The nonprofit sector is claiming it is entering another funding crisis yet not defining the root cause or coming up with a plan B or C. A business term for defining a crisis is: “A critical event or point of decision that, if not handled in an appropriate manner (or if not handled at all) may turn into a disaster or catastrophe.”
Management of nonprofit organisations (NPOs) are quick to blame economic downturns and cut backs in grants and individual donations when in-truth ‘good causes’ often attract inexperienced, well-meaning people who don’t understand fundraising yet they are running the show.
Planning and interpreting trends in the market are not viewed as board member duties, yet this should be a priority for inclusion in a fundraising plan. Fundraisers are often given unattainable yearly targets without full agreement to a fundraising plan or attention to sufficient resources, which creates panic and a tendency to jump at the next big thing without regard for a strategy or a review of what worked in the past…. Throwing the baby out with the bathwater.
Behaviour has to change; leaders must take responsibility for their organisations fundraising activities and ensure that sufficient income is raised to run programmes and function efficiently - otherwise expect a disaster or catastrophe.
Think philanthropy rather than fundraising. Smart NPO leaders will invest in building relations with current donors and potential supporters by carefully measuring levels of interest and communicating messages of appreciation. It is much more cost efficient to retain existing donors than to bring in new ones. Think retention, retention, retention.
If you haven’t introduced a Donor Sustainer Programme (also known as stewardship) start immediately as it takes years to gain traction and build a pool of loyal donors. Take time to analyse each donor and your audience - adapt your approach and embrace technology and communication tools where it is easier to tailor messages via social media and texting.
A sad decline in postal deliveries has affected direct mail campaigns for many charities; this creative approach, ideally used for keeping in-touch with loyal donors will more than likely grind to a halt unless the South African Post Office (SAPO) gets on track. We estimated that charities collectively lost around R60 million in donations during the lengthy strike. Let’s hope that the new chief executive officer, Mark Barnes, will not only focus on getting e-commerce operational and digitisation implemented but revive ‘letter box’ delivery, even consider drones for parcel and post delivery!
Now is the time to consider mobile devices and the next generation of smartphones and tablets for reaching not only the millennial generation but also seniors. Silver-surfers (50 plus) to 99-year olds are online and connected. AgeUK has introduced its own tablet known as the Breezie in a bid to help seniors enjoy the Internet and retain connected and ‘mobile-enabled’, which also assists fundraising efforts.
Other strategies that are working well and growing in popularity include crowdfunding and other online campaigns but the question is how do you sustain these relationships?
International donor agencies are reconsidering their role in the development process of South Africa, this rebooting of strategies may affect a number of organisations. Established funders such as the Ford Foundation, Rockefeller Brothers and Kresge Foundation are to focus more on impact investing producing a double-bottom line that will build durable institutions and networks, platforms that will accelerate and sustain social change. The Ford Foundation intends to reduce the number of grants they make each year by 20 percent.
More effort has to be made in sharing outcomes that will demonstrate clear results turning annual reports into ‘impact’ reports, making real change. For instance, consider alignment with the National Development Plan (NDP)? What about the United Nations 17 Sustainable Development Goals (SDGs) - have you incorporated these aspects in your work going forward and are you part of the movement?
If your organisation still enjoys commitments from foreign donors you will be doing a dance of joy this year as the Rand exchange rate continues to wobble against other currencies. The United States dollar could go to a R20 to $1.00 rate before the end of 2016.
We can expect a downward trend in corporate social investment (CSI) grants as after tax profits decline but the important thing is to remain connected to CSI staff and nurture those relationships as opportunities can come in different guises through employee volunteering initiatives, purchasing of goods or services from your organisation or pro-bono work. Education currently receives 47 percent of CSI (2015: R8.1 billion) of which 24 percent goes towards higher-ed bursaries. Expect this to rise after the #FeesMustFall protests last year. Government will be leaning on business to meet short-falls in their promise of R6.9 billion to assist students.
As public confidence in the work of nonprofits is questioned and trust dwindles, we have to think ethics and compliance. Members of the public anticipate the highest level of integrity from fundraising staff to working for good causes.
So it was disappointing to read SANParks debacle last year after erroneously paying commissions totaling R1.9 million to a senior fundraising manager, employed to generate R200 million for the rhino and leopard fund. According to a SANParks press release, he was ‘unjustly and fraudulently’ enriched at their expense. The fundraising manager was dismissed and ordered by the High Court in Pretoria to repay the full amount with interest. Ouch! SANParks should know that in the code of fundraising ethics paying commission on amounts raised is frowned upon.
The Nonprofit Organisations Directorate reported that 138 071 NPOs were registered by the end of March 2015* of which 45 percent are compliant in terms of acceptable reports submitted under the NPO Act 1997. A great improvement over previous years but still not good enough to ramp up public trust. The sector needs to be mature, even self-regulate each other to do better, much better. Minister Bathabile Dlamini may have announced a moratorium on deregistration for non-compliance last July but some NPOs have not submitted reports for 10 years, yet they keep dodging the system bringing us all down. Note: * 151 568 NPOs are registered as of 15 February 2016.
An uber funder in 2015 was the South African Government but expect some cut backs in funding to NPOs this year - so recalibrate and make another plan.
In a nutshell:
- Define your particular crisis and find solutions;
- Research what is working for you and stick to it;
- Look after your donors - don’t take the money and run;
- Recruit ethical fundraisers;
- Keep an eye on technology and new devices; and
- Be on the ball with feedback and compliance.
Ann Bown works for Charisma Consulting.