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ASU Lodestar Center Blog

Research and recommendations for effective, day-to-day nonprofit practice from ASU faculty, staff, students, and the nonprofit and philanthropic community.

Friday, April 1, 2022

Trending up

As nonprofits rely heavily on donors to provide their revenue, the question becomes, how do prospects determine an organization’s donation-worthiness? What criteria do they use to make these decisions?

Motivations for their giving include receiving tax deductions and understanding the impact their investment is making. Studies show that donors ask less about where their money is spent and more about the impact their donation is making. But nonprofit leaders do not always know how to communicate their organization's impact to retain donors and attract new ones. So, how can nonprofit leaders effectively communicate impact to stakeholders?

The problem with ratios

Charity watchdogs are a type of nonprofit that publicly share information about charities, including reviews and ratings. They often use financial ratios to measure a nonprofit's impact, but these do not most accurately showcase a program's efficiency. High program ratios may be an attractive number to management, donors, and the public, who might mistakenly see these as evidence that an organization's revenue is going towards accomplishing its mission by providing services.

Storytelling as a solution

Evidence of impact comes through testimonies. Communicating what a nonprofit does through…

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Wednesday, March 23, 2022

Venn diagram graphic

Workforce diversity is a significant concern for nonprofits with the recent growth of diverse populations in the U.S. In 2017, 87% of the U.S. nonprofit workforce and executive leadership identified as white.

Nonprofit board members in the U.S. also lack demographic, racial and ethnic diversity with less than 20% identifying as people of color. Nearly 30% of nonprofits report they have no board members who identify as a person of color. Consequently, nonprofits continue to have difficulties applying diversity initiatives which affect marginalized, underrepresented individuals’ outcomes, access to needed services, and trust. When nonprofit employees, leaders and their boards are not reflective of the communities they serve, they jeopardize mission attainment and the implementation of ineffective strategies to address social issues.

Research indicates workforce diversity is the cultural or demographic characteristics that makes employees unique, which is needed to effectively confront social issues and achieve social good. According to Nonprofit HR's 2019 Nonprofit Diversity Practices Survey results, workforce diversity is the purposeful “recruiting, hiring, developing, and retaining” of employees who have divergent “backgrounds, educations, and experiences,” ensuring employees and leadership are reflective of the…

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Wednesday, March 16, 2022

Unbalanced scale

There is increasing recognition that philanthropy is founded upon antiquated principles and values of the wealthy elite.

Rockefeller’s and Carnegie’s philanthropy continues to remain the main model for funding nonprofits, yet with increasing diversity (over the next two decades minorities will comprise more than half the population) these models based on white dominant norms will become increasingly irrelevant. Fundraising practices reflect the divisive, destabilizing and limiting function of today’s philanthropy, which is often centered on the needs and wants of white donors. Centering donor needs, rather than community needs, limits potential for better community solutions that are innovative and relevant.

The current fundraising model is donor-centric fundraising, which is based on building relationships and creating tailored approaches to engage donors in giving. While donor-centric fundraising has effectively raised funds for the nonprofit sector, there are challenges to using this approach.

Donor-centric fundraising…

  • Fails to engage donors who identify as Black, Indigenous, and People of Color (BIPOC), therefore missing important parts of the community.
  • Generates scarcity-mindset, competition, and is anti-collaboration.
  • Has messaging that appeals to donors but encourages poverty porn, or imagery that entices donors and elicit strong monetary responses, and reinforces stereotyping.
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Wednesday, March 9, 2022

Puzzle pieces coming together

The need for collaboration amongst a diverse array of community members has become a recognized focus within the nonprofit sector. For those involved with nonprofit resource development, there has been an obvious redirection of financial gifting to Black, Indigenous, and People of Color (BIPOC) - especially BIPOC-run and BIPOC-serving agencies. This is a step toward equity, but what nonprofit agencies are already well-equipped with the necessary resources? What obligations do white-led nonprofits hold for working with minority community groups and nonprofits in their communities?

Because “relatively high poverty neighborhoods [have] fewer quantities of nonprofit social service providers and…individuals residing in these neighborhoods [have] limited access to the providers that [are] in their communities,” the importance of collaborating between nonprofits serving minorities becomes all the more imperative to building better community.

Working in a white-led nonprofit agency that serves seniors has led me to question what efforts can be taken to improve our outreach to diverse neighborhoods, and I have been connecting with others in my community to inquire what they are doing to intentionally engage with members of minority communities. Diversity is essential because it provides us with insights from multiple perspectives and helps to ensure that we do…

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Wednesday, March 2, 2022

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Is your organization struggling to keep key employees around? You are not alone. Nonprofit employees are leaving at a rapid rate for a variety of reasons, including low pay and benefits packages, lack of long-term career opportunities, poor work-life balance, and even faulty leadership.

Nonprofits thrive when their employees are on board and passionate about the mission. Employees should be recognized for their hard work and dedication, and need to be provided with a sense of value in order to remain motivated and loyal. There are many ways to implement this type of culture in your organization, but here are five ways to start.

1. Revaluate your budget

Make room in the budget for all employees. Advocate for the employees that work tirelessly for the organization. When looking at the budget, ensure that employees are being paid well and are being offered other types of compensation, such as bonuses for exceptional performance; perhaps an implemented paid vacation time could provide incentive for greater work performance and raise appreciation toward the organization.

Changing the narrative about overhead funding with your donors is another area to look into. It is essential for organizations and nonprofits to understand that in order to produce the expected…

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