HUGE Thanks
Lanthropy, a minor giant among the companies that serve nonprofits, has agreed to host my images and to sponsor this blog. Can I get a round of applause? As you know if you've read these postings, I'm a fan of their software, which they keep cheap so we can actually buy it. Tomorrow they may be villains, too, but today they're my hero. Mike: Love and kisses.

Privacy: A Point of Departure… Part 4
This series of posts attempts to add something to the discourse on privacy issues, especially as they relate to nonprofit charitable business.

Concentrations of Consequence
I’ve been hearing an interesting expression recently, “concentrations of consequence.” In the press, it seems to have become a term of art for the problem of putting too many terrorist targets in one, easy to bomb location. Example: Tall buildings standing side by side and filled with people. In this context, a “ConCon” is an undesirable thing.

But the expression also has a life outside of the discourse on terrorism. I’ve been dealing with this term for some time in the contexts of human services and charitable fundraising. To us in nonprofit, a concentration of consequence is a term for those areas of density in our constituent networks that bear closer scrutiny, either for exploitation as potential donors, or as being meaningful in some way to our community development, client-finding, or client services efforts.

This may sound awfully theoretical, but relax. It’s not a tough idea at all, and understanding it can vastly improve your fundraising efforts, and even help improve services to your clients.

First let’s look at something called relationship mapping. Professional fundraisers use this technique, especially in large-scale campaigns, to identify volunteer solicitors who can most effectively approach a potential donor. Through “screening meetings” and other means, the fundraiser collects information about whom (among her board members and other supporters) knows whom (among a short list of appeal targets). New software tools let organizations collect relationship information over several years, and then use that information to “map” the relationships of their inner circle to their community’s movers and shakers and big gift makers.

Relationship mapping works on the principle of the six degrees of separation. This principle was popularized by the 1996 film of the same name by playwright John Guare. It describes one of the emergent properties of massively interconnected networks of people, which popularly holds that one is only an average of five or six relationship links away from anyone else on Earth, say, the Queen of England. The idea got going in the 1960's when a psychologist named Stanley Milgram performed an experiment that arrived at the average of five/six relationships through a clever letter-writing trick. Recent work by Columbia University post-doctoral fellow Duncan Watts and professor of theoretical and applied mathematics Steven Strogatz graphed the changes that occur as more and more links are added in a network model. They called their book Small Worlds (1999, Princeton University Press). Apt title, eh?

Pragmatically speaking, only one, two or three degrees of separation are of much use to fundraisers, because as you move further away from the organization’s inner circle, each contact (or node) is likely to have less and less affinity with the organization’s mission. For instance, the first degree of separation will more likely be a link with someone who lives locally, and may share more of an interest in the organization’s success.

Privacy For Fun And Profit
That said, we can use relationship mapping to identify concentrations of consequence that can give us critical business intelligence about whole new funding strategies. An example would be the discovery that a number of our “outer circle” prospects are involved in a political movement, party or ideology that is harmonious in some significant way with our own mission. This, in fact is exactly what is meant by the “consequence” part of the expression---the density of relationships surrounding a particular idea that may be consequential to our desire to build a new building, acquire new client referrals, etc.

By obtaining certain kinds of personal information about our board members and current donors (i.e. the names of family members, friends and their employers and other organizations with which they may be affiliated), we can exploit relationship mapping to help jog the memories of our board members when it comes time to assign appeal targets to them. In my experience, board members often do not know who some of their best prospects are. One may not know, for example, that her husband’s golf partner is a trustee for a major foundation. By overlaying the list of trustees of our prospective funders with the names of our board members’ acquaintances (and also their acquaintances—another degree of separation), a picture begins to form. Sometimes referred to as a “treasure map,” this picture can lead our solicitors through successful avenues of appeal.

