Charities in hard times
The economic collapse in 2008 will be remembered as the result of unregulated markets combined with human greed. I would love to write about the failure of the free market system and the Chicago School of Economics philosophy which lead us to this disaster (see Naomi Klein), but I will refrain from that tangent and instead comment on the non-profit sector. Charities are hurting in this economic climate. But they can adapt through a few strategies and help their many clients better than ever.
While charities can often benefit from economic declines because of a renewed enthusiasm for altruism in people stimulated by the collective experience of suffering, at this moment things may be more complex. There are more charities than ever, accounting for so many niche focuses that the average person is being asked to contribute to more and more causes. With more than 2 million non-profit organizations in North America, the vast majority asking for money...how can they survive?
The steps charities can take to strengthen their ability to provide for their clients include:
Feedback to granting agencies
o Charities of all stripes need to recognize the necessity of providing high quality, current and useful information to their funders. With money being tight these days, it's important to value the relationship with funders. This is more than just output reporting, but needs to be outcomes reporting that clearly demonstrates the value in the services provided. The more detailed this can be the better. Think how useful it would be from a fund raising perspective if a charity could report on how a $100 from a given donor was spent. I.e, $10 for office infrastructure and the rest provided 50 hot meals for homeless people, or provided a secure bed for the night and an hour of counselling for a runaway child. Charities need to have a method for collecting outcomes based information and being able to cross reference the success with the donations. This necessitates a need for appropriate case management technology.
Collaborate on shared services
o Why do small organization have their own payroll clerks or accountants. Why not outsource or collaborate on payroll and accounting? PayWorks is a simple and effective online payroll service that makes it a literal waste to have an in house payroll department.
Use the web and social media for promoting your brand/causes, awareness, lobbying, and fund raising
o Twitter, Facebook, Linkedin, Blogger.com, Orkut, WiserEarth, SecondLife...there's a new one every week....
Use technology for optimizing and collaboration amongst complimentary services
o Why not have a housing organization and an employment counselling service work together through sharing client information, sharing research and funding opportunities. Joint fund raising is also an approach that could be successful. Check out Civicrm, Kintera, Convio, SectorLynx
* Fee for service
o Social enterprise development is another avenue for charities to explore. Charities can earn a significant portion relative to their operational budgets before loosing their charitable status.
Partnerships and Associations
o No longer can NGOs work independently. Much like in the business world where collaboration is being aided by technology, the NGO world needs to work together as well. Band together for more political lobbying power and shared services. There is power and survival in numbers. Funders love partnerships and shared responsibility. There is more social return and less risk for their money. The biggest obstacle is control of projects but this can be dealt with through partnership contracts and clear communication. The focus in on client service after all.
In 2003 The Harvard Business Review printed an article by Bradley, Jansen and Silverman, called the Non Profit Sector's $100 Billion Opportunity. This article was the result of a survey of 200,000 non-profits in the US. The thesis of the article is that through five very straightforward measures the non-profit industry could free up $100 billion for more services. I have kept this article in my back pocket for years as it is a road map which the non-profit sector has yet to realize, but now is the time.
The main points relate directly to my ideas above and ultimately are all about collaboration. Given it is five years later, I think the authors would now be promoting the exploitation of technology to achieve many of these ends:
1. Reduce Funding Costs
Be more efficient in fund raising promotion
2. Distribute Holdings Faster
Foundations need to spend more faster
3. Reduce Program Services Costs
Use performance measurement approachs to become more efficient in service delivery. i.e, more bang for the buck
4. Trim Administrative Costs
Use outsource services for as much admin as possible and smaller organizations should share in outsourced services
5. Improve Sector Effectiveness
This is where partnerships and collaboration play a significant role. Avoid unnecessary duplication in services.
We need a revolution in thinking in the non-profit sector to have these millions of organizations see their collective value. Right now the sector is characterized by chaos and division due to the consistent struggle for funding. Think of the power of a united Third Sector sharing information and working collaboratively to solve the social challenges we face. That would be a revolution which could change the world. Look at the "Yes We Can" movement of Barack Obama and now enhance that with a united sector.
