A Heart Attack & Two Strokes Away From Insolvency: A Lesson from the Closing of Pacific Standard Magazine

A heart attack and two strokes away from insolvency.

That’s the way the precarious financial situation of a charity was once described to me.

That charity was so dependent on the generosity of a few people that if they were suddenly unable to donate, the work of the organization would be over.

Thoughts about that charity came to mind when I learned that the magazine PacificStandard was shutting down after ten years due to its main funder pulling out.

The magazine, which reported about social justice and environmental issues, was dependent on a foundation for the majority of its $3.5 million annual budget.

The reason given was the foundation was no longer in a position to fund the magazine, or any of the other charities it supported.

The loss of the publication, and the jobs that were lost, is lamentable. Yet it proves once again the danger of being overly-reliant on one source of funding—be that individuals, foundations or governments.

Over my career, I’ve seen the good and the bad of large gifts.

On the plus side, they make so much important work possible. On the negative side, they can lead organizations to become lazy in actively seeking new donors to make sure they don’t end up like Pacific Standard.

As anyone who does fundraising knows, you forget the donor pyramid at your peril: Lots of smaller givers on the bottom supporting the fewer larger donors on the top.

The idea behind the pyramid is that the larger and steady base should allow an organization to weather the loss of a large donor or two near the top—even if the loss really hurts.

Ten thousand people giving $100 is better than one person giving $1 million, in other words.

Especially if that large donor might soon have a heart attack or stroke.

Brilliant Spillover, or Why do People With no Fundraising Experience Think they Know Best?

Why is it that people who have no experience in fundraising and marketing think they know best when it comes to writing appeal letters?

That’s the question I discussed with a fundraiser friend recently.

He is working as consultant to two non-profit organizations. In each one, the executive director has nixed appeal letters he’s written for them.

For one director, they were too long—she doesn’t like to read long letters.

He showed her research proving that longer letters get better results, but it didn’t matter.

As a busy corporate executive, she doesn’t have time to read long letters. Shorten it!

For the other, the letters were too donor-oriented. He wanted more information about programming.

My friend tried to explain the average donor makes a decision from the heart, not the head. But it didn’t matter for him, either.

As a programmer, the director wanted more details. That's what interested him. .

For both executive directors, the problem was they wanted the kind of appeal letters they liked—not the kind their donors would respond to.

I’m sure these aren’t unique situations. Many other non-profits have the same dynamics and experience.

It drives marketers and fundraisers nuts. Why do we invest all this time, energy and training to craft good appeal letters, if our bosses, or colleagues, say no?

What makes them think they know better?

After all, when it comes to programming fundraisers don’t tell their program colleagues what to do.

So why should programmers have the final say when it comes to fundraising?

I can think of a few reasons for why we got into this situation.

One reason is we all get appeal letters, and we know what we like.

Another reasons is what a former fundraiser called “brilliant spillover.” 

Because they are good at one thing, such as programming or running projects, they assume they are good at others—including fundraising.

As my friend put it:

"It’s the kind of thing that leads some people to presume that their brilliance and expertise in an unrelated area, such as international project management, automatically makes them experts on communications and fundraising. 

"It rarely does. People should concentrate on what they're hired to do, not try to do other people’s jobs."

Finally, it’s because they forget they are not the target audience for the appeal; they know too much.

It’s hard for them to remember that the average donor rarely, if ever, thinks about the need, country, cause or project at hand.

And if they do, they have minimal knowledge about it.

What most donors want to know is: Will my donation make a difference? Will it solve a problem? Will it change a life? 

Most don’t care how that happens. That’s what they trust programmers to do.

I’m not saying programmers and executive directors shouldn’t be involved in helping draft appeals; they should.

They need to know that what’s being sent to the public is true, and doesn’t misrepresent the issue or situation.

They need to feel comfortable with how the need is being described so they can stand behind the appeal and support it.

But they should not be the final say on what is written. 

They need to respect the wisdom, experience and prowess of their fundraising and marketing colleagues, just as fundraisers should respect their ability to run programs.

Otherwise, let's let fundraisers have the final say on programming decisions, and see how the programmers like it.

Also check out my post about why IDS students should take marketing and communications courses.

Mennonite Central Committee and the End of Famine Pornography

It’s Christmas, a time for giving—and also a time for Christmas appeals.

Over the next few weeks you will see lots of ads and appeal letters asking you for money, including from aid groups.

While you will see lots of photos of people who need assistance, one thing you won’t see is famine pornography.

Famine pornography—the use of terrible images of dying children, with flies in their eyes and distended bellies, in order to raise funds—was very common in the 1980s and 1990s.

