Catalogue for Philanthropy Is Onto Something…

October 7, 2008

I just had a very nice meeting with the George McCully and his team over at the Catalog for Philanthropy.  Catalogue is a great effort, started in Massachusetts (where they are well-known) but with a desire to be more of a national effort.  This is the 11th year for the Catalogue and they have profiled over 900 charities in that time.  The result is a very nice printed “catalogue” that gets sent to the top 120,000 households in Massachusetts.

Their core screening qualification is fairly simple.  First, your organization must be some form of public benefit that impacts the quality of life in a philanthropic or charitable way.  There are over 36,000 nonprofits in Massachusetts, but George only counts 3,000 or so organizations in his “target.”  Gone from the list are churches, clubs, dues-paying associations, business groups, sports leagues and other organizations that primarily benefit a specific community.  The Catalogue is making no judgment on the value of supporting or joining these organizations, but they don’t meet the test of providing a broad-based public benefit.

If the Massachusetts experience holds nationally, then the “1.4 million registered IRS charities” may be narrowed down to less than 140,000 “Catalogue-worthy” organizations.  George also culls organizations that are above $3m in annual revenues, which actually doesn’t impact the number of organizations all that much since most are well under $3m (in the U.S., only 35,000 or so 501c3 organizations exceed $3m revenue out of 1.4m total nonprofits).

So, when people throw around the “1.4 million IRS nonprofits” number, it may be accurate, but it’s not reflective of the real situation.  Perhaps at some point Givvy and the Catalogue for Philanthropy can work on creating more of a breakdown that makes it easier for people to find the great local charities that are so easily overlooked when we pull out our checkbooks…

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Posted by John Treadway

Let me see… Seth Godin’s list…

July 9, 2008

Seth Godin has a great post from yesterday called “Let me see.“  It’s 18 ideas of how to present data in a way that is more valuable – such as a list of doctors in my down sorted by malpractice rate or car models sorted by crash and repair data (I’d add injuries and fatalities per million passenger miles, etc.).

So, how about let me see…

  1. charities sorted by those that my family or friends care about
  2. charities sorted by the ratings and reviews of people I know
  3. charities sorted by their impact in my own local community
  4. charities sorted by those that actually perform services vs. those that fund the charities that perform services (e.g. show me Horizons for Homeless Children, not the agencies that fund HHC)

Sound good?  I thought so…  What do you want to see?

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Posted by John Treadway

Net Promoter Score – Lessons for Nonprofits?

June 13, 2008

I read an article recently touting the power of a metric called “Net Promoter Score” or NPS.  You can read all about NPS at Net Promoter.  The metric is deceptively simple – and that’s the power.  It’s easy to measure and managing to it has real results.

With NPS you ask one question: “Would you recommend us to a friend or colleague?”  The answer on a scale of 0 to 10, where 9s and 10s are “Promoters,” 7s and 8s are “Passives” and any response in the 0-6 range indicates “Detractors.”  To calculate your score, you take the percentage of Promoters and subtract the percentage of Detractors.  That’s your score.

For example, if 20% of your donors are Promoters (9s or 10s), and 50% of your donors are Detractors (0-6s), your Net Promoter Score is minus 30%.  For Promoters at 50% and Detractors at 25%, your NPS is +25%. Obviously, the higher your NPS, the better.  The average for-profit business is only in the 5-10% NPS range.

If you are a nonprofit you can ask this question of all of your donors:  “Would you recommend [insert NPO name here] to a friend, family member or colleague?”  The first time you ask this question establishes a baseline.  From then on your goal should be to work like hell to get the number higher.  Why?  Obviously if a donor recommends you to their friends you’ll have the chance to gain new donors and increase your revenues.  If your number is low (or negative!) then you have to find new donors through very expensive marketing instead of the relatively free referral/word of mouth you’d get with a higher number.

You can modify this model a bit if it doesn’t quite fit, and I suspect that it would be useful in many cases to get the NPS for both your donors and those you are serving.

Here are some of the best NPS ratings, according to Net Promoter.  What’s your score?

USAA 82%
HomeBanc* 81%
Harley-Davidson 81%
Costco 79%
Amazon 73%
Chick-Fil-A* 72%
Ebay 71%
Vanguard 70%
SAS 66%
Apple 66%
Intuit 58%
Cisco 57%
Federal Express 56%
Southwest Airlines 51%
American Express 50%
Commerce Bank 50%
Dell 50%
Adobe 48%
Electronic Arts 48%

* All NPS statistics are based on Bain or Satmetrix surveys with the exceptions of Intuit, Chick-fil-A, and HomeBanc. For these firms, we used data that they provided. Their data was gathered in a reasonable (but not perfectly equivalent) fashion.

Source: The Ultimate Question, Reichheld, 2006

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Posted by John Treadway

Workplace Giving

May 22, 2008

Over the last few days I have been looking for good research on workplace giving.  I have to conclude that there’s not a lot, or that I’m just not good at finding it.  There’s some content at Charity Navigator and many charities have information on their sites about how to support them in the workplace.  I have also spoken with several HR people I know and gotten their feedback.

