The GuideStar Blog retired September 9, 2019. We invite you to visit its replacement, the Candid Blog. You’re also welcome to browse or search the GuideStar Blog archives. Onward!

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Please complete our very brief Impact Survey, so we are better able to understand what you are accomplishing with GuideStar.

Donor Data is Your Friend! 5 Steps to Get You Started

The following is a cross-post by Donna Mehr from Pamela Grow's May 22nd blog post on her website, Pamela is an author, coach, copy-writer, nonprofit marketing consultant, and regular contributor to The GuideStar Blog. To read the original article, click here.

Super Short is Super Sweet: Storytelling that Hooks Digital Donors

The preceding is a cross-post of Jim Lynch of TechSoup’s September 17th guest post onKivi’s Nonprofit Communications Blog. To read the original article, click here.

The Overhead Myth meets your Overhead Reality

Like more than 3,000 of you, and countless others who nodded their heads in vehement agreement, I signed the Overhead Myth petition 18 months ago. We are united in our belief that it is short-sided to draw conclusions about our work when watchdog groups, funders, and donors simply divide our expenses by our revenue to assess our impact. For its part, the Myth perfectly framed what we have all thought – and gave it a megaphone.

2014 GuideStar Nonprofit Compensation Report Now Available

The 2014 GuideStar Nonprofit Compensation Report is now available! Pick up your copy here:

ISO … A Great Development Director

Lately I’ve been talking to a lot of nonprofit executives who are searching for a great Development Director. Much has been reported on the difficulty of finding a Development Director who is a good organizational fit AND has the skills and experience to get results. For a detailed analysis of the problem, refer to Underdeveloped, the seminal report on the issue published by Compass Point.

Listening to Feedback Improves Fundraising Results for Nonprofits

WebThriftStore recently released a completely redesigned website and mobile shopping experience based on the valuable feedback collected from many charity partners and their supporters. The website’s new, totally streamlined design is a perfect example of how charities and the companies providing complementary fundraising services can work together to improve the experience for everyone.

WebThriftStore allows any nonprofit to open an online thrift store for free with no risk or physical inventory. Charities encourage their supporters to donate goods online, WebThriftStore sells the goods in our online marketplace, and supporters receive tax write-offs for the sold value of their items.

Because it’s a completely online platform, WebThriftStore depends on its nonprofit partners and their loyal supporters to provide feedback and opinions about their experience and make suggestions on improvements. This feedback is gathered in the form of conversations with charity executives, email exchanges, surveys, website feedback forms and unsolicited questions and ideas. Nonprofit partners recommend improvements. We listen and then act on them. Everyone wins.

The result is that new features and upgrades to our platform have been realized, including our simplified checkout process, now featuring PayPal. Other enhancements like streamlined searching and browsing, as well as faster performance across the entire platform, prove that listening to partner feedback is critical to the success of both our venture and all of the nonprofits that we serve.

In any partnership, communication is key. At WebThriftStore, we have learned that considering our partners’ needs and acting on what we hear is among the most valuable actions that any business supporting charities can take.

Find Out More

Please contact us for more information about how partnering with WebThriftStore can provide a complementary way for their support bases to contribute to the causes about which they care so much.

The preceding is a guest post by By Michael Sher, WebThriftStore Board Member.

Questions I'm Most Often Asked About Keeping Your Donors for Life

The nonprofit sector is bleeding to death. It's hemorrhaging donors and losing millions monthly. Attrition is a horrible word. Its antonym, retention, has a golden ring to it.

What follows are the questions I'm most often asked about retaining loyal and committed donors.

Why do we hear so much about donor retention today?

Because for the past decade, donor-retention rates have been sinking. Today, they're at an all-time low. According to studies by the Association of Fundraising Professionals (AFP), every $100 raised from new donors is offset by $100 in losses because of attrition.

All this despite the facts:

  • Organizations have a 60 percent to 70 percent chance of obtaining additional gifts from an existing donor.
  • A 20 percent to 40 percent chance of obtaining an additional gift from a recently lapsed donor.
  • But less than a 2 percent chance of obtaining a gift from a prospective donor.

So one thing should be blindingly obvious. The bulk of your fundraising expenditures should be aimed at holding onto and building relationships with existing donors, not in acquiring new ones.

