CORONAVIRUS, BOOM AND BUST ELECTION FUNDING, AND AN IMPENDING RECESSION

Coronavirus recession nonprofit stimulus package

Aaron Dorfman is president and CEO of NCRP. Bethany Maki is the director of programs at Progressive Multiplier. 

It’s safe to say that at this point, the nonprofit sector has been pulled into a discussion about COVID-19, as leaders urgently strategize about how to slow the outbreak and help those directly affected.

However, beyond the need to fund cure, care and containment, we also have a responsibility to the movements and causes that we hold dear to think through how the outbreak will affect our sector more broadly — specifically the intersection of achieving our mission and financial sustainability.

A perfect storm of nonprofit challenges

The economy, natural disasters, big breaking news, election cycles, etc. all make catching potential donors’ attention and investments more difficult. In the course of a normal year, these dynamics are commonplace and even anticipatable. We know how to reschedule campaigns, we’re getting better at planning for the boom and bust of electoral cycle funding and have learned to lean into more resilient sources of independent revenue like sustainer giving to get us through the ups and downs.

But what happens when a boom election year, a global pandemic and a looming recession are on a collision course with your fundraising plans and will ultimately impact if you can fully deliver on your mission in this moment? 

Most of the progressive nonprofit staffers with whom we spoke are not seeing impacts on their revenue just yet, but they are seeing increased demand to deliver on their missions. Jobs With Justice (JWJ), an NCRP nonprofit member that recently secured a $1.3 million planned giving commitment from a project funded by the Progressive Multiplier Fund, is grappling with how hourly workers will be affected by the economic impact of the public health response. JWJ Development Director Brenden Sloan says that the current crisis provides an added sense of urgency to the state and local coalitions work that they are doing on the ground with low-wage workers and other members who don’t have paid family or medical leave. “We have been in talks for a while now about starting a national hardship fund to give direct support to groups of workers affected by natural disasters or events outside of their control,” said Sloan. “This outbreak really puts more urgency on finding funding for that.”

Andrea Hermann, director of development at Clean Water Action and Clean Water Fund, is immediately concerned with how crisis response will impact the organization’s recruitment of members and donors that can help move the political needle in 2020. “We have a pretty diverse revenue source between our field operations, phone operations, direct mail, online, major donors, foundations and corporate donors – but the field is our a significant way of getting new donors in and achieving our programmatic goals in 2020,” said Hermann. 

For the immigrant justice community, the coronavirus outbreak has only added to the constant, fast changing challenges from white nationalists, hate groups and the Trump administration. Even previously agreed to legislative efforts, like the language enshrined in the House’s NO BAN ACT that would stop President Trump’s Muslim ban, are being slowed down by the crisis response.  A full floor vote on the NO BAN ACT that was expected this week now hangs very much in doubt.

“The House Judiciary Committee is adding language in response to the coronavirus that would open up executive authority to exercise discrimination by exploiting public health concerns,” said Lakshmi Sridaran, Executive Director of South Asian Americans Leading Together (SAALT), who has been a leader in promoting the NO BAN ACT. “Our coalition is working hard to fight back, but there is strong bipartisan consensus around this language.”

How philanthropy should respond

Organizations like SAALT are already under-sourced. According to NCRP’s Movement Investment Project brief, the State of Foundation Funding for the Pro Immigrant Movement, less than 1% of the giving from the 1,000 largest foundations went to work that is intended to benefit immigrants or refugees even though immigrants make up 14.4% of the U.S. population.

How can philanthropy help?

Rapid response funding

As this current crisis demonstrates, what organizations need most are additional flexible funds that will quickly allow them to deal with the immediate intersectional challenges posed by the coronavirus outbreak. Funders should specifically provide rapid response funds to organizations or intermediaries such as the Emergent Fund who can move money quickly to the grassroots efforts that focus on areas where:

  • The Trump administration may use this crisis to push an agenda against the will of the American people (i.e. Muslim ban).
  • Corporations may act in such a way that exacerbates the problems that we face (i.e. not paying hourly employees).
  • We can push our own agenda (the need for universal health care, paid leave and more).

A stimulus package for nonprofits

With a potential recession approaching, the philanthropic community must seriously consider moving resources into supporting a nonprofit stimulus package that would diversify and scale nonprofits’ revenue generation. A combination of grants, recoverable grants and loans could help nonprofits raise a multiple of the dollars invested through a variety of techniques. The investment does not need to be more than the annual 5%, although we would encourage that. The Progressive Multiplier Fund, which funds revenue generation efforts, is helping its grantees raise nearly $4 for every $1 that the PMF grants out.

What can nonprofits do now?

