Nonprofit Management
Article | July 20, 2022
Data is the new currency boosted by artificial intelligence and the pandemic — obviously impacting society in small and significant ways, such as with immense data collection. It's an asset that we all have (our information), and it's precious to governments, corporations and, yes, nonprofits. But not everyone is using data wisely (e.g., safeguarding it), and some are taking advantage of this opportunity.
As a result, data gets compromised and put at risk of being stolen or misused, including by nonprofits who haven't invested in cybersecurity. In short, we've reached a moment where the privacy lights are blinking red, and nonprofits must invest in cybersecurity. Protecting donor data is no longer just something nice to do. It's essential, and donors will move away (as well they should) from nonprofits that don't protect their information by having transparent and clear data policies.
To put this in perspective, think of companies like Facebook and Google. They know your full name, location, interests and more about you (and your donors) than you might think. These large corporations also know everything about what you do online: where you've been online and who you've chatted with (and when). Inevitably, nonprofits are getting on the data bandwagon to better target and predict how and when donors will give.
And while a growing number of tech companies provide fundraisers with much better insights and abilities to raise more money with the use of data, we need to ensure there's a balance. Moreover, nonprofit leaders must know what's involved in obtaining and securing donor data.
Data Is the New Gold
Data is a commodity for all organizations, from small businesses to Fortune 500 companies and nonprofits. About 97 zettabytes of data exist now, and by 2025, it will nearly double, which is astounding. And we're in a time when you have to use data information to grow and sustain your organization to compete and stay afloat. In other words, it's not an option.
However, it’s vital to internalize the message that data is the new gold in the digital era, and it needs to be protected. In other words, cybersecurity is critical. First, the world had the GDPR, which affected U.S.-based companies and nonprofits. Then California created a privacy law, Virginia, and recently Colorado, with other states following.
Protect Your Data From Corporate Invasion
We need to understand where and how it gets collected to protect everyone's data. In other words, nonprofit leaders don't get a pass on the fact they can't understand technology. No one's saying you have to learn how to code, but you do need to understand the implications of the data your organization collects. For instance, your marketing team probably has Google Analytics set up. As a leader, you need to understand what information gets collected because sooner or later, your donors will ask you.
You should understand if and how your web presence collects data, such as the location, operating system, browser type and more from those who visit your site. You should realize that nonprofits, and probably your own, use that information to cater ads and increase conversions on their sites.
For example, suppose a donor visited a New York City education nonprofit’s website last week, and now the same donor visits a nonprofit school in Boston. In this case, the one in Boston will know that visitor is highly interested in education since it’ll recognize the browser the visitor used. Even with the most basic tracking and data collection, the chances are that your organization collects this information by using something called "cookies," which store information on a computer or mobile device when someone browses certain websites.
Google has an advertising network where advertisers can place ads related to what Google thinks you're interested in — based on things like what websites a person visited or what YouTube videos they watched. Advertisers, including nonprofits, pay Google every time someone clicks on their ads. Google also uses cookies to track browsing habits to show these targeted ads across different devices (e.g., computers, tablets, phones). Although the use of cookies is evolving, the point is that donors know this. Do you?
Stop Corporations From Tracking You and Your Donors
If you want to keep data safe on the internet, it's vital to curb certain behaviors. First and foremost, realize that the information captured on social media and the engagement from your followers gets transmitted to Google and Facebook, for instance, which, in turn, sells all of it.
Second, think about the tools you're using online to engage with donors. For instance, do you want the Facebook Messenger service or chatbots communicating with your donors and collecting their data? It's essential to inform and obtain consent from your donors on how you collect and use their data and make them aware that things aren’t so simple with social platforms, for instance.
Use Services That Don't Collect Unnecessary Data
One way to safeguard nonprofit communication data is by using services that don't collect any information. For instance, instead of using SMS texts to communicate with your donors, how about using encrypted platforms, such as Signal? Be careful with WhatsApp, as Facebook owns that one. Sure, these services may be a bit more of an inconvenience, but they don't collect personal information, which donors will appreciate.
Beware of Free Services and Applications
In the digital age, nearly everything has a price. Platforms like Facebook and Google offer you a "free" service in exchange for information. As the saying goes, if you're not paying for it, then you and the data are the product. It means that when you use these services, they give your nonprofit data to advertisers — for a fee from which you do not benefit — to make money off of your donor data and information. Conversely, nonprofits need the data to reach and better interact with donors in the digital age. Therefore, it's a careful balancing act of not taking data for granted and being mindful of the services you use and why.
