Humane Society Fights Another Battle for Wildlife

When we hear The Humane Society, we think of cute, sad puppies and kittens that need adoption. We also think of slaughtered horses, abused pets, and mutilated lab animals.

The Humane Society of the United States fights everyday for the rights of pets and wildlife, a battle they’ve fought in conjunction with the wildlife scientists of the U.S. Fish and Wildlife Service for years.

In a hasty move last month, the U.S. House of Representatives overturned a rule designed by wildlife management professionals that prohibits and sanctions the killing of hibernating bears and young wolf pups in dens.

Following the vote, President and CEO of The Humane Society of the United States Wayne Pacelle stated:

What the House did today should shock the conscience of every animal lover in America. If the Senate and President concur, we’ll see wolf families killed in their dens, bears chased down by planes or suffering for hours in barbaric steel-jawed traps or snares.

Backers of the measure claim it is a states’ rights issue.

Fighting legislation takes significant resources and The Humane Society for the United States will be in full-on fundraising mode to ensure that the organization serves its mission to protect animals.

The new political era has introduced a host of threats that directly impact nonprofits. Organizations will continue to run up against unexpected issues that require quick action and a reserve fund to tap. We in the nonprofit sector are going to see more call-to-action funds over the next few years. How will this shape the fundraising climate? Will donors heed the call?

In short: get ready for a shake-up in fundraising strategy compared to the past eight years.

Oregon Standoff: Group Says #ServiceNotSeizure

(A view of the Malheur National Wildlife Refuge)

As federal authorities enter negotiations with the 20 or so extremists currently held up at the Malheur National Wildlife Refuge in southeastern Oregon, one environmental nonprofit is stepping up to offer everyday citizens appalled at the situation the opportunity to contribute positively.

Conservation Lands Foundation rolled out the #ServiceNotSeizure hashtag in an effort to raise funds to put young people and veterans to work maintaining precious nature reserves in government possession.

On the organization’s website:

The Bundy family from southern Nevada has been in a decades’ long feud with the Bureau of Land Management (BLM) over the family’s use of public lands for grazing, but the recent militant takeover of the Malheur National Wildlife Refuge in Oregon has taken the dispute to a new level…Here’s a way to direct your frustration toward helping our public lands: the Conservation Lands Foundation has launched a Crowdrise campaign to invite donations that will support veterans, youth, and Native Americans who want to work as conservation stewards on BLM’s National Conservation Lands.

The organization is tapping into popular sentiment against the gun-toting posse of anti-government extremists, whose behavior is endangering the health of the refuge. In ridicule, people have shipped a number of vulgar or demeaning items to the occupiers. Conservation Land Foundation thinks that people can better spend their energies counteracting the extremists’ noxious behavior through good deeds. The money raised through the group’s #ServiceNotSeuzure campaign will generate job opportunities as well as the staff power to help preserve public lands.

These are imitation-worthy tactics for fundraisers interested in leveraging breaking news stories for specially targeted fundraising campaigns.

Social Impact Bonds Could Influence Nonprofit Fundraising

(Part one in a three part series on social impact bonds)

A pioneering system for enacting social change yielded its first results late last year, answering few questions as to its efficacy, cost-effectiveness, and future import.

Social Impact Bonds (SIBs) – a transatlantic phenomenon with enthusiastic support in both the United States and Great Britain – first emerged on the philanthropy scene in 2010. Writing for Harvard Magazine at the time, Ashley Pettus describes SIBs a means to “offer governments a risk-free way of pursuing creative social programs.”

The “risk-free” nature refers to the use of private investment for social spending, thereby eliminating the public’s financial liability in the event of the project’s failure.

In theory, this is how an SIB functions: it involves an intricate arrangement, spanning government, nonprofit, and private sectors. First a government defines a social issue and policy objective, replete with a measurable outcome and a timeline for the project. The government then contacts a nonprofit intermediary whose job is to secure investors for the project. With funding secured, the intermediary then employs and manages front-line service nonprofits to pursue the project’s objectives.

The contract delineates the terms of success. If the project meets or exceeds its goals, a predetermined metric dictates the return-on-investment for the project’s backers. This means that – in the event of success – the government guarantees the upfront investment, paying it back in full, and additionally rewards the investors for sparing the government future social spending costs. If the project fails, the investors suffer losses and the public is (theoretically) off the hook.

According to supporters, the appeal is manifold – SIBs limit the taxpayer’s risk in social spending, encourage innovation in solving social issues, and also incentivize investment in pro-social causes by rewarding investors for successes.

In the United States, the enthusiasm and intellectual backing for SIBs stems largely from the faculty at Harvard. Jeffrey Liebman – Malcolm Wiener professor of public policy at Harvard and former acting deputy director for policy of the Office of Management and Budget for the Obama Administration – released a report in conjunction the Center of America Progress in 2011 that extolled the virtues of SIBs. Liebman went on to found the Harvard Social Impact Bond Technical Assistance Lab, funded by the Rockefeller Foundation. The institute pairs government agencies with Harvard fellows who assess agency capacity for implementing SIBs.