Such “treasure maps” are not in themselves concentrations of consequence. As useful as the map may be to acquiring a gift from a donor, we would only get really excited if we found that several maps pointed to a pattern of affinity, some concentration of people and institutions around a particular shared ideal or goal. The map gets us into that loop of the network, where we can develop fresh strategies that exploit our new friends’ sweet spot.

This is all really cute as a theory, but it raises the question of how it can be put into practice. With so many potential relationships (refer to my earlier post on The Network Effect to give your mind a boggle), how could we ever productively collect, analyze and use this information?

I’m reminded of Charles deGaulle’s famous exhortation, “How can anyone rule a nation that has 246 kinds of cheese?” Getting a handle on all of our inner circle’s relationships seems an intractable task.

It’s not. The solution, of course, is good planning, good record keeping, and probably some software tools. By using a database that stores links between constituents in a form that can be analyzed easily, and then using software that is designed to look for these links and display the maps, you will be able to do the basics, which is to display relationship maps. (One such program is MintMAP, but others exist as well. Search Google for “fundraising software” and “relationship mapping.”)

But how do we use relationship mapping these golden concentrations of consequence that can launch us into the big leagues? We want to run with the big dogs!

That’s yet another journey deep into computer land (some would say science fiction). I try to keep these posts as non-technical as I can, but to understand how this happens, you’ll have to tune into Part 5, where the going gets just a trifle rougher…

COMING IN PART 5: Running With the Big Dogs; Math Is Hard.

Privacy: A Point of Departure… Part 3
This series of posts attempts to add something to the discourse on privacy issues, especially as they relate to nonprofit charitable business.

If Not Privacy, Then What?
Is it possible to live in a world in which many of our secrets are known? What happens when our medical records are available to potential employers who are trying to control their employee health insurance costs? Or when a potential romantic liaison ends before it begins because your date ran a background check on you and discovered that you had been accused of sexual harassment as a college student (although you were exonerated)? Or when you can’t buy a certain car you want because it has become a chic marketing technique to reserve certain cars for certain “qualities” of people? Or when you can’t receive a kidney transplant because your DNA makes it quite plain that you will die of something else within a couple of years anyway?

These are the kinds of emergencies we can conjure up at this early stage in the privacy paradigm shift. Ably assisted by the infotainment media, we will surely come up with many more fears. But I want to offer an alternative scenario…

You Just Can’t Hide It. Many groups have learned that when you can’t hide what makes you somehow undesirable in the dominant culture, the thing to do is to be proud of what you are. Self esteem and putting an end to obfuscation has been reported as a pretty good upside by men and women who have “come out,” for instance. Power to the purple!

Don’t Try To Fight It. Perhaps the notion of privacy is a perceptual thing. Eskimos in the Aleutian Islands live in open rooms, and the functions of life go on, as they must, without anyone perceiving that their privacy is being violated. If we hold on too tightly to the idea that we must never be expected to alter our perceptions, we will surely suffer the perception of indignity and the perception of oppression.

Fix What Breaks. If the health insurance system, the healthcare system, the legal system and the education system aren’t going to work as privacy evolves, change them. It is interesting how a seemingly unrelated dynamic tends to materialize just when systems are in crisis and need a shove. That is another emergent property of complex networks: “programmed obsolescence.” The human body, which dies sometime after its offspring have reached maturity, is an often-quoted example of programmed obsolescence. Bad political ideas, stupid business plans, and, in general, any cultural or economic system that can’t keep pace with change, tends to disappear or evolve.

Bounce Back. Human beings and our culture are very resilient. Homo sapiens has adapted both physically and psychosocially to almost every climate and condition on the planet—all without transpeciation (evolving into separate species). We have borne famine, war, genocide, racial and gender oppression, and every imaginable kind of bad Internet joke, and still we keep coming back for more.

COMING IN PART 4: Concentrations of Consequence; Privacy For Fun And Profit.

Privacy: A Point of Departure… Part 2
This series of posts attempts to add something to the discourse on privacy issues, especially as they relate to nonprofit charitable business.