Data as a Premium Commodity
Data is undeniably a more sought-after commodity. In fact, it’s now a highly precious and premium commodity. Companies currently spend billions of dollars on data mining and analysis. This happens by using "data brokers" that collect information from public records, surveys, and other databases and then combine them to create detailed reports about people's lives.
However, nonprofits should realize the ethical difficulty they face and work with vendors and providers emphasizing ethics and security. Moreover, nonprofits can't stick their collective heads in the sand, and speak honestly and openly with donors about their data. In sum, we need to take data protection seriously: to protect ourselves and donors from abuse, extortion or identity theft!
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Nonprofit Management
Article | July 13, 2022
With more than 33 years working in, or for, the nonprofit sector, I've learned a lot of things about being an executive director or CEO of a nonprofit organization. I wish someone had been around to tell me beforehand what I should know, but unfortunately, like many E.D.'s I was originally thrust into the mix without a clue. So, for your benefit, here are the top 10 things I wish I knew before I joined a nonprofit board. Perhaps they will help you to serve better on the right board or to prevent you from serving on the wrong board for your specific background, talents and temperament.
1. The Board, Not the CEO, is Accountable
Board members need to understand that it is not the CEO but the Board that is in the box at the top of the organizational chart. Being in that top box means accountability for everything that happens in the organization. The buck doesn’t stop with the CEO but with the board.
I’ve seen this: For several years, an organization covered expenses by spending down every penny of a $1.5 million endowment. Every year, their board of high-powered business people approved a budget that actually planned for income from bequests, as if they could predict when their donors might die. When things finally came to a head, the board’s response was to ask the ED, “Well what are you going to do about this?” It never occurred to them that THEY had been accountable for the mess all along!
The board, corporately, is ultimately accountable when things go right, and when things go wrong, and it needs to know how to put that accountability into practice.
2. A Board Should Never Micromanage
Some boards see micromanagement as the road to accountability. Some see it as a detriment, but still can’t seem to stop. Either way, if your board is micromanaging, they are on the road to failure.
I’ve seen this: An organization had come through a time of financial hardship. They had eliminated their debt and were now operating from a position of fiscal strength. The board, however, was still in hardship mode, scrutinizing every purchase, no matter how small. They took 10 minutes at a board meeting to “investigate” why the staff went to one store vs. another, where they could have saved (I’m not kidding) $20 on a $200 item. The staff knew that every move they made would be second-guessed, and eventually they became immobilized. The board saw this as further proof of the need for scrutiny, and that cycle eventually crippled the organization.
Micromanagement is the opposite of accountability. True accountability is proactive and preventative, while micromanagement is reactive and fear-based.
3. My Involvement Will Not Fix a Dysfunctional Board
Sometimes our ego gets in the way, and we think that our involvement with a board will finally fix whatever problems the board has been having. From poor attendance to bickering and feuds, to the countless other issues boards face, my personality and skills alone will never solve these problems. It will simply bring one more person into the morass, to endure and potentially exacerbate those problems.
I’ve seen this: Board members in a rural area often drove for as much as an hour to get to board meetings, only to find there was no quorum. Frustrated, they instituted policies for removing board members who failed to attend meetings, only to lose those board members entirely. The reason? Aside from reviewing reports, the board did virtually nothing of significance for the organization. Once the board refocused its purpose (and then refocused its meetings!), attendance was almost always 100%. And new board members could be assured that board meetings wouldn’t waste their time.
4. My Time on the Board Does Not Equal Money
Every board should have a policy requiring board members to donate to the organization to the best of their means. This is NOT a fundraising issue. This is a living-by-example issue. If the board doesn’t believe the organization is worth investing in, why should a donor? How can we ask others to give generously when we haven’t done so ourselves?
I’ve seen this: Some of the board seats of an organization serving low income families are reserved for recipients of the service. As a condition of a large gift, a donor wanted to be assured the board had all donated as well. When the “client” board members were asked, “What amount could you give - even if it’s just 25¢?” they all gave. One client wept as she handed over a $1 bill. “This is an honor. No one has ever asked me to participate in this way before,” she said. However, some of the non-client board members became angry, saying they were never told they would have to donate their time AND their money.
With a giving policy in place, prospective board members will know what is expected of them BEFORE they join the board, and before a donor puts them on the spot by asking, “Has all your board given to the organization?”
5. The Board/CEO Relationship is Crucial for Success
If the board’s relationship with the ED isn’t great (or it stinks), or there are hard feelings between the board and staff overall, this will carry into every decision made by the organization. The Board/CEO relationship is like a marriage. It requires work! It also requires a great deal of trust and communication. Without these two ingredients, the organization is likely to ultimately fail.