While it’s not time to panic, it’s definitely time to prepare, even if that preparation is just in the “form of thought experiments and what-ifs to think through the possibilities and get aligned around the possible outcomes and impacts,” as direct marketing and fundraising consultant Miriam Magnuson said in a recenblog post.

Three things that they should immediately consider doing:

1. Make sure there are no holes in the current revenue generation bucket and learn into sustainable revenue resources.

2. Talk to your organization’s management about revenue forecasts: Whether it’s a shifting internally of resources from fundraising to mission delivery, or a downturn in foundation support or a dip in individual giving as the stock market stumbles, it’s highly likely your fundraising forecast will need to change.

3. Talk to funders specifically about what you need: You will need more funds of course. Take the time to prepare the business case that supports what you need to meet this moment.

At this moment of need, it is our ability to reach out and help each other that will help organizations and the communities continue to do the work of making this world better. We owe it to the long sustainability of these vital movements to not just help the public survive the current challenge, but to also help organizations come out stronger for the future.

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Photo by Malik_Braun. Used under Creative Commons license

Grant Ideas: Look Here!

Grant Ideas Progressive Multiplier Fund

Since the early days of the Progressive Multiplier, we have come across a lot of innovative grant ideas. While we’ll continue to steer organizations towards techniques that we discover that work (e.g. Free Will), we’d be loath to over-steer, because we truly want your best ideas, not ours. In that spirit, we thought we’d share some of the questions that you can ask yourselves when coming up with your proposal, and share examples of grants that we believe fit the line of thinking raised by these questions.

Question 1: What worked in the past that was not part of your plans, and therefore you didn’t pursue? Could this idea be your idea for a grant?

I still recall the day that Frank Canata returned to my door-to-door canvass office in Chicago in 1998, gregariously shouting towards me that I had not given him enough houses, but that he’d still beaten his daily goal by standing on the street corner and asking for money. I thought “only Frank could pull that off” and brushed past his surprising success. Years later, after someone had paid attention to a similar, accidental success in Austria and launched street canvasses, door-to-door canvasses were largely replaced with the street canvass. I even launched a street canvass for Greenpeace, which raised $23 million per year. Since then, I’ve always asked what has worked that wasn’t in the plan, and should that surprising success be tested further.

Paid Leave for the US (PL+US) is an example of an organization that discovered something unplanned that worked, and now they’re testing it more fully. PL+US found that they were the beneficiaries of Facebook crowdfunding hosted by people who were sharing birth announcements and paying their own paid leave “forward” by asking their friends and family on Facebook to donate to PL+US. Their Test & Innovation Fund grant is helping them build lookalike models, target them through Facebook Ads, and recruit them to host crowdfunding campaigns on Facebook.

Question 2: How can you play to your strengths, and test one new thing at a time?

Many organizations approach the PMF asking for funds to test lead generation and test email fundraising for the first time at the same time. Trying too many new things that don’t play to your strengths is likely to fail. Don’t get me wrong; the PMF aims to fail 80% of the time with the experimental grants we provide. But the kind of failure we like is by organizations, staff, and their partners who have experience testing one or two things that stretch them, but aren’t all brand new to them.

Texas After Violence Project (TAVP) is a great example of an organization playing to its strengths — legal training — and testing one new thing with its grant idea — marketing legal trainings — as an experiment. TAVP designed three legal trainings that are qualified to be Continued Learning Education Credits. The trainings are focused on preventing future traumatization from the criminal justice system, and promoting restorative, nonviolent responses, all while generating income from attorneys paying for the courses. With TAVP’s grant, they are testing a wide array of marketing techniques to determine the best methods for generating paying customers. Their objective is to find successful, replicable marketing techniques that TAVP and other organizations can use to market CLE courses.

Corporate Accountability International based its grant idea on its expertise in house party fundraising and distributed organizing. With their grant, CAI is activating and training their volunteers to host fundraising house parties. Through these house parties, they are building their monthly giving program and engaging their current base to be even better advocates for their cause.

Question 3: How can you take what you’re doing well to 11 to design your grant ideas?

PushBlack is building off of their 1,000,000 Facebook Messenger list and their experimentation sprint culture. Through a series of 2-4 tests per week over a year, PushBlack will very quickly learn and adapt to what increases and engages their audience and what doesn’t. With each test, they’ll look at subscriber engagement, acquisition cost of new subscribers, viral growth, format and campaign ask effectiveness, and adapt accordingly. All of their tests seek to optimize the cost and return on investment of increasing their subscriber count and income per subscriber.