The Network Effect
Until recently a somewhat obscure twig of the Information Theory branch of physics, “The Network Effect” has become a key concept leading a huge transition to ecommerce. It has achieved something like dogma status in the New Economy. The reason is straightforward as the profit motive: the Network Effect explains why ten customers can turn into ten thousand customers almost overnight for a “wired” business.

The same term, “massively interconnected network,” has been applied to the Internet, to electronic neural nets, and to the human brain. We’ve begun to understand why the brain, with its finite number of neural cells—nodes—can seemingly store unlimited memories in seemingly infinite detail: in a network, the whole is greater than the sum of its parts.

Definition: The Network Effect — Known officially as Metcalf’s Law of Network Externalities, the law states that when members are added to a network, the number of potential pathways through the network increases geometrically.

In Figure 1, there are four nodes in the network, representing six linking lines (“links”). The number of possible routes that information can travel within the network is an amazing 66.

Figure 1:


But look what happens if we add just one more node:

Figure 2:


The new member adds only four new links, but the number of potential pathways skyrockets to 320! There are now many more different interactions that can take place in the network. What if we put together ten nodes?

Figure 3:


Don’t bother trying to count the possible pathways. They number in the millions. You can see why bringing one more business onto an Internet B2B (business-to-business) hub is such a “good” thing. Suddenly, every other business has hundreds or millions of new chances to conclude a transaction.

What’s Good For General Motors…
The same thing that works in B2B ecommerce networks also works for any network—families, social circles, workplaces. New possibilities emerge as the complexity of the network rises. In fact, the very personality of the network changes at various stages in the increasing complexity.

From this example, we can understand how complex things, like human intelligence, can arise as a few million more brain cells are added to the basic mammalian brain. We can also begin to imagine how human culture emerges from the complexity of larger and larger populations. This is an oversimplification, of course, but there you have it. The Network Effect has been responsible for some rather profound developments over the eons, and it will just keep on creating new properties of intelligence and culture as the network gets bigger, and as communication pathways get more and more efficient. We can’t possibly wrap our minds around these future properties of our culture until they arrive.

[FOOTNOTE: Some information theorists call the properties that emerge from complexification “objective shifts” or “symbolic shifts.” This is what they mean: If you are making peanut butter, you need a few objects (peanuts, a grinder, a jar). After you’ve made peanut butter a few times and started selling lots of it, perhaps you teach someone else to do it for you so you can focus on the business end. Now you are only dealing with one object instead of many: a peanut-butter-maker, who handles all the lesser objects for you. You have undergone an objective shift, in which the details underlying a process are now hidden by the symbol of the process. Still other information theorists call this the basic mechanism by which language came to be. The essential concept is that the human way is to simplify, substituting one symbol for many. A sizable number of information theorists and physicists are thinking that this is the way that everything in the universe works.]

A Network Abhors Privacy
Once a piece of information leaves the (apparently) secure safety of your mind and is communicated to someone else, watch out. There are powerful forces at work in a massively interconnected network. Information recombines infinitely, and new properties emerge. The chances of you keeping your private communication confidential are slim, and the odds are mounting against it as the pathways for communication expand. There really isn't much to be done about it. No police state could hope to contain the irresistible tendency of information to escape its cozy little local house and hit the streets. Certainly, no free society could.

Just a Few of the Highlights: Expanding Communication Pathways:
 Globalization of business
 Demand for equality (which really means equity in access to information)
 Accelerating pace of electronic communication (broadband, wireless, optical switching, neural computing…)
 Dropping of political and language barriers
 Global explosion in literacy

COMING IN PART 3: If Not Privacy, Then What?; You Just Can’t Hide It.

Privacy: A Point of Departure… Part 1
This series of posts attempts to add something to the discourse on privacy issues, especially as they relate to nonprofit charitable business.