Are there primary reasons why donors stop giving?

Yes, I detail them at length in my book Retention Fundraising. In short the main reasons are:

  • Failure to properly thank and involve donors.
  • Failure to place the focus of communications on the donor, rather than the organization.
  • Failure to be consistent, both in message and in service delivery to the donor.

Organizations that brag about themselves and ignore donors will ultimately fail. Yet it's surprising how many organizations simply don't understand this.

Are there any easy, inexpensive steps we can take to hold onto our donors?

Surprisingly, there are. The three that come to mind quickest are:

  • Say Thanks. You don't have much competition here. Our research shows that more than 60 percent of all nonprofits thank their donors impersonally, slowly, or not at all.
  • Be Consistent. If you're consistent with your message you build trust. To a donor who gives money for feeding the hungry, switching the thank you to all the great stuff you're doing in the area of social justice is joltingly inconsistent, and you're likely to lose the donor.
  • Be Reliable. Just as in personal relationships, reliability is essential. If a donor calls your service center with a question or a request for an address change and is met with a rude or unknowledgeable representative, you're on your way to losing that donor. Don't stint on donor service. It's the best investment you can make.

What experiences or outputs of an organization matter most to donors?

It's certainly not because you have 10 regional offices, a bright CEO, or even a great rating among the charity watchdogs.

Donors "hire" an organization for a variety of reasons, most of which have nothing to do with what the organization thinks is important. That's why it's key to understand which organizational actions inspire donor loyalty. I call these "drivers."

I've identified more than three dozen in my book, but seven are essential if you hope to retain your donors.

Is there a way to tell if a donor is about to leave us?

These are the telltale signs that a donor is about to abandon ship:

  • Downgrading of gift levels
  • Unsubscribing from your various e-newsletter and email lists
  • Cancelling a recurring gift, such as a monthly retainer/sustainer payment
  • Negative comments about you in social media
  • Cancelling an event reservation

On the other side, are there obvious signs that a donor cares and is likely to be more loyal than others?

Absolutely. In my experience, the tip-offs are when he or she has:

  • Taken the time to complain
  • Reached out to change his/her address
  • Gone to the effort to have his/her gift matched by his/her employer
  • Attended a conference call briefing or actual meeting

The key to retention seems to be understanding donor attitudes. Is that correct?

Without a doubt. Attitude determines behavior. And that means donor behavior (giving) is determined by the actions you take to influence his or her attitude positively or negatively.

Few organizations understand that the actions they themselves take determine the donor's attitude—positively or negatively.

Importantly, all these positive and negative actions can be measured. The "good" reinforced. The "bad" eliminated, and the "weak" improved.

So if you could sum up the message in your book, it would be?

Not a single message, but several:

  • Donors are made, not born. It is the actions you take—not the economy, not the competition—that determine whether your donors will stay or leave.
  • You can measure commitment. This is not some fuzzy, loosey-goosey concept. There are methods, as outlined in the book, to determine what drives donors to you or away from you.
  • Retention is hard work. Unlike acquisition that is as easy as signing a purchase order, retention takes time, skill, evaluation, and investment.

But it's worth it, you're saying, and all this effort will ultimately produce loyal donors?

I'll go out on a limb and say that anyone who follows the recommendations that our research has uncovered can expect as much as a 130 percent increase in income in the next 36 months.

Roger Craver
© 2014, Emerson & Church, Publishers

Roger Craver is author of the new book Retention Fundraising: The New Art and Science of Keeping Your Donors for Life.


Benchmarks to Guide Your Grantseeking

GrantStation conducted its eighth semi-annual survey focusing on grantseeking, the State of GrantseekingTM, this past March. More than 1,200 nonprofits participated, providing data and experience that can be turned into actionable information to help your organization succeed at grantseeking.

The results of the survey are important because change in all fields, including philanthropy, is happening at a faster rate than ever before. From the immediacy of social media to the focus on overhead and transparency to volatile shifts in government funding, waiting for a year or more to learn current trends simply doesn’t cut it.

And, whether you are an experienced grants professional leading a team of grantwriters or a volunteer preparing to write your first grant application, having recent, trending data will help you prioritize, manage your time and expectations, and quantify your level of grantseeking success.

