"Cheap in America"

FYI: Tonight (Wed.) on ABC, John Stossel has a special called "Cheap in America" where he analyzes the state of charity in the U.S. along with who gives and who doesn't. 10:00 p.m.

Here's an article about it on ABC's Web site.

America The Charitable: A Few Surprises

I found this article online this evening and thought you guys might find it interesting.

America the charitable: A few surprises

It's well known that Americans lead the world in philanthropy. But those making $20,000 or less give away more, as a share of their income, than do higher income groups.

By The Christian Science Monitor

Everybody knows Americans are big givers. But their charitable impulses keep generating surprises.

Consider just a few conclusions from recent research:
- Charitable giving plays a bigger role in the economy than is suggested by some $260 billion in annual contributions. Each dollar of giving appears to create $19 of extra national income, according to a new book.
- Demand for nonprofit services gets proportionately bigger, not smaller, as a locality's income rises, a Federal Reserve economist finds.
- The philanthropy of the wealthy may not hinge on tax incentives to the degree many believe.
- In one new survey, a majority of wealthy givers say they would contribute the same amount if the estate tax were abolished. Ditto, they said, if they could no longer deduct the value of gifts from their taxable income.

These disparate studies are shedding light not just on who gives but also on why they give and what their actions mean to society. Often, the conclusions run counter to expectations.

"It's the first word, not the last word," says Arthur Brooks, referring to his new book on charity called "Who Really Cares." "We need more people thinking about (the study of charitable giving) in a serious way."

Brooks and other experts say that by understanding charity better, Americans can learn how to encourage more giving. The result would probably be a healthier and wealthier society.

Time and money
Of course, it's not as if American philanthropy has never been studied before. A number of institutions track the nonprofit sector fulltime in one way or another. But the data on charity-linked activities are far less complete -- and less systematically analyzed -- than for areas such as government and private industry.

One thing that's long been known: The United States leads the world in levels of charitable activity. The pattern runs from the rich, steeped in long tradition of philanthropy, to the poor. Those making $20,000 or less a year give away more, as a share of their income, than do higher income groups.

Americans donate their time as well as money -- some $150 billion worth annually (measured by using an estimated average value of $18.04 per hour).

"I see a great commitment," says Karen Rivers, who recruits helpers for the Colorado branch of Volunteers of America in Denver. "We just were inundated with people who wanted to volunteer for Thanksgiving Day."

Rivers had to turn volunteers away as the group served holiday meals to about 3,000 homeless and others in need.

Some experts see charity as a defining trait of the United States, more than consumerism or business. But those forces may be intertwined.

For one thing, many nonprofits are selling services -- from health care to classical music -- in a marketplace alongside for-profit rivals. By many measures, they are successful.

For example: As personal incomes rise in a given county, the income of nonprofits seems to rise even faster, says Rob Grunewald, an associate economist at the Federal Reserve Bank of Minneapolis, who has analyzed counties in 47 states. This suggests that not-for-profit activities are what economists call a "superior good," something people want to buy more of (or donate more to) as their incomes rise.

But ties between charitable ventures and the economy hardly end there.

Giving helps the giver In his new book, Brooks points to evidence that charity is no mere peripheral activity. It pays off for society in ways that may transcend the rates of return on many traditional investments. Why?

It's not just that charity helps those on the receiving end, says Brooks, an economist at Syracuse University in New York. It also strengthens the cohesion of society at large. Moreover, it appears to make the givers themselves more successful, possibly because the activity transforms them somewhat into better or happier people. Whatever the reasons, he finds that higher income tends to push up charity -- and that greater charity tends to push up income.
Another provocative conclusion is that conservatives are better givers than liberals -- a theme that is likely to draw close scrutiny. This pattern is less about politics, Brooks says, than about charity-linked lifestyles that are most common to people who call themselves conservatives: religious commitment, marriage and children, and entrepreneurship.