In the nonprofit sector, privacy politics is part of our everyday experience. Between issues of client/patient records confidentiality, donor information privacy, and the issues of crossover between them, this is a damned interesting time to be alive.

The Privacy Debate Has Already Been Won
Or lost, depending on your perspective. Technology removes the “friction” from the wheels of commerce. It also removes natural barriers that have protected privacy in the past. With the Internet it has become much easier to acquire information about individuals that many would like to consider private, personal, sensitive and confidential. They think we’re all in for a terrible Brave New World. You know all that.

I’m here to tell you, they’ve got it all wrong, and they’re trying to sell you a crock.

Privacy statutes are being proposed in every U.S. state. But there is no constitutional “right to privacy,” only a body of case law vaguely supporting an individual’s expectation that privacy will be respected, and some hazy interpretations of the Fourth Amendment that attempt to stretch its meaning (the government should keep its sticky fingers off your personal property) into a privacy right.

It would seem that a storm is brewing between forces of the market on one side, and individual privacy on the other. There’s no firm law that protects you from having your email address passed around, and it looks like they can get away with much more than that. Is this a bad thing? Is it a totally bad thing?

I believe that technologies—not just the Internet, but many others—have already rendered the issue moot. There will be less of what we now call privacy in the future, less and less all the time. But there will not be any overwhelming feeling that we have lost much in the bargain. The reasons why, and the notion that giving up some privacy may not be all bad, are the subject of this rant.

You Are a Node
Not a nerd, a node. You’re a node; I’m a nerd and a node. As a member of the human species, as a citizen of the world, as a member of a family, as an employee or entrepreneur, as a friend among friends, it may seem that you and I are connected with many different networks. But in fact, we are both parts of only one network, two nodes in six billion. (The closer relationships we will call concentrations of consequence, but more on that in a later post.)

All of the many groups that you find yourself part of—your family, your workplace, your spiritual community—are deeply interconnected. Your family seems to belong to you, but, seen from another perspective, several family members may belong to a different group that you aren’t part of. Perhaps that group is called Teenagers, or Buddhists, or Breast Cancer Survivors. Because of this, the intimacies you share with your closest friend or family member are quite likely to be shared with someone else by them, outside of that comfortable little group the two of you share. It is only our limited perspective that leads us to believe that a confidential discussion will not “leave the group.” Seen from other person’s perspective, the group includes others. Others with unknown agendas.

Telephone, telegraph, tell a node.

COMING IN PART 2: The Network Effect; What’s Good For General Motors.

Bail Outs: What About Charities?
I’m old enough to remember the Chrysler bail out. Frankly, I was shocked at the time. How could the government give a billion dollars of taxpayers’ money to a for-profit, publicly traded corporation? Well, here we go again.

The airlines are in deep doodoo, no question about that. 9/11 was a shoe up the butt of an industry that was already buggering itself. Now, predictably, we are asked to bail them out of their own sinking ship. Well, OK, I suppose the airline industry is one of those key components of the economy that we must not allow to crash. And who wants to put all those delightful world-traveling flight attendants out of work?

But what about the nation’s charities, whose coffers are depleted and still draining as a direct or indirect result of 9/11? Are we to believe that the nation’s 1,498,000 nonprofit organizations, employing 77 million Americans---a $1 trillion industry---is expendable?

I mean, if you’re going to keep American Airlines CEO Bob Crandall in crisp new Armani suits, how about a couple bucks for the Boys and Girls Club? Some charities will inevitably go belly up during this ongoing economic crisis, while corporate giants gorge themselves at the expense of the Medicare Trust Fund.

And about airline security… I know it’s the democratic thing to do to nationalize airport security, but I have a problem with it unless the airlines foot the bill. Is the government paying for the metal detectors at Planned Parenthood? Nope.

The simple and inescapable fact is that this is just another case of corporate welfare. The sacred American Corporation is digging its teeth deeper into the government tit and pushing aside the runts.

