closing at about 9:30 p.m., Norm was in a particular hurry. “John, help me throw the kettle into the van; I need to get going!” he said. So, we somehow managed to get the kettle into the back of the front-seat-only van and took off for 14th Street, at a pretty rapid pace. Despite my suggestion that he slow down, Norm was not to be deterred. He was in a particular hurry on this Saturday night, for whatever reason I have never learned. So here we are, me riding shotgun and Mario Andretti behind the wheel. The words “Norm, slow down, man” were no sooner out of my mouth than he executed a far-too-fast left hand turn which resulted in the World’s Largest Kettle crashing through the rear doors of the van and bouncing onto the intersection of Seventh and 35th where all of its contents spilled onto the street. I’ll never forget the look of horror on Norm’s face as he was running all over frantically grabbing at flying bills, many of which were already on their way to the Bronx . We retrieved as much as we could and made our way to headquarters, this time at a far more deliberate speed! I never did find out what happened the following Monday when Norm had to explain why Saturday’s proceeds were lower than expected. I suspect that it couldn’t have been good!

Asbury College
My very first fundraising job was with the Development Department within the Metro New York’s Divisional Headquarters. I was 28 at the time and literally started on the bottom rung of the fundraising ladder. Just prior to my first Christmas there, I was assigned the task of traveling to Wilmore, KY in an effort to recruit Asbury College students as bell ringers for the Division. I was fortunate to have Lt. Col. David Moulton at Asbury (he was the ASF coordinator at the time) as my liaison and he was terrific in helping me to meet my recruitment goal of 50 students. While recruiting, I created a special “Kettle Op’s” team, one which I would personally supervise and which would be placed within the borough of Queens. This was to be an elite group, to consist of eight young men who were willing to work very long hours but with the promise of earning a correspondingly handsome level of pay. I interviewed several students, assigned most to corps and recruited what I thought was a terrific group of ambitious and competitive young men. I was able to get them situated in one of the Queens corps and they started the day after Thanksgiving. Two of them actually worked almost until the last possible moment on December 24th. That experience was among the most rewarding of my fundraising career. These young men were tireless and for the most part kept a cheerful and positive experience, despite the fact that Monday – Friday, they began in the subway stations at 6:30 a.m. and concluded at 9:00 p.m.. Like these students, I was exhausted when the experience was over, but felt a tremendous sense of accomplishment and appreciation for a team of truly special young men.

Chicago Staff Band
I had the privilege to play with the CSB 1967 – 1974. It was a wonderful experience and one I shall always cherish. Well, maybe except for one particular experience. You see, every December, the band would choose a Saturday to go caroling within neighborhoods located along Chicago’s Lake Shore Drive, an incredibly wealthy area. Now, this did not involve a Red Kettle, but we did play as we moved outside from one very tall apartment building to another. As you might imagine, the temperature across the street from Lake Michigan in December is anything but temperate. So, here we are a group of about 30-40 uniformed icicles going from one high rise to another. The idea was for people to put cash or a check in an envelope and throw it down to where we were playing and where “gatherers” were awaiting to retrieve the donations. Only one problem: those towards the top of the high rises, some of which were 20 floors high, had to weigh down their envelopes by enclosing a few coins. I was so glad to be playing a tuba when a heavily weighted envelope was descending. At least I had head cover. Those poor cornet players! The other problem was the temperature itself. We would be right in the middle of “O Little Town of Bethlehem” when half the bands valves would freeze up. We actually had one person running around providing valve oil wherever and whenever needed. Honestly, I don’t know if the Band still engages in this activity. If they do, hopefully they have special winter issue steel helmets!