Still, his main point is that more Americans, regardless of ideology, should embrace giving as a tool for progress. Brooks quotes Proverbs: "One man gives freely, yet gains even more; another withholds unduly, but comes to poverty."

Many who do charitable work can relate to that. Pier Penic works in public relations but her passion is what she does for free as the founder of Culture at Home, a support group near Washington, D.C., for mothers who are home-schooling their kids. "I'm doing more here than I would at a corporate job," she says. "I love to see results."

Her story echoes some of the common forces that motivate people to give time or money to charity: First, she identifies with challenges facing home-school moms. In her case, the feeling is amplified because she herself is one of those moms. Second, she wants to make a difference.
Third, she draws satisfaction from the effort to help.

The urge to make a difference These forces are among the core motivations that foster actions of generosity beyond the sphere of one's family circle, says Paul Schervish, who heads the Boston College Center on Wealth and Philanthropy. "There would still be a need for philanthropy, even if our economic needs were all taken care of."

The urge to make a difference, and to take satisfaction in it, outweighs monetary considerations.
For example, a survey of 945 ultrarich individuals released last month by Bank of America and the Center on Philanthropy at Indiana University found that slightly more than half would give the same amount regardless of whether the estate tax or deductions for charitable giving were repealed.

None of this means that tax policy is trivial for charitable giving. But the survey suggests that Americans' penchant for giving isn't driven primarily by tax breaks.

This article was reported and written by Mark Trumbull for The Christian Science Monitor.

"Mandatory Volunteerism"

Clary and Snyder discuss the idea of “mandatory volunteerism” as a short-term solution with potential long-term consequences. “Although requiring people, particularly young people, to engage in community service may have desirable effects (e.g., increasing actual participation in the present), mandating ‘volunteerism’ may prove counterproductive in the long run,” (pg 158). The authors refer to a study in which college students were mandated to complete 40 hours of volunteer work within a semester, with special attention paid to students’ intentions to volunteer in the future. Clary and Snyder found that with increases in external pressure to ‘volunteer’ come decreases in internal motivation to volunteer. “Certainly, immediate volunteering can be induced by requiring students to serve, but it seems that future choices to volunteer will be less likely if the initial experience is accompanied by perceptions of external control,” (p. 159).

I want to open this topic of “mandatory volunteerism” to the class. I know that as a high school senior, I was required to complete 40 hours of community service per semester in order to graduate from the IB program, and I’m certain that many of you had similar experiences. Those of us in our early to late 20s were part of a broader initiative to socialize us into volunteerism (don't remember Clean the Beach field trips in elementary school?). Do you think it worked? Did this “mandatory volunteerism”, either for school requirements or competitive college applications, deter or promote private volunteerism later on?

Come On Funders, Give Rural America A Break!

Come on Funders, Give Rural America a Break!

The Snavely/Tracy article on rural nonprofit collaborations was interesting and exposed a unique service population in the third sector that we often forget. If you don’t live in a rural area, it’s likely that you just don’t think much about the geographic-specific challenges that are an inherent part of that community.

Collaboration is certainly a trend being encouraged in all sectors. In the profit-making world we call it mergers and acquisitions when in actuality these ‘marriages’ are more like hostile takeovers (e.g., US Airways biting at the heels of Delta). Nonetheless, the basic justification for bringing two or more entities together is pretty much the same across the board; for the purpose of realizing synergy.

In the nonprofit sector, in particular, federal legislation now strongly encourages collaborative efforts and often will not consider an organization for funding unless they have solid evidence (i.e., Memorandums of Understanding or other friendly contract-like documents). And yet as strongly as they encourage collaborations as part of the criteria in the competitive process, their guidelines for grant recipients often make it difficult for funding recipients to live up to the collaborations originally proposed.

In rural communities like the two that were studied in this research effort, there are many, many barriers that can prohibit the successful collaboration of nonprofit organizations. Geographic size, population dispersion, lack of public or personal transportation, cultural issues, and lack of local community matching resources are very real environmental problems that can greatly curtail the sharing of information and resources that is required in collaborations.

