BS: Anyone work in non-profit/fundraising?

Subject: BS: Anyone work in non-profit/fundraising?
From: Kim C
Date: 16 Dec 03 - 01:18 PM

I have worked at a non-profit agency for 7 years and I still don't understand how this fundraising thing works. At the beginning of the fiscal year, the staff was told there was no money in the budget for raises (usually we get 3%). No big deal, they still pay our insurance. Anyhow, I was surprised to see the bills come across my desk for a recent fundraising event we just had: about $30,000 worth.

In my way of thinking, if we can afford to put on a $30,000 event, we don't need any funds. Not to mention, that $30,000 would have more than taken care of measly 3% raises.

Is it entirely normal that non-profits spend money to make money just to spend and make more money?

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: GUEST,MMario
Date: 16 Dec 03 - 01:33 PM

yup

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: Kim C
Date: 16 Dec 03 - 01:42 PM

But what's the point of that?

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: KateG
Date: 16 Dec 03 - 01:52 PM

Alas, yes.   As with any business, the only way to have money come in is to spend some. And of course, not every fund-raising event is sucessful (i.e. profitable). The question to ask of that $30,000 fund-raiser was not "how much did it cost?" but "how much did it bring in...espcially after all the non-cash expenses (staff time, wear and tear on the building etc.) are factored in.

A fellow museum person once worked in an institution where the young man in charge of concerts couldn't see why spending a million to make a million ten thousand was not a good idea. His accounting didn't factor in staff and overhead costs....and at the then going rate of interest the million would have earned 20 - 30 K in the bank with absolutely no effort on anyone's part. It's too easy in the non-profit world (speaking as a 20 year veteran) to get caught up in the moment and forget essentials like cost:benefit ratio.

My advice to you is to read your organization's annual report with a fine tooth comb, and also their tax return (which is public information, and can be obtained through the Foundation Center in NYC).

But even in the best run non-profits. The most non-profit aspect is the staff...which is why I'm now a for-profit consultant.

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: wysiwyg
Date: 16 Dec 03 - 01:53 PM

Bottom line. An event nets not only $$ directly but also increases publicity for the org or issue, and it also can generate later gifts that are HUGE. FR is not an action, it's a culture, and it is pretty weird. Everything that happens within it has multiple purposes.

As far as staff salaries, that's a problem. People measure org effectiveness partly by the percentage of donated $$ that goes to "operating expenses." So the smaller the percentage of gross income you pay to staff, the more you can say you give to the delivery of services.

It's all pretty sucky. Figuring out the whys won't actually change that; it's just sucky because it's sucky. NPs are an odd part of the economy.

~S~

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: Kim C
Date: 16 Dec 03 - 02:07 PM

I understand about spending money to make money, but I also thought non-profits were supposed to be frugal in their spending. We spent $3000 on floral arrangements. Floral arrangements! We could have gone to a wholesale florist and done the damn things ourselves for half the cost.

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: Amos
Date: 16 Dec 03 - 02:13 PM

Kim:

That's just misestimation by management on the best way of doing things; non-profits are more often frugal by necessity and for good PR than because of any particular rule. If there are more efficient ways to do things (e.g., flowers) (more benefit for same or less dough spent) then they should be brought out as improved ways to do things, assuming you have a reasonable management. (I tricky assumption, generally).

A

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: Rapparee
Date: 16 Dec 03 - 02:13 PM

I know of a library that raised over $2,000,000 to build a new facility at no cost to the taxpayer. The city (city library) took the money and built the building, as was their right as the library's fiscal agent. But rather than pay the bills, the city put the $$ in a special fund by creating a special group -- the money was invested, the profits went to pay off the new library. Well and good, but the stock market tanked and the fund is almost worthless now. The library still isn't paid for, but the money now comes from the city's general (tax-supported) fund. Not illegal (I think), but certainly skirting the edges.

It's not all that difficult to get money for bricks & mortar. You can't get it for operations at all.

