Is it Worth it to Hold Your Summer Event This Year?

It’s the season! Every week, almost every day, another invitation arrives about yet another summer fundraiser. In northern Michigan, endless opportunities abound to dance, picnic, run, bike, sail, or tour, while benefiting a deserving nonprofit. Through the grapevine, we hear that attendance is down and our professional journals reference “donor fatigue.” We wonder about the economy and worry about the weather. Would we better off scheduling a series of lunch dates with major donors? Is this the summer to stop the madness?

Special events are often the primary fundraising approach for small nonprofits. While they only raise a small amount of revenue compared to a large amount of time and energy, they do have benefits.

• Increased public visibility and an opportunity to tell your story.
• “Friend-making opportunities” and a vehicle to attract and cultivate prospects.
• A mechanism to involve and motivate volunteers.
• Opportunities to thank and strengthen relations with current donors.

With the variety and flexibility of special events being limitless, they are ideal for acquiring, retaining or upgrading donors. One or two special events each year can greatly assist organizations in building a broad base of individual donors, which can provide the organization with increased annual giving (Klein 2000).

According to a 2007 study by Charity Navigator, about half of all charities use special events as a way to fundraise with special events generating 15% of all contributions to organizations. While this may not be a large percentage, it does add up to a significant amount of money.

The Charity Navigator study also found that special events are inefficient in comparison to overall fundraising activities. On average, the charities studied spent $1.33 to raise $1 in special events contributions, compared to an average overall fundraising rate of $.13 to raise $1. Only 15% of the charities that held special events were more efficient when using special events to fundraise than they were in their regular fundraising activities on the whole.

So, how do you evaluate whether to launch, continue or retire a special event? First, be strategic. This is a business decision. What is the primary objective in holding the event?

If your objective is to raise friends and cultivate potential donors, then you must design the event to capture names, build your database, and interact with individuals. You must also have opportunities to educate attendees and tell your story.

If the primary purpose is to thank donors, include opportunities during the event, to recognize, interact with and thank donors.

If it is publicity and visibility you’re seeking, the event must be unusual and newsworthy!

As you evaluate the value of special events in your fundraising program, remember that 76% of fundraising revenue comes from individual donors. Over-reliance on special events will negatively impact your fundraising program, if you sacrifice a focus on individual donors. Be sure to place a sufficient (in fact, the majority of your emphasis) on individual donors and personal contacting.

With Everything Going On, is Now the Time to Plan and Evaluate?

Demand for services is increasing. Staff is stretched to the limit. Current funders are reporting the need to cut back. Attendance at board meetings is dropping. Your major special event will net significantly less than last year-etc., etc., etc. You are working ten hours a day, and more, as you wade through the myriad of details, juggling to keep everything going. You just don’t have time to plan or evaluate your organization’s work.

Executive directors often feel isolated and board members frequently feel powerless as they struggle to meet the needs of the organization and its constituents while “putting out fires,” especially in today’s volatile economic climate.

Whether this is a description of your organization, a reflection of some aspects of the challenges it faces or an exaggerated example that is hard to imagine, the foundation from which to move forward successfully is based in planning and evaluation.

While it’s true that you probably don’t have the time, you do need to take a deep breath and step back from the situation long enough to remember what you already know in theory. Evaluation and planning will save you time, energy and resources in the long-run and better assure that you are maximizing your mission achievement and best serving your community. It is especially important in challenging times and has many benefits that will help immediately as well as lay the foundation for years to come.

