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Accountability Is Key

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Earning those donor dollars harder than ever.

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You know how retailers are battling it out over the few dollars consumers are willing to spend? It's no different in the nonprofit world. Merely grabbing a donor's attention isn't enough. We have to make a solid argument for why our cause is the one worthy of your hard-to-part-with dollar.

To accomplish this, nonprofits need to communicate to donors that they are adapting their programs and services to meet the changing face of need in today's economy. For example, food pantries are now serving the redefined "house poor" - families who are using limited earnings to pay their mortgage and avoid foreclosure, and then have little money left for groceries once the mortgage has been paid.

Nonprofits also have to create forward-thinking, innovative programs that provide novel solutions to new problems. No one is unscathed by this downturn. A laid-off worker might have his car repossessed. If he lives outside the city, how can he look for work without a car? Rates of domestic violence and alcoholism will inevitably increase as stress mounts over lost wages. These problems need to be anticipated and dealt with quickly.

Nonprofits also need to lobby for stronger public-private partnership as a way to solve social problems. Government currently spends millions on programs that simply don't work. For example, do we need to incarcerate as many people as we do? One in 100 people in this country are currently in jail. That's the highest rate of incarceration in the world. There are programs already in place that can solve problems related to drug abuse and delinquency in minors more cheaply and more effectively, while reducing the risk of recidivism.

Similar to a commercial enterprise, charities also need to show they can get by with less. In a social services agency the largest expenses - utilities and lease payments - are non-negotiable. So employees typically bear the brunt of cost cutting when donations fall. In the last year, my agency reduced headcount by 25 through layoffs and attrition. However, in social services, there's an inverse relationship between economic activity and our workload.

As the economy falters and people lose jobs, their need and our workload increases.
Because we must do more with less, we have started to prioritize the needs of our clients. This month I challenged all of our departments to find out which populations have been hit hardest recently, and what we can do about it. This inevitably means some projects will have to be shelved for a time.

In my columns, I attempt to draw both parallels and departures between nonprofit and for-profit business models so you'll understand our challenges and needs from a business perspective. As donors, I encourage you to open a discussion with your charity of choice, to see if they are meeting today's needs and challenges in the most efficient and effective way.
And on a very basic level, ask yourself this: Where is the need in my community greatest? This is just my opinion, but if given the choice between funding a new opera house or helping families keep their homes, feed their children and find employment, I truly hope your significant donations support the latter until the economy rights itself. Keeping the lowest rung of the economic ladder from snapping off will help us get out of this mess and back to prosperity.
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No positions in stocks mentioned.

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