What Can We Do About It?
Here’s an idea: Complain like hell! Go to Public Citizen’s Elected Officials Page and get your congressional representatives’ email addresses, and tell them you’d like them to put a moratorium on corporate bail outs unless and until congress appropriates new dollar-for-dollar funds to community building initiatives, long term care for the elderly poor, medical insurance for children, education, and whatever else floats your boat. If you like, give them the link to this rant, too (at the bottom of the post).

And while you’re at it send email to Donald Evans, Secretary of the Department of Commerce (devans@doc.gov), and tell him to slap the pigs away from his trough. Then, lest we forget Bob Crandall’s favorite watering hole, the Department of Transportation, drop Norman Mineta a line at dot.comments@ost.dol.gov, too. And don’t let George do it to you without so much as a kiss; ring his chimes at president@whitehouse.gov.

Remember the old bumper sticker that goes “Wouldn’t it be nice if the schools had all the money they needed, and the military had to hold a bake sale?” Substitute the corporate charity of your choice.

Nonprofit Software Can Suck II
This is a follow-up to my earlier post about nonprofit software costs. This time I'll talk about quality.

First off, any software you buy needs to make it easy to add new records. When you are adding a new person or company to your database, the software should have some kind of "auto population" feature that automatically fills in parts of the record that are almost always the same for every record, like the city and state in the address, and classification information, like "donor" or "prospect." this makes it MUCH easier to enter records. If this is fundraising software, the same thing applies to when you are entering gifts. Each gift entry should automatically fill in most of the gift record for you.

Also, be sure that the software you buy has lots of "Wizards" that make complicated stuff easy. In general, there should be a Wizard or some form of internal intelligence to lead you through every different type of record entry. If this is software used by program staff, such as client services software, the software should keep users from accidentally entering bogus data (called "data conformation" or "data validation"). Otherwise your records will get filled with nasty useless junk real fast.

Make sure the software has a "tune up" utility that backs up, repairs and compacts your data for you. All database software has the common issue of data corruption, because database files are huge. One single file can be tens of megabytes in size, and that makes it easy for hiccups to happen. Good software will provide an automated means for cleaning up your database, and for making periodic disk backups that you can restore from in case of a terrible accident. This should be in addition to your regular tape backups, because restoring your critical database file shouldn't rely on a tape system that may or may not make it easy to do a "selective restore."

CRITICAL: make sure that the software has an easy-to-use security system that lets you identify specific users that have permission to access the database. While this seems obvious, some packages actually don't have security, and others make managing it very complicated.

A word about data retrieval... while most commercially available software for nonprofit organizations offer a means to query your database to find records that meet certain criteria, most of them are very hard to use. Look for a system that doesn't force you to use a separate report generator (like Crystal Reports) to build reports on your data. Also, find out if the software you are planning to purchase can let you do data retrieval with using "computerese" like AND, OR, EQUALS, GREATER THAN, etc. That kind of querying can be hell for non-technical users. At least one nonprofit software company that I know of makes all of their stuff very easy to query without any technical knowledge.

Got any other suggestions or rants about nonprofit organization software? Glad to post it.

Software: Solution or Sucky?
In my previous post I made a strong plea for nonprofit organizations to get with the program (computer programs, that is). I feel obligated to recognize the caveats. Software can suck.

Let's take a look at one of the really big problems first: Money. Software can be expensive. The up-front cost can be crippling to a smaller organization. For instance, Blackbaud is a company that makes a fundraising software package, The Raiser's Edge, that can cost upwards of $20,000. Please look around before you buy this "market leader." There are plenty of other less expensive solutions.

Then there are the ASP (Application Service Provider) deals, where you "rent" software that only works through your web browser. That's actually a great idea, in theory. But as of this date there isn't a single ASP fundraising or client services application in existence that is anywhere near as good as even the inexpensive "shrink-wrap" stuff. With ASP software, you pay-as-you-go, making monthly or quarterly "rent" payments. These can add up to a whole lot more than just buying the good old-fashioned shrink-wrap software.

