In the midst of all the news about the financial meltdown on Wall Street and Capitol Hill and how it will impact the nonprofit sector we were struck by an interesting piece in the International Herald Tribune that talked about the issue of donor anxiety as related to high net-worth individuals.  While the sector is bracing for big changes as a result of the crisis and what this might mean for fundraising and corporate giving, this article discusses the pressure facing those who have big money and are likely to give in spite of the gloomy economic climate.  And how do these individual philanthropists and donors in general, give responsibly?  By looking at the impact of their dollar.  Sounds simple ... but it is a crucial step that is often overlooked. 

Responsible giving is more than looking at one of the many online charity rankings.  It is more than selecting a group based on its name or mission.  Responsible giving is making sure that when your dollar leaves your hand it arrives in the hands of those who will do something with it.  Something that makes a difference.  Something that counts. 

The uncertain future of Wall Street has almost every industry questioning its financial future — the nonprofit sector included. Speculation of today’s economy and the impact on the nonprofit world has been addressed over and over (see here, here, and here). This latest financial crisis seems to have convinced many that the impact will be great. Mike Spector of the Wall Street Journal addresses the crisis and how charities and other organizations who heavily rely on corporate giving are already feeling the aftermath of the fall of giants like Bear Stearns, Lehman Brothers, and the uncertainly of other major institutions.  According to Spector, many NYC organizations rely on gifts from the financial industry and those that do are already feeling the heat.

It is times like these that organizations need to tell—and show—potentials  donors and funders exactly what they are doing with their money.  This will make for more effective giving, in the hope for a more effective sector.

How might the latest financial crisis affect the industry as a whole — corporate giving, individual donations, fundraising, etc.?  Sound off in our comments section.

Our own Steve Butz was featured on WYPR on Tuesday discussing the important topic of nonprofit management as well as efforts by Social Solutions and future efforts by the Superstar Foundation to change the way nonprofit organizations and the sector are managed and supported.                                               

Here’s a summary of the segment.

After working with juveniles for a nonprofit, Baltimorean Steve Butz thought he saw inefficiencies- and opportunities- in the way nonprofits are commonly managed.  His software company Social Solutions has made a name for itself helping nonprofits streamline their operations.  Now, he’s started the Superstar Foundation to give grants to outstanding direct service providers.  We’ll ask how a little bit of cash might actually motivate the ‘not-in-it-for-the-money’ set.

To listen, click here.

Marc Pitman, a fundraising consultant and author of The Extrememe Fundraising Blog, posed an interesting question on his LinkedIn page — as a donor, what do nonprofits do that annoy you?  Answers range from not sending address labels in direct marketing campaigns to don’t try to guilt someone to giving over the phone.  Read the responses here.  While some responders simply listed off a handful of what some might consider minute details (don’t call at dinnertime, for example), there are some underlying issues addressed.

One person talked about the lack of engagement from the organization — the communication is in form letters, there is no genuine thank-you.  And because of this disconnect, the person felt that they were not a true part of the movement.

We all know the donor-charity relationship is crucial to providing services to help those in need.  Why not make the donor feel empowered? Just as we should with our volunteers, our employees, and the communities we serve.  Give them the chance to see how their $10, $100, or $1000 donation is being used.  Whether they appreciate the market ploy or not, they might just be impressed by your org and no longer bothered by the ringing phone at dinnertime.  

An interesting survey from the Corporation for National and Community Service found that just over one quarter of Americans, nearly 61 million people, volunteered in their communities in 2007.  These volunteers gave 8.1 billion hours of service worth an estimated $158 billion in terms of volunteer-worth.    

Perhaps the best news is that after a six percent decline in total volunteers between 2005 and 2006, volunteering levels stabilized in 2007.  And there were one million more volunteers in 2007 than 2002.

The survey didn't find all was good when it comes to Americans and their time giving back to their communities, however.  One third of those who volunteered in 2006 did not continue to do so in 2007, raising concerns that volunteers are losing interest, are not encouraged to remain with the organization or are feeling burned out.

Despite positive news that volunteer levels are increasing from previous years, there is still much work to be done.  What should organizations do to keep volunteers interested?  Are you encouraged by the results of this study?    

