I agree with Kate... it's hard to think of how anyone can justify ACORN's reaction to this story. I know it's painful to say. Trust me, I love ACORN and the important work they do.
I'm not saying I agree with the wackos like Michelle Malkin or the Consumer Rights League, but this is a really big fuck-up.
Thank god for whistle blowers. This one was a true hero.
Reed over at the AFP blog pointed out a great article yesterday by Anthony Pisapia and Brett Bonfield from Idealware:
"Managing Constituent Relationships: Four Case Studies" tries to explain how four organizations have implemented CRM and what their experiences can offer others. The authors take a complete look at the product, the cost, the implementation, the challenges, and the words of advice.
The examples they cite are the NY-NJ Trail Conference, which used a database software called ebase; Hispanics in Philanthropy selected Microsoft CRM 3.0; Washington Toxics Coalition recently migrated from ebase to Salesforce and finally, Easter Seals uses a combination of Convio and Team Approach.
The rest of the article is on the TechSoup website.
Mark Hrywna reported yesterday that The NonProfit Times engaged the Opinion Research Corporation (ORC) in Princeton, N.J., to repeat a study it performed three years ago for The NPT. ORC asked 1,000 people: "When you receive a mail solicitation from a charity, which of the following places on the Internet do you look at before deciding whether to give money?"
Here are the results:
Yup. I guess you can call that a dramatic shift. It seems just as soon as everyone was just beginning to understand that their website is their authoritative online voice...
Those rules have changed.
More than four out of ten people look up their information on an independant rating agency, an online discussion group, or a blog. That's quite a change from just 36 months ago.
Which disgraced former executive for a well-known disaster relief organization was rumored to be applying for the vacant position of Gautier City Manager down in Mississippi so that the alleged baby daddy can be closer to his Southern Belle's new baby?
Stephanie Strom at the New York Times compares the vastly different approaches taken by Acorn and the Points of Light Institute when each learned off potential financial embezzlement.Acorn chose to treat the embezzlement of nearly $1 million eight years ago as an internal matter and did not even notify its board. After Points of Light noticed financial irregularities in early June, it took less than a month for management to alert federal prosecutors, although group officials say they have no clear idea yet what the financial impact may be.
Yuck. But wait it gets worse:
A whistle-blower forced Acorn to disclose the embezzlement, which involved the brother of the organization’s founder, Wade Rathke.
The brother, Dale Rathke, embezzled nearly $1 million from Acorn and affiliated charitable organizations in 1999 and 2000, Acorn officials said, but a small group of executives decided to keep the information from almost all of the group’s board members and not to alert law enforcement.""Wade Rathke said the organization had signed a restitution agreement with his brother in which his family agreed to repay the amount embezzled in exchange for confidentiality.
Wade Rathke stepped down as Acorn’s chief organizer on June 2, the same day his brother left, but he remains chief organizer for Acorn International L.L.C.
He said the decision to keep the matter secret was not made to protect his brother but because word of the embezzlement would have put a “weapon” into the hands of enemies of Acorn, a liberal group that is a frequent target of conservatives who object to its often strident advocacy on behalf of low- and moderate-income families and workers."
Don't you see... they kept it a secret so as not to give their enemies a weapon.
The NonProfit Times broke a story this week about an unfolding scandal at the Points of Light Institute.
"An estimated 1,100 customers who purchased travel vouchers for airline flights from the Points of Light Institute’s store on eBay have been left with nothing. The Points of Light Institute has closed that area of the eBay store and is working with law enforcement to investigate what it is calling “significant financial and operational irregularities.”Michelle Nunn, president and CEO, was interview by The NonProfit Times on Tuesday and tried to explain how the organization uncovered the scandal.
Each reservation is for one to four people, so as many as 4,400 travelers could be impacted. Sources told The NonProfit Times that travel had been booked through May 2009 that could total more than $1 million."
"Two senior managers learned of the irregularities through customer complaints, which they explored and ultimately verified through an independent contractor, and reported to Nunn on the evening of June 26, she said. Customers were notified of the situation late Friday, July 4, at which time the refund application process began.It's amazing what kinds of problems managers can actually uncover when they explore customer complaints. Sounds like whoever was pulling off the scam set-up a complex way of hiding what they were doing. Apparently, the organization is still trying to figure out exactly what happened.
Because of the ongoing investigation, Nunn could not elaborate on the type of “irregularities.” She said the U.S. Attorney’s Office in Washington, D.C., was contacted within 24 hours, as was the organization’s counsel -- McKenna, Long & Aldridge -- which is doing its own investigation."
