Wednesday, November 23, 2011

How to set up a charity in Australia

So you want to do some good, and establish a new charity to help someone or something?  An option is to set up your own charity.  This is rarely the right option for the cause, though it may be the right option for you.  Whilst it seems, on the face of it, a selfless act setting up a charity is often as much about you as the cause.  This is not a bad thing - after all, Barnardos, Greenpeace and MSF wouldn't exist and be doing their great work if they hadn't been set up by someone.

But, and it is a big but - there are now so many charities it is unbelievable.  And many of these are set up and run by well meaning amateurs trying to do some good and make themselves feel good about it.  Maybe they are angry about injustice or just want to do their bit.

Setting up a charity is almost certainly not the best way to help change the world.  Volunteering, fundraising or donating to an existing charity is likely to have a greater impact.

The only factor that would make setting up your own is passion - it is more likely that you will throw everything into 'your own baby', which is not a bad thing.

Even so, make sure you do your research and speak with the experts.  Understand the impact that what you will do will have on other organisations.  Remember that the thing you are excited about is likely to be because you happened to see and witness it, but it is probably not the most pressing problem in that country or region.

Here are some examples of how well meaning amateurs think they are doing good but could end up causing more damage.
* Several INGOs pull out of a region to force an end to specific corruption; you come in and innocently perpetuate the problem.
* A business owner introduces a malaria eradication program in a village in a poor country she has vacationed in.  Infant mortality from malaria in that village goes down - but malnutrition zooms up and conflict with the next village escalates.  An experienced NGO would have combined the malaria reduction with sexual and reproduction advice and worked with local villages to implement and spread the model.
* A returning holiday maker decides to distribute pens, school bags and other stationary to a school they happened to visit.   When the kids go home, bullies from other schools pick on them and nick their stuff.
* A manufacturer decides to sell shoes to affluent westerners and distribute a free pair to a poor person in a particular country. Unless the shoes are made local to the poor beneficiary, it is likely that the shoe manufacturers in their region will be put out of business; creating more problems.
* A woman is helped to set up her own business buying fish direct from the fisher, not the local wholesaler.  This makes her business better, but of course damages the wholesaler.

None of the above examples are necessarily wrong; and maybe the benefits outweighed the advantage - but all of them had undesired and unexpected impacts that only someone who is involved in such work could predict.

Usually the side effects are benign, and manageable but occasionally things go horribly wrong.  Stories like this one about a false orphanage run by an Indian missionary are rare but people are often desperate when they are poor and it is easy to make up a scam and take advantage of well meaning tourists.

Of course, established charities make mistakes too - but on balance they are going to get more things right than wrong.

If you still want to set up a charity (in Australia), check out Philanthropy Australia's guide here.


Monday, November 21, 2011

Add 'eradicated polio' to your CV?

Jonas Salk made it possible.  After inventing the polio vaccine, he was asked who would own the vaccine.  He replied "Well, the people I would say. There is no patent. Could you patent the sun?"  A true hero responsible for providing the key tool to hammering polio.  It was quickly snuffed out in nearly all countries and is now endemic in only four countries - Afghanistan, India, Nigeria and Pakistan.

We are amazingly close to finishing the job - just $535m short of funding in early 2011.

But now an Australian student will be able to add those words to his CV, along with an inevitable "Young Australian of the Year" award.  

This Australian, Michael Sheldrick, was the final speaker at the FIA WA Conference a few weeks ago.  And his talk was incredibly motivating.

Even though he says "I am not a fundraiser" I think it is fair to say he bloody well is.  He managed to convince the Australian PM to give $50m, provide a platform for Bill and Melinda Gates to chuck in $40m and a few other Commonwealth countries in the UK to pitch in too.  Combined with the brilliant efforts of the global Rotary movement millions of kids will grow up, like Michael did, to never experiencing the disease. A seriously large chunk of that $535m will be knocked out thanks to the work of Michael. He is quick to point out that it was not him alone.

Managing The End of Polio Campaign was his role with Global Poverty Project. "It was very much a team effort and would not have been possible without 'All hands on deck'. In particular, a stand out Concert Producer."

It is so tempting to write up his story here, but it would ruin it - it is best coming from him.  He is a gifted storyteller, and this was key to his success. Check out his video.