Let’s Go Negative

If you were to ask these questions in the opposite way, you’d get a great list of things not to do in your proposals:

  1. Don’t ignore things that surprisingly work when thinking of an idea for a grant. Those are the best next things to test;
  2. Don’t propose to do a big plan that includes multiple new things, none of which play to your strengths. Stretch yourselves or test one new thing in your tests, but do it with staff or consultants who have skillsets that can be applied to these new ideas;
  3. Don’t rule out improving your current programs. Just optimizing them, in some cases, could lead to millions of dollars.

For more examples of grant ideas we’ve funded, check out the Center of Excellence. If you aren’t registered yet, go here to sign up.

For a full list of our guidelines and our FAQ, please click here.

$2.5 Million in Bequests Generated in One Year

The Progressive Multiplier Fund recently connected a national progressive non-profit organization with FreeWill, an online estate planning software platform where non-profits’ members can create a will and are encouraged to leave the non-profit a part of the estate. With a few emails, the organization generated nearly $2.5 million in bequest commitments in under 12 months.

FreeWill was founded by Patrick Schmitt, former Campaign Director at MoveOn.org and Innovation Director at Change.org, and Jenny Xia, one of Forbes 30 Under 30 Social Entrepreneurs list in 2019. Since it’s inception, the company has generated $252 million in commitments to nonprofit causes. The average gift left to charities through FreeWill to date has been $70,000, about twice the national average.

Patrick and Jenny were drawn to create FreeWill by one simple fact: in the next 20 years, an estimated $30 trillion will be inherited in the United States. This is the largest wealth transfer in human history.

FreeWill solves a few important problems in planned giving:

First, under 25% of donors who leave a non-profit in their will alert the non-profit to this fact. With FreeWill, non-profits email and mail their current members, know immediately if their members made a commitment to that non-profit, and then the organization continue to build a lasting relationship with the people who’ve left the organization in their will.

Second, testing messages and techniques in planned giving is very difficult. Planned giving teams send mail to their low-dollar donors, donors include the organization in their will but don’t tell the organization, and seven years later a check may arrive. FreeWill enables non-profits to A/B test their messages and know what is working in real time.

Many progressive organizations who serve low income communities assume that planned giving is not for their base. Our experience with planned giving is that the profile of a planned giving donor is someone who can afford to donate $10-20 per year to a charity, is on a fixed income, but owns a home or has some remaining retirement funds, enabling the person to leave a gift in the mid-$30,000s as a legacy to a non-profit that actually asked for the gift.

How to Qualify and Apply for a FreeWill Grant with the Progressive Multiplier Fund

The Progressive Multiplier Fund has funds for eight non-profits to test FreeWill or similar planned giving tools. Non-profits should have a responsive email list of 100,000 or more, and should have been in existence for around ten years or more. To Apply, please reach out to FreeWill directly to learn more and get a quote.  Then you can click “Projects” in the Center of Excellence and then click “New” to create a Recoverable Grant application, and include your email list size. Feel free to use content from People’s Action’s grant application to keep it simple.

For more information on planned giving, search for Planned Giving in the search bar of the Center of Excellence.

Facebook Lead Generation and Fundraising Grows in Popularity

** Note — all links point to the Center of Excellence. If you don’t have access, apply here.

Summary

Organizations are increasingly using Facebook ads to target audiences that look like their donors or members (sample grants for this here). In general, organizations applying to the PMF have tested and refined their look alike models to generate a lead (someone who opts in to their email list or to being called) for about $.70 per lead. This is an excellent way for organizations of all size to scale up quickly.

Building Look Alike Models

If you have not mastered this technique yet, a good first step would be to apply for a small grant ($5,000 or less) to build and test a look alike model for fundraising purposes. You can enter 1,300+ donors’ email addresses into Facebook to build a model, or rent direct mail lists from organizations that are similar to yours to get the sample size that you need.

Telemarketing and Email Leads on Facebook

Once organizations have created their look alike models, they use several techniques to raise funds:

  • Email Communication – many organizations incorporate the leads into their regular email streams, first including the leads in a welcome stream that culminates in a fundraising appeal, and then incorporating the leads into their normal online fundraising program;
  • Telemarketing – this is perhaps the least used and the highest ROI technique, calling people within 12-24 hours. Some non-profits with proven in-house telemarketing teams are able to generate new monthly donors for under $100 per donor, including staff and marketing costs;
  • Immediate Asks – After signing up for their email list, some organizations redirect leads to a donation landing page, where a fraction of leads immediately convert to donors. This is not the primary method of fundraising from these new leads, but provides a nice bump in income; and
  • Peer to Peer Fundraising — Some organizations are using Facebook ads to recruit people to host peer-to-peer fundraisers for their organization on Facebook.

