What Rainie says, much of it related to the explosion of social media and mobile communications, applies to all messaging and communications, which makes these observations pertinent to fundraisers, and especially those in advocacy groups.

Some key thoughts:

• With hugely expanded networking capacities, there are many more — and new — civic actors, many operating independently.
• Four messaging opportunities — to traditional ‘paid media’ and ‘earned media’ now add ‘owned media’ (e.g., websites, customer service) and ‘shared media’ (e.g., social sites, YouTube) … all requiring communications strategies.
• Six stages of engagement — observing (Lurkers matter, he says), following, endorsing, contributing, owning, leading.
• Migration of authority away from organizations (like your nonprofit) to — traditional experts with new platforms (e.g., blogs), amateur experts who are avid contributors (some with tribes), new algorithmic authorities (e.g., Google, Bing).
• Different ‘attention zones’ — continuous partial attention to media streams, immersion in ‘deep dives’, info-snacking in free moments.
• All organizations under more scrutiny, where trust depends upon transparency — surveillance (powerful watch the ordinary), sousveillance (ordinary watch the powerful), coveillance (peers stalk peers).
• Age of big data is upon us, giving new power to analytics.

This is a powerpoint presentation, so you will need to fill in the blanks yourself. But it’s well worth the mental effort … a very stimulating presentation.

Lee Rainie, you deserve a raise!

Tom

I received an email yesterday from Jeff Brooks, the mega-smart, mega-iconoclastic editor of the FutureFundraisingNow blog.

He wanted to know what grievances Tom and I had against an Australian fundraiser named Sean Triner ‘cause  someone using the email address the_agitator@gmail.com was saying some very disparaging things about Sean on Jeff’s blog.

Frankly, neither Tom nor I would know Sean if he walked up and shot the pet kangaroo who’s here in the office and edits our copy. Obviously.

But what Jeff’s email triggered in me is a reminder to all of us that the internet is still pretty much the Wild West when it comes to veracity, anonymity, and the capacity for mischief.

And like the deadly and silent water moccasin, it’s mighty easy for an errant supporter or – heaven forbid – a competitor to start planting bad stuff about your organization.

This is a big problem in the commercial world. As a result, a big business in ‘reputation management’ has been spawned. You’d be wise to Google and find out more.

Let’s not be naïve. It can happen to us too. Although the article’s dated, I do recommend you download and read J.R. Hipple’s  speech on the importance of paying attention to what can affect your reputation.

As for the_agitator@gmail.com, send him or her an email and tell ‘em to get a life or at least have the guts to use a real name.

Far more importantly, what steps are you taking to monitor and deal with digital water moccasins?

Roger

P.S.  There are dozens/hundreds of articles online about the “ins” and “outs” of reputation management. Here’s one I found helpful for understanding what your organization is up against and what to do about it.

I mentioned that I thought there was an ‘aggregator’ of such feedback for nonprofits, but couldn’t recall it at the time.

Mal Warwick filled in the blank by pointing me to GreatNonprofits, a website where you can furnish a review of the nonprofit of your choice.

Cool, I thought. I immediately paid a visit and was impressed. Led by a seasoned nonprofit executive, Perla Ni, founder and former publisher of the Stanford Social Innovation Review. Funded by the Kellogg Foundation and other mainstream funders. Great Board and advisors. Tied into GuideStar. Just what the doctor ordered!

So I used the Search function to pick an organization purely at random, and read the two reviews on it. The group shall remain nameless!

One was a glowing review from a totally smitten donor who had nothing but praise for this charity, which she perceived as doing amazing good works for poor people in India.

However, the other was written by a (erstwhile!) donor, who upon visiting India on an unrelated trip, stumbled upon what he perceived to be extremely profligate — to the point of ethically questionable — spending by this same charity.

Wow! What do you make of that?

My sense is that GreatNonprofits aspires and prefers to do what its name suggests … help would-be donors find credible, perhaps previously unknown, charities to support.

But what about the disguntled … and even further, the ‘whistleblowers’ who suspect something improper might be going on?