The model has broad political support, with the Obama Administration (the president himself a Harvard alum) budgeting $300 million for future SIB-related projects. A bipartisan group of Representatives introduced the Social Impact Bond Act, which would implement the president’s SIB allotment.

If SIBs take hold, there are huge implications for the nonprofit sector, according to Key Elements Group President and CEO Lynette Zimmerman. “This has the potential to become a major shift in the way non-profits provide programs and leverage public grant dollars,” Zimmerman explains. “Over the past several years public dollars available to non-profits have decreased. Monies set aside for SIBs could be a new funding source for organizations quick to position themselves.”

Currently, the national value of SIB investments in United States is small. There are approved or pending projects in 16 states, plus Washington, DC. New York and Massachusetts have pursued the model most aggressively. The city of New York struck a $9.6 million deal in 2012 with Goldman Sachs and the nonprofit MDRC to reduce youth recidivism at Riker’s Island. Gov. Deval Patrick of Massachusetts introduced the nation’s first competitive bidding program for SIBs in 2012.

For all of the enthusiasm and slow-but-steady proliferation of projects, there are virtually no results available in order to access the model’s effectiveness. The only available results are from the very first SIB, initiated in the UK, which had its first review in August 2014.

The results were inconclusive. The project is sponsored by the Ministry of Justice, with funding from the national lottery. Social Finance UK – intermediary SIB booster funded by big philanthropies such as the Rockefeller foundation and the Omidyar Network – raised 5 million pounds from private individuals and hired two nonprofits with the goal of reducing recidivism at the Pertersborough prison in East England by 7.5 percent by 2016. If the rate fell by 10 percent by late 2014, the investors would enjoy a first round of payments.

Recidivism rates fell short at 8.4 percent. If the project continues at this rate, however, investors will receive their money back by the end of the program, with an additional 13 percent profit.

These modest gains were deemed insufficient by government officials, who cancelled the third trial group for the project. The individuals that would have been in the program will instead be a part of a national program that functions similarly to an SIB except for one major component – it will not have any investors anticipating financial rewards. These sort of policy shifts are one of the chief dangers that analysts predict could curtail the effectiveness of SIBs, which are data-driven projects that accumulate actionable information over time.

There are other criticisms. Some specialists argue that the projects do not actually save or free up public money, since the amount raised by investors is budgeted and set aside by the government. Additionally, the metric for deciding returns on investment could pose steep loses for taxpayers and arbitrary earnings for investors. Budget analyst Kyle McKay testified about Massachusetts SIBs before the Senate Budget Committee that while private backers are providing only $12 million in SIB funding, the state is on the hook for $27 million in payments.

Lastly, if SIBs become a dominant means for funding social spending, investors could use data to cherrypick projects that are likely to succeed, thus neglecting the very pressing and more challenging social issues that the model was designed to address.

This is all speculation, however. With only one data set describing only a portion of a long contract, the Peterborough project does inspire concrete conclusions. What is for certain is that with bipartisan support, intrigued investors, and groups such as Bloomberg Philanthropies willing to backstop loses on some SIB projects, the model will be around for the foreseeable future. We’ll stay up-to-date on the issues, looking at what the growth and mutation of SIBs means for nonprofits.

Fundraising Essentials: Mobile Giving

Earlier this month, Paypal announced its 2014 charitable giving statistics. If there is one thing that the numbers tell us, it’s that donors are moving toward mobile devices as their preferred means of digital giving.

Paypal – an online payment service – saw a 50 percent overall increase in year-end giving, totaling $212 million in donations. #GivingTuesday had its best year since its founding in 2012. Donors gave 66 percent more than they did through Paypal the previous #GivingTuesday, and mobile giving leaped an astonishing 101 percent.

The trend in mobile spending is not unique to nonprofits. On Black Friday this year, retailers witnessed a 62 percent increase in Paypal purchases made through mobile devices.

The biggest reason for this development is that mobile giving is extraordinarily easy. Revolutionizing during the tragic earthquake in Haiti, nonprofits adapted text-based donations into their campaigns with great success. By simply responding to or sending text messages, donors could send gifts in response to ongoing events completely hassle-free.

Political campaigns took the strategy one step further during the 2012 presidential election. Campaigns stored their donors’ credit card information, soliciting funds via emails that allowed repeat donors to merely click a giving level to immediately send a gift.

Mobile fundraising simultaneously taps into the immediate psychological gratification that derives from charitable giving, while also satisfying consumers’ ever-growing preference for convenient, streamlined, and user-friendly digital designs that simplify financial transactions.

Take tipping at restaurants and cafes, where a similar trend has emerged. Tipping has increased due largely to the intuitive design of iPad checkouts, through which a click of a button enables the consumer to tip without experiencing any interruption to flow of the transaction

Advancements in computer technology have driven the size of consumer electronics down, while greatly increasing their capability and utility. In thirty years, we’ve seen seen the arc of technological progress span between the release of the household desktop to this year’s highly anticipated iWatch.

Consumer behavior – part catalyst for this rapid change, but itself molded and affected by technological progress – now evolves at a quicker rate than ever before. Keeping track of this evolution is essential market-watching for fundraising professionals.