Use of the images was widely criticized by many for the way they promoted a negative stereotype of people in the developing world as always being needy, starving, desperate, and helpless.

But even though academics and some NGOs denounced the practice, famine porn continued to be used on TV, and in print for one simple reason: It worked.

At that time, I was directing communications for Mennonite Central Committee Canada.

Like many other aid agencies, we were upset by the constant use of famine porn, including by some leading Canadian NGOs.

But instead of just joining the chorus and criticizing the practice, we decided on another approach.

We decided to set the bar higher.

In 1992, we created the first Canadian code of conduct for reporting about needs in the developing world.

According to the code, MCC would portray people in the developing world in ways that affirmed their dignity, promoted their skills and abilities, and revealed them as active participants in efforts to improve their lives.

At the same time, we would report honestly about urgent needs, such as for food. But we would not use language or images designed to shock donors into giving money.

We announced the new code of conduct at a press conference on November 25, 1992. It received widespread media attention.

Immediately, the bar was set higher not just for MCC, but for all Canadian NGOs.

The code was a game-changer. For the first time, the media and donors had a yardstick against which to evaluate NGO fundraising appeals.

It would be wildly simplistic for me to suggest MCC's code of conduct was solely responsible for the demise of famine pornography in Canada.

But it played a significant part.

As was reported by Esther Epp-Tiessen in her history of MCC Canada, in 1995 a leading authority in the Canadian humanitarian sector credited the agency with raising the bar for other NGOs.

Of course, it didn’t stop all at once. But over time the use of famine porn lessened.

Today, you would be hard-pressed to find any famine porn in fundraising appeals. And any reputable NGO has a code of conduct to govern how it reports about and uses images of people in the developing world.

I’m not saying images of extreme need should never be used. Sometimes we need a picture of starving children to shock us out of our complacency—as with what’s happening in Yemen, right now.

But they should never be over-used, and they should never be the only kinds of images NGOs share about the developing world.

Today, the big challenge facing the NGO sector is not famine porn, but things like short term mission and service trips and Christmas shoeboxes—both of which are very popular, but are poor ways to address the issue of global poverty.

Maybe it’s time for another NGO to step up with a new kind of code of conduct.

The fall, 2018 issue of MCC's Intersections is dedicated to the issue of how the agency represents relief and development. Find it here.

Amazon Isn't Too Big to Fail, and Neither Are Non-Profits

Amazon is not to big to fail.

That’s what owner Jeff Bezos told staff recently.

Despite the fact the company is the largest retailer on the planet, it’s future is not guaranteed.

What would cause Amazon to fail?

Not caring about its customers.

“If we start to focus on ourselves instead of focusing on our customers, that will be the beginning of the end,” Bezos said.

“We have to try and delay that day for as long as possible.”

What’s true for Amazon is true for non-profits.

When more time is spent talking about in-house things—what language, messaging, images and words to use to describe the need to be addressed—they are started on the road to trouble.

Don’t get me wrong; all those things are important.

The people non-profits want to serve be described in a way that affirms their dignity and self-respect.

But when more time is spent coming up with the perfect words that will make program staff happy about an appeal, rather than the words that will motivate people to give, an organization has begun that inward and downward spiral.

Hey—I’m not saying the concerns of program staff shouldn’t be heard. There can and should be vigorous discussions.

But there’s a reason why program people do programs, and fundraisers to fundraising: Both know best how to do their jobs.

When it comes to programs, fundraisers shouldn’t tell them how to do their jobs. And vice versa.

But that’s often not what happens. People who know nothing about fundraising—who know nothing about what motivates givers to give—insist on being involved in writing and approving appeals.  

(A former fundraising colleague called this “brilliant spillover;” people who are good at one thing think they are good at other things, like fundraising.)

When programmers start to act like they are the targets of the appeals, an organization is in trouble.

The truth is they are the worst people to approve fundraising copy. They know too much.

Fundraisers need to attract the attention of people who know little, or even nothing, about the need at hand.

People who have a dozen opportunities to give.

Who are distracted by a hundred things in their day.

And fundraisers have to do it in a few hundred words.

Of course, the situations we appeal for are way more detailed, nuanced, and complex than can be described in an appeal letter.

But appeal letters aren’t educational documents. They can inform, but that’s not their main purpose.

Their main purpose is to raise money.

Anything that gets in the way of that reduces their impact.

When more time is spent discussing how to make program staff happy, rather than what will raise the most money, then the discussion has turned inward.

And that can lead to failure.

If a huge company like Amazon is worried about turning inwards, then non-profits should be, too.

Pink Gorilla Suits, or Getting Media Attention for Charity Runs, Walks and Whatever

A friend wrote recently to ask for advice about raising money for cancer research.