While it was encouraging to read that there is some degree of collaboration taking place in the two communities studied (case management and referral services were the most prevalent examples of this), I was frustrated to read that the adoption of common service procedures, policies and guidelines between organizations were only practiced by about 1/3 of the responding nonprofits. Isn’t this where collaboration would be most beneficial? Wouldn’t more people in rural communities be helped in a more efficient and effective way if nonprofs adopted common service delivery procedures, guidelines and strategies?

I can just imagine the frail senior citizen, the parents of a special needs child, or the farmer in need of health care, trying to navigate a rural patchwork system of services where each nonprofit has their own specific set of rules, guidelines and procedures that requires a lot of bureaucratic paperwork and other annoying inconveniences.

In these tiny communities where trust and pride are major issues and citizens are not accustomed to asking for help, I’d like to see the government funding sources relax some of the strict service procedures that are often part of the funding and compliance agreements with the nonprofit groups. Maybe if the funding sources could remove some of the walls and barriers that are part and parcel of the grants, the rural communities could realize more meaningful collaborations.

Are There Too Many Nonprofits?

Are There Too Many Nonprofits?

Dr. Alvarado’s editorial (April 2004) regarding the number of nonprofits was thoughtful, well written and provocative. I so appreciate her sharing John Gardner’s recognition/definition of the nonprofit sector as a “significant source of renewal…(that) comfortably harbors innovators, maverick movements…. and critics and dissenters of both liberal and conservative persuasion.” This is brilliant and speaks to the original intent of non-profit organizations; particularly when we realize that many (if not most) nonprofit organizations are born out of controversial ideas that are, in Gardner’s words, “unpopular or strange (with) little chance in either the commercial or the political marketplace.”

When I think about organizations like Planned Parenthood, the Pediatric AIDS Foundation, the National Organization of Women, the March of Dimes, UNICEF, the Peace Corps, the NAACP, SNCC, Head Start, National Coalition for the Homeless, and others, it remains clear to me that these organizations (and hundreds of others like them) have changed lives by restoring hope and instilling fairness and equity. It is also very clear to me that all of these organizations were considered highly controversial, unpopular and strange at their inception.

As I have indicated in previous blogs, I strongly believe that all of our lives have been made better by the good works of the third sector.

But the question here is not about the good works of nonprofits. The question is whether there are too many non-profits. And while my gut sense is that there probably are, I will temper my response by suggesting that before we can really answer this question, more file-cleaning, record updating and data gathering must be done in the nonprofit sector.

According to Alvarado, there were 909,574 public charities registered with the IRS in 2002. Stats in another reading assignment (a blog from the Stanford Social Innovation Review) reveal that there were 964,000 public charities registered with the IRS in 2003. Quite frankly, I don’t trust either of these numbers. There are, admittedly, an unknown number of 501 (c)(3) organizations that remain on the books with the IRS even though they have shut down. Until the IRS can successfully weed out the ones that aren’t functioning anymore, we don’t really know the real number of nonprofs in this country.

In Stephen McNeil’s blog, he states, “dissolution/revocation of public charities is more difficult than a divorce in Nevada.” If this is true, then this could be one critical factor as to why there are a lot of dead 501(c)(3)’s still on the IRS books.

While I wholeheartedly agree with Alvarado that nonprofits are “laboratories for creativity and new leadership,” I regret that what we are finding in the nonprofit sector is often a far cry from this noble calling. Some of my concerns are as follows:

- Service duplication and overlap

- Lack of accountability

- Lack of credible market research and analysis to justify the ongoing creation and development of new nonprofit entities in certain geographic areas and in certain areas of need

- Non-profits that are not able to meet the call to be of service; they are poorly organized, poorly run and poorly funded

- An overwhelming majority of small nonprofits operating on shoestring budgets that are less than $25,000 annually


Alvarado could not be more correct when she states that bigger is not necessarily better. However, the question here is not about size. This is a very practical, basic business question of efficiency. For example, economies of scale show us that an organization with an operating budget of only $25,000 lacks the capital and resources to provide maximum service levels in a way that is economically feasible. We also know that there is no value-added when duplicate services are provided to the same community.

