Working together towards a generosity ecosystem

We keep hearing there is a crisis in the nonprofit sector. Here is but a sample of a few articles and news stories that have come out recently:

• Sector still has a talent crisis, says Children's Society fundraising lead
• MIT scandal exposes a crisis of ethics that all nonprofits must fix
• Fundraising, number of donors plummeting

These are issues that get to the very soul of what it means to run a mission-driven organization. Treating your employees fairly, running your organization honorably and with ethical intent, and engaging your stakeholders in a way that makes them feel part of the mission.

Yet over and over and over, I am seeing thought leaders and think pieces that point the blame at the board of directors or the executive directors or the development staff or lack of training or a so-called embrace of scarcity as the reason for why we are in this mess in the first place.

Folks, we're blaming fundraising climate change on plastic straws.

We need to rethink how all these different pieces fit together. An ecosystem is a large community of living organisms (plants, animals and microbes) in a particular area. The living and physical components are linked together through nutrient cycles and energy flows.

All these issues, these solutions - they don't live in a vacuum. I'd like to lay out what I see as some of the fundamental structural issues affecting our work as well as chart a path forward toward what I'm calling a generosity ecosystem, in which the infrastructure and individual components of everything we do work toward a greater common goal of creating social good in the world.

Brief Sector History

Tried and true methods of fundraising that we try to educate folks about have been around since the 1900s when Charles Sumner Ward and Frank L. Pierce launched their paradigm changing approach to benefit the YMCA. Time limits on campaigns, omni-channel marketing, celebrity endorsements - these created a template that would be adopted and built upon that is still leaned upon today.

And that is an important point - history is a series of events that has an ebb and flow that often repeats itself. Yet there are massive institutional elements that have slowly been put into place by social movements that go well beyond our sector. As detailed in the powerful book The Tyranny of Kindness, "Charities have been powerful since they first popped on the scene during the middle of the nineteenth century. Run exclusively by men, they were originally premised solely on the negative - stopping behaviors they believe to be inbred and causally connected to poverty."

If we go back to the period during World War 2 and toward 1969, there became a deep intertwining of the role of government and the private charitable sector, leading to things like the establishment of the IRS code around 501(c)3 organizations as tax deductible entities as well as the ability for certain designations to eventually lobby for specific causes directly to legislators.

If we forget the history of our sector, we will be forever damned to repeat the mistakes that have built up over years and years of nonprofit professionals simply implementing things to survive the day.

Technology Takes Control

Back in 1981, a self taught computer programmer named Anthony Bakker was bored with his job at a bank and saw an advertisement by the Nightingale-Bamford School in NYC asking for a computerized billing system. He responded, got the job, and realized that other schools were interested in similar technology. This was the founding of Blackbaud, the largest and most influential nonprofit technology vendor in the world.

Entire books can and should be written on the history of nonprofit technology itself, but one thing has become clear - this is big business. The total available market for nonprofit technology is several billion dollars and has led to a dizzying amount of options for nonprofits to choose.

Yet the core basics of how we structure and think about revenue has basically been unchanged since Bakker first started creating what would eventually become The Raiser's Edge. That is software that I was trained on and it helped shape how I would implement fundraising best practices that I read about from the likes of Roger Craver and Jim Greenfield.

As these technologies proliferated and more options entered the market, the standards at which we judged engagement with our donors and other types of stakeholders changed. We started seeing more and more resources on choosing the right technology for your organization and I continue to see the same questions about "What donor management system" or "what auction software" or "what online form builder" should I choose in forum after forum post.

Yet we are adrift and there is muddled ability for us to get an answer as vendor after vendor puts out guides and best practices and whitepapers that flood us with information but provide us with little clarity on how to move forward as a cohesive whole. We put our technology and answers and silver bullets and fundamentals in small or slightly larger boxes that then get moved into the foundations of our organization but never get unpacked together.

These structural decisions are made in a vacuum due to lack of understanding, clarity, cohesive planning, or just plain indifference and have had an amazing ripple effect throughout our industry that has led to the issues cited in the beginning of this article. Staff are tired, donors are disinterested, executives are looking for answers, and we all lack a common language to bring us all together.

When I say we need to stop blaming fundraising climate change on individuals, it is the very structures that the technology sector has created in resource management that I think needs to be primarily addressed before we can move forward.

Towards a generosity ecosystem

It should be noted and stressed that this is not laying the blame at the feet of one vendor for creating structural inequality that has greatly affected our ability to manage this crisis. If we are going to step up, it will take all of us to own our own respective issues and address them head on. I do not have all the answers but feel we can begin to work towards creating an industry changing paradigm shift when it comes to charting the future of philanthropy.