With My Wife and Children
In 1984 I was recruited to the Michigan Tech Fund in Houghton, MI located in the beautiful Upper Peninsula. When I arrived, I was quite surprised to find out that there was an Army Corps in the little town of Hancock located across the Portage Lake from Houghton. I was introduced to Major Mary Postma who wondered if I would be willing to become a member of the advisory board, which I was only too happy to do. As a board member, we were expected to do our part as bell ringers during the Christmas season. I signed up for four hours on a Saturday afternoon and thought I would see if I could entice my wife Gwen and our three children to share in the experience. Gwen was happy to join in, but my kids were initially a bit skeptical. They had placed coins in the Red Kettle before but had never been on the receiving end of the experience. With a bit of prompting, all five of us arrived en masse at the Red Kettle located smack dab in the middle of the small shopping mall in Houghton. Our kids started off a bit timidly, but once they saw how sharing people were, they quickly got into the spirit of things. Our three-year old became our most demonstrative “thank-you-er” and relished the role. It was a wonderful experience, so much so, that for each of the four years we were in the UP, we made it a family tradition to spend at least half a day each Christmas Season ringing bells.

JB+A Senior Vice President John Marshall has more than 40 years of experience in the nonprofit sector — almost as much experience as he does serving on the Red Kettle. You can reach John at jmarshall@fundraisingjba.com or at 816.914.3780.

The Results Are In: 2016 U.S. Trust Study of High Net Worth Philanthropy

By | All Posts, Annual Giving, Commentary, Donor Cultivation, Education, Fundraising, Insights, Major Gift Solicitation, News You Can Use | No Comments

ustrust_bulletinlogo_140820Editor’s Note:  The 2016 U.S. Trust® Study of High Net Worth Philanthropy, in partnership with the Indiana University Lilly Family School of Philanthropy, reports the giving patterns and priorities of America’s wealthiest donors and provides valuable insights into the strategies, vehicles and approaches that can make giving more effective. This Study is a continuation of the 2006, 2008, 2010, 2012 and 2014 reports. 

Results are based on a nationwide sample of 1,435 responding households with a net worth of $1 million or more and/or an annual household income of $200,000 or more. For the first time, the study includes a deeper analysis based on age, gender, sexual orientation and race.  The Study offers comprehensive information on the charitable giving and volunteering activities of high net worth households that will apply directly to our Kansas City philanthropic endeavors. 

This past June, JB+A partnered with U.S. Trust and the Indiana University Lilly Family School of Philanthropy to present Giving USA 2016:The Annual Report on Philanthropy for the Year 2015.  We are pleased to continue to share valuable information that complements Giving USA data and can be used by nonprofit professionals, donors, volunteers and others interested in promoting philanthropy.

What did we learn?
The Study reveals that giving levels remain high and the future looks bright, supported by several findings:

  • The vast majority are giving: Last year, 91% of high net worth households donated to charity compared to 59% of the general population of U.S. households.
  • They are spreading the wealth around: on average, wealthy donors gave to eight different nonprofits last year with donors over the age of 70 giving to an average of 11 organizations.
  • These households plan to give as much or more in the future: 83% of wealthy donors are planning to give as much (55%) or more (28%) in the next three years than they have in the past.
  • Time is also treasure: these high net worth households also demonstrated their commitment to charitable causes through volunteering.  50% of wealthy individuals volunteered their time to charities they support. This is twice the rate of the general population (25%).

Motivations to Give
While there is an assortment of reasons motivating high net worth philanthropy, the following were cited as the top motivators for giving in 2015:

  • Believing in the mission of the organization – 54%
  • Believing that their gift can make a difference – 44%
  • Experiencing personal satisfaction, enjoyment or fulfillment – 39%
  • Supporting the same causes annually – 36%
  • Giving back to the community – 27%

Only 18% of the respondents cited tax advantages among their top motivations for giving compared with 34% who cited this as a motivation in 2013.