Workplace giving seems to fall into four buckets:

  • Combined Federal Campaign(CFC) – far and away the largest, this is a workplace giving behemoth for all federal, military and postal employees and generates many millions in donations every year.
  • United Way(UW) – under the national organization there are nearly 1,300 local United Ways that partner with large employers for workplace campaigns.  The emphasis is on larger organizations with several thousand employees and a high-engagement model.
  • Community Foundations – other foundations in some geographies compete with United Way to manage workplace campaigns for large and mid-sized companies.  Their approach is generally similar to UW, but perhaps with a different emphasis on where the money goes and how decisions are made.
  • Ad hoc – a lot of companies run their own workplace campaigns on an ad hoc basis with little or no external management.  Workplace giving campaigns can be very time-consuming and require a fairly significant time commitment from the company to be successful.

I’m certain their are other models, but these are the biggest models I can find.

For the most part, donor/employee options are limited in workplace giving campaigns.  CFC provides a list (albeit large) of approved charities, which are reviewed and approved by the OMB.  UW campaigns often fall under 3 or 4 focus areas (e.g. childhood education, health, etc.) and the money is donated through to organizations selected by the local UW leadership.  The same model holds true for community founcations.

Ad hoc workplace campaigns are often driven from the top, with a committee or individual screening and selecting charities to include – often with extensive employee input.  Supported organizations are almost always local, and typically small so the impact from the local employer can be meaningful and appreciated by the charity.

Somehow the ad hoc campaigns feel the most real and connected to the community.  That’s the sense I get from folks.

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Posted by John Treadway

Donor’s Money Isn’t Going Where They Think It Is

May 6, 2008

In a short by thought-provoking article in the Stanford Social Innovation Review, the authors point out the difference between what people feel they are doing with their donations (47% said assist the needy) and where their donations were actually going (6% actually).   This is a big gap!

It’s even more astonishing that 67% of the people they asked “felt confident that their contributions would reach their intended targets.”  On what basis did were these people so confident?  This gets back to the question I asked in February – What % of your donations are to education?  Health?  Human Services? Most people don’t know.

I think that the number one issue here is that giving is a bit like a black box to most people.  You respond to some appeal, give from the hip, and hope for the best.  Hey!  We’re talking about $223 billion in donations from individuals!   Shouldn’t there be a better way to give so we can know where the money is going?

Stay tuned!

(p.s. thank you to Katya for highlighting the roundup post from Kivi.)

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Posted by John Treadway

Is Causes on Facebook a failure?

April 16, 2008

I just read a great post from Beth Kantor regarding the impact of Facebook on charitable donations. It raises the question of impact, but the data is still not complete. So, I’m going to take a stab here by analyzing the top charity app on Facebook – Causes.

Causes Logo

Quick note on Causes: a “Cause” is something a Facebook member creates to drive awareness for an issue,and the Cause is tied to one specific Charity designated by the Member creating the Cause. For example, the most popular Cause,”Support the Campaign for Cancer Research,” generates donations for Brigham & Women’s Hospital in Boston.

For more on Causes, see Network for Good’s article and materials from April 1 “Causes…” webinar.

By many measures, Causes is a success. Over 8 million Facebook users have installed the Causes app according to Appsaholic (a Facebook app that tracks Facebook apps). This is an estimate based on Facebook’s published daily active users and % of total installs that are active. Today it’s 80,411 active users at 1% engagement, equals ~ 8 million installs. The Active User count has actually been steadily declining over the past several months (at one point I recall 157,000 or so active users). It’s still the 69th most active according to Appsaholic, but it used to rank a lot higher.

What does this mean? A lot of people have installed Causes, but very few people are doing anything with it (e.g. low active user count). It’s kind of a dead app, even with the large installed base. Why? Well, you get Karma points when your friends look at your profile and see that you “support” Save Darfur (with 851,808 other FB members) or Stop Global Warming (with 1.8 million other FB members). However – how do you engage with these causes once you’ve installed them?

Where’s the Beef?

Awareness and Karma points are all great, but are the charities receiving donations? The number one “cause” on Causes is “Support the Campaign for Cancer Research” with 3.1 million members. Since the cause was published last Summer the total amount donated was $61,980. 3.1 million members – $62k in donations. That’s a depressingly low $0.02 per member. I contacted one of the charities linked to a top 5 Cause to learn if they were seeing a lot of impact outside of the small $ in donations reported on Facebook. The short answer was “not much.” Not that the money they’ve received is not valued (it is) or that the exposure to their issue was not valuable (it is). The “beef” just does not appear to be all that filling.

Here are the top 5 causes on Causes and their numbers…

  1. Support the Campaign for Cancer Research: 3.1m members, $62k donated (2 cents per member)
  2. Stop Global Warming: 1.8m members, $23k donated (1.2 cents per member)
  3. Animal Rights: 1.3m members, $22k donated (1.7 cents per member)
  4. Society Against Child Abuse: 1m members, $10k donated (1 cent per member)
  5. Save Darfur: 852k members, $17.5k donated (2 cents per member)

Total donated in the top 5 causes? About $135k.

