Brave, bold and daring … the new US group challenging charities’ bad press

Billboard ad defending charities. Pic by Dan Pallotta

Billboard ad defending charities. Credit: @danpallotta

This article originally appeared in The Guardian

“Braver, bolder and more daring than anything the [US] charity sector has at the moment.” That’s how seasoned US fundraiser and nonprofits advocate Dan Pallotta describes the Charity Defense Council (CDC), the organisation he founded which recently launched its first campaign.

Pallotta feels that umbrella organisations such as Independent Sector and Council on Foundations have legitimate roles, but believes the US sector is “missing some functions”. Established in 2013, CDC’s mission is to defend the work of US charities by countering negative press, positively promoting the sector and providing a legal defence fund.

The Massachusetts-based CDC threw its first punch as a charity “anti-defamation force” in August, with the issue of a media advisory criticising US news organisations ProPublica and NPR over their investigation of the American Red Cross’s reconstruction activities in Haiti after the 2010 earthquake.

The ProPublica/NPR story claimed that the charity’s excessive overheads and lack of expertise had produced disappointing results in Haiti. CDC argued that the overheads were justifiable and alleged that the reporting was flawed.

CDC president Pallotta says regular publication of advisories – at least 20 a year – will be a big focus over the coming months. “We didn’t figure NPR or ProPublica would issue an apology,” he says. “But it’s about creating a voice for CDC so people begin to respect it.”

With a 21-strong advisory board drawn from nonprofits and sector consultants, CDC is currently seeking its first executive director who will be expected to raise a $1m (£660,000) annual operating budget in the first year through grants, membership and individual major gifts.

The new hire will also oversee an extension of the ad campaign CDC launched earlier this year to defend charity overhead costs. Using donated billboard space across major roads in the Boston, Massachusetts area, the poster campaign stated: “Don’t ask if a charity has low overhead. Ask if it has big impact.” The campaign rolls out in New York and Washington DC later this year and will feature “overhead heroes” (charity employees) explaining why their costs make a difference to their cause.

[tweet: https://twitter.com/danpallotta/status/552251969315028992%5D

Pallotta has long-argued that overheads are a necessity in the nonprofit sector and not a waste of donor dollars. His for-profit events company, Pallotta TeamWorks, created the Aids bike ride and breast cancer walk fundraising events, which netted charity clients $305m (£201m) over nine years.

But the company closed in 2002 when sponsors wanted to distance themselves because, as Pallotta says in his 2013 Ted talk, “we were being crucified in the media for investing 40% of the gross in recruitment and customer service and the magic of the experience”.

Tessie San Martin, president at development agency Plan International USA, welcomes CDC’s mission to educate about overheads. “Nonprofit spending on training and IT is a fraction of what for-profits spend in these two areas,” she says. “Is it because nonprofits do not need as sophisticated an investment in these and other related areas as for-profits? Of course not. It is because of the misguided belief that a low overhead is somehow virtuous and a high overhead is a sign of waste.”

CDC’s defence of competitive remuneration is something San Francisco-based resource development consultant Jill Linwood considers to be vital. “Here in the Bay Area, we are competing for some of the same folks that consider working for a great salary in tech,” she says. “We need to be able to offer a wage that is more than a quarter of the corporate offer.”

Andrew Watt, president and chief executive of the Association of Fundraising Professionals, which represents over 30,000 members worldwide, admires CDC’s aim of getting “top-level issues out there” but is “a little dubious” that adverts can influence mindsets unless individual charities are proactive, saying: “When there’s a negative issue, it’s a real opportunity for the charity to educate the public about how they work.”

In the UK, public concerns about aggressive fundraising techniques and excessive overheads have continued to dent confidence in the sector, and the recent government-commissioned review of fundraising has proposed a tougher regulatory regime.

Like the CDC, the recently-formed Understanding Charities Group (UCG) hopes to change public opinion. Coordinated by CharityComms and NCVO, the cross-sector group of charities, umbrella groups and agencies has devised a “theory of change” involving the public and the media. Activities include a closed LinkedIn group to act as a rapid response unit to media stories and a plan to improve generic charity coverage across a range of media.

Alan Gosschalk, fundraising director at Scope and chair of the UCG, says that, unlike the CDC, the UK group is not about the sector defending itself from attack and hopes to emulate the work of Imagine Canada, a 1,250-member organisation that supports and promotes charities. He says: “We want to enable charities to be more positive and on the front foot about what we do and the amazing things we achieve, rather than fighting off attacks.”

