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Donors May Be Adding Inefficiencies To Fundraising

April 22, 2024

by:

Joe Patti

Seth Godin recently made an interesting post about non-profit fundraising, in particular the inefficiencies that exist in the process that can’t be fixed by technology, because it can, but rather the expectations of the donors.

Along the way, it’s not unusual for a nonprofit to spend 50% of the money they raise on the expense of raising more money. That’s not because they’re inefficient, it’s because we are.

We demand a gala, or an emergency, or artfully written fundraising letters. Donors want personal attention from the folks who are ostensibly doing the front line or strategic work of the nonprofit, and treat regular donations as an exception, not the standard.

When the internet arrived, it dramatically lowered the transactional costs in a wide variety of industries. You can buy an airline ticket yourself faster and with less intervention than through a travel agent. You can buy stocks for transaction fees that are a tiny fraction of what a broker used to charge. But creative and effective nonprofit fundraising has been stuck in a cycle of risk, galas and uncertainty.

This reminded me of a letter that appeared this summer in the Chronicle of Philanthropy where a donor said he was going to stop giving because he wasn’t getting the communication and attention he expected. He made a follow up post this February which contains a link to the original letter. The original letter garnered a lot of pushback from the non-profit community, including some satiric criticism written by Vu Le While the donor says in his follow up he has learned more about the challenges non-profits face in regard to fundraising, he still seems to expect a lot of what Godin says keeps fundraising costs high for non-profits.

Advocacy, Fundraising, Marketing/PR

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There Is A Group Naming Names And Advocating For Better Funding Practices

April 17, 2024

by:

Joe Patti

Around the start of the year, the group Crappy Funding Practices was created on LinkedIn. Vu Le who writes the Nonprofit AF blog had started calling out the problematic practices of funders on Twitter a few years ago, but with the help of some volunteers, they decided to expand the scope of their activities and started to solicit submissions of bad practices non-profit staff have run up against.

A lot of what they call out are things like onerous reporting requirements or twenty page applications requiring world changing results in return for $5000 grant or prohibitions on fundraising for a quarter of the year. And even an instance where you had to pay $100 to attend a luncheon to learn if you received a grant.

One of the very worst examples were the requirements from a foundation supporting classical music.

The team also praises some positive funding practices like the Minnesota Council on Foundations which offered tools for other funders to use in order to reduce barriers for grant seekers. The Fairfield County Community Foundation got a shout out for acknowledging that they listened to feedback from grant seekers and had revised their processes.

Even though the page has only been operating for about four months, a writer from Inside Philanthropy took notice and reported on the page, the problems it was addressing, and the change that is slowly taking place as a result.

I expect that the profile of the group will continue to rise over coming months and years. Hopefully that will result in some industry wide changes that will make the process easier and more equitable for grant seekers.

As the article mentions, none of these problems are new. They have been acknowledged as hurdles in the granting process for years and years, but most funding organizations haven’t really worked at making changes to remove barriers for applicants. Vu Le started calling people out by name out of frustration. The group of volunteers behind Crappy Funding Practices has helped expand on this effort out to act as an advocate for non-profit grant seekers rather than out of spite. Though I imagine there is some angry frustration at the base.

I post about this not so much to encourage people to submit funders you dislike as to let people know that there is an organized effort to advocate for better conditions on your behalf. That said, if there are organizations whose practices and requirements are burdensome, you may want to consider completing their submission form.

Examples of Great Funders can be submitted here.

Advocacy, Fundraising, Working In The Arts

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Benefits Of Incorporating Your Arts Career

April 15, 2024

by:

Joe Patti

h/t Artsjournal.com for linking to a really valuable article on Observer about considering creating a limited liability corporation (LLC) if you are an artist. I recently created a post on ArtsHacker summarizing some of the ways in which an LLC protects artist’s personal assets in the case of lawsuits and in some cases, divorce proceedings.

This excerpt from Observer article summarizes how an artist would operate after forming an LLC:

….but most artists operating as one-man shops set up limited liability companies, according to Powers, where the LLC is the employer and the artist is technically the employee. When a sale or commission is made, the money is paid directly to the corporate entity, which then pays the artist, either in a lump sum or in increments (as a salary), and the artist pays taxes on that money as ordinary income. But not all the money transfers directly through to the artist. The corporate entity retains some cash to purchase art supplies, health insurance, workmen’s compensation to protect employees who may get injured during transit or installation, commercial premises and liability insurance—and, assuming the artist is successful enough, to hire employees or consultants.

The article discusses a number of legal scenarios an artist might find themselves in which the buffer of an LLC would be beneficial. More than just providing legal protection, they also note that forming an LLC would allow the artist to solicit investment to support their work. Take a look at the ArtsHacker post or go straight to the article to learn more.

Should Your Work Be Protected By An LLC?

Art(ist) Education, Business Models, Fundraising, Legal Topics

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Toward A More Shared Curation Experience

April 10, 2024

by:

Joe Patti

I’m not really a big fan of improv, but I was intrigued by the concept of a show called The Worst Cafe in the World, which has transferred from Belfast to Off-Broadway this month.

The show is described as:

The show actually gives audience members a menu of theatrical moments to choose from, and based on their selections, the cast will piece together the show. Menu items include an inspiring monologue, an improvisation calling for audience involvement and a digital experience focusing on the power of technology.

According to a press release, ticket holders should also expect different nightly specials to define their experience: think pop-up guests, delectable food and more. Even better, every guest will receive a complimentary beverage and snack upon entry—treats that sound even more exciting given that tickets only cost $25.

And I agree. All this for $25 in NYC? Amazing.

Granted, the concept isn’t really new or novel. I presented a concert nearly a decade ago where the singers provided a menu of songs the audience could choose from. It was around Christmas time so there was a good mix of operatic pieces along with sacred and secular carols. The menus were numbered so the production used a random number generator to determine what audience member got to choose the next song. I have seen groups use the choose your own aria format for fundraising events.

Despite this, I feel like this type of interactive option is under used for many performing arts events outside of improv. I am not sure why given that you can easily control the list from which people select in order to ensure a high quality experience. It is an opportunity to provide the experience of a shared curation and increase audience investment and involvement.

Art(ist) Education, Audience Relations, State of the Arts

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