I've seen this: An ED spent 20 years growing an organization to a nationally recognized and widely copied model for providing service. The board began attracting heavy-hitters, many of whom joined for the status of affiliating with this group, but who felt little passion for the mission. A rift was created between the board, who was mostly concerned about the organization’s finances (which were, by the way, in great shape), and the staff, who were mostly concerned about meeting the community need (for which they continued to maintain a stellar reputation). After a few years of this battle, the ED retired early. It has now been 2 years, and the board is still arguing over what they are looking for in a replacement ED.
Problems between the staff and the board are almost always symptoms of something larger - usually a lack of understanding / focus on the organization’s vision or its values system. It is important that a board with these kind of issues receive some kind of “marriage counseling.”
6. The CEO Should Not Be the Only One Recruiting Board Members
If the nonprofit CEO is the one doing most (or all) of your board recruitment, I probably don’t want to join the board. Look at the organizational chart. Do you really want your CEO hand-picking his/her boss?
I’ve seen this: A CEO did all the recruiting. She also determined what would be on the board’s agenda every month, and provided the board with the information she felt they should have. Not surprisingly, the board never did anything but rubber stamp what the CEO suggested. In this organization, the board really thought they worked for the CEO!
If the CEO is your board’s main recruiter, then your board likely has far more problems than you might suspect.
7. Planning and Implementing are Two Different Things: Both are Needed
An organization needs plans for how it will impact the community and plans for how it will ensure it has the capacity to create that impact. If the board has plans, but no clue about the status of those plans, that’s just as bad. An organization's plans are your answer to the big questions - Why are we here? What are we trying to accomplish for the community? If the board can’t answer those basic questions, then what exactly is the board doing?
I’ve seen this: An organization was required to have a strategic plan for accreditation. Every year they hired a consultant, created a plan, and did nothing to implement it. When they called to ask us to facilitate their next planning session, we told them we couldn’t do a plan unless we were assured the board would monitor its implementation. And they had no idea what we meant.
A board needs to understand that “ensuring that the organization is making the community a better place” is one of their primary areas of accountability.
8. The Bylaws Determine How (And If) the Board Works
Does the board have term limits, or can someone be on the board forever? Is it clear what types of actions could get someone thrown off the board, and what the process would be for removing them? Policies and procedures will guide board decisions and expectations.
I’ve seen this: A board president called for advice: One of his board members had embezzled from their small nonprofit, but the rest of the board wouldn’t vote to remove him from the board. After I picked myself off the floor, I asked if they had contacted the police or an attorney, as this was a legal issue first, and only then a policy issue. Yes, he said, he knew they needed an attorney, but right now he needed to convince the rest of the board to remove this guy. Without a policy, the rest of the board felt sorry for the embezzler and wouldn’t vote to remove him. So there he stayed, attending meetings and voting on organizational matters, months after the discovery had been made! As extreme as it appears to be, with no policies in place, the board was in a quandary about whether or not to remove their “friend.”
If you are thinking this couldn’t happen to your board, you might be surprised at some of the bad behavior I have witnessed from otherwise rational people - behavior that seems to only show itself when they find themselves on a nonprofit board. Without consistently applied board policies and procedures, it is more likely that your own odd sets of circumstances could knock your board (and your organization) for a loop.
9. Someone Has to Provide Me Training and Orientation
The board must have an orientation program, and new board members need more than their board manual and perhaps a tour of the facility. Without training, how will I know what is expected of me? And how will the organization be assured that I am capable of guiding the organization?
I’ve seen this: I once gave a long-standing board a quiz about their organization, with easy questions like “What is your annual budget?” and “Name three programs the organization provides” and “Name one staff person aside from the administrative staff, and tell what their position is.” They all failed. Many had been on the board for 20 years, and each and every one of them failed the quiz. How could they govern if they didn’t have such basic information? Often, I perform this same quiz about the organization's mission ("Tell me the mission statement of the organization") and 99% of the time, they also fail.
Board members must be well informed about the organization from the moment they are permitted to vote, because otherwise they won’t be able to do the job. At the very least, they should be able to recite the mission statement! The organization must also ensure that every single board member understands how to read the financials (not just those on the finance committee), so that every board member can be accountable for decisions that require financial understanding (like approving the budget, approving new staff positions, etc.).
10. Why Do You Want Me, Anyway?!
This will sound ridiculously simple, but it is critically important to know why the organization wants me-specifically- to serve on their board! What skills, talents, experiences do I bring to the table that complement the rest of the team? Being asked “Will you serve?” with an answer of “yes,” should not be enough for me to secure such an important position.