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: M.Ted
Date: 16 Dec 03 - 03:00 PM

If you've been involved in non-profits for 7 years and still don't know understand fundraising, this is a pretty good time to start learning, because it will help you to out a lot to understand what happens and what doesn't happen around there. You can find any number of books about it, but there are also lots of resources on the internet--

A lot of organizations spend most of their money, meaning 50-70% and more on fundraising, for the simple reason that that is how much money it costs them. And the sad fact is, without fundraising, there would be nothing to pay your salary, let alone that 3% raise--

Now, if you think you could have saved money arranging the flowers yourself--think about this:

How much time does it take to go to the wholesale florist and do the whole job yourself? All of your time costs the organization money--and if two or three people are working on the flowers, well, that's two or three times the cost, out of pocket--but when you arrange flowers, it costs your non-profit double, because the organization loses the value of the work that you would ordinarily be doing--and don't forget the time it takes to supervise your flower arrangers, to make sure the job the are doing is up to the level of what you'd get from a florist--

The bottom line is that it would probably cost you just as much or more to do the flowers yourselves, assuming that A) your work was as good as the florist, and B)that you had nothing better to do leading up to this very important fundraising event--

Think you could do without the flowers? Flowers are the most noticed decoration--without them, a banquet hall looks a lot like a cafeteria, and your donors take the centerpieces home, and proudly tell everyone where the came from--you can't get any more goodwill than that!

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: GUEST,Been There
Date: 16 Dec 03 - 04:56 PM

If you follow KateG's advice and start going over your organizations finances with "a finetooth comb", and it isn't part of yourjob, you'd better be ready for a lot of flak--the minute people see what you're up to, they are going to figure that you want to make trouble--and they'll start looking you over with a finetooth comb. Believe me, they'll find problems, even if they have to be creative. I used to write yearly evaluations in a non-profit with gov't contracts(so everything has to be strictly by the book), and, believe me, we could have gotten rid of Mother Teressa if we needed to.

If you want to keep your job, just pay the bills and keep your opinions on that $30,000 to yourself--

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: KathWestra
Date: 16 Dec 03 - 05:47 PM

I'm a veteran of nonprofit work--20+ years as communications director and/or manager for various nonprofit associations in the D.C. area. At one organization I worked for, the annual dinner cost loads of money (including expensive flowers), but actually paid for itself. People (supporters, board members, donors, and vendors with whom the association did business) bought individual tickets or whole tables. A board member with connections to the liquor industry donated the wine. A vendor we used to print our association magazine printed the program gratis. We used the occasion to highlight the accomplishments of environmental activists, generating both publicity and goodwill. Staff members strategically placed at tables with donors/potential donors were able to use the occasion to connect with these people, who later gave additional money. So I agree that the "bottom line" of these events is not just the actual cost of the fundraiser. These events can be significant "friend-raisers" too.

That said, the same organization spent an extraordinary amount on direct-mail to recruit and retain members. We had to kill zillions of trees and spend millions of dollars just to keep our membership at a steady rate. Some of the costs of those mailings were allocated as "education" expenses, which seemed pretty disingenuous to me. Yes, they talked about issues, but in a "the sky is falling" kind of way that was designed to scare people into sending money--which in turn was used for the next big direct mail push.The IRS has gotten much tougher since then on what associations can allocate to "education" expenses, and I think that's a good thing.

I think many nonprofit associations, particularly the very large ones, forget that their members expect that the money they send will be used for the purpose of ending hunger, or promoting peace, or saving wildlife, or whatever. The larger the association, the harder it seems to be for management to make the connection to the fact that all its dollars (in the case of my former organization, $19 million of them a year)come from people who are counting on the organization to spend it wisely and well and for the purpose it was given. The support staff in associations tend to see this connection much more clearly, because it is they who process the individual $25 contributions from people who say things like: "I wish I could give more, but I've been out of work for six months and this is all I can send...." I wish the president of every nonprofit were required to read these often-handwritten notes on a regular basis to be reminded of their constituency and their mission. And in the case of my former organization, they should probably be reminded of the irony of an environmental nonprofit spending a significant portion of every dollar on direct mail that killed countless trees for the benefit of a one-half-percent rate of return in memberships.

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: Jerry Rasmussen
Date: 16 Dec 03 - 06:37 PM

I was Executive Director of a large Museum for 30 years. The whole fund-raising process is frustratingly subjective. There are a ton of factors involved. For one, there is always al elemnt of the Board of Directors who are on the Board for social status, who want to have a lot of fund-raising events because they're fun, and they make social connections (which are also good for business.) Too often, fund-raising events are used for "networking."