According to the Wall Street Journal, those seeking donations are starting to more readily turn to social networking sites to seek out potential givers.  It's not sneaky - it's smart.  Considering that the biggest givers are individuals, according to GiveWell - they are reaching them right where it counts.  Plus, nonprofits and chariries are making it easy to access the information donors want, even those tear-jerking videos, and pass it along to their friends and families, who reportedly are 100 times more like to donate based on a friendly recommendation than a blind solicitation. And donating is of course, a mere click away – just as easy as shopping online.

Although this phenomenon is reportedly going to help boost donations to the philanthropic sector, we hope those donors using social networking sites for donor research are doing just that – their research. We love the accessibility, but we still need accountability. These givers should be smart enough to know that there’s more to donating than feeling good and there’s more need for the money than what might be visible on Facebook. Props to charities for meeting the donors half way.  But a reminder to donors to not take the easy way out.

It's no secret that were big fans of Steve Butz ... And it looks like the Baltimore Sun is too. 

Check out today’s article on Social Solutions, ETO Software and, of course, the Superstar Foundation.  In addtion to Steve, several ETO users were also featured.  We particularly liked a quote from Nancy Hall, a senior adviser at the Maryland Association of Nonprofit Organizations and teaches a nonprofit management course at the Johns Hopkins University, who said, "It's not enough to just do good work, you have to show results." We couldn't agree more.  

If you picked up a paper today, odds are you’ve seen reports of an interesting survey by Giving USA Foundation and the Center on Philanthropy at Indiana University that found that overall charitable donations increased by 3.9% in 2007 (or 1% after adjustments for inflation), bringing the total donations made by Americans to a record-breaking $306.39 billion.  While the news that giving in 2007 remained steady compared to previous years is reassuring to those worried about the impact of a weakening economy, the verdict isn't out yet on 2008.   

The survey found that corporate gifts and individual giving showed small declines after adjusting for inflation, but foundation grants rose 10.4% to $38.5 billion and charitable bequests were up 6.9% to $23.1 billion, contributing to the majority of the overall increase.  The survey also found strong growth in contributions to international organizations that provide relief, economic aid, exchange, and other programs. Donations rose 16.1 percent to 13.22 billion dollars and the study’s authors believe that was due to an increased awareness, especially among people born after 1981, of global issues.  Additional statistics and findings can be found here.

However, as gas prices continue to rise, the housing market remains somewhat stalemate, and job growth is minimal, the question of the impact of a poor economy on the nonprofit sector will continue to linger.  As Stephanie Strom of the New York Times points out in her story today, despite the survey's findings, there are signs of of a decline in giving. 

We’re curious to hear your thoughts—do the survey’s finding reassure you about the status of giving in a poor economy?  Or are you still concerned about this year's economic impact?

Steve Butz is a man on a mission.  Today’s official announcement of his latest endeavor, the Superstar Foundation, is proof of that.

Starting in September, the Superstar Foundation will put cash grants directly into the hands of high-performing social service workers.  What does that mean? Direct social service workers from effective organizations who are doing exceptional work will be recognized. With cash.  Cold, hard cash.  The first couple of years will consist of 5 grants at $2,000 a piece and Steve’s goal is to grow the foundation to where 30-40 recipients per year will receive $10,000 grants.  

We’ve talked about the problems young leaders in the sector feel when it comes to earning potential and other financial concerns, and now there is even more incentive to stick with the industry and improve performance.     

Visit the Superstar Foundation website for more information and check out the  announcing the foundation.  

And be sure to pass the word on to all the Superstars you know.

It’s been a long time coming.  The IRS is giving charities’ annual tax form, Form 990, a makeover—its first in 20 years.  

Starting next year, the new forms, which charities must make available to donors and other interested parties, includes a summary page that will spell out comparative financial information—both revenues and expenses—over a two-year timeframe, gives a synopsis of the charity’s mission and accomplishments, as well as outline the organization’s governance and operations, compensation for top executies and trustees, an details fundraising efforts.  While some of this information was included in previous versions of the form, the new format puts all of this information up front.  Donors who have questions where their money is going will have a better sense as to where their money is going with the pertinent information available to them right on the Form 990.

Another new item to the form is that if a charity reports more thank $15K in gross income from fundraising or spends more than that amount soliciting donations, the organization will have to answer a slew of questions and disclosures about its activities, including methods and compensation for fundraisers.

The IRS' goal seems to be an attempt to raise the stakes of accountability.  For that, we think change is good.