I’m going to go out on a limb here. There are thousands of causes in the Causes ecosystem on Facebook. Most have very few members and a small amount of donation volume. Assuming that some members donate to more than one cause, and that some members donate a lot to a single cause, my estimate is that the average donation per member since Causes got going was under $0.15. With 8 million members, that makes the dollar impact ~ $1.2. I’ll round this up to an even $1.5m just to be generous.

In aggregate, $1.5 million is a fairly good number. On a per-cause, per-effort, and per-member basis, it’s trivial. So, I’ll leave answering the question to you: Is Causes on Facebook a failure?

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Posted by John Treadway

Creating a Giving Plan

March 24, 2008

I have been working on the planning section of Givvy.com all day today. The goal is to keep it simple – few have the hours to spend working on a giving plan these days. So, we kept it simple.

  1. How much should you give?
  2. What types of causes should you give to (education, animals, environment, etc.)?
  3. What geographic focus should you have (local, regional, etc.)?
  4. What’s your vision for giving (this might come first, but writing a paragraph can be hard for some people)?

Inspired Philanthropy CoverA more comprehensive approach can be found in Tracy Gary’s excellent book, Inspired Philanthropy. It’s packed full of great exercises and worksheets to help you get your plan on. Unfortunately, there is an expectation that you’ll spend weeks with the book and included tools to create your giving plan. Most of us have a life that makes that difficult. If we can get 80% of the value in 15 minutes online, it’s a win. That’s what we are trying for with the Givvy Plan section of our site. When it launches you can all tell us if we’ve hit the mark.

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Posted by John Treadway

Investor Demo

March 13, 2008

We had our first demo of Givvy today for a VC.  The site is coming along nicely and the demo was flawless.  Great work Seth & James!  There was a bit of a debate with one of the partners about whether or not we should seek to get active support from charities in order to increase our chances of success.  Something we will look into.

All in all a good meeting, though no clear indication on their level of interest yet.  In the meantime, we’re ready to go back out there and show off our stuff to potential investors.

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Posted by John Treadway

Over 1 million nonprofits, but few good web sites…

February 26, 2008

There are over 1.3 million nonprofits in the U.S., two-thirds of which are considered “public charities.” There’s a real long-tail phenomenon here in that very few nonprofits get to any real size.  In fact, over 81% of U.S. nonprofits see less than $1 million in annual revenues, and 93% are under $5 million according to the National Center for Charitable Statistics’ 2007 Nonprofit Almanac.   It’s no wonder that most charities struggle with maintaining a decent web site.  As we know, a good web site is crucial to the ability to engage with today’s younger donors and volunteers.

So many of these small nonprofits are staffed solely by volunteers, or perhaps 1-2 paid (underpaid) staffers.  I met recently with one such underpaid staffer from a local education-related nonprofit.  She’s the only employee – the cook, waiter and bottle washer.  Between writing grants, developing donors, searching for corporate sponsors, writing thank you notes to donors, and finding the time to squeeze in programs central to the nonprofit’s mission, she admitted to me that there’s no time left to maintain even a simple and flat web site (circa 1996).  Doing the “social media thing” is totally out of the question.

So many of the larger Web sites that engage with retail donors across multiple charities – like Causes on Facebook, or Change.or, or any of the others – do a fairly decent job of exposing the already exposed larger charities.  What about the little guys?  Who is there to help them get more visibility and financial support?  I’m not sure how well givvy will do with this either, but we will try.  We know that users will find the larger charities on our site easily – but we hope that our model will also highlight smaller local charities in ways that current sites have been unable to do.

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Posted by John Treadway

What % of your donations are to education? Health? Human Services?

February 19, 2008

I’ve been asking that question lately of a lot of people. The answer I get invariably takes the form of

“Uh, what? Oh, well, um… I don’t really know. I give to [school name here] and my church and then a bunch of donations to other charities…” which they proceed to list.

Given that the average giving household spends $1,600 to $2,000 in cash donations every year (based on which study you read), it’s a bit surprising that most people really have very little idea of the relative levels of support they provide. Did they really give 25% to children’s hunger issues, or was it 3%? Was their alma mater blessed with 35% of their giving, or was it more like 70-80%? Are Harvard, Babson, BC, Wheaton or other schools more worthy than Horizons for Homeless Children, the Pine Street Inn, or the One Campaign? If not, why do they get so much more of our donation dollars?

Since it’s tax time and your donation receipts are probably close to hand, take a quick look and calculate the support you give to various broad categories of cause. Shoot me a note – jtreadway at givvy – and let me know what you found out… If I get enough responses I’ll share the overall data (won’t give out your info directly, don’t worry). I’ll include mine too, which for the record shows a 2007 pattern that is not what I really want it to be.

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Posted by John Treadway