Congress Gives Partial Extension to IRA-to-Charity Rollover

On December 16, the U.S. Senate voted to extend several charity tax breaks through only the end of 2014, though many in the nonprofit sector want a permanent implementation of the policies.

Many fundraising professionals support the IRA rollover tax break in particular, which they want implemented permanently. Before the vote, the tax breaks only applied to 2013 tax filings, but are now slated to apply to donations made by the end of the 2014 calendar year.

Enacted in 2006, the IRA tax-to-charity rollover allows 70-1/2 or older U.S. citizens to donate up to $100,000 from their Individual Retirement Accounts (IRAs) to public charity without being taxed. According to some sources, older philanthropists were waiting to see the result of the vote before making giving decisions in the final weeks of 2014.

The IRA-to-charity rollover encourages charitable giving among older prospective donors – especially those who do not itemize their donations. The tax break allows individuals to give large sums from their IRAs to charity without that allotment applying to their adjusted gross income. Additionally, the donations are applicable to required minimum deduction. This means that on joint-tax returns, a spouse can used a Qualified Charitable Distribution (QCD) to exclude up $100,000 per his/her partner’s charitable giving through the IRA rollover.

In the past, Congress has voted on the retroactive applicability of the IRA rollover tax. If Congress picks up the debate again and passes similar legislation, the tax break could theoretically apply to the 2015 calendar year.

Other tax breaks given partial extension through the end of 2014 include conservation donation incentives that help modest-income landowners contribute to land conservation efforts and food inventory gift incentives that encourage farmers to donate excess food stock to food banks.

As Donor Behavior Shifts Online, Salvation Army Struggles to Raise Funds

The last few years have seen tremendous growth in philanthropic fundraising, as the economy slowly but surely emerges from the recession. Recent figures indicate that nonprofits raised $335.17 billion in 2013, a 4.4 percent increase from the previous year. This amounted to a 22 percent increase in charitable giving since 2009 (the year many analysts consider the official end of the recession).

With falling oil prices and 2014’s widely publicized online giving campaigns, this year should follow the growth trend. On #GivingTuesday alone, donors contributed a sizable $45.7 million, heralding the start of a new, lucrative tradition, and perhaps showing early signs of improving consumer confidence as energy costs begin stabilizing at low levels.

Not all nonprofits are feeling the love, however.

The Salvation Army’s red kettle fundraisers – stationed outside of retail outlets around the country – are a cultural staple of the giving season. The jingling bells and friendly volunteers remind gift-hunting consumers that there is more to the holidays than materialism. But this fundraising strategy is proving less effective than ever before, as Salvation Army chapters across the United States struggle to meet their fundraising goals.

Programs from Upstate New York to Kansas, Missouri to Wisconsin, and Iowa to North Dakota are falling far behind their goals. Some Salvation Army efforts have raised as little as 50 percent of their targets as they enter the final days of the holiday season.

So why are the red kettles empty? Specialists point to the shift in donor behavior toward internet-based donations. The online giving trend emerged in early 2012, when analysts noted a 14 percent leap in online fundraising from the previous year.

Web-based fundraising has a number of benefits. Development professionals and data analysts can comb social media and advocacy forums to find particularly vocal or committed prospective donors. Web-based monthly donations are also an easy sell, offering streamlined and paper-free subscription services that simplify the giving process.

Indeed, scores of the most impactful fundraising initiatives these days are only actionable on the internet, as evidenced by the wild success of the ALS bucket challenge. Friends and family members challenged each other using social media, exercising an effective, digital brand of peer pressure to solicit over $100 million in donations.

Another huge component to the digital transformation of U.S. giving behavior? Millennials.

Young adults are more likely to consider themselves philanthropists, with 26 percent of them self-designating as such as opposed to only 18 percent of baby boomers. The growing generosity of millennials goes hand-in-hand with recent fundraising developments on social media, where younger demographics are disproportionately represented compared to other age groups.

Salvation Army volunteers may be getting the snub because donor behavior is shifting solidly in the direction of online charity, as younger generations of donors become increasingly habituated to digital fundraising and other prospective donors have already been tapped by social media campaigns and other online nonprofit initiatives.

Consumer spending also appears to play an important role in Salvation Army’s troubles. Retailers had a slow start this year, with lackluster figures for Black Friday and a growing number of consumers shopping online. With fewer people walking in and out of stores, there are fewer prospective donors. The biggest shopping day of the year, however, is just around the corner, and perhaps a late surge in shopper confidence will help fill the empty red kettles.

But the needy are already feeling the effects of Salvation Army’s poor performance. In Elgin, Illinois, families lined up outside the area-Salvation Army headquarters to receive food stuffs for the holidays. Many were turned away empty-handed. One of the staff commented that it “was sad to see the need but even sadder to watch all the food dwindle away as the line of those seeking help grew shorter, then turning those in need away due to the lack of our food donations.”

No nonprofit wants its operations to shrink, especially one providing basic needs. If traditional means of fundraising are no longer sufficient to meet the same demand for its services, Salvation Army should look to expand its methods and strategies for 2015, exploring the possibilities of online fundraising and integrating with new charitable institutions such as #GivingTuesday.

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