Sponsor Insight

By Angela E. White, CFRE, senior consultant and CEO, Johnson, Grossnickle and Associates

Giving USA released its annual estimates of U.S. charitable giving in June for 2016, and the results show overall growth during a presidential-election year filled with national tumult and impending policy changes. Giving USA 2017: The Annual Report on Philanthropy reports that total giving in our nation reached $390.05 billion in 2016, an increase of 2.7 percent over 2015. This total is the highest since Giving USA began tracking this data 40 years ago.

Published by Giving USA Foundation, a public service initiative of The Giving Institute, Giving USA is the longest running and most comprehensive report of its kind in America. It is researched and created by the Indiana University Lilly Family School of Philanthropy.

Despite volatility in economic and political arenas in 2016, each of the nine major categories of charitable organizations realized growth in giving. This has happened only five other times during the past 40 years (1976-2016). The increase continues a positive growth trend, indicating that charitable giving has overcome losses from the 2008 recession, although growth has slowed and is considered moderate overall.

Giving by individuals showed strong growth — an increase of 3.9 percent (2.6 percent adjusted for inflation), continuing to be the largest source of charitable giving. Research indicates that this growth may be attributed to an increase in gifts from the general population rather than from mega-gifts — currently defined as gifts exceeding $200 million — as in recent years. This strong growth boosted total giving and offset the drop in bequests (-9 percent). Bequests are not predictable and frequently fluctuate from year to year and are not influenced by economic factors.

“In 2016, we saw somewhat of a democratization of philanthropy,” notes Patrick M. Rooney, Ph.D., associate dean for academic affairs and research at the Lilly Family School of Philanthropy. “The strong growth in individual giving may be less attributable to the largest of the large gifts, which were not as robust as we have seen in some prior years, suggesting that more of that growth in 2016 may have come from giving by donors among the general population compared to recent years.”

Organizations in the arts (6.4 percent), health (5.7 percent), the environment (7.2 percent), and international affairs (5.8 percent) experienced significant growth in giving. Growth in the arts may indicate the effect of assertive and innovative fundraising practices. And, research suggests growth in environment and international affairs could have been impacted by a new phenomenon borne of the contentious political climate: rage donations. These donations are a reactive reflex for some donors, given out of frustration in response to post-election policy changes.

Education, while still very strong, saw slower growth in 2016 (3.6 percent) than in recent years, which may be related to the drop in mega-gifts.

What does all this mean for future nonprofit fundraising? The recession is officially behind us with a seven-year growth trend, but new challenges lie ahead. Philanthropy trends show Americans continue to give generously even in uncertain times, though their giving priorities may shift a bit with the issues at hand.

For example, the predicted cuts in government support of specific programs could put pressure on philanthropic support of basic needs charities and other human services and public-society benefits organization.

It is important to remember that as the national economic climate changes, so can donors’ passions and giving patterns change. Different and innovative approaches to cultivate prospects and donors may be called for to increase giving and move your organization forward.

We encourage you to download a free copy of the Giving USA 2017 highlights or order your full copy of the report at givingusa.org.

Angela E. White, CFRE, has been instrumental in JGA’s success since 1996, when she joined the JGA team. In 2011, she became CEO of JGA, responsible for providing day-to-day leadership to the firm and guiding the JGA staff, while continuing to provide tailored consulting services directly to its clients. White has a high level of expertise in philanthropic consulting in healthcare, education, social services, arts and faith-based organizations. She also has considerable knowledge and experience in strategic planning and data analysis.

By Ann M. Merkel, Senior Vice President and Chief Market Development Officer, The National Bank of Indianapolis

Congratulations! As the leader of your nonprofit, you have successfully led your team in growing and fulfilling your organization’s mission. In fact, your organization is serving more people than you ever envisioned — or planned for!

As we know, with growth often comes challenge — specifically, how are you going to fund all of this growth? Maybe you secured a new, large contract or you’ve received a large multi-year grant? Or maybe you’ve outgrown your physical space?

Regardless, you may be faced with a new challenge — asking your bank for short- or long-term financing. Here are some steps for turning that challenge into a success.