His children were planning a run in a local park to raise funds in memory of their child—my friend’s grandchild—who had died of a brain tumor.

He wanted to know: How could he get media attention for the run to raise funds for other children and parents in the same situation?

After expressing sympathy for the loss of his grandchild, I told him the truth: It would be very hard.

The best way, I said, would be to tell the story of the grandchild, or what his loss meant to the parents, or about others facing the same thing.

But even then, it would be tough.

It’s not that the media are jaded, or don’t want to help people raise funds for good causes for things like this.

It’s just that there’s so many of them. It’s impossible for the media to cover them all.

I know; as a columnist for the Winnipeg Free Press, I get e-mails from people who want me to write about their fundraising efforts of various kinds.

There just isn’t enough time or space to write about every one.

Ever since Terry Fox tried to run one-legged across Canada in 1980, there have been multiple runs, walks, rollerbladings and whatever else across the country, or in most any locality.

All of them are well-meaning, done for the best and most altruistic purposes.

And all of them want media attention.

Frankly, it’s impossible for the media to do that, especially considering the downsizing that has occurred at most media outlets lately.

A gimmick helps, like the man who is rollerblading from Manitoba to the Pacific Ocean in a pink gorilla suit.

(Although the publicity didn’t necessarily help in this particular case, since reporters also discovered he has been charged with fraud—not exactly a stirring endorsement for someone who wants you to donate to their cause.)

As for cross-country charity walks, runs and whatever, not only are they hard to do and get media attention for, they often fail to raise as much funds as hoped.

This was addressed by the National Post in 2017.

In an article titled “Why your noble plan to cycle or run across Canada for charity is probably a bad idea,” author Tristin Hopper notes that some of these efforts fail to even cover expenses.

A cross-Canada marathon “remains lodged in the Canadian psyche as a noble and surefire way to support a cause, but it can be one of the least efficient ways to generate money for charity,” he writes.

In many cases, participants “would have generated more cash for their cause if they’d just stayed put, gotten an entry-level construction or resource job and donated the paycheque to charity.”

Which raises another important point; the media is wary of lending its support to charitable causes today—they don't want to be accused of promoting efforts that defraud donors.

So don't be surprised if reporters want to know if causes are connected to reputable charities, have the proper permits and approvals, and can explain how expenses will be covered.

So: What to do if you want to do a run or walk or something else for charity?

Plan for it as if the media won’t cover it. Use social media, personal networks, word-of-mouth, whatever.

And if they do cover it, be prepared for anything—even if you have a gimmick like a pink gorilla suit.

The Giving Behaviour of Canadians: Who Gives, How, and Why?

Who, why and how Canadians give is the subject of a new report titled 30 Years of Giving in Canada.

The report, commissioned by the Rideau Hall Foundation and Imagine Canada, the umbrella group for Canadian charities, is designed to help charities better understand the current giving landscape in Canada, and to use that knowledge to help them do better fundraising.

Earlier, I interviewed Bruce MacDonald, President and CEO of Imagine Canada, about some main findings of the report, including the impact of declining religiosity in this country.

Here are a few more highlights.

Decrease in Donors

Starting in 1990, the proportion of taxfilers claiming donations began to decline fairly steadily, dropping from a high of 29.5% in 1990 to 20.8% in 2014.

Despite the decline, the amount given to charity by individual donors increased from 1995, reaching $1,640 by 2007.

This drove rapid growth in donations, even though the percentage of taxfilers claiming donations declined.

The overall trend is clear, according to the report. “The donor base is getting ever-smaller. From the peak in 1990, the percentage of taxfilers claiming donations has dropped by roughly a third, while the average amount claimed has nearly doubled.”

This means, the reports states, “that charities are relying on an ever-smaller number of people for donations.”

The Best Givers

Both the likelihood of giving and the average amounts donated generally increase with age, income, frequency of attendance at religious services, and education.

Men are less likely to give than women, but tend to make larger donations when they do donate.

Those who are married are most likely to donate, while widows and widowers tend to donate the largest amounts.

Those who are single are least likely to donate, and tend to contribute the smallest amounts.

Role of Religion in Giving

The report confirms previous research about religion and giving, showing that those who attend worship services regularly tend to give more often and more.

91% of those who attend at least once a week give $1,284 a year, while 90% of those who attend at least once a month give $633.

As for those who attend at least three times a year, 90% give $428, while 83% of those who attend once or twice a year give $287.

As for those who don’t attend at all, 76% give, donating $313 a year.

In other words, the less people attend worship services, the less they give—a chilling thing to realize at a time when attendance at worship services is declining overall.