Following the rock concert he was involved with, a government minister asked him to introduce the minister to Bill Gates.

If you see him speaking somewhere, go see him.  For those coming along to the Pareto party in Melbourne on 1 December don't worry about asking him to tell his story, he is happy to tell all. 


Wednesday, November 16, 2011

Major Donors

The barriers for asking for large gifts from individuals are numerous.

"I need to do more research"
"The timing is not right"
"I don't know how much to ask for"
"The chairman should ask this one"
and lots more

Many of these are valid, but ultimately not asking is a failing strategy.  If you want to get $1m from someone then  you almost certainly need to build a relationship with them, and going straight in with an ask will not get you that $1m.  But done well, a smaller ask is unlikely to put them off their bigger one.  In fact, it is part of building a relationship.

If that person was already a donor, then there is some form of relationship already in place.

For example, to lift a donor from $500 - which they donate in response to your annual Christmas appeal - to $5,000 is much easier than following the full seven steps to developing major donors; and it helps bring them along the journey too, if you follow it up properly.

If you have a lot of higher value donors who donate to your appeals, but you don't really do anything else with them, try ringing them up and having a chat.  Ask them why they support you, if they have friends that do too.  Try and set up a meeting.  Maybe 1 in 3 or 4 will catch up with you.  There you can look to ask them for a more substantial donation.

It isn't that hard, and I have worked with many organisations to formalise this approach as a process, and with all but one it has led to significant extra income at little cost - and bringing those donors closer to a really big gift.  I call this 'Major Donors: Next Week" because you need to do it next week, or it doesn't work.

Lucky Australians can find out more about major donor fundraising from an excellent bunch of practitioners at the Fundraising and Philanthropy "Art and Science of Major Gift Fundraising" event at the end of the month.  A bargain at $600.  Check it out here.

Frankie Airey helped raise around $500m in one campaign.  Gulp.

Charlotte Grimshaw will also be speaking at the event.  She can help identify potential major donors from any list of donors.

Wednesday, November 9, 2011

Social media and fundraising; learnings from corporate world

The final session of day one at the WA state conference was with a young entrepreneur award winner, Tenille Bentley.
A very interesting session, beginning (like all social media sessions) with all the huge numbers but refreshingly localized for Australian market. Mind blowing numbers; I loved one analogy - as Australians continue to give up cigarettes they become addicted to Facebook. The infamous unfair break, the smoko, is replaced by the facebooko (or face-o).

Some good tips-
- Only worry about Facebook, Twitter, YouTube and LinkedIn.
- 80% of your social media communications should be about your topic, indirectly about you - only 20% about your products (something I call 'Fluff and Bite')
- don't think of social media with a 'what is the ROI' approach. That is like asking 'what is the ROI on my mobile phone'. It is about relationships
- gave example of peril of ignoring social media; someone working at Dominos spits in a Dominos Pizza, video goes viral, Dominos no idea why or what to do about it. Eventually they counter on YouTube and begin to recover sales
- always have policies that people agree to to allow you to remove inappropriate comments. But be aware they will just post them elsewhere
- all charities should have a Business Facebook page. Allows for analysis.
- great use of you tube, blender manufacturer blends things like iPads.
- how often should you update?
** Facebook 2 x a day on business page plus 5+ conversations on others walls
** twitter 5-10 days
** LinkeDIn once a day, business focus
** YouTube when you have something good and worthwhile
- biggest growth on Facebook is 55-65 year old women

Frightening end- managing a social media brand takes about 26% of a working week.

So if you haven't got time to do it, see her because that is what her company provides. Nice, subtle pitch!

Good stuff. The challenge for the fundraisers here is, of course, what role social media can have with their fundraising.

For me, social media is still best used for retention strategies, particularly for online and face to face recruited donors, and overlaying it with Game Layer is the best idea.

Tenille Bentley,

Tuesday, November 8, 2011

Maths and Fundraising at WA State Conference

I am at the FIA Western Australia State Conference listening to Paul Ramsbottom, a fellow fundraising geek. He is looking at revising the donor pyramid.

This is how the National Park Service in USA illustrates their donor pyramid.

Ken Burnett, who brought the donor pyramid to the attention of many of us in 1992, recently blogged that it was no panacea. Also, the Agitator (The American one, not me) recently blogged about it and how it was not really useful.