If you already engage in systematic planning and evaluation, you know this list is much longer, but the following are a few highlights of benefits to a well-developed and executed process. Through planning and evaluation organizations can:

1. Prioritize needs and activities and break down the work to be done into manageable pieces, providing focus and calming the chaos that often creeps into challenging situations
2. Give voice to the board, staff and other key stakeholders in the organization to share their perspectives regarding the organization and how it functions and where it needs to adapt to better meet its mission
3. Channel information collected from those served to guide program/service development and delivery
4. Look externally at community need versus mission alignment, competitors versus competitive advantage, uniqueness versus duplicative efforts, organization brand/reputation versus other providers, trends and organization preparedness
5. Bring the organization together through a framework that unites people to work toward common goals by empowering shared ideas, collaborative solutions, openness to adaptation, and group responsibility. It becomes our plan, not their plan
6. Facilitate development of systematic processes to set priorities and allocate resources, becoming the blueprint for success
7. Create a vehicle to engage more people and renew existing commitments to the organization
8. Serve as a tool to systematically increase efficiencies and effectiveness and consider new revenue streams
9. Document funding needs and reassure funders that your organization is a solid investment

With the results of the recent economic impact of the nonprofit sector in Michigan report (www.mnaonline.org), we now have validated information about what we knew intuitively: the nonprofit sector is a significant economic driver to Michigan’s economy, both as an employer with at least 1 in 10 employees working in the sector, and as an industry with annual operations roughly equivalent to the manufacturing or retail trade sectors. NorthSky Nonprofit Network recently released survey results for nonprofits in its ten-county service region in northwest Michigan that indicated that 80% of those reporting anticipate an increased need for their services in 2009 while 70% of those reporting anticipate significant difficulty with cash flow in 2009. How to bridge that gap is on the minds of many organizations. Systematic evaluation and planning are key tools to utilize.

NorthSky is a program of Rotary Charities of Traverse City. As such, NorthSky is considered a “first responder” to the nonprofit sector in its region. At NorthSky we promote systematic planning and evaluation and are seeing an increased desire by nonprofits to either initiate systematic planning or to modify existing planning processes to become ongoing management tools. As the environment is changing quickly, embracing a planning and evaluation process is a crucial first step to assure the organization can meet its opportunities and challenges appropriately. As planning should not be episodic but ongoing, the tools and process that NorthSky utilizes to facilitate systematic planning and evaluation are designed as such. There are many different planning and evaluation models so it is possible to find the tools and facilitator that best fit the organization’s culture.

At NorthSky, we utilize an organizational capacity assessment tool to guide the organization in evaluating its current capabilities in the areas of leadership, adaptive, management, operations and technology. With the facilitator, the organization’s leadership utilizes the assessment results as the foundation to develop an organization capacity building plan. The plan prioritizes capacity gaps within the organization that it will build in order to best meet its mission. How these capacities will be developed is also outlined. The organization then moves into the next level of planning. NorthSky utilizes a modification of the LaPiana Real Time Strategic Planning model as it is designed as an ongoing process. The organizational assessment and capacity building plan are considered within the planning process to help assure that the organization can implement its strategies to achieve its goals. As part of the implementation plan, organizations design their evaluation and reporting approaches to provide tools to measure how well they are doing in relation to their desired outcomes. Evaluating how the plan is performing is critical and builds in the mechanism for ongoing systematic planning to respond as necessary to evaluation results.

It is the systematic approach to planning and evaluation that will help your organization the most over time. It does take time, energy and resources to establish, but the return on the investment can be immediate and should have long-lasting benefits with continued use. Organizations need to “work the plan,” not just go through the process.

Developing planning and evaluation systems are generally considered organizational capacity building activities. There are funders and service providers throughout the state that can assist organizations in adopting these tools for sustainability. I would recommend contacting the Capacity Building Services department of MNA for referrals to resources in your area.

Submitted by:
Debbie McKeon
Executive Director, NorthSky Nonprofit Network

Share your thoughts on planning by posting your comments here.

Retreating to Advance Your Board

It’s the season of the board retreat and throughout northern Michigan board leadership is planning for time away. Board retreats can be an effective vehicle for team building, planning, training, and problem solving. Time challenged board meetings with over-loaded agendas provide little opportunity for an in-depth discussion or meaningful educational opportunity. The board retreat provides the luxury of time to dig into an issue or topic, map out a new approach, and get creative in our thinking. So, how do we construct a board retreat to optimize the time and set the stage for team building and creative thinking?

