During recessionary times, people often turn to the nonprofit arena for help in meeting basic human needs. However, these same nonprofit organizations are currently struggling themselves. Increased demands on their services, coupled with rapidly declining revenues as many of their tried-and-true donors limit or eliminate their donations, has required nonprofits to do more with less. As countless organizations are being forced to close their doors this year, it is clear that more emphasis must be placed on building strong and sustainable funding models for nonprofits.
What is sustainable funding? Sustainable funding is a holistic approach to fundraising that moves beyond traditional tactics such as securing grants or tapping a few wealthy corporate or personal patrons. It focuses instead on developing new and creative funding mechanisms to help nonprofit organizations become more sustainable in the long term, allowing them to focus more of their resources on the important programs and services they offer.
Today's bleak economy can serve as a pro-active stimulus for developing creative, sustainable funding mechanisms to reinvigorate nonprofit institutions. Creative brainstorming is important to find transformative ways to enhance traditional nonprofit funding techniques with more sustainable methods. Online fundraising methods, such as contests or blog posts accompanied by a "donate now" button can help generate substantial visibility for an organization.
One sustainable funding initiative that I am supporting leverages the bold new world of online coupons to benefit nonprofit organizations. As President of CommonKindness.com, I'm working to help nonprofit organizations nationwide benefit when consumers clip coupons. Our new website, www.CommonKindness.com, creatively leverages online coupons and discounts, allowing people to support the nonprofits they are passionate about while they save money.
Each time a coupon or discount is used on CommonKindness, the brand that posted it pays an advertising fee. Consumers receive the full value of their coupons, while CommonKindness shares 60% of the advertising fees with the nonprofits consumers support. This model truly creates a win/win/win whereby people save money, nonprofits generate much-needed funds and businesses increase traffic and sales.
For example, Catholic Charities Brooklyn and Queens is letting its constituents know about the valuable, money saving coupons on CommonKindness. Each time one of their supporters prints a coupon, funds are generated to help support the numerous community programs Catholic Charities Brooklyn and Queens offers to its neighbors, including programs for older adults, children, people who are developmentally disabled, formerly homeless or isolated.
To localize its "socially responsible local economic stimulus plan", CommonKindness encourages local merchants to also post coupons for their products and services on the site to support nonprofits in their community. Local coupons provide added reasons for people to regularly visit the site. Supporting local nonprofits helps to create customer loyalty for local businesses, all of which helps to increase the "sustainability" of the model.
Historically, a stimulus done as a cash payment or tax rebate will only result in about 17% being spent on consumer goods or services, according to NFO WorldGroup, Inc. When incentives are offered in the form of redeemable coupons or discounts, about 57% of consumers are likely to respond and sales increase accordingly.
As a committed nonprofit activist, I believe the future of the nonprofit sector depends on the development and use of creative and new sustainable funding methods with strong business and practical value. Let's support the life- and community-enhancing work that our nonprofit organizations deliver to Americans in need with sustainable funding ingenuity.
NPs are typically (although not always) run by well-intentioned folk with limited commercial experience; yet invariably commercial/financially-sustainable models are eschewed in favor of idealistic models where perfect is made the enemy of good.
I've overseen $100K in pro-bono services via my companies & witnessed NPs spending too much time managing staff & volunteers (mitigating against volunteer burnout) & chasing funds - at the expense of achieving whatever their world-changing vision is.
The waste of financial & human resources within NPs is simply unsustainable within a commercial enterprise.
So what we see is an appalling level of waste - where resources that could be deployed to multiple missions are burned within one. With more than $250 billion annually in philanthropic funds within the US alone, it's clear there is no shortage of capital available.
Yet how much of this is going to waste is an entirely legitimate question to ask. As the CEO of a corporation that burned through $250 billion a year, every year, without managing to solve many of the problems it was supposed to be solving, my competence would definitely be called into question.
Initiatives such as commonkindness are definitely a step in the right direction - BUT if Non-Profits don't achieve a significantly greater degree of efficiency, more revenues raised will simply equate with more revenues (& opportunities)
With a similar shopping mall and coupon functionality and a newly launched plug-in that lets consumers shop at any major online retailer - and automatically donates 2-5% of their purchase directly back to their favorite charity - We-Care.com and Commonkindness just seem to make it easier to be a good supporter - without necessarily writing large checks every month. Lets get more of that!