What do high net worth donors want?
Donors have strong feelings about how their donation should be used. They feel that nonprofit organizations should:

  • Limit the amount of the individual’s donation that is spent on general administrative and fundraising expenses – 89%
  • Demonstrate sound business and operational practices – 89%
  • Acknowledge donations by providing a receipt for tax purposes – 88%
  • Not distribute their names to others – 84%
  • Send a thank you note – 61%

“This year’s Study reinforces that our wealthiest donors are engaged, willing and eager to give,” says Jeffrey Byrne, President + CEO of Jeffrey Byrne + Associates, Inc.  “with nearly half the wealthy individuals surveyed indicating that charitable giving has the greatest potential for impact on society, it is up to us – the fundraisers and nonprofit professionals – to connect, cultivate and steward these individuals.”

The study also highlighted several key findings regarding volunteerism amongst high net worth individuals.

“A significant finding from this year’s study is the correlation between volunteerism and giving” said Lewis Gregory, CAP, Senior Vice President, Institutional and Private Client Advisor for U.S. Trust in Kansas City.  “A high percentage of wealthy individuals give financially to the organizations with which they volunteer. They also give 56% more on average than those who do not volunteer. I hope this inspires nonprofits to appreciate and cultivate their volunteers on a whole new level.”

Other Key Takeaways
And the winner is:  basic needs organizations.  While many of the nonprofit subsectors benefited from increased contributions from high net worth donors in 2015, basic needs was the clear front runner.

  • 63% of high net worth households gave to basic needs organizations
  • Religion received the largest share of dollars (36%) – more than basic needs (28%), higher education (8%), health (7%) or the arts (5%).
  • The highest share of high net worth households also prioritized education as the most important current policy issue (56%) ahead of poverty (34.6%) and healthcare (33.8%).
  • New research: There’s no better time than election season to study the political giving behavior of high net worth individuals.  The study found:
    • One out of four wealthy individuals contributed to a political candidate in 2015 or planned to do so in the 2016 election cycle
    • Donors over the age of 70 (40%) and LGBT individuals (38%) were more likely to give to a political candidate or campaign
    • The top three public policy issues that matter most to wealthy individuals are health care (29%), education (28%) and national security (27%), closely followed by the economy (26%)

To access the full 90-page report, visit www.ustrust.com/philanthropy.

“Interim CEO”: Frequently an Integral Element to a Successful Transition

By | All Posts, Boards + Leadership, Capacity Building, Commentary, News You Can Use, Organizational + Personal Development, Strategic Planning | No Comments

susan_cropped-267x300Susan Spaulding, Founder & Lead Consultant, Recalibrate Strategies

Editor’s Note:  We are pleased to introduce Susan Spaulding as a guest contributor. Susan is the Founder and Lead Consultant of Recalibrate Strategies, helping companies grow their business.  Susan applies proven marketing systems to recalibrate businesses and their brands by collaboratively creating a success blueprint and facilitating a process that harnesses insights, generates new ideas and provides a strategic roadmap.  Susan has more than 30 years of experience as a CEO, entrepreneur and marketing expert with exceptional leadership and facilitation skills.

Optimally, a CEO departure announcement includes naming the new CEO. This is often the case when the current CEO gives the board ample notice of retirement plans, or if the current CEO is being promoted or re-assigned within the parent company. And, if the CEO departure is the result of an ongoing performance issue, the board should be prepared to announce the new CEO immediately.

However, in practice naming an interim CEO is frequent. Reasons are varied (1), and include:

  1. A succession plan is lacking or not up-to-date. The board isn’t prepared to name a successor CEO.
  2. The CEO needs to step away from his/her role for a period of time – often for a personal or family health issue – but expects to resume the CEO position.
  3. The board believes it’s in the best interest of the company to appoint an interim CEO. Perhaps the desired CEO is not available immediately, or the board decides to deviate from the succession plan for whatever reason.

Roles of Interim CEOs
While interim CEO roles can be as varied as reasons for needing interim CEOs, below are primary roles interim CEOs fill.

  1. Keep the company on course and on strategy until a permanent CEO is selected.
  2. Execute a company turn around – usually following CEO and/or company performance issues. The interim CEO is more likely to be selected from outside the company, and have turnaround experience.
  3. “Trying out” a potential permanent replacement can indicate the board is leaning toward selecting this individual as CEO, but need to see how the individual handles the position temporarily.