Once you open the door, the door is opened!

Perhaps GreatNonprofits should scan the reviews it hosts, and create a ‘watchlist’ of sorts to balance out the ‘Top Rated’ category they already provide!

Tom

It’s not just the BPs, Goldman-Sachs and Toyotas who need a plan.  Crises large and small can and do occur in nonprofits and, hopefully, if handled promptly and well damage can be mitigated.

Sunday’s New York Times carried two articles well worth a read.  The first –a piece on the doping investigation of Lance Armstrong and its possible effects on his Livestrong Foundation – reminds us of the stakes and complexities involved when a good cause and its popular champion come under siege.

The second, a well-reported piece titled “In Case of Emergency:  What not to do.” is a helpful primer of  communication “do’s” and “don’ts” as seen by a range of crisis managers in the professional PR priesthood.

Of course, there’s anything but universal agreement on how best to handle a crisis, but one thing is universal and certain:  Some plan is better than no plan.

As we’ve seen from the BP crisis, there are many ways to get things wrong, but what are the few basic things that every organization faced with a crisis has to get right?

For a no-nonsense look at why so many of the old chestnuts that pass as ‘solutions’ may be far more harmful than helpful, I commend Eric Dezenhall’s brief guide in the current issue of the publication Ethical Corporation.

Dezenhall, who heads the crisis management firm Dezenhall Resources in Washington, D.C. has been labeled ‘the pit bull of public relations’ by Business Week because of his ‘take no prisoners’ stance in handling crises for his clients.  While the types of clients he generally defends aren’t my cup tea, his advice strikes me as powerful and effective.

Among his points:

• Think twice about relying on the old ‘chestnuts’ like “Get out in front of the story”…”Fess up and apologize”…”Speak with one voice”…and “A crisis is an opportunity.”  Instead…
• Become familiar with case studies of effective crisis management — especially those that defy conventional wisdom — and he cites several examples.
• Determine where your situation lies on the continuum between repentance and defiance.  When you are guilty, repent; when you are innocent, push back.
• Allow for the unexpected, it is vanity to believe all variables are foreseeable.
• Given the choice between a good crisis plan and good leadership, pick a good leader.

My sense is that even in this world of the 24-hour news cycle and the blogosphere not many nonprofits have crisis plans of the ‘bad news’ type.  Only plans for dealing with natural disasters, political contingencies, and other mission-related emergencies.

Here’s to a crisis-free week.

Roger

And it looks like we have a hung jury!

One group leans toward more timely and frequent donor communication, including in lieu of "saving it up" for the annual report. Another group says different strokes for different folks … so they wouldn’t necessarily discard the annual report.

One thing everyone agrees on: Make it donor-centric!

At the end of this post, I included excerpts from the comments that will give you a feel for the range of opinions. But many are quite specific in terms of practical advice … and I urge you to read them here.

My opinion? Call me a fence-straddler! I believe …

1. AR’s should definitely NOT displace regular, timely donor-focused reporting. If an AR is done at all, it should meet an explicit strategic and audience need.

2. There’s a key issue here of proportionality. First, an AR should not become an all-consuming exercise (in terms of staff energy and dollar resources) at the expense of consistent year-round donor communication. And second, an AR should not be "over the top" in terms of being out of character with the overall style and means of the nonprofit.

3. As noted above, make it donor-centric … not a celebration of your misson statement, org chart and staff pedigree. Remember: it’s the results that count … specifically, the results your donors (and volunteers) made possible by their generosity.

4. Use all media. If you do an AR, get it online … perhaps in its component parts to facilitate browsng and downloading.

5. Financial transparency is an absolute requirement. But obviously your website can provide all the needed information … with levels of detail your donors and prospects can self-select.

6. Do it well, or don’t do it at all! I’m not referring to slick production values here; I am talking about quality communications — from story-telling, to genuine reflection of your nonprofit’s personality, to design and layout "best practices."