Somewhat shockingly, 95 percent of the respondents to the spring survey told us that they do not use any grant industry benchmarks to compare their grantseeking performance with external standards.

So why is it important to understand benchmarks and trends, especially if only 5 percent of organizations are doing so?

Without understanding current benchmarks, you are planning your grants strategy in a vacuum. You are for all intents working entirely alone, with no input to guide your planning.

Clearly, most organizations have experienced leadership with the knowledge and wisdom to guide their organizations successfully, but most people lack objectivity. While organizations can quantify their own grantseeking success by measuring their performance against the past, benchmarks enable organizations to determine how their results stand up against those of similar organizations and to plan for the future. The results of surveys, such as the State of Grantseeking, provides you with some basic guidelines as you build your own grant strategy for the year.

So, what does that mean to you? The best way to explain this is through some examples taken from the spring State of Grantseeking report.

Median highest grant awards vary dramatically by mission, ranging from $20,000 for organizations focused on arts, culture, and humanities (ACH) to $200,000 for educational institutions. Without benchmarks to add to their analytical toolbox, an ACH organization that was awarded a grant for $40,000 could think that they were underperforming (compared to the $47,000 median largest award of all respondents), when instead that award is actually double that of other ACH organizations.

This table shows benchmarks by mission focus:

  All Organizations Arts, Culture, Humanities Community Improvement Education Institutions Education Nonprofits
Lowest $ $35 $100 $2,000 $169 $500
Highest $ $80 million $25 million $2 million $80 million $9 million
Median $ $47,000 $20,000 $46,000 $200,000 $26,000
Average $ $586,866 $386,060 $154,403 $3,016,745 $363,531
  Environment Health Housing, Shelter Human Services Youth Development
Lowest $ $999 $35 $500 $500 $3,000
Highest $ $650,000 $12 million $1.3 million $80 million $5 million
Median $ $42,244 $60,000 $35,000 $50,000 $37,500
Average $ $102,603 $495,907 $112,146 $797,690 $204,311

Another example, big-picture this time, concerns the simple truth that applications equal awards. For the respondents to our survey, the breakpoint on grantseeking success is three or more applications. The spring survey indicated that in the last six months of 2013, 84 percent of organizations that applied for grants won awards. When we delve into that statistic, we find that 90 percent or more of organizations that applied for three or more awards won at least one award.

If you are just launching a grantseeking program for your organization, you now know that you will want to submit at least three applications in the next 12 months if you are to receive an award. Sharing this kind of information with your board can help guide their expectation, as well as assist them as they establish specific goals and objectives for any grants program.

This is just a glimmer of how you can use the benchmarks articulated in the spring 2014 survey report to help you grow your own grants program.

GrantStation uses the report to help illustrate the current state of grantseeking and to stay out in front of trends that will affect grantmakers and grantseekers. We use this information as a steering mechanism for growth, and as a real-word lens, to ensure that we continue to provide the tools and resources organizations need to stay competitive in the world of philanthropy.

Our participation goal for the fall 2014 State of Grantseeking survey is 1,500. The survey is open until the end of September. Please participate in this very revealing snapshot of what is happening in grantmaking today! And more important, begin to use this information to help guide the development of your grantseeking program. The resulting reports and associated webinars are always free, because we believe that this information is imperative to creating healthy, sustainable organizations.

To take the survey simply go to our home page for an overview, or go directly to the survey itself!

Cynthia M. Adams, GrantStation
© 2014, GrantStation

Cindy Adams is CEO of GrantStation, a premiere online fundraising resource that provides information on more than 6,500 funders accepting inquiries. You can learn more about trends in philanthropy in her weekly podcast: Talk2020, part of GrantStation's Vision2020 series to help nonprofits prepare for future grantmaking.

Giving Honest Feedback to Your Board on How They're Doing with Fundraising

Every executive director I've known has at one time or another felt that his or her board could be doing more to raise money for the organization. It's a frustrating situation—how do you tell your bosses that they're not doing their job? Addressing the issue directly is fraught with danger. You can, however, hold a mirror up to the board's fundraising performance in a way that will allow you to identify problems without naming names or pointing fingers.

Start by suggesting the idea to the board chair or Executive Committee: "Wouldn't it be a good idea to look at an anonymous profile of our board members to see how active and effective they are at the board's various responsibilities?" Getting board leadership behind collecting and sharing the data is important—the issue then belongs to someone other than the executive director.