What’s critical for any interim CEO appointment is clarity between the individual and the board on responsibilities and primary objectives. It’s critical for the interim CEO to have ready access to board members. Consistent support from the board is critical for the interim CEO, for company employees and for external shareholders/stakeholders watching closely to assess company leadership and overall stability.

Importance of Acting Swiftly
In general, an interim CEO is needed due to a former CEO’s sudden departure. However, in some cases the need for a new CEO – interim or otherwise – was clear much earlier than the decision was made.

Sometimes when a CEO becomes ill, they and the board choose to believe – sometimes with diagnoses and inability to carry out responsibilities indicating otherwise – the CEO’s illness will not prevent him/her from maintaining a reasonable productivity level. The fear of negative impact, internally and externally, from announcing this “weakness” sometimes prevents timely disclosure of reality.

Example (2, 4): Apple’s Steve Jobs both refused to accept appropriate cancer treatment and board recommendations to disclose his illness. Rather, he elected (allowed by the board) to keep his illness secret. He later took a leave of absence. Tim Cook took on the role of interim CEO three times (2004, 2009 and 2011) before actually being named CEO.

Similarly, given performance issues, the board should be particularly well prepared to name a new CEO.

Often the reluctance to disclose the situation, and move forward with a new CEO is based more on emotional responses than on objective assessment of what is best for the company.

Looking Forward
Several sudden CEO departures have been in the news within the past year. Each situation varies. However, what appears consistent is a board ill-prepared for the CEO’s sudden departure. Given the acknowledged importance of succession planning, it’s concerning to witness multiple situations where succession plans are not simply implemented.

Per The Conference Board (3), boards spend an average of two hours annually discussing succession planning. Clearly the topic deserves more attention.

Recalibrating Actions:

  1. What is the status of your company’s succession plan? Is it up-to-date? Does it include contingency plans? Does it encompass roles below that of the CEO? Does it include replacement plans for those who step up to fill an open role?
  2. Ensure there is a written agreement in place between the board and the CEO that addresses unexpected situations like a personal or family illness. Then, if such a situation arises, it is the board’s responsibility to follow through on the agreement.
  3. Succession planning – certainly inclusive of, but not limited to the CEO – is a primary responsibility of the board, and should be treated as such. This will require considerable time on the board’s part to understand the status, skill sets, experience, gaps, and aspirations of leaders lower than the CEO – in some cases multiple levels below.
  4. Ensure you are having discussions with your board frequently to provide status updates on various leaders, new hires, etc. As well, discuss openly how and when announcements of changes will be handled by the board to maintain the greatest company stability and lessen negative external impact.

You can reach Susan Spaulding and Recalibrate Strategies at www.recalibratestrategies.com.

Sources:

  1. Saporito, Dr. Thomas J., Succeeding as an Interim CEO: How boards and temporary chiefs can work together., Chief Executive, March 11, 2016
  2. Stevens, Laurie, M.D., Rolfe, Steven, S., M.D., A Healthy Approach to CEO Illness: How should companies cope with a leader’s health crisis?, Chief Executive, March 4, 2016
  3. Semadeni, Matthew, Mooney, Christine H., and Kesner, Idalene F., Interim CEO: Reasonable Choice or Failed Selection?, The Conference Board, June 2014
  4. Friedman, Lex, Apple Turns to Tim Cook to Replace Steve Jobs, Macworld, August 24, 2011

“Time, Talent and Treasure”: Part Two of a Three-Part Series

By | All Posts, Boards + Leadership, Commentary, Donor Cultivation, Fundraising, News You Can Use, Stewardship, Volunteers | No Comments

Katie LordKatie Lord, Vice President

As far as nonprofit jargon is concerned, we have all probably used, or at least heard, the phrase “Time, Talent and Treasure” when referring to how we can engage individuals with our organizations.  While it may seem to be a fairly basic concept, defining it is becoming an increasingly complex matter, as definitions have evolved among different generations. In this three-part series, we will examine the components of this trifecta  individually, and emphasize how your organization can effectively create programs right now that can be easily implemented to grow your base of supporters today, tomorrow and in the future.