• Get to know your banker before you have a need. Communicate regularly and familiarize your banker with your organization’s ongoing funding sources. Share your strategic plan and communicate the steps for achieving your plan. This understanding will allow your banker to be your advocate when it comes to approving your loan request.
• Be prepared to discuss your financial statements. You’re a skilled administrator and an enthusiastic visionary for your organization, but if you don’t have a strong understanding of your organization’s finances, include your controller, financially-savvy board member or your CPA in the conversations when you’re seeking a loan.
• Confirm your financial statements are current and accurate. Most funders, including banks, prefer to rely on CPA-prepared reviewed or audited financial statements. Make sure your banker understands the nuances of nonprofit accounting, as well as how contracts or funding cycles affect your financial results.
• Communicate a clear plan for how you intend to repay the loan. Create a financial statement forecast that addresses not only the impact on your organization of the new or expanded revenue source, but also the additional related expenses. Your banker needs to have a clear understanding of the additional cash flow that will be available to repay the loan.
• Identify the asset(s) that you will use to collateralize the loan. If that asset is real-estate related, include the cost of “due diligence” items (appraisal, survey, title work, etc.) into your financial forecast.
• Share the feasibility study, if your organization is engaging in a capital campaign to repay the loan. If this isn’t your first campaign, be prepared to discuss the size and success of previous campaigns.

The suggestions outlined above will not only be of benefit when times are good, but will also pay dividends should your organization experience a decrease or interruption in its annual revenue stream.

A solid banking relationship is especially critical when your organization faces an unexpected financial challenge. Communicating early and honestly with your banker will increase the likelihood that your bank will be willing to work with you during the challenging time. As a nonprofit administrator, you know very well that your donor relationships are built on mutual trust and take time to cultivate; and, the same can be said for your banking relationship, too!

In her role as Senior Vice President and Chief Market Development Officer for The National Bank of Indianapolis, Ms. Merkel is responsible for cultivating and maintaining high profile corporate, individual and community relationships.

By Jeremy York, HR Field Representative, the Synergy Companies

Most people are familiar with the term job description. It is the document that outlines items such as job responsibilities, experience, education, skills, etc. A dreaded document that most managers hate to prepare or fail to see the overall importance of having such a list. But what most managers do not understand is that a job description is an essential component of a successful people strategy.

First, job descriptions provide clarity and outline expectations. They help employees understand the fundamental framework for their job. Without job descriptions employees find themselves interpreting the job as they see fit, bogged down in a quagmire of tasks that may not be job-related or do not add value to the business strategy. Employees don’t have a clear focus on where they should spend their time or what tasks are the most important if it is not provided in a job description.

Second, job descriptions are a valuable tool in the recruitment process by specifically outlining job duties to applicants. They provide a road map in identifying qualified candidates so that you can hire the best talent. Applicants understand the core responsibilities of a role when they apply and therefore, understand what they’ll be expected to do once hired.

Third, job descriptions assist managers during performance reviews to accurately evaluate an employee’s ability to perform his or her job. Many managers struggle with performance reviews and see them as creating conflict. The job description can lessen the appearance of conflict by providing objectivity in assessing employee performance against the defined responsibilities of the job. Compare employee actions to job specifications and voila, an accurate assessment of performance.

Lastly, job descriptions help ensure legal compliance with regulations such as the Americans with Disabilities Act and the Fair Labor Standards Act. Employers often find themselves in situations where an employee asks for an accommodation based on a disability or argues that he or she is eligible for overtime pay. Job descriptions can serve as the first line of defense when questions arise regarding these situations.

Still not convinced that you need job descriptions? Having job descriptions can be the difference between winning or losing (paying hefty fines and/or penalties) employment related legal battles. This means that job descriptions could save you thousands, even millions of dollars in legal fees and settlements. Whether unemployment or unfair employment practices claims, job descriptions could be your best defense in giving yourself more leverage against such claims.

Jeremy York, SPHR, SHRM-SCP, is a Human Resources Field Representative for Synergy PEO Services. He provides strategic and generalist HR support to local nonprofit organization leaders and their staffs. York has over 15 years of human resources experience. He is the current director of certification for the Indiana State Council of the Society for Human Resource Management (SHRM) and serves on the IndySHRM board of directors as the past president.

By Jennifer Pendleton, vice president Indiana, Aly Sterling Philanthropy

When an organization begins a fundraising effort, it tends to be special events.

We dream up creative new ways to hold auctions, cook-offs, bake sales and golf outings.

While these events bring people in our door – regardless of whether they are interested in our cause or not — we quickly learn the return on investment (ROI) for these events is low.

Each takes a lot of work and doesn’t necessarily yield long-term donors or relationships that lead to sustainable gifts. Many people just come to have fun and play golf with friends, not to get involved or learn more about the organization’s mission.