Next, gather data on how much each individual board member has personally given to the organization and how much in donations he or she has facilitated.

Create a profile for each of the items you're measuring. The images below show how you can report the information.

Note: When you report on donations board members have facilitated, use the broadest definition of facilitated that you can. If a board member made an introduction that eventually led to a gift, participated in a fundraiser, helped cultivate a donor, or in any way assisted with efforts that culminated in a donation, that individual should get credit for facilitating the gift. More than one board member may have facilitated a single donation; there is nothing wrong with that. If you split hairs and do not acknowledge everyone involved in securing a gift, you'll bring the credibility of all of your data into question.

It will quickly become apparent how many (but not which) board members are active—and inactive—in fundraising. In my experience, presenting this information in this manner normally generates productive discussions among board members about their own fundraising activity levels, how they can help in this area, what roles they may play, and prospects the executive director needs help cultivating. A chart with more detail (but no names) can also be made available to board leadership to help frame the conversation and answer any questions about the data. (I have rarely found that this process has led to questioning of the data, but it's good to have the backup available for scrutiny.)

The full profile of the board is also invaluable to the Membership Committee in analyzing potential areas of need for future board membership. Not every board member may have been recruited with the expectation of helping with fundraising; some board members serve roles in line with other areas of expertise. For board members who were recruited with the expectation that they will be contributing to fundraising, however, it's healthy to use this anonymous process periodically to give honest feedback on how the board is doing in this crucial area.

Note: The process described here can also provide insight into other aspects of the board and its activities, such as tenure, areas of expertise (e.g., business, law, finance, community), demographic profile, geographic representation (if the organization serves multiple geographic areas), and board meeting attendance.

Bill Hoffman, Bill Hoffman and Associates, LLC
© 2014, Bill Hoffman and Associates, LLC

Bill Hoffman has more than 30 years' expertise in various aspects of the nonprofit sector, having worked at all levels of nonprofit organizations, including serving as chief executive of a $6 million education foundation for 9 years. He and his firm have written and presented on topics ranging from board development to community and volunteer engagement, organizational development and performance, and best practices in national, regional, and state publications and symposia.

Taking Nonprofit Inbound Marketing Automation to the Next Level

The following is the second part of this two-part cross-post series by Social Media For Nonprofits. Click here to read yesterday's part one post, Basics of Social Automation for Nonprofits. Click here to read the original version of today's post.

Basics of Social Automation for Nonprofits

The following is a cross-post from Social Media For Nonprofits' July 24th blog article. Click here to read the original post. Please visit our blog tomorrow for the second part of this two-part series.

11 Tips On How to Write Original Appeal Letters

If your appeal letter isn't pulling in enough money in the last few years, it might be the downturn. It might also be because your appeal letter reads like a grant proposal.

The importance of slowness in the development office

Alvin Toffler’s 1970 mega-hit Future Shock described “too much change in too short a period of time.” 1970! Anyone remember how slow things were then?

What’s your good deed for today?

Today, GuideStar staff remembers. We remember the victims of the September 11, 2001, attacks. We remember those that rose in service in response to the attacks. We remember the way our nation joined together that day. And we pay tribute to the importance of working more closely together in peace to improve our world.

10 Ways Board Members can Help their Nonprofits find the Right Software

The following is a cross-post from Board Assist's September 2nd post. Click here to read the original article.

Standards for Excellence Proud to be ‘External Perspective’ Program Listed on GuideStar

With interest and a bit of nostalgia, I read Jacob Harold’s recent post on this blog, “Celebrating Our Past, Looking to Our Future.”

Nonprofits' Special Data Needs

The Big Data revolution is upon us. Everywhere you look or listen there are people ruminating about how the mass generation and collection of consumer information in unimaginable quantities has heralded a new dawn in marketing, sales and organizational structure. Data scientists, organizational behaviorists and sociologists can't seem to stop writing about how this glut of information will soon be utilized to build corporate and municipal infrastructure.

Celebrating Our Past, Looking to Our Future

Buzz Schmidt was frustrated. As a fundraiser and a donor, he’d encountered the same roadblock: he couldn’t find the nonprofit information he needed.

How do we think about political nonprofits?