Paul agrees. The problem with the pyramid is that it infers people move along it. You bring them in, they make another gift, then another, then become an automatic donor, then a major donor and finally a legator. This doesn't really happen.

He is getting into some pretty neat maths stuff now - looking at state charts; a mathematical approach in this case looking how people change their state. The key question is what triggered the change in state.

A donor can, at any point, move from one 'type' to another. As time moves along, the state of the donor is only ever at one fixed point. He points out that this needs to be managed within charities - he says that Amnesty International in Australia are the only charity he knows of to be working on this topic. If you can't afford it (but have a database that justifies it) then simply outsource data entry and hire data analysts.

His second maths thing is graph theory. For those who haven't heard of this, it is simply the theory behind things like how LinkedIn suggests who you should connect with. Also called social network theory.

He shows how Jason Boley managed to use this to spot an incredibly important link between a donor, through the LA Foundation and to another donor - they would never have known without this connection.

The first network map is complex, but Jason drilled down, focusing on LA Foundation and Atlanta Foundation (the red nodes).

Drilling down we see these new connections - that were unknown to the university.

So. We have learned a little about state theory and graph theory, but what does that mean for you?

The key here is that the technology overlay changes the game through four things.
Speed, Scale, Automation and Analytics.

These two theorie will help you target better, saving money on marketing to the wrong people and increasing money by getting the right ones. And of course, major donor fundraising will benefit from networks discovered through graph theory.

Paul Ramsbottom

Direct Mail Acquisition Presentation at FIA WA

For those attending the conference, as promised, here is the presentation.
Click here.Even if you didn't attend, you are welcome to check it out!

Major Donors: Next Week

I am presenting at the FIA State conference in Perth.
One of my two sessions is all about major donors next week.
The bottom line is that the biggest obstacle to getting money out of potential major donors is the fear of asking.  So how do you get over that?

The presentation, and more useful information is below.
The FIA Presentation, in Prezi.
An explanation of Hitch-Hikers Guide to Major Donors
Identifying major donors

Thursday, November 3, 2011

The evil of communications departments

At the recent IFC Conference in the Netherlands, I did a session on story telling, and that all fundraising needs to revolve around stories.  Abstract and clever marketing, as well as stats and 'how clever are we' stuff just doesn't work.

Margaux Smith from UK agency bluefrog realised she was the devil.  (A devil with a good wit and prose though).

And another fundraiser's reaction on the masterclass to some of the tacky stuff that works...

Check out here what Margaux learned....


Tuesday, November 1, 2011

Raising capital for fundraising investment: A new future?

Good fundraising programs have excellent returns.  Despite the constant nonsense about high cost of fundraising, most charities achieve extraordinary results from little funds.

Investing in direct mail, phone or face to face / direct dialogue can achieve amazing results for charities - an investment of $1m could generate between $500k and $1m net 'profit' every year for five years or more - a great return and better than the stock market.

According to Givewell, the top 100 Australian charities* by investment portfolio have about $6.8bn in reserve.  These reserves will be invested in property and traditional investment markets.

I have argued before that charities should consider fundraising as part of their investment portfolio.  The chart below shows how a decent fundraising program would outperform investments in property or shares, assuming they achieve an average of 8.4% and 10% respectively - both excellent returns in this day and age.

Clearly fundraising can be a better option, but it needs to be good fundraising built on proven techniques to be invest-worthy.

But what if you have no money to invest?  Although these big charities have plenty of money, most charities are simply not rich.  So how do they take advantage of the excellent returns fundraising can offer?

I know of one charity in the UK that borrowed money from a bank to invest in fundraising.  Another decided to use all of it's income to reinvest in fundraising - not doing any charitable work until it had enough capital.

But Scope in the UK has taken this to another level. Their fundraising shops are doing well, and they want to increase the number of shops from 250 to 350.  This will cost more than they have spare, so they are launching a bond.  This is the first I have ever heard of at this scale.

They are asking investors for $30m.  Just like a company would raise capital.  They will repay investors just like a company would.

Brave and Brilliant, and hopefully the start of a new trend of social investment portfolios.

More info here.

* As declared in annual reports 2009/2010.  Some charities in Australia so not produce annual reports, including some very big ones with very large reserves.

PS - thanks Jan Chisholm for the info!
Disaster Fundraising Guide download it here