Doing the funny business: why Red Nose Day USA paid off

RED NOSE DAY -- Season: 1 -- Pictured: Seth Meyers onstage at NBC's

Red Nose Day host Seth Meyers onstage at the NBC telethon (Photo: Virginia Sherwood/NBC)

This article originally appeared in The Guardian

Launching a national fundraising event in a country of 320 million people and multiple time zones may seem like an ambitious gamble. But UK charity Comic Relief hopes the first Red Nose Day USA, which culminated on 21 May with a telethon raising over $21m (£13.6m), will prove to be worth the risk.

Red Nose Day USA builds on the success of its UK namesake which, since its launch in 1988, has raised more than £1bn to help 50 million people in the poorest communities at home and abroad.

The biennial Red Nose Day UK fundraiser encourages people to “do something funny for money” in their school, community or workplace. It concludes with a live TV show and telethon on BBC1, which in March 2015 raised over £78m and attracted 8.5 million viewers.

Around 3.2 million viewers watched the inaugural Red Nose Day USA’s slick, three-hour broadcast from New York featuring live comedy sketches, musical performances and pre-recorded acts.

The US show also included pre-recorded celebrity reports from the field (Jack Black in Uganda and Michelle Rodriguez in Peru) and household name hosts (Seth Meyers, David Duchovny and Jane Krakowski) to urge viewers to donate during the show.

Twelve non-profit organisations in the US and worldwide will benefit from the first Red Nose Day USA, from Boys & Girls Clubs of America to international vaccination organisation, Gavi.

Red Nose Day USA is run by Comic Relief Inc as an independent sister organisation of Comic Relief UK – the charity set up in 1985 by screenwriter Richard Curtis in response to famine in Ethiopia.

Comic Relief innovation director, Amanda Horton-Mastin says the idea of a US Red Nose Day had been percolating for some time: “We share the same language, the US is an amazingly generous population and we have a lot of shared comedy.”

Campaign challenges

Given the scale of the US, it was essential to have an effective network partner so the team was delighted to secure NBC, which worked with its affiliates to promote the event locally. “With the BBC and two or three media partners you can reach everyone in the UK,” Horton-Mastin explained. “The fragmentation of the media [in the US] is a massive challenge.”

Another challenge was building brand awareness in a country where red noses mean Rudolph, not raising money: “Nobody knew us – we were starting from zero awareness.”

Walgreens – the pharmacy chain with 8,232 outlets across the US – was chosen as exclusive retailer of the campaign’s trademark red noses and other select products from vendor partners such as Mars, Kraft and Coca-Cola. Sales of these items, combined with fundraising by Walgreens’ employees and customers, raised over $8m while embedding the campaign at community level.

Bringing a new fundraising brand to market within just a few months meant that social media was a crucial element of the campaign. NBC created a dedicated app which enabled users to add a red nose image to a new or existing photo, then share on Facebook, Instagram or Twitter. Building on this, Red Nose Day USA partner M&M’s asked people to make someone laugh then share their story with the hashtag #MakeMLaugh, in return for a $1 M&M’s donation to Red Nose Day. The campaign hit its $250,000 target and raised $1.25m from M&M’s.

Additionally, the Bill & Melinda Gates Foundation pledged $25 for each photo posted on Twitter or Instagram by 1 June with the hashtag #RedNose25, up to a total $1m.

RED NOSE DAY -- Season: 1 -- Pictured: Gwyneth Paltrow onstage at NBC's

Gwyneth Paltrow makes an entrance at the Red Nose Day telethon (Photo: David Giesbrecht/NBC)

Content is king

Creating a rich source of newsworthy content that could go viral was another priority. “Content is king so we wanted to make the entertainment really strong,” Horton-Mastin added.

Telethon night highlights included a Game of Thrones mock musical by Coldplay that has attracted over 7m hits on YouTube, The Voice winner Sawyer Fredericks’ rendition of John Lennon’s Imagine and an acoustic duet by Ed Sheeran and Kermit the Frog of the Muppet Movie song, Rainbow Connection.

The strategy appears to have paid off. According to Nielsen’s Twitter TV ratings – which map the social conversation around a telecast three hours before and after the event – four million people across the US saw 149,000 Red Nose Day tweets, making it the third most social TV event of the week, behind only the NBA Draft Lottery and David Letterman’s final Late Show.

Other countries including Iceland, Finland, Germany and South Africa have hosted their own events based on Red Nose Day or Sport Relief, usually run under licence from Comic Relief. In Australia, a Red Nose Day has existed since 1987 as the main annual fundraiser for SIDS and Kids, a national charity supporting families affected by infant death. Horton-Mastin said Comic Relief will continue to look at opportunities to expand the brand where there is a giving culture and a TV culture.

In the meantime, Horton-Mastin hopes Red Nose Day USA will become an annual event: “We’ve been very optimistic and have huge aspirations, because our mission is about driving positive change using the power of entertainment.”