Let's name names and compare some competing systems. For simplicity's sake, I'll just stick to fundraising/marketing software here.

Compare The Raiser's Edge and The Mint FM. Raiser's Edge is made by Blackbaud, and The Mint FM is made by Lanthropy (by way of disclosure, Lanthropy is this site's sponsor). It's hard to compare the two easily, because you buy Raiser's Edge in pieces---the basic software costs upwards of $7,000, then you add on the modules that you need for membership, events, campaigning, tributes, etc. Lanthropy packages all of these pieces together in the basic product, so we'll compare equivalent packages: Raiser's Edge, with basic training will set you back between $13,000 and $20,000, depending on special deals and options, while The Mint FM with training will cost around $3,500.

And don't forget the ongoing cost of your "Annual Maintenance Agreement" which entitles you to ongoing customer support and free upgrades. Raiser's Edge will run between $2,000 and $3,000 annually, while The Mint FM will run between $600 and $700 annually. Huge difference.

In yet another hat tip to our sponsor, lets compare The Mint FM to an ASP product called eTapestry. You use eTapestry through your web browser and pay a monthly fee. For four users (what you get the basic Mint FM package), eTapestry will charge you around $250 a month. Over two years that's around $6,000. While you save a little on entry cost, you get stiffed pretty quick. What's more, in my humble opinion (having used all of these products), eTapestry falls into the sucky category, for now at least. They are making some strides in improving their software, and they do bear watching. They also offer their software for free if your organization has less than 1,000 records, which is nice, except I don't know of many organizations with a prospect list smaller than 2,500. (There's no limit with The Mint FM or Raiser's Edge.)

There's another company that bears consideration (sorry, sponsor). Campagne Associates makes a nice little package called GiftMaker Pro that, with training, you can get for between $3,500 and $5,000, depending on options. GiftMaker has been around for eons and is one of the best selling packages. I've used it and find it just barely acceptable. The data retrieval capabilities suck, and I find the user interface cumbersome. It also lacks many of the features of The Mint FM (but then so does The Raiser's Edge). My pick is still The Mint FM.

If you've got a favorite nonprofit software package, reply to my email below and I'll post it here. Just no advertising please. I'll post fair commentary and anything with useful information.

Be careful out there.

Time for Accountability
No choice in the matter. I had to start a blog. When the flap started about the Red Cross spending funds designated for the New York disaster relief effort on other things, my blood began to boil. Not because I believe the Red Cross did something terribly wrong, but because there’s a much larger problem here, and I’ve seen it in every nonprofit I’ve worked in except one.

Here’s the problem. How can any charity be sure that the money designated for a specific activity is actually spent directly on that activity unless they track the damned funds? Truth time. Almost nobody is doing this very well. I have worked for three organizations that did not even use fund accounting, so they simply could not do it. Impossible. No way. As a consultant, I have worked with innumerable others who also did not use fund accounting. Keeping an Excel spreadsheet somewhere in accounting with some numbers on it doesn’t do it. You have to assign incoming dollars to a fund (not just a revenue account) on the books, and charge expenses off against that fund as they are spent. Messing around at the end of the fiscal year to try to make it all wash is dishonest at best, and fraud at worst.

Can’t help the harsh words. Angry with me? Fine, reply to me at torrentsnightingale@hotmail.com. Hell, let’s talk about this and get it fixed. NPOs have no more right to play funny business with the books than any other corporation. Did I hear someone say, “Maybe less?”

