Nonprofit University Blog

A tagline?  Does your nonprofit have one?  Do you really care whether you have one or not? 

Does it make or break your organization?  And I ask this as someone whose organization has a tagline:  In the business of nonprofits.   

Blogger Nancy Schwartz recently conducted a tagline survey and found that 72% of nonprofits don’t like or don’t have a tagline.  (Twelve nonprofits won prizes for the best taglines, and to that dozen I send congratulations.)   Well, gee whiz, that really concerns me.  Not!  Taglines are, and this is absolutely not a dis as I like our tag line, and we use it often, icing on a nonprofit cake.  They do, as Ms. Schwartz says, help establish brand and add new life to a worn message.  But they are still just icing.

If Ms. Schwartz had done a similar survey on mission statements, what would her results have been?  And mission statements are more central than a tagline to not just what an organization is, but how it operates.  Ninety percent of the time, you hear a tagline and you have no clue to what organization it belongs.  So what is the value of that?  But with a well crafted mission statement, a reader/listener should be able to get right to or pretty close to the nonprofit.  (My last two classes in nonprofit management offered as an elective La Salle University’s MBA program provide me the anecdotal evidence of this.)

What if Ms. Schwartz had done the survey on financial situations or program integrity?  Would she have found 72% of nonprofits unhappy with their financial position or unaware of it? Depending upon who she surveyed—senior management, other members of the organization, board members—odds are good that she would have found an awful lot unaware of the real financial situation of their organization.  Now that does concern me.

Program integrity is another where an awful lot of folks who are an integral part of an organization would most likely shrug their shoulders.  Would they know whether the people running a program have the appropriate skill set to deliver the product?  Would they know whether the program is really producing the outcomes it says it does?  Would they know whether the program was fiscally sound or draining the organization of valued resources for an uncertain outcome?  Now that does concern me.

I understand the value and importance of marketing our nonprofits in order to be successful in what we do.  But I also understand that as much as many people just like the icing, most want some cake to go along with that icing.   Let’s concentrate first on making sure we have a fully-baked cake before we pile on the sugar.

 The Nonprofit Center at La Salle University’s School of Business – In the Business of Nonprofits         

 Is it true that our tax laws that allow individuals to donate tax free, as much of their assets as they wish to charitable causes is really another gift to the rich paid for on the backs of the rest of us?  Ray Madoff, Boston College Law School Professor, would have us so believe.   And her point is one that should give us all pause.  Noting Leona Helmsley’s bequest of $8 million for the care of dogs, she questions the acts of other similarly wealthy individuals, their private foundations, idiosyncratic causes, their search for immortality, and, of course, the charitable deduction laws that provide them this playground. 

Helmsley’s $8 million gift, Madoff explains, is really only a $4.4 million gift from her estate, and a $3.6 million dollar gift from taxpayers.  What, you say?  Given that her estate would be taxed at 45%, the government just lost $3.6 million in estate taxes, as that is what would have been owed on her $8 million had it not gone to charity. I wonder how we, the taxpayers, might have spent that $3.6 million had we been asked.  Were I asked on my 2008 tax return how I would like my share of that $3.6 million spent, and my choices were dogs, early childhood education, feeding the hungry, or literacy programs,  I’d have a hard time selecting amongst the last three options.  But the dog thing just wouldn’t be there. 

And before you jump, don’t misunderstand:  my family and I love animals; we give much to causes that ensure the care and feeding of dogs, cats, whales, endangered species, etc.  But it is a rather niched interest, unlike the other choices which, based on the number of such organizations and programs and the dollars they receive, are not so niched.  So, if donors seeking to avoid tax payments get to select their charities of choice, shouldn’t taxpayers be allowed to do so, as well? 

Perhaps Helmsley should have been allowed to give $4.4 million to the dogs and while the taxpayers were asked how to distribute the other $3.6 million. I doubt that any employee of a nonprofit would argue that tax benefits for charitable donations should be eliminated.  And I’m sure the wealthy, charity-inclined individuals would agree.  But Madoff’s implied question lingers and begs to be addressed:  who or what do these laws really benefit—the wealthy or the public good? 