When people on the Board suggested fund-raising events, I'd always suggest that we do some preliminary planning to come up with a budget, and a fund-raising goal. There were several occasions where, to do the event the way that the Board of Directors wanted to would have cost more money per person than we could afford to charge. The suggestion was usually made that we get corporations and businesses to sponsor the event, which in some cases meant that annual contributions that were unrestricted and helped pay things like salaries were re-directed to offset losses on a "fund-raising" event.

"Good press" and exposure have value, of course, but it is very intangible, and may or not pay the bills. There's also the old adage that "You've got to spend money to make money." That's true. But, if you don't spend money wisely, you'll end up losing money. I don't ever remember that truism..

Jerry

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: Kim C
Date: 16 Dec 03 - 06:52 PM

M.Ted, members of our local Junior League are required to contribute so many hours of volunteer work every year. I have no doubt that any of them could have done some fine flower arrangements or other such decorations for a lot less than what we spent. (The "professional" flower arrangements were not all that great - in fact, many of the staff commented on how chintzy they looked - certainly not what I would have expected for the investment.) That way, we cut costs, promote volunteerism, and the Junior League ladies fulfill their requirements. Sounds like win-win to me. Maybe it's too easy.

I know that fundraising takes money, and I have no quarrel with that. What I have a quarrel with, at least in my office, is that no one seems to want to take the time to research the best options for the money we have to spend.

Earlier this year we had a concert that brought in close to $60,000. Expenses were about half that. If we spent $30,000 to make $30,000, it seems like we didn't actually raise any money at all. Am I looking at it all wrong?

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: wysiwyg
Date: 16 Dec 03 - 07:43 PM

NPs have to buy stuff just like anyone else, much of the time. Over time, you start to take shortcuts. Buying what can be donated is one of the first, especially when you must be able to count on the results. You want your people to be service-delivery specialists, not floral arranging specialists, don't you? How do you allocae time?

I ran a local Red Cross unit. YMMV, but the idea of coordinating your Junior Leaguers' volunteerism makes me shudder. A lot of volunteers want to do it dressed up and in public view so they can work the room, too-- especially the White Glove Gang.

Also, every volunteer-- and I treasured all of ours-- is a potential landmine of one sort or another. You learn in short order who you can depend upon, and for what.

I'd have ordered the flowers and I'd have bought plain stuff in enough bulk to fill things out. But I would hope I'd have had a contact in the flower world who would give me nice discounts, or even free flowers in exchange for a credit line in the programme. I'd have avoided anything showy because people would assume we were spending thir money on flowers, not people (even if the flowers were totally donated.)

If you don't have a board that can and will finesse such arrangements for max impact/min outlay of time and money, you end up paying through the nose.

Sniping from within the organization is how many other people burn out. If you can be a better Exec than the one in place, go try your hand in a small NP and see how you make out.

Why not assume someone is doing the best they can with whatever situation they have inherited, see where you can help by being a good friend and seeing it how they see it, and get back to your normally positive outlook?

~Susan

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: DougR
Date: 16 Dec 03 - 09:45 PM

Kim C: I worked with nonprofits most of my life and retired as Development Director of a professional theatre company.

A $30,000 expense figure sounds very high to me, unless the organization had a very high return on the investment. I would say an expenditure of $30,000 should bring in at least four or five times cost. Your thought about flowers is on the mark in my opinion. It is possible that an event chairperson may have lost perspective as they so often do in order to ensure that the event "looked" well enough to stroke his/her reputation.

Most performing arts organizations base their budget on raising at least 50% of their income from earned income (tickets, advertising sales, sponsorships) and the balance from contributions and special events. They don't always reach any of their goals though for any of the income sources. Special events, in particular, are usually a real crap shoot.

Unfortunately, when goals are not met, it is usually payroll that suffers. Particularly, staff members. The executives usually don't suffer as much.

DougR

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: Kim C
Date: 17 Dec 03 - 08:32 AM

Susan, that is good advice... I have to say, though, that our fundraising person seems to be more concerned about "having a party" than the services of the agency itself. It's like a toy to her, almost. She doesn't actually have to work. She drives a Jaguar, compliments of her husband. The job is just a way for her to pass the time.

It used to be, we had to get three bids on products/services before we made a purchase. That apparently isn't happening anymore.

I do like where I work, for the most part, and it concerns me that we may not be making the best use of our money. I don't know how to address that, as the Exec is always making excuses for the behavior of the fundraising person.