Spending that gift on something other than exactly what it was donated for is like deliberately sending a customer the wrong product. It’s more than just a bummer when it’s charity. It’s dicking with people’s hearts, not to mention the public trust. I’m not suggesting that the IRS ought to start yanking 501’s willy nilly. Nor should boards of directors (who, let’s face this fact, too, often care to know far less than they should) start raking management over the coals. Why not just teach finance personnel how to do it right? Need more staff? Hire them! Need more money to hire more staff? Tell the donors! Yank that weepy kid’s face off that appeal envelope and use the space to tell donors the truth: It costs money to run a business right. Some of the money we need is for administration, equipment, space and professional development. It’s not like it’s a secret.

Don’t you wonder sometimes if donors really believe that your people work for free? Christ! Maybe they do! Shame on us! Donors who respond to stupid Police Athletic League phone calls, buying 25 tickets to send crippled children to some bullshit circus? Puh-LEEEEZ! These fraudulent outfits couldn’t get away with that crap if donors were better educated. I say we should make it harder for the cons by teaching our donors what it really costs to run a nonprofit organization. Stop bragging about how little of your organization’s budget is spent on admin! This is nothing to brag about if your admin sucks.

I had one good teacher, and it wasn’t in school. It was the executive director of a Tulsa, Oklahoma organization who was pretty tough on the details. But he made damned sure that we could track the bucks. I suppose his healthy fear of a federal single audit had something to do with it. But, what’s that!? If your organization doesn’t have to do the single audit, suddenly you’re off the hook? Bullshit. If you have any pride in your work, you’ll figure out how to track every dime down to the actual service you provide to the community, no obfuscation, no shuffling, no whining “that’s too hard.” How can fundraisers be expected to face their donors when the finance people and the E.D. and the board are lazy and playing games to gitshit2fit?

Maybe you think I’m wrong. Maybe you have yourself convinced that it’s OK to ask for money by packing that letter or grant request with half-truths, just talking about the services and not giving equal time to the business costs. OK, so you don’t lie outright. But it’s a lie just the same. And a HUGE missed opportunity to bring donors up to speed on the ugly truth. We live with a government that can’t be bothered to provide basic care for its people, so the burden falls to nonprofits. Americans are fond of patting themselves on the back for their charitable giving, and then turn right around and refuse to pay taxes to pay for education, healthcare and subsistence for the poor, and add insult to injury by refusing a decent minimum wage. That stinks.

Let’s tell the truth. Personnel costs are SUPPOSED to be high! These people do the work that most Americans consider below them. So, if they are all doing it out of love, money shouldn’t matter, right? They should have to struggle to keep from getting thrown out of their homes, have no money to give their kids for college, and borrow to the teeth just to make birthdays and Christmas and a little common creature comfort happen for their families. That stinks, too.

Now we’ll have to listen to all the media bitching for weeks about how the Red Cross (and then probably the United Way and anybody else they can sink their teeth into) is diverting money from disaster relief just to keep the lights on, build needed facilities, and pay their people. So what will the outcome be? Hand-wringing by the charities about how the media is unfair? Um… it’s the truth, isn’t it? This isn’t going to be easy. But we need to bite the bullet and use this opportunity to tell the American people that you can’t starve charities’ legitimate spending on business costs. We’ve done this to ourselves by not being straight with our donors. We practice slash-and-burn fundraising—just get the money by yanking heart strings and blubbering about how much good your dollar will do (no details, just the sales pitch), and then do it again next quarter and next year, until it’s a habit. “Your gift of $47 dollars will provide umpteen crayons for northside kindergarteners.” No it won’t! It will BUY 25 packs of crayolas at a buck apiece, and PAY for 2% of the costs of this mailing and PAY 0.006% of our accounting, administrative services, management and fundraising personnel salaries and PAY 0.011% of the costs of having our building, and PAY a little tiny piece of everything else. Now, I know that won’t be an easy sell (and it makes for a very messy letter), but we need to find a way to do it.