Giving Trends

The report says there have been several shifts in how Canadians give since 2004.

First, giving to Religious organizations is decreasing, both in terms of number of donors and amounts donated.

Second, giving to International organizations is increasing, both in terms of number of donors and amounts donated.

Third, the amounts donated to social services organizations have increased, even though the number of donors has remained flat.

Fourth, the number of donors to health organizations and hospitals has declined significantly, although the amounts donated have been less affected.

Why Do People Give?

“Most Canadians are motivated to donate by a mixture of personal and ideological factors,” the report says.

Ideological factors “include feelings of compassion towards those in need and the desire to make a contribution to their community.”

Personal motivators “include belief in the cause of the organization and being personally affected or knowing someone who is affected by the cause.”

Other reasons for donating, including tax credits received in return for donating and religious obligations, are reported by less than a third of donors.

How do People Give?

Three ways of giving stand out, according to the report, providing two-thirds of donations.

They are: Donating at a place of worship; donating on one’s own initiative; and donating in response to a mail request.

They are followed by donating in memory of someone, paying to attend a charity event, and donating at work.

The remaining five methods are donating in response to a telephone request, by sponsoring someone in an event, in response to a television or radio appeal, via door-to-door canvassing, or in a public place such as at a shopping centre or on the street.

Collectively, these five methods accounted for only about one in every ten dollars donated.

After donating by mail, the next most important method is donating online.

The report says that not while more needs to be learned about online giving, it is clear it is on the rise.

In 2013 12% of Canadians reported making at least one donation online; collectively they contributed at least $860 million online, equivalent to approximately 7% of total reported donations.

Donors who are younger, have higher levels of education, and higher incomes are more likely to donate online.

Where do Canadians Learn to Give?

The report notes there is not much data available that can shed light on how Canadians learn to give.

It refers to the 2010 Giving Volunteering and Participating survey, which found the main ways people learned to give or volunteer were religious organizations, student government and organized sports.

The survey also showed the importance of parents setting an example for children; respondents indicated they were more likely to give or volunteer if they saw their parents doing those things.

Of all the ways people learn to give, “being active in a religious organization when young had by far the largest impact,” the report states.

Religion also influenced how much people gave; “being active in a religious organization as a youth had the largest impact on the amount donated as an adult.”

Those who had parents who volunteered or saw someone they admired helping others also donated more.

Youth and Giving

The giving behaviours of younger Canadians differ from those of older Canadians in several significant ways, the report found.

“Most importantly, younger Canadians are less likely to donate, tend to make smaller donations, and support fewer individual causes,” than older people, it says.

Those aged 15 to 24 are less likely to donate than those aged 25 to 34, the study found, and people in that age group are less likely to donate than those 35 and older.

Those in the youngest age group also donate less, on average, than those in the middle age group, who in turn donate less than the oldest age group.

Older People and Giving

Older Canadians give larger amounts and donate to more causes. In terms of total donations to all causes, the average donation made by those 65 and older is about one-and-a-half times the average donation made by younger donors.

Older donors devote more of their giving to organizations working in the areas of religion; international development and relief; grant making, fundraising & voluntarism; and education & research.

Those aged 65 to 74 are the most likely to donate to secular causes, while those aged 75 and older are most likely to donate to religious causes, the report says.

Summary

The findings presented in Thirty Years of Giving in Canada suggest that, despite the unquestionable generosity of Canadians, much could be done to increase giving in this country.

It suggests that charities need to find ways to more effectively engage young people and new Canadians.

With the decline in religious attendance, this could include the expansion of formal efforts to teach young people about giving, in both secondary schools and in colleges and universities.

"Even small increases in the proportion of Canadians who give and/or small increases in average donation amounts would have an enormous impact,” it states.

Time, however “is of the essence,” it adds.

“The Boomer generation, which has been the mainstay of the charitable sector

for most of the past 30 years, is aging. There is a limited amount of time left to tap into the philanthropic impulses of this generation and it is unclear if younger generations will be willing or able to take their place.”

Charities also need to find ways to engage immigrants, which are becoming a growing part of the population.

“Over the coming decades, immigrants will make up an even greater percentage of the population and this group is often unfamiliar with and distrustful of the charitable sector,” it notes.

Charities also need to recognize the way Canadians give and the causes they give to is changing.

“Organizations that are adept at understanding changing attitudes and preferences will be in a better position to adapt their messages and tactics,” it says.

“To navigate this uncertain future, the sector will need more and better data and strong digital strategies to facilitate future giving.”

Finally, collaboration will be important.

“Collective efforts to encourage a more robust giving culture should also be considered,” it states.

Download the report here.