Talent is the second segment in this three-part series examining the “Time, Talent and Treasure” paradigm as it relates to nonprofit management. As we continue to take a deeper look at each component individually, an examination of how your organization can implement strategies that effectively utilize the “talents” of your leaders and impact your current recruitment efforts can have an immediate impact on your bottom line.

(If you missed Part 1’s exploration of “Time”, click here to access the post.)

In the “Time, Talent and Treasure” trifecta of support that we use in nonprofits to describe and measure the value of contributions that our volunteers or staff provide to our organization, “talent” seems to be the hardest to define in a universal context or to measure on a scale of impact.  This is due to its ambiguous nature and differing definitions based on the uniqueness and needs of each organization.  For the purpose of this article, we are going to define “talent” as “contributions of an in-kind service that requires special skills or knowledge to perform.”

“Talent” is tied to both “time and treasure” as it requires the donating of “services and specialized knowledge” that take time to perform and implement and would require payment if performed on the open market. “Talent” is a more refined form of volunteer service as it usually provides a business-related or operational-focused service as opposed to program support.  Such “talent” directly effects budget line service costs and can include both technical and professional services.

What is unique about “talent” is that each generation has specific talents that can be utilized by a nonprofit organization.  Millennials, Gen Xers and Baby Boomers possess a vast majority of skill sets and talents that seldom overlap and are mostly unique to their era, but are complementary to each other.  When combined through Board or committee work, each generation offers great insights and the ability to accomplish and implement a more cohesive organizational business plan that will allow the nonprofit to achieve higher strategic goals at lower costs.

For example, a Baby Boomer may perform an audit, management consulting, or financial services at no charge and be able to provide valuable sector specific expert level information, as they changed jobs and sectors less often.  A Gen Xer usually has changed jobs more often than Boomers, but less so than Millennials, and are often more likely to be self-starters, middle managers and business owners, making them excellent project managers.  Millennials know a little about a lot of different sectors as they have been exposed to more cross training and job transitions.  They have skills focusing on social media, digital marketing, information technology and event planning.  This is not to say that there are not cross-generational specialties as there are exceptions to every rule, but generally speaking, the “talents” of each generation are significant to a nonprofit’s organizational success and growth.

Thus, it is very important for nonprofit organizations and leaders to not only look at the skill sets of potential Board members and volunteers when recruiting, but to also look at diversity in age, gender and race.  It is a common mistake by nonprofit leadership to only look at “treasure” when acquiring new Board members and volunteers.  While giving capacity is a factor, it should not be weighted more than “talent,” as a high degree of “talent” is usually a predictor of later success and “treasure.”  Baby Boomers and Gen Xers have used their talents to grow into their ability to give “treasure” in their higher earning years. However, that can decrease in retirement with fixed incomes looming, creating a shift in the giving of “treasure” to the increased giving of “talent.”  Gen Xers are beginning their highest earning years and the peaks of their careers, but still wish to contribute in ways that complement their dollars.  Finally, Millennials are in their early earning years and will grow into their higher earning capabilities, but are eager to contribute now, and the best way to do that is through their “time” and “talent.”  Those organizations that seek out Millennials now will see big returns later.

In closing, the three current working generations are ripe with talent if you know where to look and how to assess “talent” based on your organization’s goals and objectives.  The most talented people in a particular field are easy to find: just look in business publications, LinkedIn and trade publications.  The same names will most likely keep popping-up.  Remember, it is wise to include the younger generation now so as to cement those relationships early and to include all levels of “talent” and professions.  By doing so, you will limit the effects of “talent” turnover and create a built-in succession plan of talented leaders within your organization.  Also, a generation’s gift of “time” and “talent” will ultimately increase their commitment to your organization resulting in the gift of “treasure.”