• Allocate time and resources for sufficient planning prior to the retreat. Obtain input from participants and reserve time on calendars. Give careful thought to logistics such as location and space.
• Establish a meaningful agenda and discussion topics that tie to priority issues and challenges for the nonprofit.
• Use hands-on activities, games, and small group discussions to move the session forward. Change the meeting format frequently to maintain participants’ attention and interest and to keep the session energetic.
  
• Do not overload the agenda or over-program the day. Provide enough flexibility to move away from the agenda and address unplanned but critical topics that arise.
• Consider using a retreat theme to make the session not only fun but focused on primary set of objectives. For example, a theme might be sports-related (“Getting to the World Series” or “Going for the Gold”), focused on non profit best practices, and include a physical team-building activity.
• Set the stage for all the participants to feel successful and enjoy the session. Provide sufficient preparation materials and information prior to the session to prepare attendees. Identify activities and exercises that are comfortable for all participants
• Provide social time and opportunities for relaxation. Take time to acknowledge and thank the board and to celebrate accomplishments.
• Follow-up is essential in making the board’s time away of long term value. Identify a transcriber for flip charts notes and to capture group work. Outline next steps prior to adjournment. Place follow-up action steps on subsequent board meeting agendas.
  

Share your tips on planning a successful board retreat by posting your comments.

Enjoy the week,

Pam Evans

Time Away from the Office Boosts Your Creativity & Productivity!

Well, I’ll confess! I played hooky from my work schedule yesterday afternoon and went for a walk on a beautiful spring day. I felt guilty, of course. There’s way too much going on at NorthSky to take time away in the middle of the day. But I shrugged it off and enjoyed the blooming flowers, trees, and did some bird watching. You can probably predict what I discovered. I came back from my walk energized and with a strategy in mind for two complex consulting engagements that I had been grappling with all week. We know this, don’t we? That taking a break and building in recreational time is essential to our work. That some of our most amazing and creative ideas come like a bolt during a bike ride or an afternoon on the boat.

Think about it. When was the last time you truly had a creative or innovative idea? What triggered it? Sometimes working in a group, throwing off constraints like worrying about the budget or the board’s reaction, loosens up our thinking and unleashes our best ideas. Have you been at a family picnic or holiday party and suddenly the great inspiration arrives, seemingly from nowhere. (Well, maybe it was the Chardonnay…)

According to Virginia Smith Harvey at the University of Massachusetts (http://www.indiana.edu/~futures/creation.ppt#256,1,Finding Creative Solutions), we are creative because it’s fun, energizing, and provides opportunities to solve problems. We aren’t creative because our lives are built around routines, it can get us into trouble, and because it requires us to abandon logic, practically and what we already know. Frankly, we’re taught not to be creative. To be creative we need to abandon what we know and look at things differently. Do things differently.

I think this is good advice and that we need to look for opportunities for recreation, exercise and to work in fresh settings. We need to build creativity exercises into our planning and problem solving sessions.

Much has been published about encouraging creativity in your work. One book I particularly enjoy and use often is “A Whack on the Side of the Head: How to Unlock Your Mind for Innovation.” Another is the training series, “Games Trainers Play,” Scannell and Newstrom.

Enjoy the spring and don’t forget to share your creative ideas with the rest of us!

Pam Evans

Post your thoughts and ideas about creativity.

Get Inspired! Investing in Your Leadership Development Pays Out Multiple Dividends to Your Nonprofit Organization

It’s not often that we take time away from the office to consider our career and what it means to be a nonprofit leader. Yet, nonprofit leadership is much more than a resume' of skills and accomplishments and worthy of our careful consideration. It’s a way of thinking, an approach, personality, style and of course, a passion for the work that energizes us and inspires others. But how do tap into that energy and inspire others without feeling particularly inspired ourselves? Inspiration, passion, and energy are needed in the nonprofit world more than ever. But with a jammed packed schedule and competing priorities, how do we remain enthusiastic and excited about the work?

This week I had the opportunity to attend MNA’s Super Conference to scope out workshop ideas and trainers for NorthSky’s professional development series. I attended several sessions that have recharged me and remind me how important it is to take time to learn something new and listen to the success stories around us. We feel a little guilty, don’t we, about leaving the office and spending the money on our leadership development? But, isn’t it possible that just one good idea, solution, or new resource, makes it worth it? Or maybe just provides a reminder of why we are in the nonprofit field?