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: wysiwyg
Date: 17 Dec 03 - 09:10 AM

But the FR person IS the person in the job. At least you have one who is active and doesn't make messes! Sometimes, also, the FR person is someone with community conitacts who can haul in big bucks no one ever hears about. Our community hospital's PR head is like that-- she's really a Rainmaker. Anyhow, these things tend to operate however they can, and as I said earlier, it is an odd part of the economy where things don't always appear to make sense.

~S~

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: GUEST,MMario
Date: 17 Dec 03 - 09:21 AM

Look at it this way -

if you havbe $30 k and spend it on a function that brings in (gross) $60k; you have doubled your money. Yes, 30k made 30k; but it also paid back the original 30k.

it could be worse - I donated two shawls last may to an auction - material costs for me were approximately $10. (about 40 hours of labour on each)
The auctioneer paid no attention to the notes regarding the shawls - auctioned them off together as a lot; knowcked them down at $5 - to the utter dismay of several people who wanted to bid on them - but he never gave them a chance. (took the first bid and did a REAL quick goign,going,gone)

I didn't even have a chance myself to match the bid; thus giving me the chance to auction them off elsewhere or give them as gifts!!!!!

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: wysiwyg
Date: 17 Dec 03 - 09:39 AM

Uh oh, now I'm gonna start some trubble......

Idea-- Ask the FR person to lunch. Ask her (in a roundabout way and then zoom in for the kill question, "I'm just curious, and I have been wondering if there is any way I might help in FR. What would need to happen in FR for everyone to get a 6% raise next year?"

Asking questions, if they are not perceived as threats, can be cery very subversive when an org is stuck. The key is, remember, it's the Q that matters, not the A. The Q worms its way in and things start to happen..... I would never suggest something like this to someone who has problems with negativity. You, on the other hand..... it could spark something you don't see till later, that could be very powerful. No one in NP ever has enough dream-time, you know??? Start someone dreaming and.... you know???

People say I like to stir the pot. I always respnd, "No, I'm just a hot stone. [genuine interest and curiosity about how things work; genuine love for people, especially the goofy].....If you throw me into a cold pot it's bound to boil and stir itself."

Maybe you're a hot stone too! :~)

~Susan

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: Kim C
Date: 17 Dec 03 - 09:51 AM

Oh yeah, I'm a hot stone all right. I get frustrated sometimes though, because while I come up with all manner of ideas, the People in Charge think they are the only ones whose ideas matter.

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: wysiwyg
Date: 17 Dec 03 - 10:22 AM

Right. People do like to have their own ideas, and they hope for support for them. Questions can be a way of sparking their ideas, if you can leave your agenda out of the equation. It only works if you value their ideas more than your own, unless you are part of a team agreeing to work together on ideas.

I guess we hot stones have to choose when to be the stone and when to be the stew. Having ideas, and being responsible for implementing them, are two very different critters. How often have you been hip-deep in rehearsing up a new set, and in your first performance had someone tell you that what you SHOULD be doing is, Kumbaya? :~)

I'm not aiming for sarcasm-- but really, if you had that FR job, it would look totally different to you as soon as you tried to do it. If you have gifts in that area maybe you should be doing FR-- but in another nonprofit where you can test your own ideas out and still meet YOUR payroll.

You could test your ideas by doing Mudcat fundraisers..... or volunteer in another NP where there is not also the need to keep a paycheck.

In friendship,

~Susan

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: Kim C
Date: 17 Dec 03 - 10:34 AM

You're right, Susan, if I tried to do the job it would be a lot different. There are several other factors in play, though, that I am trying not to address here, in an effort to avoid the appearance of mean-spiritedness. Let's just say that I always believed that people in management were supposed to be the ones to set the good example for everyone else to follow.

I did apply for the FR assistant position a couple of years ago, but I didn't get it because they didn't want a hot stone. ;-)Actually the person they did hire turned out to be a hot stone anyway, albeit in a much more subtle sense, and she resigned because she got tired of doing all the boss's work and getting none of the credit.

Anyhow... I do appreciate everyone's input here. Thanks. :-)

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: M.Ted
Date: 17 Dec 03 - 12:02 PM

"our fundraising person seems to be more concerned about "having a party" than the services of the agency itself" You mentioned that your organization is a chapter of the Junior League.