"The independent contractor was terminated “as soon as we learned of these issues,” Nunn said. The contract was created and begun in 2003 as a program of the Points of Light Foundation, which merged with the Hands On Network last year. The independent contractor, Maria Herrmann, was a former employee in business development at the Points of Light Foundation, but Nunn did not know the duration of her employ prior to that.Call me a cynic, but the whole idea of people raising money for charities by selling discounted travel vouchers sounds shady. Call me a purist, but I get really queasy when the donor's motivation is driven by the idea of "getting something for free" instead of for the donor intent being on helping support the mission.
Herrmann is no longer listed on the organization’s Web site and calls to her cell phone and home phone were not returned. A woman answering the door at Herrmann’s Washington, D.C. residence told a reporter she could not help her and declined to say if she was in fact Maria Herrmann."
Despite thousands of tickets being sold, Nunn described the eStore as a “very small enterprise,” grossing about $100,000 and netting $15,000 in the fiscal year ending 2007. She explained that the numbers "are the totals that were reported on our books and in our audited statements of Points of Light Foundation (pre-merger). The recent discoveries obviously do not align to these numbers and that is what is under investigation.”The NPT story can be from here and to read about a traveler's horror story, go here.
For the sixth month in a row, they published one of my columns on The NonProfit Times web editorial page. You should go read the entire post on their site... along with an articles by Eleanor Clift and Rick Cohen.
Here's a teaser:"During the past year, the [list] industry has endured a combination of: shrinking list universes, a weakening economy, lots of bad publicity, increasingly organized backlash against “junk mail,” and the aggressive expansion of cooperative databases. More importantly, nonprofits with established mail programs are beginning to ask questions about the saturation of the shared donor universes and whether there are better ways to reach new donors."
I tried to explore each of those factors in the piece... although, admittedly I'm not really what you could call "knee-deep" in the list industry... so I'm observing many of these patterns from afar. If you disagree, I'd love to hear about it.
In addition to the thousands of people who visit this website every month or read my stories via RSS, more than 700 people are signed up to receive Don't Tell the Donor by email. In the two weeks since I last posted to this blog, many of you have emailed to ask where I've been or why I stopped writing. So... I'm going to tell you:
I bought a time machine.
That's right, a small metal chair rigged to flux capacitor which only requires 1.21 gigawatts of electrical power to send me flying forward or backward in time. Despite my lifelong promise to myself that if I should go back in time and steal someone else's invention or stop myself from making all those mistakes I made in high school... alas... I decided to use the time machine to travel into the future to share with you what fundraising will look like next year at this time.
It's worse than just not good... it's downright scary.
The housing market isn't going to get better. As a result, I guess it was inevitable that banks like Wachovia, Washington Mutual, PNC Bank, and Fifth Third were going to go belly-up... but, even I was surprised to see General Motors and American Airlines file for bankruptcy.
Unemployment soars above 6% and many of you lose your jobs as smaller nonprofits begin to disintegrate in larger numbers. I hate to say I warned you this was going to happen... but I even ran around with my hair on fire trying to get your attention.
This isn't a normal recession. Unfortunately, this is an unraveling of a massive credit bubble... and it will not end through the normal cyclical economic patterns.
The truth of the matter is that you don't need a time machine. The writing is already on the wall. Target Analytics reported yesterday that revenue declined in the 1st quarter of 2008 for 60% of the 72 large organizations in their benchmarking study. Giving USA Foundation and the Center on Philanthropy at Indiana University reported individual and corporate giving actually declined in 2007 when adjusted for inflation.
So... go back to living in denial if you want to... or you can adjust yourself and your fundraising programs for the new economy... either way, it's not going to get better for at least another year.
Rather than me posting yet another entry about Convio, I decided to lift this message that Robert L. Weiner from the Strategic Technology Advisors to Nonprofit and Educational Institutions posted to a fundraising listserve yesterday:
Convio just announced that they will be releasing a donor database, code-named Akido, on the SalesForce.com platform. This will be a separate product from their online Constituent Relationship Management suite -- you don't have to be a Convio CRM client to use the database. They also say it's not simply a new template for SalesForce, but a product built from the ground up. Info is at: http://www.convio.com/signup/crm-system.html
As of now, the database is only available through what they're calling their Charter Program (which I read as beta testers). The program announcement includes a FAQ (at the bottom of the page) about the database and the program, plus some promotional videos: http://www.convio.com/convio/news/charter-media-room.html
And if you want more, Gene Austin, their CEO, is blogging about the new database here: http://tinyurl.com/5uldng
They plan to release the product in the 2nd half of this year. They haven't announced pricing.