7. I see ARs — if well done — as potentially most useful in the major donor prospecting context. In high dollar peer-to-peer cultivation and solicitation, the Board members and other missionaries like to have a single document (yes, a document) that integrates key achievements (success stories), the unique success strategy, the key people, and the basic financial profile. Ultimately, the "close" might well require a more customized approach that addresses the specific concerns and objectives of the individual prospect (i.e., donor-centric), but an AR designed expressly to support major gift solicitation can be an important conversation-starter.

I guess, as I think about what I’ve just written, I see the AR more as a prospecting tool than as a reporting tool for current donors. For the current folks, "reporting" should be ongoing and as tailored as possible to the known interests of individual donors or groups of donors. And in the format/medium they prefer.

No silver bullet here! Take a look at the comments below.

Tom

Simone Joyaux
Make your annual report a donor-centered interesting storybook that is useful to your donors and prospects. Maybe your annual report is only 2 pages long. Maybe your annual report is an issue of your newsletter. But for sure, your annual report isn’t one of those corporate communications documents that talks image, costs too much money, and doesn’t grab the attention of donors. Yes, I still like annual reports, the right kind!
   
Jay Goulart
Over, Dead & Worthless … I have much experience getting rid of this beast and have redeployed the money for a greater return in raising money. The Annual report is written for everyone, so it is not written for anyone.    

Katie Nelsen
I’ve often considered the annual report one of the most important stewardship pieces an organization can produce, but deep down, I think I’ve been waiting for someone to challenge the status quo … Should we let the necessity of listing donors be the deciding factor on whether we produce an annual report as we’ve always known it?
   
Dawn
I think annual reports are dinosaurs … I think the the lesson of annual reports is to find ways to share the kinds of information they typically contain with donors 3-4 times per year for ongoing cultivation.

Janice
I believe they really are important cultivation tools … I do think an online version is preferable to printing and mailing those more expensive pieces. However … I would suspect that knowing your audience is the key to figuring out whether or not you can go digital with an Annual Report–but I think it’s worth the effort to produce one regardless.
   
Kathy Swayze
I think annual reports (and newsletters) continue to be important tools for stewarding donors. Organizations can certainly cut back on the glossy paper and expense, but they should not cut back on the information.
   
Jen
What makes most annual reports so deathly boring is that they are cover-to-cover organization-centred: do you think your donors really care about your mission statement, vision statement, 3-year strategic plan and your organizational structure? What do YOU care about as a donor? You care about stories. You care about how your money is spent. You can — and should — create an Annual Report that is donor-centred.

You can use your Annual Report to engage with your donors and build a relationship. We’ve just created a “Gratitude Report” that we are enormously proud of, and our client is delighted with it. Totally unique, totally donor-centred.   

Andrew Kramer
…we’ve never published an annual report. We just try to be responsive to our donors and volunteers, communicate directly, efficiently and timely information about our progress and financial standing–and of course we tell lots and lots of stories and take thousands of photos. The whole idea of an annual report just doesn’t make sense to me–in fact, it would become a reason NOT to communicate with our stakeholders on a more timely basis because we’d have to have something to put into the annual report.

Is there a requirement to publish an annual report? … We’ve been getting grants for six years and no annual report. Major donors are the largest source of revenue for us and no annual report. So unless I’m missing something, the better question is, who are nonprofits really putting together annual reports for? Their stakeholders or their marketing departments and senior management teams so that they can rest assured that they accomplished something in the PREVIOUS YEAR.

Shannon McCracken
By the time all the annual finances are officially approved and the numbers can make it to a graphics department for publication … well, it really feels like old news. And if we’re doing our jobs well, these major donors are already hearing from us in other ways about how well we’re using their funding and where the need for more support still exists … And what remains is the donor recognition piece. I think if we retire the glossy annual report, we can find other ways to give our major donors public kudos in a more timely fashion.

Raymond J. Mitchell
Long before there were anywhere near the kinds of “whiz-bang” technology we have available today — the multiple means of electronic communication, the web-based channels galore — folks in the nonprofit sector stroked chins, puzzled over and opined about the real value of the annual report as a tool for general communication and donor cultivation.