Finally, Alvarado states, “For the most part, public charities are efficiently run entities.” I’m not sure how she knows this. She provides nothing in her article to support this statement. And I’m not sure whether we should believe her or not.

The RED Campaign

I know that the blog for this week is about volunteerism, but I heard about this RED Campaign (www.joinred.com) and wanted to know your opinion about it. Basically,
the RED campaign is a commercial initiative designed to create awareness and a sustainable flow of money from the private sector into an organization called The Global Fund (www.theglobalfund.org/en) to fight the AIDS in Africa. The Global Fund is an innovative partnership of governments, non-profit organizations, and the private sector, working together to rid the world of AIDS, tuberculosis and malaria (http://www.joinred.com/globalfund.asp)

Bono and Bobby Shriver, Chairman of DATA (Debt, AIDS, Trade Africa), created the RED campaign to engage the private sector in the fight against AIDS. Some of the partners that they have include: Apple (Red iPods nano), American Express, Converse, Gap, Giorgio Armani and Motorola. The idea is that you buy products from these companies and a portion of your purchase goes to The Global Fund. If you buy the RED iPod nano that is $250, Apple will donate $10 to this organization. What do you guys think about this initiative? Have you heard about this campaign before?

900,000 Nonprofits and Growing

Some of these collaboration readings raise an interesting point: We encourage competition and enforce anti-trust legislation in the nonprofit world, yet we view competition to be unnecessary and wasteful in the non profit world—we even seem to encourage, albeit unsuccessfully, a giant merger eliminating the smaller organizations. I’d never thought of that. I never really thought that the smaller nonprofits were wasteful, but it has occurred to me that they could do so much more with a single, large budget if they merged together and cut some staff. What a mistake!

I feel as though I should have known better because I have seen collaboration up close. I’ve spent some alternative spring break weeks working with urban hunger programs—one in New York and one in DC. On both occasions, my group was being hosted by a nonprofit group that exists for the sole purpose of sending volunteer groups out to the various soup kitchens, food banks, and homeless shelters in these cities. This nonprofit’s role is to set up volunteer groups on what amounts to a week-long tour of volunteer opportunities related to hunger. It seems extraneous, but it is also a source of collaboration among the nonprofits that accept the volunteers. Plus, as a volunteer, I had a chance to see how the organizations work together to serve the homeless constituency as a whole while at the same time, getting to know the unique populations that utilize specific services in specific areas.

As a result, I’ve come to the conclusion that the increasing quantity of active, small nonprofits are beneficial to the clients they serve. Besides, if they were truly unnecessary, I believe that they would run out of funding.

Toys for Tots deny gift

http://www.cnn.com/2006/US/11/14/toy.jesus.ap/index.html

Oh yeah, a company tried to give Toys for Tots 4000 Talking Jesus Dolls. And was actually "surprised and disappointed" when they were rejected. TFT said that they had no idea what religions the kids are that they are sending them to. The toy company spokesperson thought it wouldn't matter if a Jewish child got a Jesus doll because it quotes scripture from the bible and therefore it shouldn't be a problem.

Here is a situation where the Marines better tread very carefully.

Hoo Rah!

School Donor Reneges on $20M Pledge

School donor reneges on $20M pledge: Man takes back offer after feeling insulted by university president

The Associated Press
Updated: 7:25 p.m. ET Nov 10, 2006

MIAMI - A $20 million gift for a university medical school evaporated with a phone call after the donor thought the university president insulted him.

Herbert Wertheim took back the gift offer after the call last week and resigned from Florida International University’s board of trustees.

“The conversation just wasn’t what it should have been. There were things said that shouldn’t have been said, and Humpty Dumpty is broken,” Wertheim said.