Start looking at institutional issues, not individual problems

I've spoken about this before, but there needs to be a complete tone shift by the thought leaders in our space when it comes to the labor force in our industry. By blaming our issues on individuals, it ignores a larger structural issue of ignoring proper professional training on how to run a mission-driven organization correctly. As I've heard someone opine, it is easy to start a nonprofit but hard to close one down.

While I absolutely agree that we need to stop focusing on degrees as the core requirement for getting a job in our industry, there should be a concerted effort to prioritize professional development that is both affordable yet also tied to rewarding the labor force for that investment as well as the organization itself. And we need to take extremely seriously institutional inequalities that exist and should support initiatives like AFP's Women's Impact Initiative and other research and projects around overall diversity, equity, and inclusion in our sector.

On the technology vendor side, there needs to be a concerted effort to ensure that job applicants and new employees can achieve baseline knowledge of the full scope of systems that are in place at the organization. Policies and procedures guidance, free training, and affordable deeper dive and support packages need to become the norm. When I worked at my job before my current position, I cost my organization thousands of dollars in training. That needs to stop and one of the things I'm proud about is that we've made Neon One Academy a completely free and open platform for anyone to get certified in. By democratizing access to information and resources, we will ensure that our labor force is informed from the ground up when developing into fully supported professionals in our sector.

Start being realistic about where revenue is coming from

A new resource by the National Council of Nonprofits did a deep dive on 990 data and found that the vast majority of revenue for nonprofits still comes from sources other than individual fundraising or corporation donations.

As history has shown, relying on government funding for our survival is going to be an unreliable path forward, but we also need to start breaking down the walls between our respective revenue streams. A concerted effort should be made to adopt resources and guidance like the Unified Chart of Accounts to ensure that we are fully aligned and understanding where profits and losses are coming from.

Technology vendors need to focus more on ensuring that nonprofits can have full financial transparency in their operations, with a better focus on easy to implement tools around reconciliation, batch management, check deposit, credit card and ACH withdrawals, and revenue projections around all funding, not just donations. Grants, program revenue, DAFs, matching gifts, and more need to be centrally understand so an organization can be armed with all the information needed to make important decisions about headcount, program investment, and more. That is why I was so excited when we rolled out NeonPay as the first step in our technology ecosystem in creating a unified space for getting a clear picture of finances.

Start making the technology easier to manage

Too. Much. Stuff. There are way too many options in the market today but from personal experience I can guarantee that the vast majority of the developers are unfortunately making decisions based off their immediate understanding of the product they work on and not the larger impact things may have on the organization's data management, hygiene, and financial projections capabilities.

We don't have enough conversations about the impact of data coming in and out of our respective ecosystems. That is why I'm encouraged by initiative's like Microsoft's Common Data Model for nonprofits but we need to take a step further and curate this for the average nonprofit where it is utterly seamless. We at Neon One are making great strides in putting this into practice, but as an open ecosystem we need to be vigilant in embracing that not everyone will use our technology but things must be made easy to interface between our software and services. That is why we have made a commitment to research, align, and be open to discussion with all vendors on how all our technology can work together.

As we create our own internal standards for data, we are laying out how the most used data models interface, align, or conflict and are making practical notes and considerations that can be used to help organizations make the right decisions when it comes to simple things like household and address management, what data to focus on, and key metrics. There is no reason to reinvent the wheel, which is why Neon One has embraced the fullness of AFP's Fundraising Effectiveness Project and the Key Performance Indicators recommended by that initiative that has brought together vendors like us, Bloomerang, and DonorPerfect.

Start embracing change but not lose sight of the mission

"Things won't change" is the most dangerous statement that we can internalize. Life is full of changes. Changes in the seasons, in our body composition - the very thing we cannot control or stop is time. And with time, comes change.

There are major shifts already at play in how humanity communicates with each other. Our sector needs to embrace that while core principles of relationship building, focusing on the fundamentals, and concepts of donor centricity are vital and at the key to what we all do, the ways in which we interact are shifting and we need to adapt or die. We need to also chart a path that is distinct and different from the for-profit sector, building solutions unique to a true generosity ecosystem.

Taking the above recommendations to heart will ensure that this change is guided in the right direction. Building a generosity ecosystem is difficult and in some ways slow, some ways very fast. We also always need to keep our eyes focused on the forest in that if we are to truly succeed in redefining the future of philanthropy, it will be a future that is predicated on hope, inspiration, community building, open dialogue, intolerance for the intolerant, and an embrace of ethical decisions and interactions with each other. Technology platforms have big questions that need answering but I am proud of the work that Neon One has put into articulating our own vision through our ecosystem charter.

Final thoughts

I've been wanting to write this for some time now and it only touches on the iceberg of issues and ideas that I think we need to address. No matter what, it is going to be important to listen, be open to new ideas, while also using a combination of data as well as heart and creativity to build something beautiful. Yet I see so much good and excitement in the world today - let's embrace that.