I believe in the power of statistics. But I also believe that statistics can be manipulated. They can be manipulated by the method of their collection and by the method of their presentation. And while both bother me tremendously, it is the latter that worries me the most, as the naïve reader/listener may be easily duped. And once duped, bad decisions may follow.Take, for example, the following. Ted Hart has been tracking online giving since 2001, when a mere $550 million dollars was given online to nonprofits in the United States. In 2007, that number had jumped to $10.44 billion, which was itself a 52% increase over 2006’s figure of $6.87 billion. That sounds huge, right? (And that is how many sources have portrayed it. Could those sources be online giving consultants and companies?) You read this and if you are a nonprofit without online giving capability what are you to think? Run out and get that capability? Maybe.Maybe? What nonprofit doesn’t want a chance at a piece of that $10.44 —and clearly growing—billion? Well, let’s read another set of statistics. According to the folks behind Giving USA, that $10.44 billion represents only about 4% of total household or individual giving in 2007. But according to the Philanthropic Giving Index (Center of Philanthropy, Indiana University), nonprofits have been having increasing success in gaining access to online dollars: in 2001, less than 10% of nonprofits surveyed said they were successful in internet fundraising; by 2007 that number had more than doubled to 22%. (Keeping the statistics theme going, what if I had simply reported that between 2001 and 2007 the number of nonprofits reporting successful Internet fundraising programs had more than doubled? That leaves quite a different impression than what I wrote, or if I had written, “Less than a quarter of the nonprofits surveyed had successful Internet fundraising programs.) So, cutting to the chase: in 2007, less than a quarter of nonprofits had improved success in gaining access to the less than 4% of the total household or individual giving done via the Internet.What is my point in all of this? Well, I think I actually have two. First, online giving is not a silver bullet! It will not save you from a floundering development strategy built on traditional methods. It is merely one of many options that should be part of a strong, diversified development strategy that is carefully designed and regularly monitored and re-evaluated. Second, before you let statistics lead you down any path, make sure you have the full statistical picture, and not just what the author wanted you to hear.

Two new data points give with one piece of news and take away with the other.

According to Giving USA 2008, the news appears all glowing. In 2007, over $306 billion was given to charities by foundations, corporations and individuals, an increase of 3.9%. And, good news or better news, depending upon how your organization’s planned giving skills are, bequest giving rose 6.9%, after what is referred to as a “steep decline” in 2006. The conclusion drawn is that we are beginning to see the tip of the wealth transfer iceberg.

But let’s not rejoice too much, just yet. Two other things are happening that should, dim this potentially rosy picture. The first the sector cannot control; the second it can and should. First, as we all know, the recession hadn’t really hit in 2007. Gas prices weren’t over $4 a gallon, the costs of the basics of the food pyramid hadn’t started to spike and airlines weren’t charging per bag. There certainly hasn’t been a lot of hoopla about people rushing to give giving their tax rebates to charity. So, a year from now, I’m not sure I’d be sharing the same positive statistics about giving and the transfer of wealth.

Second, is a growth trend in the sector does not seem to be abating. According to the Urban Institute’s The Nonprofit Almanac 2008, the number of nonprofits in this country grew to over 1.4 million, up from the 1.1 million entities that existed in 1998. Even taking into account the number of organizations who went out of business over the course of those 10 years, there are still more nonprofits today looking for a piece of the eligible dollars. It truly is a zero sum game. There simply is not enough money to go around, nor should there be.

It is time for the sector to get wise. Proliferation and independence are not, as I’ve said before, necessarily good things. We cannot afford to continue to spawn new organization after new organization, to support organizations that have been hanging on by a thread for years or to keep hoping that next year will be different. We must encourage, help and, if necessary, push mergers, acquisitions, partnerships. Here is a case where less truly will be more: more money to go around to the good, strong nonprofits, more employees working in organizations that can afford a seriously, livable wage, and more—and better—services for our clients and communities.