Our nonprofit organizations need us to be energetic, enthusiastic and creative problem solvers. Investing in your own growth is an investment in your organization and in the growth of your team.

Take Time on May 18 or 19 to Join NorthSky and Lawrence Technological University at the Mission Driven Path: Pursuing a Career in the Nonprofit Sector. Or find other opportunities this spring to learn something new and recharge your leadership battery.

Information Continues to be Released Regarding Economic Stimulus Opportunities!

NorthSky staff had an opportunity to participate in a webinar, A Recovery Act Update for Michigan Nonprofits, presented by Leslee Fritz, Director of Michigan’s Economic Recovery Office. The presentation was helpful in highlighting the ways in which the Recovery Act funding will come into communities, the status of those streams, and where we need to go to get up to date information. The ARRA funding that is available to nonprofits is coming in two ways:

1. Through formula grants to existing programs (e.g. Medicaid, school funding, Food Stamps, Community Development Block Grants, etc.). This funding is moving out quickly to state and local governments and other organizations through existing mechanisms. Many of the formula funds to states and governments require that they work with community organizations. Nonprofits are encouraged to check with their municipalities for opportunities to partner.
2. Through competitive grants, the vast majority of which will be at the federal level. These competition announcements are coming out more slowly. There are some out now, but according to recent briefing they are expecting the bulk of these competitions to be open in July and August. All ARRA federal grant competitions must be posted on www.grants.gov (more information below). The state will likely have some competitive grants which will be posted on www.michigan.gov/recovery (more information below).
   

The funding made through formula grants to existing programs and through competitive grants will cut across almost all sectors – health, education, human services, transportation, energy, housing and community development, the environment, and arts and culture.

Prior to the signing of the ARRA, the Governor requested summaries of “shovel ready” projects from organizations around the state. The purpose of the list was to assess the need in the state and lobby for resources to come to Michigan. Most of the ARRA funding is being coordinated at the federal level, or simply passing through the state to local communities through formula grants. The little discretionary funding that is left for the state is going to meet their ongoing budget shortfalls and will not be used to fund any of the “shovel ready” projects. Organizations with shovel ready projects are encouraged to pursue competitive ARRA grants and contact the units of local government that received formula allocations to pursue partnership opportunities.

If you are interested in securing economic stimulus dollars for your nonprofit, it’s important to check three resources daily for updates:

www.michigan.gov/recovery - State of Michigan’s portal for ARRA information. Click on “Grant Opportunities” for a summary and contact information for all ARRA grant opportunities (formula and competitive).
http://www.grants.gov/applicants/recovery.jsp - The grants.gov page dedicated to federal recovery act competitive grant opportunities. There are links to all the federal departments’ newly created recovery web pages as well as a link to a listing of all of the open Recovery Act competitions.
www.recovery.gov – The federal government site for Recovery Act news and reporting.

The PowerPoint and question and answers from this webinar can be accessed at: http://www.mnaonline.org/pdf/MNAGovOfcPPTPresentation_April142009.pdf. Look for a link to the full transcript of the presentation and question and answer session in next week’s update.

Additionally, on April 9, the White House held a special “briefing for outside organizations about the American Recovery and Reinvestment Act (ARRA)” to provide an opportunity “to learn about how the ARRA funds are being distributed in the various departments and how you as organizations can participate.” The National Council of Nonprofits attended the briefing and has published this Special Report so nonprofits across the country can have equal access to this important information. (Source: National Council of Nonprofits)

Why Do Capacity-Building? Another Way to Think about Our Work

I was recently challenged to help one of my clients explain the concept of capacity-building to her board – why we should do it and why it should be funded. I’ve been doing this work for so long that it just makes logical sense to me! Why doesn’t it for everyone?! I decided to use a theory-of-change logic loop and it has proved useful. I thought I’d pass along both the tool and the logic of capacity-building.

