The NonProfit Times - June 1, 2008 - (Page 25)

STREETSMART NONPROFIT MANAGER philanthropic exchanges requires a deliberate shift of gears, and if one is steeped in the commercial world that gearshift is not easy to make. This is why the general public will never regard nonprofit, public charities as efficient. They’re not intended to be efficient, at least not in the same way, because if they were able to be efficient by classical measures it would probably be because they are encroaching on an area of commercial interest. It is also why the philanthropic exchange is satisfying only in an indirect way. The commercial model depends on direct consumer feedback, both for financial reward and for adjustments. In the Philanthropy Triangle the donor gets no personal contact with those they are funding, a public charity has to play an intermediary role, and in any case the results might be hard to measure and could well take a long time to be clear. Further, one can’t necessarily trace a given effect back to an individual donor, which is why funding buildings is popular while funding building maintenance expenses is not. No wonder that traditional commercial entities aren’t interested in the same things as those in the Philanthropy Triangle. Still, the philanthropic exchange is usually satisfying, if only because for the vast majority of donors the emotional distance between giver and recipient is, up to a and resources alone will be enough to constrain interest in this approach. TOO MUCH OF A GOOD THING But for a small number of nonprofits, earned income actually represents a subtle threat to their ability to manage the Philanthropy Triangle. The two-way commercial exchange is based on a transaction, whereas for the Philanthropy Triangle to work it has to be based largely on relationships. When a nonprofit emphasizes earned income at the expense of philanthropic revenues, it risks weakening the trusting relationships that make funders willing to give monies that produce a hard-to-verify social return. Earned income strategies always have their limits, if only because of the tax code. What it takes to please donors is different from what it takes to please paying customers. Commercial transactions, better known as earned income strategies, definitely have their place in the mission-based world. But, for many reasons, the Philanthropy Triangle must predominate. It’s not that nonprofits can’t be like a business. It’s that, beyond a point, they shouldn’t. NPT Thomas A. McLaughlin is a national nonprofit management consultant with Grant Thornton in Boston. He is the author of the book Nonprofit Strategic Positioning (John Wiley and Sons, 2006).His email address is thomas.mclaughlin@gt.com The philanthropic exchange is usually satisfying, if only because for the vast majority of donors the emotional distance between giver and recipient is, up to a point, navigable. point, navigable.When the donation is to a local homeless shelter the donor can feel a high degree of assurance that the money is benefiting the more or less definable population of local homeless people, whereas small donors to a medical center are likely to feel like they’re throwing pennies into a 10-story kettle. The growth in the numbers of nonprofit entities, in combination with government pullbacks, is ramping up interest in earned income, a key component of social enterprise. For most mission-based organizations, earned income will rarely be more than a supplemental revenue source. The investment in time, energy Connections* More Efficient. More Effective. Let’s face it. Connections are everything. You can connect to a world of knowledge about foundations with our Fact Finder tools—Foundation Finder, 990 Finder, and our new Trend Tracker, which lets you compare and analyze data for up to five foundations at a time with easy-to-read charts and graphs. Fact Finder tools are simple to use, they’re online, and they’re free. Visit foundationcenter.org/findfunders/ factfinder. Kara Rutowski, CFRE Director of Development The Early Learning Institute Passions: Fundraising and hiking More Yourself. The less time you waste, the more time you have for yourself. The more time you spend being yourself, the better ties you form with donors. The better ties you form with donors, the more money you raise. So, learn more about DonorPro, the professional, nonprofit management software by TowerCare that handles the mechanics of fundraising so you spend more time on the art of fundraising. It’s simple: DonorPro gives you more time to be yourself, and to engage in your passions … like fundraising, and as is the case of Kara Rutowski, hiking. Be yourself. Raise more money. DonorPro can help. For a demo, call us toll free at 1-866-935-8281 or send an e-mail to donorpro@towercare.com www.donorpro.com Building a better world means making smart connections to advance your mission. *Let’s keep building. JUNE 1, 2008 THE NONPROFIT TIMES www.nptimes.com 25 http://foundationcenter.org/findfunders/ http://www.donorpro.com http://foundationcenter.org/findfunders/ http://www.nptimes.com

Table of Contents Feed for the Digital Edition of The NonProfit Times - June 1, 2008

The NonProfit Times - June 1, 2008 First Kroc Center Set To Open It’s Layoffs And A Lawsuit At ARC In The Twin Cities Hospices Put On Life Support Contents Who...When...Where...How...What? Idol Charities Still Waiting For Funds Heck Of A Job Play On Words Make Endowments Pay Donor Management Software Who’s Next? Joining The Masses Online Email Evangelism Three Corners Business Briefs Fiduciaries And The 990 Calendar United Way Refocusing On Programs, Reducing Affiliates NPT Jobs Resource Directory

The NonProfit Times - June 1, 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.