I think the reason for that puzzling about value is based on two factors: (1) the annual report can be a pretty costly collateral item (depending, of course, on how free you feel to spend money), so it’s always going to be called into question by somebody; (2) the organizational rationale and overall strategy and goals in producing an annual report are either missing or not well-conceived in the first place. And the issue of donor communication/recognition/cultivation obviously needs to be a critical component of that rationale and strategy.

…I have battle scars to show for having tried to run toward both extremes with this question over the years. My bottom line? There is no single, one-size-fits-all answer to this issue … figure out the best course of action for your own organization and produce a report that helps to MANAGE AND SUSTAIN POSITIVE RELATIONSHIPS.
   

Here is a post titled Trust Is the New Black from Online Spin by David Morgan, a very successful online entrepreneur and blogger, that focuses in on the issue of trust. Here’s the crux:

"Today, more people can have more relationships — personal, business, casual, formal, fleeting, long-term — with more people more often than ever before in history. And, with the rise of social media, the possibilities for more relationships are growing fast and exponentially. This phenomenon is particularly challenging for media, entertainment and information companies to deal with, and it is turning marketers’ and advertisers’ worlds absolutely upside-down.

When consumers have so many different kinds of relationships with so many different people and companies and products and services and ideas, how can any, or many, of them stand out? How can media companies or marketers establish meaningful visibility, let alone usage loyalty, in this ever-entangling clutter? There is only one answer now: trust.

Trust is the new black. It is too hard for most people to truly distinguish the complex and too-subtle differences of so many tangible and intangible products and services. Consumers need something else. That something else is trust. Trust is finite. Trust is generally based on experience and time. Trust is quite personal. A person’s trust is something that he or she controls. While it can be won and lost, it cannot be forced or taken or imposed by recipients."

Boy does he nail the issue!

How does your nonprofit build trust with your constituency? I’ll offer one suggestion tomorrow.

Tom

P.S. David attributes the phrase "trust is the new black" to Craig Newmark, founder of the phenomenally successful Craigslist. There’s proof in the pudding!

In 1995 Clayton Christensen coined the terms “disruptive technology” and “disruptive innovations” to describe technological innovations, products or services that use a “disruptive” strategy rather than “revolutionary” or “sustaining” strategies to overturn dominant or status quo products in a market.

“Disruptive innovations” can occasionally come to dominate an existing market, either by filling a role that the older technologies couldn’t — as cheaper, smaller sized flash memory is doing in the personal data storage area. Or by successfully moving up-market through performance improvements until finally displacing the market leaders and incumbents — as digital photography replaced film photography as the front-runner.

Which leads me to wonder if the “disruptive innovation” of peer-to-peer philanthropy – the third party giving sites like Global Giving, Kiva, DonorsChoose and Social Actions – will eventually replace the big, brand name nonprofits? Afterall, dozens of these sites have sprung up in recent years and they’re raising tens of millions of dollars for good causes. Many experts in the field are predicting exponential growth.

Last week’s Chronicle of Philanthropy carried a well-researched, well-analyzed piece on the rising number and early successes of the on-line peer-to-peer philanthropy groups with websites that enable small donors to make gifts or loans directly to charities, individuals or schools.

While the piece mainly focused on the issue of if and how these groups should charge administrative fees for their services, a quote from Charles Best, the founder of DonorsChoose – whose volume is doubling nearly every year — made a point about why these sites are increasing in popularity.

“Our Web site does attract some people who have become skeptical about writing checks to big institutions. They didn’t know where their money was going, and didn’t have a connection to people touched by their gifts.”

For the past three years we’ve been warning Agitator readers that “brand organizations” should no longer take for granted their brand dominance and the security it provides. And here’s yet another wake up call.

Of course the rise of these peer-to-peer sites bespeaks innovation. But quite frankly, this rising phenomenon speaks equally to the laziness and head-in-the-sand attitude of too many of the big boys who should have, could have, and still can be making a similar case and approach for themselves.