The loss of the businessman’s money also meant the loss of a matching $20 million grant from the state, and it means Wertheim’s name will no longer go on the medical school.

Wertheim, who made his fortune manufacturing ophthalmic equipment, had wanted to defer some payments on the gift until 2009 for tax purposes, despite agreeing to deliver a lump sum within 30 days of naming the school for him on Sept. 29.

In the phone call, he said, university President Modesto “Mitch” Maidique told him he had gotten the naming rights “on the cheap” and that the university “could now get $100 million for it.”

Maidique responded in a letter Thursday, apologizing and leaving the door open for further negotiations, but saying that receiving the $20 million in a lump sum had been “pivotal” in the naming-rights agreement because it ensured the state would match the gift.

“You have been a friend of the University’s and of mine for almost 20 years. If I was unclear during our conversation and I unintentionally hurt you, I apologize,” he wrote.

The university’s press office didn’t return calls Friday. But school board chairman David Parker said he was confident other donors would step forward. Parker said the school would likely return at least $700,000 Wertheim already had sent.

Wertheim, chairman and CEO of Brain Power Inc., joined the school’s foundation board of directors in 1988 and led its first capital campaign, raising $204 million in four years.

Class News

Hey everyone,

If you picked up the survey for extra credit on the blog postings that was given out in class on Nov. 8, then I need to get it back from you by Thanksgiving to receive the full extra credit. You can slide it under my door (2041-D in Weimer) or put it in my mailbox in the basement. For those of you who have to travel to campus, you can also mail it to:

Richard Waters
Dept. of Public Relations
College of Journalism and Comm.
BOX 118400
U of Florida
Gainesville, FL 32611-8400

I'll be in the office next Wednesday and available via email if you have any questions.

Good luck w/the two projects!

Follow up to Olympic Bid Activity

http://www.chicago2016.org/

This is the website that Chicago has for its bid for the 2016 Olympic Games.

http://www.sccog.org/

That is Los Angeles'.

Competition Begets a Unified Voice?

Initially this was a response to Sarah's posting below, however it turned out long and I thought it would be a good post, albeit late.

We have spoken about how NPOs need to have a unified voice. One thing that stops them from having a unified voice is that there are so many non-profits that are similar but not alike. Additionally, to the kudos of many npos, very few want to drift from their own specific missions. They want to stay the specific, special entity that they are, however that is not conducive towards speaking with a unified voice.

I know there is a lot of competition in the non-profit arena, but is there more in the corporate arena? And what is the alternative to being an unsuccessful company in either one? Non-existance - or on a lesser scale the fear of non-existence. In the business world this shows itself as mergers and assimilations of companies (look at the media environment after the 1996 telecommunications act): eight major companies survived.

Perhaps the reason there is so many npos that still survive is that there isn't enough competition. The only reason the world is getting smaller is because humanity is getting larger. This means that organizations are getting lost, or really assimilated. They don't cease to exist entirely, just cease to exist as they did in the past.

Competition seems to be a good thing. It yields the best of the best, or at least it is supposed to. NPOs are good at hanging on and because it is a different environment that places emphasis on adhering to the mission before the bottom line (generally), therefore the mission comes before commercial success, lending them to hold on longer and be more creative in their survival techniques. Three being marketing, IMC and public relations.

They function to grease the wheels of business and they will certainly do the same for NPOs and those that embrace and take advantage of this grease will be more competitive and have a leg up on nonprofits that fail to do so.

So I think it does create more competition, which is bad for any NPO that is unable to compete, but good for a more unified voice of nonprofits. It seems to be working for the big eight media conglomerates. The only difference in NPO is the locations of the mission and the bottom line.

Too Much Competition?

Is it true that marketing is something that all organizations do, whether they recognize it or not (Kotler), and we can thereby argue that IMC does have a place in nonprofit communications? Or, does the introduction of true marketing techniques in nonprofit communications further increased competition (rather than alleviate the competitive environment) for the fiscal attention of donors, leading to a "competitive stalemate" amongst larger NPOS and “compassion fatigue” amongst donors? Is the issue that publicity and marketing have been lumped together and are now perceived as synonymous?