That’s when we get “it.” Fundraising is all about relationships. And we understand – firsthand – that we need to cultivate the donors with potential for the largest gifts. We know this is where the cost to raise a dollar is the lowest. So we work to screen our major gift prospects, cultivate the relationships and woo them by showing how we can work together to impact the community.

Then we wait and hope they fall in love with our mission and decide to make a sacrificial gift to our organization. The highs and lows of chasing major gifts are thrilling and exhausting, and can make planning for programmatic needs challenging.

World weary and seeing those closest with new eyes

At some point, however, we realize there are people who have been loyally giving to our organization over the years, sitting right under our noses.

Right under our noses!

These people are so close to our mission we’re practically neighbors. We don’t need to convince them we’re trustworthy or that our work matters. These donors next door are also already writing checks and volunteering to help. We don’t even need to convince them to act.

That’s when it dawns on us: perhaps we’re both ready for a deeper, more meaningful relationship…

Mature programs make room for all kinds of friends

Our mission already has a devoted crew of donors and doers. So, why do we ignore them to compete against every other organization in town for the same slate of big donors?

While these “usual suspects” are undeniably important, they only represent part of the picture. Every nonprofit should pursue a diversified spectrum of donors. What does the diversified spectrum look like? Is it one-time donors? Board member introductions?

Sustainable fundraising programs cultivate a range of donors with the aim of building loyalty and providing more and better ways for them to engage.

Getting started

An organization’s databases contain an abundance of next-level donors waiting for the invitation to do more! They have raised their hands, possibly multiple times, to show us they care.

It makes sense we should start by getting to know our middle-donor segment. Are they Gen Xers? Millennials? Baby boomers? Knowing who’s on our list (and how they like to engage) will help inform early decisions about outreach.

As we begin building relationships, we should develop a program to standardize communication with this group moving forward. Note what works and what doesn’t, and ask donors for feedback. Our goal should be to create a simple-to-operate program that offers meaningful engagement for everyone.

Finally, these are our donor-pyramid people. If they see the results and impact in their giving, they could invest a little more (or a lot more) each year. Is there a path for them? If not, create one that provides them with opportunities to deepen their involvement with the organization’s mission.

Now’s the time to take the first step to identify and connect with your donors next door to create deeper relationships that lead to more meaningful engagement and loyal support…

Jennifer “Jen” Pendleton is a self-described board governance “nerd” who believes sound leadership and strong organizational culture are keys to nonprofit success. She’s also driven to help these leaders identify their nonprofits’ unique qualities and roles in the community, with the goals of making nonprofit magic happen and bringing vibrant visions to life. Before coming to ASP, Jen served as president and CEO of the Community Foundation of Boone County (Indiana).

By Cali Curley, assistant professor, IU School of Public and Environmental Affairs at IUPUI

Every March since 2012, Brackets For Good, an Indianapolis-based 501(c)(3) charitable organization, hosts online “competitive giving” fundraising tournaments. With March Madness as the impetus, there are now nonprofits in 10 additional cities involved, and a national competition.

Participating nonprofits organizations rally enthusiastic donors to out fundraise their opponents in order to advance into the next round of the tournament. By generating stakeholder excitement, promoting the tournament, and soliciting corporate involvement, nonprofits earn increased exposure, raise funds, gain access to free fundraising tools and are introduced to new donors.

Dollars from donors translate to points, giving participants the opportunity to advance in their bracket. Competing nonprofits keep donations received during tournament play, no matter how far they advance. The winning organization in each city receives an additional Championship grant sponsored by corporate sponsors.

This year’s tournament concluded last week with more than $3.5 million raised for nonprofits across the country. That total eclipsed the amount that the organization helped raise in its first five years combined. Indianapolis led all areas with more than 7,000 individual donations.

Capitalizing on the excitement of this bracket-style tournament, Brackets For Good teamed up with myself and SPEA at IUPUI colleagues Drs. Jamie Levine Daniel and Marlene Walk to better understand the impact that competitive giving, as a new fundraising strategy, has on nonprofits, their donors and the community at large (e.g., sponsors, participating cities).

Guided by input from Brackets for Good, this ongoing research reflects community needs and holds academic and practical relevance. For instance, a grant from the IUPUI’s Sports Innovation Institute made it possible for the SPEA research team to incentivize donors with additional dollars to donate in exchange for donors’ participation in a survey. Data from the donor survey provides insight into donation frequency, donation reasoning, expectations and the impact of  “competitive giving” on supporters’ decision to give. Additionally, participating nonprofits were surveyed to paint a clearer picture about the sector’s capacity to adapt to the evolving forms that philanthropy is taking.