Recruiting Leads to Facebook Messenger Lists

Several organizations are exploring building Facebook Messenger lists with Facebook Ads. Facebook Messenger fundraising is currently less competitive than email, signing someone up does not require the person to leave Facebook messenger and go to a different landing page, and the viral nature of Facebook Messenger means that the effective cost per sign-up (i.e. people who sign up from paid ads and viral content) can be as low as $.35. Accelerate Change is working with several organizations to pioneer a set of fundraising techniques on Messenger, including:

  • Real people messaging new leads to ask them to donate;
  • Incorporating financial asks into welcome series and after advocacy asks; and
  • Sending fundraising appeals during times of crisis to support multiple local organizations.

Applying for Grants for Facebook Marketing

If your organization (or consultant) does not have a track record of running Facebook ads and generating leads or subscriptions for under $1, then you are welcome to apply for a mini-grant (i.e. $5,000 or less) to run a series of tests to reduce your lead generation cost.

If you do have a track record in generating inexpensive leads via Facebook, but do not yet have a proven track record in generating $2 for every $1 invested over time via emailing or phoning these leads, please consider applying for a grant to test the follow-up fundraising techniques.

Finally, if you have proven that your organization and team (including staff and consultants) can do both of the above, please consider applying for a recoverable grant with the Progressive Multiplier Fund.

Take a look at past grants and the key performance indicators that are tracked to measure success (and learn as we go) when drafting your grants.

Fundraising Innovation: Study Shows Need for New Non-Profit Finance

Most progressive organizations can dramatically increase unrestricted, sustainable revenue through disciplined financing and information sharing according to a recent study on fundraising innovation.

In 2016, a group of fundraising innovation thought leaders conducted a six month study that unearthed a critical mass of progressive organizations that are ready to launch small donor and fee for service tests, and to roll-­out proven programs, but cannot find the needed financing. Of the 35 organizations interviewed for the study, each organization was testing an average of two scalable revenue projects. These project were primarily focused on small donor fundraising, fee for service, and certification programs. Half of the organizations surveyed could raise $500,000 more annually from proven models if they had the funding to invest.

The Results: Fundraising Innovation is Widespread, Financing is Inadequate

  • Widespread Fundraising Innovation, particularly among smaller organizations. Smaller progressive organizations are doing a higher volume of innovative experiments, which could benefit significantly from increased funding. While some of these non-profits lack the capacity to scale, there is no shortage of consultant and intermediary support organizations to complement non-profits’ existing capacities.
  • Proven Scalable Revenue Programs. A critical mass of larger progressive organizations have developed scalable fundraising models that, if expanded, could raise significantly more revenue. Unfortunately, the organizations lack the financing to expand these initiatives.
  • Experimentation and Innovation. A small number of foundations provide limited grants to progressive groups to conduct scalable revenue experimentation. Unfortunately, this form of financing is neither readily available, nor abundant enough, to optimize scalable revenue testing. Strikingly, the study found that smaller social, economic, and racial justice organizations conducted a higher volume of innovative experiments that could benefit significantly from increased funding.
  • Best Practice Sharing can Accelerate Learning and the Scaling of the Progressive Movement. While organizations share some best practices, there is no progressive-wide hub where results and techniques from rigorous tests are widely shared. Indeed, because the field is changing rapidly, even general best practices around grassroots fundraising are not easy to find for organizations with limited experience.

A New Path for Fundraising Innovation and Scalable Revenue

We designed the Progressive Multiplier Fund (PMF) from these findings to provide the following three core services:

  1. Create a Test and Innovation Fund to turbocharge experimentation and knowledge dissemination. An essential component of scaling progressive groups is to fund experimentation and prototyping. When such experiments succeed or fail, the next step is to share that information across the progressive movement. Small donor fundraising needs constant innovation as older methods (e.g. on-line, direct mail) lose steam. The Test and Innovation Fund will incentivize progressive groups to experiment more creatively. The fund will ensure that a diverse range of progressive organizations are able to participate.
  2. Create a Growth Fund that leverages donor dollars. Our research demonstrated organizations need a relatively unavailable type of funding: recoverable grants. These investments are risk-­free to the grantee. Any income returned to the Growth Fund will be reinvested in future projects. The grantee would pay back the Growth Fund (or not) out of gross revenue from the scalable revenue project proceeds, not out of its general budget. All net income after the loan repayment would go to the non-profit organization. This model leverages funder dollars in two ways: First, the Growth Fund would re-grant this money several times in the future. Second, as the Growth Fund builds a track record, it may take out commercial loans against its track record and balance sheet – which many organizations are unwilling to do – using its cash on hand as a guarantee to leverage larger sums to invest in progressive organizations; and
  3. Create a Center of Excellence on Scalable Revenue. Our findings support the need for a Center of Excellence (CoE). The CoE will share best practices in small donor, fee for service, or sales efforts across the progressive movement.