I’ve seen this: "Warm blood and a pulse." If only I had a nickel for every board who told me this is their recruitment criteria. If prodded, they might offer that they are seeking "business people" or "people with connections." On the other hand, when I ask what criteria and processes they have in place for recruiting their janitor, they rattle off a whole litany of qualifications and reference checks, etc. If our boards are accountable for everything our organizations do, shouldn't we have at least as good a process for "hiring" board members as we do for hiring the janitor?
A board must have a solid recruitment process that includes not only applications and interviews, but first and foremost knowing what they are looking for, and how I fit into that mix.
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Nonprofit Management
Article | July 28, 2022
Advocacy vs. Activist Roles:
Non-profits all over the world are typically divided into those that engage in grassroots activism, those that advocate ideological positions, and those that combine the two to work for the betterment of society. This means that many non-profits, such as the Red Cross and Oxfam, are both activist and advocacy organizations, whereas others, such as the World Watch Institute and the Club of Rome, are primarily advocacy organizations.
Furthermore, many non-profit organizations, such as Greenpeace and the World Wildlife Fund, are primarily activist in nature. The key point to remember here is that no non-profit can exist solely through activism or advocacy and thus must combine both functions to gain legitimacy and credibility.
In other words, non-profits must strike a balance between activism and advocacy in order to achieve their social welfare and public good objectives. Of course, there are many non-profits in the United States that primarily function as advocacy groups with a presence only in the country because politics in the United States is driven by lobbying and special interest advocacy, which means that liberals must fund non-profits that advocate for their ideologies.
Grassroots Activism, Interventions, and Crisis Management:
When it comes to grassroots activism, non-profits must not only have the necessary ideology but also a deep commitment as well as the willingness to endure odds and overcome obstacles. This is because grassroots activism usually entails non-profits confronting the might of the state in areas where they must question the state's practices and point out gaps and anomalies in the implementation of the government's social schemes and welfare policies.
Furthermore, grassroots activism necessitates intervention and crisis management by non-profits, which frequently puts them in conflict with vested interests who do not want interference from those they perceive to be unwanted attention and spotlight focusers on their nefarious activities. This is why many non-profits stop at the beginning of their activism and do not move on to interventions and crisis management. This is also why many non-profits collaborate with law enforcement and government agencies so that any interventions and crisis management can be carried out in tandem with the government rather than the non-profits taking on the role that the government must. Of course, this is easier said than done because, in many cases, non-profits discover that governmental agencies have abdicated their responsibilities, forcing them to intervene and correct the problems on the ground.
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Nonprofit Management
Article | July 12, 2022
It is crucial to keep a keen eye on what the significant figures imply for NGO’s and how they affect their operations. Learn more in detail in the 5 key lessons!
It's alluring to concentrate just on the significant figures that affect the non-profit industry as a whole. However, it's equally crucial to concentrate on what those significant figures imply for certain NGOs and how they may affect your day-to-day operations. The report can be used to learn the following five key lessons.
Lesson One: Small-Dollar Donors Are Being Left Behind
Around 84.1% of contributors give less than $500 yearly to the organisations they support, and just 19% of new donors are retained over time, according to the most recent Fundraising Effectiveness Project data. This indicates that the great majority of small-dollar donors are leaving non-profit organizations.
Lesson Two: There are Winners and Losers by Mission Type
Donors change the emphasis they give to certain missions every year. Donors' giving priorities clearly reflect the legacy of COVID-19 as well as the enduring influence of racial and social justice movements.
The number of non-profits with missions in the arts, culture, or healthcare increased significantly in 2020. Non-profits with an emphasis on foreign affairs, human services, and education, on the other hand, had slow growth or reductions in 2021.
Lesson Three: Corporate Giving is a Distraction
It will become more crucial to engage with people instead of concentrating on corporate ties as businesses modify their philanthropic alliances and employees try to support their preferred causes outside of their workplace's giving program.
Lesson Four: It’s Time to Modernize Bequest Giving
A warning sign that NGOs are not investing in highlighting the opportunities available with legacy gifts is the decline in bequests during 2021. Although any donor can establish a contribution through their estate to a non-profit they are passionate about, there is a frequent misconception that bequests must be customized for significant donors.
Lesson Five: Retention and Acquisition Benchmarks Are Critical
For its key revenue figures, the Giving USA report heavily depends on IRS 990 information. When examining giving trends throughout the sector, that data is helpful, but it is less helpful when attempting to comprehend the behavior of all donors.
It is reassuring to see that when discussing contributors' ongoing support of NGOs, the Fundraising Effectiveness Project's data on acquisition and retention of individual donors was recognised as the primary source. It's crucial to comprehend donor behaviour, and you can achieve this by comparing the donor behaviour of your own organization to benchmarks from the ‘Fundraising Effectiveness Project.’
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