Who are the future philanthropists?

Experts suggest big donors should be moving towards an entrepreneurial approach to giving that ‘disrupts the status quo’. Photograph: Reid Wiseman/Nasa/Handout/EPA

Experts suggest big donors should be moving towards an entrepreneurial approach to giving that ‘disrupts the status quo’. Photograph: Reid Wiseman/Nasa/Handout/EPA

This article originally appeared in The Guardian

Look at the organisations supported by the top 20 UK or US philanthropists and you’ll see a similar picture: research bodies, hospitals, educational institutions and foundations. Perfectly acceptable choices, but hardly risky ones. Yet growing evidence suggests that philanthropists who take more risks could bring about greater innovation and impact in the not-for-profit sector. Think northern California’s project to raise food stamp enrolment rates with the support of technology – an unprecedented approach that aims to improve food poverty for thousands of residents.

A CAF report published earlier this month found that four out of five wealthy donors under 40 hold socially-conscious investments, including some that will not necessarily offer a financial return. The findings in Philanthropy: a gift or investment? mirror the growing trend for big donors to move away from the usual beneficiaries and traditional methods of giving, to identifying and nurturing “disruptive” interventions to complex problems. The Edge Fund’s backing of UK grassroots social justice projects that don’t make it on to the radar of traditional funders exemplifies this.

Plymouth University’s Prof Jen Shang is leading a study involving 22 philanthropists across the world who support international development. The study seeks to identify the thought processes and actions behind donors’ more risky decisions.

Shang, research director at the university’s Centre for Sustainable Philanthropy, says philanthropists who are open to risk-taking have several things in common. For example, they consult widely with a range of stakeholders to get a full picture of what is needed. So for a healthcare project, that could mean engaging children or other user groups as well as medical staff.

Risk-taking philanthropists also have “an empathetic ability to act on what they find”, says Shang. So if a charity’s youth project wants to fund vocational job training rather than further education – because that’s what its beneficiaries want – the donor respects this.

But Shang admits that not all donors may be emotionally ready for this kind of decision: “How many philanthropists are willing to use their hard-earned income to help someone reach their dreams when those dreams aren’t consistent with what the philanthropist believes should be their full potential?”

The Plymouth study, which will release findings next year, has not found donor age to be a factor in risk-taking. However, Shang says a donor’s “appetite for learning” – be that about beneficiaries’ needs or project best practice – seems to make a difference to the way they approach risks in giving.

Helping donors to develop skills for risk taking and other challenges is the aim of the Philanthropy University, an online education resource to be launched later this year. It is an initiative of the UK-based Stars Foundation, whose annual Impact Awards offer unrestricted grants (ie no rules on how money should be spent) to NGOs across the world working with disadvantaged children.

While many donors would prefer to specify what their money is used for, Stars founding chairman Amr al-Dabbagh argues that unrestricted funding is “catalytic” for NGOs: “It unlocks the potential of these organisations to invest in themselves, be responsive, scale up and become resilient sustainable organisations in their communities.”

And al-Dabbagh believes big donors should be moving towards an entrepreneurial approach to giving that “disrupts the status quo”. He cites Bill Clinton’s Clinton Global Initiative as an example, bringing together philanthropists, world leaders, business and NGOs to find innovative solutions to global problems such as access to healthcare.

Turning established giving practices on their head is key to the work of California’s Philanthropic Ventures Foundation (PVF). Over the past 23 years, it has distributed more than $98m (£64m) on behalf of more than 2,000 philanthropists to grassroots organisations and community groups in the San Francisco Bay area and worldwide. A flagship programme is teacher resource grants of between $500 and $2,500 for classroom materials, projects and field trips. Teachers fax their one-page requests to PVF and receive a response within 48 hours.

Chief executive Bill Somerville explains PVF’s philosophy: “We exercise a great deal of trust. You might want to use the term ‘venture’, meaning one is willing to try something even though it might not work but in your professional opinion you feel it is worth taking a risk.

“I don’t even know what strategic means and never use the word. Nor do I use the term ‘problem’. My commodity of exchange is ideas – what do you want to see happen and how do you propose to bring it about?”

This process of identifying creative projects and solutions is often seen in giving circles, formed by individual donors with common interests. Members pool monetary contributions and decide as a group how to distribute funds. Usually they have close contact with the charity or organisation and often will find, or back, a project that a traditional funder would not.

Somerville in California says philanthropists should see risk-taking as a learning experience: “Philanthropy does not like a failure and thus most foundations do not take risks. I don’t feel the world will get better unless we are willing to try new things, to take risks, to be willing to accept an occasional failure.”