GRANT WRITING, FUNDRAISING ISSUES, MISC.
Taking a Businesslike Approach to Charity

Condensed from GuideStar (www.guidestar.org) Newsletter
Increasingly, donors, funders, and the media are using business criteria to measure charities' performance. They expect nonprofits to quantify their missions, programs, goals, and achievements and to be able to show how closely they have or have not met those standards.

That's exactly as it should be, GuideStar Newsletter readers say.

The November Question of the Month asked, "Do you believe that charitable organizations should use business criteria to measure performance?" Some 80 percent of participants responded, "Yes." Another 14 percent replied, "No," and 5 percent were not sure.

Yes: "You Can't Deliver What You Don't Measure"
"You can't deliver what you don't measure," wrote Kathleen Olson of the Point Defiance Zoological Society. Funders more and more are looking for outcomes. Why should we expect any less of our staff, board and volunteers?" The need to maintain public trust and demonstrate effectiveness was a common theme. "Charities are handling donors' money with the intent of fulfilling a promise or mission. This makes them ultra responsible for solid business and financial practices," said Gail Billingsley of the YMCA at Virginia Tech.

An anonymous participant argued that adopting business criteria can pay off in other ways: “Marketing principles can assist a non-profit in serving more clients, strategic planning demonstrates that an organization has a concrete plan for the future, and financial benchmarks are not only beneficial to the future security of an organization, but one aspect that many donors investigate before they make a contribution."

Several participants, however, issued caveats with their affirmative answers. "Measuring performance provides essential information about the health of an organization. … It is important to keep in mind the human factor, however, remembering that a measurement is a fact, not a judgment," wrote Nan Breedlove of STAND! Against Domestic Violence. Nonprofits "need to have a 'goodwill' quotient built into any performance measure," Ted W. Regan of Rippleffect, Inc. stated.

In the end, it's all about mission, said Erin Melus, president of RADD: "Utilizing applicable business criteria maximizes both societal and donor ROI (return on investment), but 'applicable' is key. Performance must serve mission."

No: "Serve the Mission, Not the Bottom Line"
Mission was also the reason cited most often by respondents who answered, "No." An anonymous participant observed, "Business criteria revolve around profitability. Efficiency, productivity, and pricing all feed into profits. Nonprofits need to attempt to measure performance, but most human service organizations measure success with number of people assisted, or some equally 'soft' number. We try to achieve efficiency and productivity to serve the mission, not the bottom line."
Focusing too closely on business-style measurements can compromise how an organization carries out its mission, another anonymous participant asserted: "Certainly we should be good stewards of our resources, but our first and foremost concern should not be 'the bottom line.' When we overemphasize about performance measurements, we begin to 'cream' our beneficiary selection and eliminate the most needy and those with the most barriers from our client list."

A Donor's Point of View
Perhaps a donor should have the last word. Margaret Tomaszek of Bank One noted, "As a banker and a donor, I want to know that the maximum amount of my donation or loan is benefiting the mission of the organization. I look at nonprofit management as having the same fiduciary responsibility to act on a 'reasonable person' basis as I am required in my profession towards depositors."

GuideStar invites all 501 (c) 3 organizations eligible to accept tax-deductible contributions to update their GuideStar reports. For more information, go to www.guidestar.org/npo.

No matter what your annual budget or your primary sources of revenue (special events, major gifts, etc.), direct mail should be an integral component of your development plan. If you’re not having much success in this arena, perhaps your packages are not creative or compelling enough to inspire donations, or perhaps you’re not mailing to the right target audience at the right time with the right message. My advice? Don’t be “penny wise and pound foolish.” Successful direct mail programs need skilled management and analysis, creativity and patience. Seek help from a direct mail fundraising consultant. The expense for expert assistance will be well worth it in the long run.

Suzanne E. Coffman, Dec 2004
© 2004, Philanthropic Research, Inc. (GuideStar)
Suzanne Coffman is GuideStar's director of communications and editor of the Newsletter