I borrowed this very basic theory-of-change logic loop from the W.K. Kellogg Foundation’s internal evaluation unit. It looks like this:




Issues and Opportunities

To apply this logic loop to capacity-building, I had to consider first the issues that have caused capacity-building to arise for nonprofits and what opportunities become available to organizations as a result. Here’s what I put together in describing “Issues and Opportunities:”

1. Nonprofits traditionally receive funding only for programs. Many funders have had restrictions about using funding for operations, equipment and other such elements of infrastructure.
2. Therefore, nonprofits have under-developed infrastructure. Many struggle with the basics such as financial reporting, as well as functions such as quality improvement systems. A common theme is under-developed board governance and, in some cases, poorly functioning executive leadership.
3. Nonprofits cannot sustain programs long-term. When the three-year grant ends, all too often, the program ends. Or it must be reorganized to attract funding from another funder. How many of us have written grants where we said we’d find a way to fund the project long-term and we had, at best, a vague idea of how to do that?
4. As a result, there is ongoing expansion and contraction of services to the community. This makes it difficult for service seekers to know where to go to get what. And it is expensive to keep repeating the “start up” cycle that comes with new funding for a new idea (or new funding for an old idea revised). Changes in service delivery should be guided by needs, not by the availability of funding.

You may have other ideas about the issues and opportunities. The logic loop helps us to identify those.

Responses

So, now what? What is the response to these issues and opportunities? Here is how I answered:

1. Initial research has identified the elements of strong nonprofit functioning. Research done by McKinsey and Company for Venture Philanthropy Partners identified seven broad categories of capacity that nonprofits need to have to function successfully.
2. It is possible to assess functioning via capacity-building assessment. McKinsey’s work has been converted to a grid that accesses the capacities that nonprofits have in four areas: leadership, adaptability, operations and management.
3. Funders understand the need to fund infrastructure development. In our region, Rotary Charities has led the way by making grants to help agencies assess their capacities and then develop plans for how to address their gaps. Rotary also provides up to three years of funding for the implementation of capacity building activities. Many of you have or are participating in this process by completing an organizational capacity assessment and developing a plan for capacity building with NorthSky.
4. Capacity building activities are undertaken. The field of nonprofit management and consulting are beginning to develop and provide services and programs that address a variety of capacity issues. We see board development, fund development, volunteer management among the more predominant needs.

This is good news. We have a tool that can help us assess capacity. We have funders who are willing to invest in strengthening capacity. And we’re starting to develop the programs that address the capacity gaps. So, off we go? Not quite!

Outcomes

We can’t leave this discussion without talking about outcomes. We all know our funders want to know what impact their funding produced. But, most importantly, all of us as leaders and staff in nonprofits need to know what outcomes we’re trying to achieve. That is true of capacity building as well. There are three levels of outcome to consider:

1. Initial outcomes: how did the functioning of the organization improve? Are boards functioning better? Is more money being raised?
2. Long-term impact: are these organizations better able to meet their missions? Are they serving more clients? Are their services more effective?
3. Social change: is the community better off because of the investment in these nonprofits? Is the community healthier? Are its citizens enjoying a better quality of life?

These outcomes seem logically connected, don’t they? But, we really don’t know for sure unless we can answer all of these questions with sound research. And this is where it gets tough – answering the last two questions requires considerable time and resources to design and implement research studies. More about that in a minute...

Putting it all together

If I put all of this information, in abbreviated form, in my logic loop, we end up with a concise way to look at what might seem like a very complex thing called capacity-building. It looks like this:




And, if I over lay on this model an approach to evaluating capacity-building, I come up with this:


Getting back to outcomes for a minute, how much time and resource should we invest in evaluating capacity-building? We can and should be able to articulate initial outcomes. But long range outcomes and social change are better left to large funders, university-based researchers and scientists, and field theorists.

I am hopeful that the logic loop offered here will give all of us the compelling rationale for continuing the very important work of capacity-building. And I hope you can see that you can apply this approach to other aspects of your work as a nonprofit organization. I wish you the best of success on behalf of your clients and the community!

Post your comments on Chris Ameen’s capacity building model.