I don’t have an answer, but I’d like to propose a debate on whether NPOs marketing efforts make the competitive aspect of the nonprofit atmosphere better or worse.

Brand Identity or Client Accountability: Who decides?

I was surprised by Brown & Dacin's finding that consumers' perception of an organization can influence -- and even outweigh -- their perception of a product. Is that an example of excellent consumer relations or uneducated consumers?

When this model is applied to nonprofit organizations, does it allow the organization to attend to image-related issues at the expense of program quality? Could this be a way of putting donor desires over client needs?

While Kim Hyojin, author of "Branding of Nonprofit Organizations," stated that "branding of an organization does not justify poor products or services," the author does not provide any data regarding the extent to which the practice of branding to avoid quality might occur. Furthermore Hoeffler and Keller affirm the link between good branding and good reputation through their discussion of brand recognition, credibility, and personality.

Do we think brand identity can overshadow accountability?

Mixed feelings on CRM

I do agree that the concept behind cause-related marketing is an excellent one; companies and non-profits partnering to achieve mutual goals - the companies are trying to sell products, and the non-profits are trying to raise money and philanthropic awareness. However, I do wonder sometimes if they're not pushing the emotional envelope a little too far with some of these "branded" products (as Sara & I discussed several weeks back, pink kitchen mixers with some of the proceeds going to benefit breast cancer research? Hmm...).

Evelyn & I addressed this topic in a presentation for Management last spring, so I went back to our PowerPoint and found the pro & con list we came up with...

Pros

• Allows companies to position their brands on a social responsibility platform
• An appealing way for consumers to support social causes - they have an increased inclination to purchase brands exhibiting social responsibility
• An avenue for the companies to donate money to non-profit organizations
• Highlight the social responsibility of the brand - the display of ethics and social responsibility is an important element of organizational effectiveness
• Identification with popular causes is good for employee morale and recruitment

Cons

• Threatens the integrity of contemporary society by absorbing charitable giving into strategic marketing exchanges
• Giving is bundled together with brand-related choice, consideration of price, packaging and other consumption-related thoughts

The pros definitely outweigh the cons in terms of quantity, but the cons bring up some serious ethical considerations.

Personally, I feel much better about supporting organizations that give a substantional portion of proceeds from designated products to a specific cause, even more so if that product has an apparent link to the organization's mission. That makes me more inclined to believe that the company has a real dedication to the chosen cause and they're not using the alliance solely for promotional purposes.

What do y'all think?

Cross-cultural branding efforts... A waste of resources?

So branding like integrated marketing communication is defined very, very differently depending on who provides the definition. The most "fair" definition I found--and I welcome challenges to this one--is: "An orchestrated effort or campaign that focuses on introducing, re-introducing or enforcing the brand for a particular product or organization."

Branding faces enough problems within a single culture as far as getting people to stop and take notice of the organization, product or service. But many organizations, especially international NGOs and relief organizations, are trying to launce international branding campaigns?

Given the complexities of international communication (e.g., cultural interpretations of words, symbols, colors, etc.), are these international branding efforts worth it?

Is it worth it for donors in particular given that many cultures expect the government to support nonprofits rather than individuals?

Integrated Marketing Communication... oy vey!

So this week, we're talking about marketing and branding in regards to the nonprofit sector. Marketing a nonprofit may involve challenges that the same task for a for-profit entity may not (e.g., lack of resources, explaining the benefits of marketing to donors who want $ to go to clients and programs), but for the most part they're fairly similar. So I wanted to ask your views on something else related to marketing...

IMC, MarComm, or the "C Suite"--whatever you want to call it--the merging of marketing, advertising, and public relations. Is it a good thing? Now consider in your responses from these two different perspectives: (1) the organizational view and (2) the discipline's views.

What are the implications of continued IMC growth?