Editor’s note: Lee Drutman is a visiting fellow at GuideStar. Lee has a Ph.D. in political science from the University of California, Berkeley and studies lobbying and money and politics. Formerly, he was a senior fellow at the Sunlight Foundation.

Throwing in the Towel

The following is a cross-post from Philantopic's May 7th blog post. To view that original article, click here.

Fundraising Training Exercise: Building a Board Fundraising Ladder

Excerpted from Train Your Board (And Everyone Else) to Raise Money

Celebrating Our Past, Looking to Our Future

Dear Friend of GuideStar,

Buzz Schmidt was frustrated. As a businessman, he was accustomed to having the information he needed to compete for and allocate funds. He found that having consistent information reduced the cost of doing business and made managers and investors stronger and more accountable.

Later as a fundraiser for a major international development agency, and as a donor, he was struck by how little information was available to facilitate effective philanthropy. Without readily available information about nonprofits' programs, achievements, objectives, and finances, philanthropy was ineffective, enormously expensive, and fundamentally unaccountable.

Buzz reasoned that with greater nonprofit transparency, donors could be more proactive and responsible, nonprofits could benchmark and improve their performance, and society as a whole would benefit.

Thus an idea was born. On September 6, 1994, Buzz and four colleagues opened the doors of a small organization that would become GuideStar USA, Inc. Its goal? To gather nonprofit information and make it available to the public so that donors could make better decisions and nonprofits would be more accountable.

The first years were tough. Money was tight, and getting information out of nonprofits was a monumental challenge.

But Buzz and his colleagues persevered. In 1996, they released the Directory of American Charities, which contained reports on 42,000 nonprofits. They quickly put that database online. And then, in October 1999, GuideStar became the first organization to post nonprofits' 990s on the World Wide Web.

Things exploded. GuideStar became the go-to place for nonprofit information, sparking a revolution in nonprofit transparency.

Fast forward to 2014. GuideStar is still the premier provider of nonprofit information. We're proud of what our first revolution has achieved. Transparency is now an expectation, one that the public and (most) organizations embrace. Learn more about GuideStar's history

Today, as we approach our 20th anniversary, we've embarked on a second revolution: nonprofit transparency that drives nonprofit effectiveness. We've outlined that vision in our new strategic plan, GuideStar 2020. We're building the information scaffolding for social change and helping to ensure that the nonprofit sector is capable of tackling the great challenges of our time.

We invite you to read GuideStar 2020 to learn more about our goals and how we will achieve them. We'd value your feedback on our plan—let us know what you think by posting a comment on the GuideStar Blog.

Thanks to everyone—nonprofits, donors, journalists, researchers, government officials—for contributing to GuideStar's success during our first 20 years. We're honored to be building on that history.

On with the next revolution in nonprofit transparency!

All the best,

Jacob Harold
President and CEO
GuideStar USA, Inc.

P.S. Has GuideStar had an impact on your life or work during the last two decades? If it has, we'd love to hear from you. Please share your experiences with us.

Pouring Lukewarm Water on the #IceBucketChallenge

It starts with a nagging muscle cramp. And then there’s a twitch in your leg that won’t go away. Weeks later you notice that half your body is inexplicably weaker than the other half. Soon thereafter your breathing becomes labored. You go see one doctor, who sends you to another doctor, who sends you to yet another doctor. After a myriad of tests rule out other possible causes, you are diagnosed with amyotrophic lateral sclerosis. Statistically, you will be dead within three to five years, but within a year there is a good chance that you will be trapped inside your own permanently frozen body. You will be able to think clearly, move your eyes, and control your bowels but beyond that you will have no function of your legs, arms, feet, hands or any other voluntary muscle systems.*

Four Fun Ways to Show Donors Your Heartfelt Thanks

As many managers of non-profit organizations know all too well, getting someone to donate for the first time can be difficult. But getting them to give a second or third time is even tougher. Researchers who looked at a group of 1.8 million donors found that only around 43 percent of them gave money to the same group two years in a row, Urban notes. In many cases, these generous souls are probably still donating money — it might just be to a different cause. NPEngage also notes that getting repeat donors can be tricky; the typical non-profit organization in the United States will not see about 70 percent of people again after their first donation. In addition, only about 10 to 15 percent of people will make five annual donations in a row.