Police in Ohio are looking for a 12-year-old girl who goes by the name Victoria Tanner. The girl is accused of scamming "hundreds of people out of hundreds of dollars" by claiming to raise money for the Multiple Sclerosis Society.
NewsNet 5 showed this video to viewers today. Scam victims say they believe the girl is being coached to enter a restaurant, ask permission to solicit funds, and promise season passes to an area amusement park. Some police even think the girl's parents are coaching her."She tells you that her dad manages Cedar Point and will give you a free season pass for $40," Heather Lobello of All Paws Pet Grooming in Parma said. "I've been waiting for over a week to hear from her or get the tickets. When I called the number she gave me -- a bogus number -- the person on the other end said 'you've probably been scammed.'"
The charity is not receiving the money and the donors are not receiving the amusement park passes (big shocker!). The scam has covered a 360 square mile area over the past week.
In related news... I bought some magic beans from a guy near my office yesterday. He told me that it was worth paying $40 for the handful of beans because they would grow some huge stalk to take me to magical places... as of yet - no stalk.
It's been less than three months since the Red Cross announced that Jeff Towers would be the new chief development officer for the Red Cross. Technically, he's only been on the job since May 5th.
Even though he might have missed the executive shake-up from this past winter, a major RFP process for new fundraising consultants, a contenious funding relationship between local chapters and the national office, and ongoing attention from pesky bloggers... today he is dealing with a serious fundraising problem.
The Associated Press is reporting that during a conference call today, Towers said that its Disaster Relief Fund is wiped out and it's being forced to borrow money to help flood victims throughout the Midwest.
The shortage in the organization's only domestic disaster relief fund comes as it continues flood relief efforts in soaked Iowa and ramps up its work downstream in Illinois and Missouri as more flooding is expected there. Officials said the Red Cross has 2,500 workers on the ground, 89 percent of them volunteers.
Joe Becker, senior vice president of disaster services, said the fund has been depleted over the past few years in the absence of large-scale disasters that bring attention to the relevance of the Red Cross.
"We have had a large number of mid-size disasters or silent disasters that have cost us a considerable amount of money where we've not been able to raise what it's cost us to provide that service," he said.
A very close friend of Don't Tell the Donor is celebrating their birthday today. Unfortunately, "a fundraiser" was too busy trying to raise money to share any cake and pass along best wishes in person... here's to hoping a special blog post will do the trick!
Happy Birthday.
On June 5th of last week, Tom over at The Agitator posted this article:
Courtesy of Don’t Tell the Donor blog, I just saw Convio’s reaction to Blackbaud’s purchase of rival Kintera. In it, Convio CEO Gene Austin comments that in April alone, Convio processed over $41 million in online contributions for its clients.Even though it was this site that originally posted the number, Austin must have decided not to post to Don't Tell the Donor directly. Instead, Austin posted this challenge to a bet on the comment thread at the Agitator:
So here’s my question for you, Gene…
Are you ready to predict a $500,000,000 (that’s a half-billion for you creatives) online fundraising year for Convio clients? That’s getting to be big money!
Gene Austin on June 5th, 2008 10:53 amWhen I read the bet Austin was making, I couldn't wait to offer my own Vegas-style lines on what Convio's expected donation processing total will be for 2008. At first I thought the SEC might be supisicous if I was to publicly comment on how many donations I thought would be a reasonable over/under... but my urge to gamble made me get involved.
As we all know there is a fair amount of seasonality in fundraising (Spring, October and the end of year), but I actually think $550M is achievable this year. Remember that this is only actual online giving and many of our clients will testify that their offline results are significantly impacted by their online communications and strategy.
If you are a “betting man” Tom we could put a little wager together on $550M. If we don’t hit it, I will fly you to our Summit and pay for your registration….now what do I get if we beat it?
Tonight in New York City, the caped crusaders over at the ACLU announced the public phase of the largest fundraising campaign on behalf of civil rights and liberties in American history. According to the group's press release:
"The $335 million "Leading Freedom Forward: The ACLU Campaign for the Future" is an unprecedented effort to build the organization's infrastructure by increasing funding to key state affiliates nationwide, dramatically enhancing advocacy capabilities and securing the ACLU's financial future for generations to come."