Without meaning to be disrespectful in any way, let me point out that for the hundred or so years that it has been around, Junior League has been as much about parties and the society page as it has been about volunteerism--Mary Harriman, who founded the organization, intended it to be like that, using the cache of her family name, and position in "Society" to recruit and train volunteers   from young women of "breeding" to work in the Settlement Houses--noblesse oblige--

The idea at the time was, since we're going to have elegant society parties anyway, why not use them to raise money and do worthwhile work--over the years, a lot of people have questioned as to whether the parties or the work were more important--

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: Kim C
Date: 17 Dec 03 - 01:11 PM

Our organization isn't a chapter of the Junior League - we sometimes engage members of the Junior League as volunteers. In the past they have worked on decorations, stuffing invitations, etc.

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: Rapparee
Date: 17 Dec 03 - 01:30 PM

I've seen far, far too many things done that look, well, "schlocky" to want to have them reflect my library. If you're going to do it, why not do it right?

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: Kim C
Date: 17 Dec 03 - 02:05 PM

Perhaps I am naive - but I believe that it can be done "right" even on a smaller budget. Personally I think cut flowers (available at wholesale florist) in a sleek glass vase make a nice centerpiece.

I have to say, that our $3000 flower arrangements were pretty schlocky.

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: jimmyt
Date: 17 Dec 03 - 04:31 PM

Interesting thread you have here. Quite honestly almost everyone has it right as I read the remarks. It all depends on your perspective I guess. Kim, you are probably right about the flowers. It is, however, an isolated example. There may be far more forces to reckon with here than you can imagine. Lots of these issues when they relate to fundraising depend on how you are perceiving it, and most people can't see the big picture.Obviously if there is blatent corruiption of funds, it is one thing, but sometimes a person may agree to pay for a particular item of a program if the business is directed a certain way ie "I will pay for the flowers if you give the job to my niece who has just opened a flower business." etc It is hard to see the big picture if you are not in the director's seat. I am not saying this is right or wrong, but that it is the way these things operate frequently. I personally think that all things being equal, spending thirty to make sixty (100 percent return) is not necessarily a bad deal. I am on the board of directors of a community theater company, and many times we would take that kind of return and run with it. Again, I am just making some observations, and like I said, I think there are lots of right answers here.

Being a businessman, I will tell you that most of the people in the community would prefer to donate their dollars to nonprofit organisations that have very little of the money going to operating costs. I think we all realize that operating expenses are necessary, but we sure want to see the bulk of the money going to the cause, not to operating expense.

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: Kim C
Date: 17 Dec 03 - 05:20 PM

Well, that's all true, and I don't know that we didn't actually get a discount on the flowers. They might normally have cost $6000 for all I know.

But now, here's another thing. The management of the agency is really good at not communicating with the staff. So when they say, no raises this year, every penny counts... and then I see some of these bills... it seems dichotomous to me. If our annual report is supposed to be a matter of public record, I think the staff should be informed about what the agency is doing with its money. Is that an unreasonable idea?

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: M.Ted
Date: 18 Dec 03 - 11:55 AM

Kim--Reading between the lines, it seems like rather than just the flowers, you are upset about whole way that your organization handles it's money and it's people. You are most likely right, simply because a lot of non-profits are not very well managed.

The thing is, as a worker bee, there is very little that you can do to change things. I once worked at a place where the Executive Director was so far out in space that *all* the senior managers got together and complained to the board of directors. The board listened to them politely and then replaced them all.

If you are fed up, after seven years, maybe it's time to look around for a place with a mission that you believe in and a management style that you are comfortable with. When you're ready to leave, then you can clue everyone in--

Subject: RE: Fundrasing rule for non-profit
From: GUEST
Date: 13 Oct 04 - 12:27 PM

I am interested in finding out the fundraising rule. I hear it is 30/60. Put out 30 percent and get 60 percent return. Or your budget should be 30 percent of your estimated profit. Is either one true?

Subject: RE: BS: Anyone work in non-profit/fundraising?
From: mooman
Date: 13 Oct 04 - 12:38 PM

Yes.

I also have to endure yearly the no-money-for-a-payrise argument. However I am told the accounts are "very healthy" at present and the plans are to put even more into the "operating surplus" (i.e. interest account in bank).

No...I do not understand it either. But then I am not a financial type, just a humble scientist (which is probably the problem!).

Peace

moo