The technology exists to make it possible to track every dime from the donor’s gift all the way to the service rendered. The technology also exists to quantify outcomes in dollar costs. This is a no-brainer. How about, instead of sending yet another one of those goofy newsletters, substitute a mailing to each and every donor with a precise accounting of her giving? Tell her that her $75 was applied to the Indigent Care Fund, and was spent on seven patient packs, eleven intake files, 13 minutes of electricity for the infant acute care unit, seven minutes of nursing care and 0.006 seconds of physician services. Uh-huh! Truth hurts, don’t it! Suddenly my little gift seems like TOO little. Well, damn it, IT IS! We’ll help her work on that.

GOD, I wish someone would just straighten this crap out once and for all! It’s not rocket science, it’s just accounting, training, tools and the will to do it. It won’t cost anything like this most recent screw up will cost, and pales in comparison to what all the ongoing screw ups keep costing us all.

What’s the problem with treating donors like they can read and think? I’ve reviewed grant requests sent to some pretty sophisticated funders, and some of those applications were about as stupid as the worst Boys Town letters. They must have thought we were as dumb as dirt. Not to mention gullible. It’s plain stupid to send bullshit to a foundation, but it’s downright immoral to spew it out in bulk to the general public.

OK, I admit that I have been guilty myself, on occasion. Under pressure to just get the letters out the door and the checks in the mail, it’s easy to slight higher principles. But imagine a different environment, in which the fundraiser had access to real, uncooked, up-to-the-minute outcomes on a cost basis. I know that all of us would be using that stuff, and feeling a lot better about it. If we can’t get it from the top, maybe we can get it from the bottom. Maybe we as fundraisers should conspire with our program colleagues to come up with a better system, whether or not the E.D. seems interested? There’s a trick I learned for getting around a sleepy finance department, whereby the program managers and I came up with a coding system that they would use to keep records of client-by-client expense based on a “pseudo-allocation.” I coded my donors’ and foundations’ gifts into “funds” that the program managers and I “allocated” to their departments. We substituted our “fund” coding for the official chart of accounts, and then we ran up the fund numbers into the “real” accounts just before reporting them to finance. I know this seems really stupid, but it was all we could do under the circumstances. I hope your situation isn’t as dire. Fund accounting and meticulous costing is what it takes to be able to really tell donors what you need their gift for, and then to reinforce the relationship with real reports. They LOVE this way of doing things, and I’ve got the testimonials to prove it. Of course, you’d have to have some pretty dedicated program managers to run such a Rube Goldberg covert operation. So my advice is to fire the finance department and hire real accountants. And fire the E.D., too, if he’s equally out to lunch. Demand what you know you need to do this right. And buy some real computers, for crysakes, and get some people who know how to use them. Paper is dead, man!

Don’t tell me this is impossible. “My! If we had to do this, it would cost a FORTUNE!” Wake up! The technology is here, and so are the smart organizations that are going to be using it. It’s what the world is coming to. Donors are getting feisty. Foundations are getting nitpicky. Younger donors are going to expect accountability on a scale we can scarcely imagine. Wake up and smell the cappuccino. So what if it does cost a fortune? Who knows where the fortunes are better that we do? Tomorrow’s donors and foundation trustees will be more demanding that the old money was. Hell, they already are! Have you taken notice of all the talk about outcomes assessment? This is just the tip of the iceberg.

This is turning into a manifesto, I guess. And a call to action. If you’ve bothered to read this far, these words must have had some meaning. Write me back. And use a nom de plume to keep your job if you have to. (Obviously I did. Even the dumbest bean counter in the sloppiest NPO on Earth wouldn’t name his kid Torrents Nightingale.) Here’s a link to Hotmail.com where you can get a free and more-or-less anonymous email address. Just remember to be dishonest when giving them your “real” name (and may this be our last dishonest act in this business).

It’s the twenty-freaking-first century. Time to kick some butt. Time to Make a Freaking Difference. Change begins at home, baby.

I’ll be adding fuel to the fire, and I hope you’ll pop by my blog again. Welcome to the maelstrom!