As millennials become even more central participants in philanthropy, fundraising innovations such as ‘competitive giving’ becomes even more important.

SPEA’s collaborative-competitive-giving research team will begin investigating the results to answer questions central to understanding the implications of using competition in philanthropy.

Keep an eye out for future publication of findings.

Cali Curley joined SPEA IUPUI in 2014 after receiving her doctorate in Public Administration and Policy from the Askew School at Florida State University. Her research focuses on the intersection of policy and local government. Her primary interests revolve around the individual level motivations, incentives, and barriers related to policy participation decisions. 

By Ann M. Merkel, Senior Vice President and Chief Market Development Officer, The National Bank of Indianapolis

You are sitting at your computer, working happily away on a project, when you receive an email from a co-worker or friend, encouraging you to open an embedded link or an attachment.  Or maybe it’s an urgently worded email from your organization’s executive director, instructing you to immediately wire funds to a new vendor.  Or worse, the message instructs you to email to them the W-2 information of all your employees.  Curious or eager to help, you click on the link or open the attachment.

Unfortunately, you’ve just exposed your organization to Business Email Compromise and the potential loss of confidential information, as well as funds.

In recent months in Indiana, nonprofits, governmental entities and private corporations have all been targeted by cybercriminals who gained access to information, mostly through emails containing embedded links or attachments.  Cybercriminals threaten to steal your data, encrypt or destroy it or make confidential records public. If you’re “lucky,” they may offer to give the data back…for a price.

This hijacking of data and demand for payment has created its own apt name: ransomware.  Unfortunately, ransomware can be purchased for less than the cost of a smartphone or a designer handbag.  It’s also a faster and less expensive way to steal than credit card identity theft. Nationwide in 2014, there were 783 cyberattacks and breaches, exposing 85.6 million records.  In 2015, there were 781 attacks, but the number of records exposed soared to approximately 169 million.  Cybercriminals then share the stolen data through social media outlets. Intel Security (McAfee) and the Center for Strategic and International Studies (CSIS) estimated the likely annual cost to the global economy from cybercrime is between $375 billion and $575 billion.

There is no shame in being hacked; criminals are smart in appealing to your interests and making emails look legitimate.  The loss of data, however, is a serious threat.  Key is educating your employees when to be suspicious.  Following are some questions to ask of your organization, and topics to discuss.

Recognizing fraudulent emails:

• Even if you know the sender, verify that the message is legitimate. Pick up the phone and call or walk down the hall and ask the sender about his or her request.
• If you receive a request via text message, don’t respond to the text.  Instead, call the number you have on record for the sender and verify the request.
• Although false emails can look professional, many do not.  Notice misspellings or badly formatted content.
• Be leery of third-party emails.  Hover your cursor on links to see phony addresses.  It’s best to search separately for the actual URL.
• Never respond to a request for sensitive information through an unsecured email.
• If your organization doesn’t already have a policy on internet usage, create one. Let your employees know that they shouldn’t be using their work emails for personal activities. If you use online banking services, consider dedicating a PC for this purpose only.

Suggestions for protecting your information.

1. Firewalls. Contact your local technology companies and consultants, who often have special rates for nonprofit organizations on firewall technologies, which are designed to prevent unauthorized access, and keep this product current. Heed all security software warnings on links and attachments and do not download if advised not to.

2. Back up, back up, back up! Viruses aren’t just about your health any more.  Computer viruses, ransomware and malware (software that disables computer systems) are less threats if you back up your work daily. If your data is compromised, you can always go back and retrieve updated files with minimal loss of information. Cloud storage is recommended, but regardless, files should be stored in a separate location.

3. Saving data. Many nonprofit organizations cannot afford nor do they need a high-tech individual server.  Consider, instead, free data storage cloud services that Google and Microsoft offer to nonprofit organizations.

As your bank’s fraud prevention software has become increasingly impenetrable, cybercriminals are focusing their attacks on you and your employees, instead.  With information gleaned from a nonprofit’s website or from public domains, they use social engineering/phishing to gain access to your organization.

Cybercriminals believe employees are your weakest link.  However, with some training, they can become your strongest asset in fraud prevention.

In her role as Senior Vice President and Chief Market Development Officer for The National Bank of Indianapolis, Ms. Merkel is responsible for cultivating and maintaining high profile corporate, individual and community relationships that strengthen the Bank’s brand and reputation.