The group already has raised more than 2/3 of the money:
"The campaign has already raised more than $258 million - over $102 million in cash and pledges and $156 million in planned gifts - highlighted by 21 contributions of $1 million or more from the ACLU's staunchest supporters and several of the world's most noted philanthropists. These include two gifts of$12 million, one from George Soros, through his Open Society Institute, and one from the Sandler Foundation. Other leadership contributors include the Leon Levy Foundation, which donated $5 million, and Delaney and her husband,Wayne Jordan, who donated $4 million."Personally, I've always thought capital campaigns got to cheat by waiting until they've almost raised all the money before announcing the actual number of the goal. How many annual fund directors are allowed to get 2/3 of the way through their fundraising drive before acknowledging the actual number goal.
"A major goal of the campaign is to substantially increase the ACLU's presence and effectiveness from coast to coast by significantly increasing the programmatic and institutional capacity of its affiliates, particularly instates where civil liberties violations are most egregious and opportunities for change most promising. These states include Florida, Texas, New Mexico,Montana, Mississippi, Michigan, Missouri, and Tennessee.While the ACLU was making this fundraising promise to donors in New York City, the organization was also hosting a huge membership conference for donors in Washington, DC.
Moreover, smaller affiliates located mainly in the South and in the country's heartland will be bolstered by increased resources that will enable them to hire full-time attorneys, launch new advocacy programs, and expand communications and public education initiatives."
Remember last year when Hillary Clinton was the presumptive nominee and everyone was talking about how she was getting donors to max out for both the primary and the general election at the same time?
What amazes me is that while she has sooooo much debt - she is also awash in cash that is restricted to use only on the general election. According to Greg Gordon at McClatchy Newspapers:I guess political nuts will be debating for the next couple weeks what she plans to do with that money. Will she give it to help Obama? Will she keep it and use it for another run in 2012?"Clinton's latest report to the Federal Election Commission showed an April 30 cash balance of nearly $29.7 million, but that was deceiving. FEC spokesman George Smaragdis said the figure included $6 million in primary-season cash and $23.7 million in donations designated for the fall general election campaign. None of the general election donations can be used to retire debts accrued during the primary season.
Clinton's biggest problem, of course, is the $21 million in IOUs, which include $11,425,000 she is known to have lent her campaign through the first week of May and possibly millions of dollars more in yet-to-be-disclosed loans during her last-ditch primary campaign efforts."
For me, the lesson is that donors who give restricted gifts are short sighted and almost never really get what they think they are paying for. I've written before that I think it is selfish for donors who demand their gifts be used for restricted purposes are selfish and their help is counter-productive.
In this case, I guess the donors didn't have a choice if they wanted to give a maximum contribution it needed to be split between primary and general. But it certainly is ironic. I wonder if these donors can ask for a refund?
The newest Carnival of Nonprofit Consultants for this week is up over at Fundraising Breakthroughs... and even though they rejected my post again this week... I think it is always a great roundup of great posts you might have missed.
Even though "carnivals" are popular for any theme of blog subject category... it always makes me snicker thinking of that word because as most of us fundraisers know... working with nonprofit consultants IS sometimes like BEING at a carnival.
What booth would your consultants work at if they really were on a carnival midway? Would they be selling cotton candy and junk food? Would they be heckling you into the guess your weight game? Or maybe they would be the creepy guy trying to get you to play some game that is rigged against you?
I've been reading several blog postings about the fact that May 30th marked the first anniversary for Facebook's toolkit that enables the development of 3rd party Applications (Apps) that integrate directly with Facebook user data.
The Giving in a Digital World blog provides some interesting statistics on the biggest non-profit Facebook App, ‘Causes’ from Project Agape (now also available on MySpace). The allure to nonprofits is strong since they now have a total of 12 million registered users supporting over 80,000 US and Canadian non-profit organisations.Over the last 12 months, $2.5 million has been raised through Causes for 19,445 organisations - equating to an average of just $126 per organisation. No donations at all have been made to 75% of the 80,000 organisations being ’supported’.
This leaves blogger Bryan Miller wonders if there is a greater potential. Caroline Preston at the Chronicle of Philanthropy's Give and Take blog also wrote about the underwhelming response to the news from people over at TechCrunch.
Adam Hyman points out on TechCrunch that the $2.5-million total works out to being only $0.21 per user. “How can anyone call this a success?” he asks.The TechCrunch reaction is likely to shape the industry's reaction to the fundraising news because Michael Arrington published this article at the Washington Post. However, Allan Benamer at the Non-Profit Tech Blog took issue with the idea that the fundraising revenue was low. Benamer reminds readers:
"...the amount is actually greater than the first year revenue for Kiva, GlobalGiving and DonorsChoose COMBINED."My own personal reaction is that the success of the Causes App should not be judged based on the dollar amount raised. Rather a more important metric should be the number of users who agree to share their name and contact information with their favorite nonprofits through this feature. That's why this is a revolutionary development.