In a recent speech Google Enterprise product manager Rishi Chandra said said it plain and simple: "Today the world is not about individual productivity. It is about team or group productivity."
While charities can often benefit from economic declines because of a renewed enthusiasm for altruism in people stimulated by the collective experience of suffering, at this moment things may be more complex. There are more charities than ever, accounting for so many niche focuses that the average person is being asked to contribute to more and more causes. With more than 2 million non-profit organizations in North America, the vast majority asking for money...how can they survive?
The steps charities can take to strengthen their ability to provide for their clients include:
Feedback to granting agencies
o Charities of all stripes need to recognize the necessity of providing high quality, current and useful information to their funders. With money being tight these days, it's important to value the relationship with funders. This is more than just output reporting, but needs to be outcomes reporting that clearly demonstrates the value in the services provided. The more detailed this can be the better. Think how useful it would be from a fund raising perspective if a charity could report on how a $100 from a given donor was spent. I.e, $10 for office infrastructure and the rest provided 50 hot meals for homeless people, or provided a secure bed for the night and an hour of counselling for a runaway child. Charities need to have a method for collecting outcomes based information and being able to cross reference the success with the donations. This necessitates a need for appropriate case management technology.
Collaborate on shared services
o Why do small organization have their own payroll clerks or accountants. Why not outsource or collaborate on payroll and accounting? PayWorks is a simple and effective online payroll service that makes it a literal waste to have an in house payroll department.
Use the web and social media for promoting your brand/causes, awareness, lobbying, and fund raising
o Twitter, Facebook, Linkedin, Blogger.com, Orkut, WiserEarth, SecondLife...there's a new one every week....
Use technology for optimizing and collaboration amongst complimentary services
o Why not have a housing organization and an employment counselling service work together through sharing client information, sharing research and funding opportunities. Joint fund raising is also an approach that could be successful. Check out Civicrm, Kintera, Convio, SectorLynx
* Fee for service
o Social enterprise development is another avenue for charities to explore. Charities can earn a significant portion relative to their operational budgets before loosing their charitable status.
Partnerships and Associations
o No longer can NGOs work independently. Much like in the business world where collaboration is being aided by technology, the NGO world needs to work together as well. Band together for more political lobbying power and shared services. There is power and survival in numbers. Funders love partnerships and shared responsibility. There is more social return and less risk for their money. The biggest obstacle is control of projects but this can be dealt with through partnership contracts and clear communication. The focus in on client service after all.
In 2003 The Harvard Business Review printed an article by Bradley, Jansen and Silverman, called the Non Profit Sector's $100 Billion Opportunity. This article was the result of a survey of 200,000 non-profits in the US. The thesis of the article is that through five very straightforward measures the non-profit industry could free up $100 billion for more services. I have kept this article in my back pocket for years as it is a road map which the non-profit sector has yet to realize, but now is the time.
The main points relate directly to my ideas above and ultimately are all about collaboration. Given it is five years later, I think the authors would now be promoting the exploitation of technology to achieve many of these ends:
1. Reduce Funding Costs
Be more efficient in fund raising promotion
2. Distribute Holdings Faster
Foundations need to spend more faster
3. Reduce Program Services Costs
Use performance measurement approachs to become more efficient in service delivery. i.e, more bang for the buck
4. Trim Administrative Costs
Use outsource services for as much admin as possible and smaller organizations should share in outsourced services
5. Improve Sector Effectiveness
This is where partnerships and collaboration play a significant role. Avoid unnecessary duplication in services.
We need a revolution in thinking in the non-profit sector to have these millions of organizations see their collective value. Right now the sector is characterized by chaos and division due to the consistent struggle for funding. Think of the power of a united Third Sector sharing information and working collaboratively to solve the social challenges we face. That would be a revolution which could change the world. Look at the "Yes We Can" movement of Barack Obama and now enhance that with a united sector.
In a recent speech Google Enterprise product manager Rishi Chandra said said it plain and simple: "Today the world is not about individual productivity. It is about team or group productivity."
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