Part of the reluctance no doubt goes to the almost genetic aversion big groups have for earmarking contributions. (“We’re writing and asking you to support programs about water quality, but we really want some funds for the new office building.”)

But the fact is growing numbers of today’s donors – as seen in a variety of surveys including our most recent DonorTrends 2008 Survey and in the rising popularity of sites like GlobalGiving – want to be more directly involved in the objects of their beneficence.

Is it too late for the big boys? Have they missed the boat? I posed these questions to Dennis Whittle, the former World Bank exec who founded GlobalGiving eight years ago. Dennis, whose gentle words and steel-like determination make him the great fundraising pioneer he is, diplomatically answered my questions by reminding me of the "Innovator’s Dilemma".

“Innovator’s Dilemma” — a term also coined by Clayton Christensen in his 1997 book titled the same — describes how incumbents typically compete by continually adding new features or more complexity, eventually overshooting the requirements of their target market and providing an opportunity for upstart competitors to provide a lower-cost "good enough" solution.

In kicking this around with my colleague Ryann Miller, the Managing Director of DonorTrends, who watches online developments like a hawk, it’s clear that the “problem” the larger charities have isn’t one of technology. After all, they too have online donation pages, and most have very in-depth programmatic operations that extend far, far beyond the web and technology.

At the heart of the Innovator’s Dilemma for the larger, older, most historically successful nonprofits is the bind of general or unrestricted funds philosophy and the need to find ways to ‘earmark’ and connect donors and recipients in a better way. It’s less about one OR the other, and more about borrowing ideas from each, and mutually benefiting from the unique selling points of the third party fundraisers and embedding them in the all-too-staid conventional groups.

And of course, it’s all about mindset. And the willingness to adapt and change.

If CEOs and fundraisers in the big incumbent organizations affected by the rise of peer-to-peer philanthropy aren’t concerned and figuring out how to incorporate the innovating and compelling aspects of this new phenomenon, they oughta be fired!

Roger

That said, it's highly questionable whether the Internal Revenue Service should be playing the role of expert where the effectiveness of non-profits is concerned. But, that's exactly what's happening as the IRS, for the first time in 25 years, prepares to overhaul Form 990, the annual information return filed by most non-profits in the U.S.

The IRS claims the changes are meant to “increase transparency” and make it easier for the IRS to “facilitate compliance oversight.” For an overview of the IRS' redesigned form with its 15 schedules, instructions and the IRS' own commentary on the reasons for all this, just click here.

From a fundraising standpoint the proposed changes fall into two groups: 1) issues of presentation that can affect how potential donors look at an organization when veiwing Form 990 and, 2) burdens on an organization that may be imposed as a result of new fundraising reporting requirements.

ADRFCO (Association of Dircect Response Fundraising Counsel) is kicking up a dust storm over this in coalition with the Association of Fundraising Professionsals (AFP), the Council on Advancement and Support of Education (CASE). and the Direct Marketing Association's Nonprofit Federation . ADRFCO vows to fight the IRS on the so-called “metrics” the tax service is proposing.

Some of the 'metrics' which ADRFCO terms “contrived” go a proposed laundry list of changes, including an accounting for every outside vendor that contributes products or services to any sort of fundraising, a computed 'fundraising ratio', and placing the name and salary of the highest paid employee of the non-profit on the first page of the proposed Form 990.

Well, frankly, it's about time our trade pays attention to developing or refining meaningul metrics. However, those metrics should go well beyond measuring fundraising efficiences to –far more importantly –the effectiveness of an organization's actual delivery on its goals and programs, thus giving donors a real measure of insight and comparison.

BUT…this is NOT the job of the Internal Revenue Service. For the government to impose meaningless, out-of-context ratios via a tax form as though these were the “best measure” of non-profit performance is asinine and counterproductive.

HOWEVER…all of us should be alert to the reality that even this well-intentioned and mis-guided attempt at squeezing performance data out of non-profits should be taken as ONE MORE WARNING that donors–and their government and other watchdog protectors –crave more information about whether gifts are well-used and getting the job done.

Roger & Tom