The NonProfit Times posted my monthly column in their exclusive web editorial sectionRecruiting, training, and retaining top notch fundraising staff is perhaps the single biggest challenge facing nonprofits today.
Go here to read the rest of my article.
You can’t control postal rate increases or the impact of bad economic times on your donor’s ability to give. As a fundraiser, you might even be hopeless to control the quality of programming content or the effectiveness of your organization at serving its mission.The good news is that you probably have more control over staffing challenges than most other variables and there are some incredible new resources available to nonprofit leaders to help recruit, train, and retain. The bad news is that far too few people seem to be using the available resources.
Most successful leaders know that the hiring process is critically important for preventing “bad apples” from even getting hired in the first place. Unfortunately, you can be the most selective interviewer on the planet, but if you don’t have quality prospective employees to choose from you aren’t going to build a quality team.
Gene Austin, the CEO of Convio, sent out his response this morning to last Thursday's announcement that Blackbaud would be acquiring Kintera.No doubt you have now heard the news about Blackbaud's proposed acquisition of Kintera. This is certainly an interesting, but not entirely unexpected, development in our rapidly evolving market.
A lot of that stuff sounds like spin to me... but you have to admit, it takes a certain of amount of chutzpah from Austin to give Blackbaud pointers on the need for them to "rationalize a roadmap" to integrate multiple eCRM and donor management platforms.
The Software as a Service approach we have led in the industry has driven tremendous success for organizations like yours, and we believe this approach causes challenges for legacy software providers. Blackbaud now faces the task of addressing the well-publicized operational challenges at Kintera, while rationalizing a roadmap that includes multiple eCRM and donor management products from four companies (Blackbaud, Target Analytics, eTapestry and Kintera). It will be interesting to watch this integration play out over the coming quarters and years.
My hope is that this acquisition will convince Blackbaud to listen and respond to the growing demand from nonprofits for interoperability and an open approach to integration. We would like to see Blackbaud make their APIs freely available, following Convio and other leading vendors who have worked with clients and the market to drive improved results. Better data integration benefits the nonprofit market.
We are increasingly excited about the success our clients are achieving and the growth in our business. We processed over $41M in online gifts for our clients in April alone — making this our largest month ever. Our business remains strong, with over 30% revenue growth in Q1 2008 compared to the same quarter in 2007 (on a proforma basis including our acquisition of GetActive). You will also see announcements from us in the coming months that highlight our continued investment in providing solutions that help you get more value from every constituent relationship.
We remain committed to your success — keep up the great work!
Regards,
Gene Austin
Make no mistakes, this is high stakes poker. Austin's use of this communique response to call on Blackbaud to "make their APIs freely available" seems designed to position Convio as an advocate on behalf of nonprofits against the newly created Blackbaud monster.
...and then there were two.
In news just hitting the wires... Blackbaud announced today they are buying Kintera as an all-cash tender offer for all of the shares at a price of $1.12 per share.
Tim Williams, Blackbaud's Senior Vice President and Chief Financial Officer, stated, "In addition to the strategic reasons supporting the acquisition of Kintera, we believe the acquisition is attractive from a financial perspective as well. Subscription revenue was already the fastest growing source of revenue at Blackbaud and it was expected to become larger than license revenue at some point in the second half of 2008. With the acquisition of Kintera, this will become a certainty as we will add another significant source of subscription-based revenue from an on-demand service offering. The evolution of Blackbaud’s business model toward new revenue sources with ratable revenue recognition has been a significant and positive development over the past several years, and it complements the very strong cash flow profile of the Company.”
Kintera will continue to be led by its current President and CEO, Richard LaBarbera. The company is expected to formally launch the tender sometime next week and close on or around July 2.Because both Blackbaud and Kintera are publicly traded companies there are very specific Federal Trade Commission rules about what can be said and done until the deal officially closes. This may take as many as 30 days and until then both companies will perform as separate units, competing with each other as they did prior to this announcement.
* Blackbaud becomes the leading provider of online solutions and services to the nonprofit industry with over 4,500 clientsHmmmmmm. Interesting.
* Both Kintera Sphere and Blackbaud NetCommunity are strong Internet solutions that largely serve very different segments, including The Raiser’s Edge, Team Approach, eTapestry, and non-Raiser’s Edge customers.
* Blackbaud plans to continue to support and invest in both products.
* Kintera’s other offerings, FundWare, P!N and certain capabilities within Sphere (e.g., Friends Asking Friends) are well-recognized and respected in the marketplace.
