Springtime in China (1/2015)

This article is an excerpt of the article “Tender buds of philanthropy” in the magazine DIE STIFTUNG (6/2014).

by Christian Gahrmann and Li Yiqiong

It’s springtime in China. Not with regard to the weather conditions, of course. But the atmosphere of re-building the country has finally reached the nonprofit sector. Only a few years ago neither NGOs nor a donor market existed in China. Now we can observe the first – though very rare and tiny – buds of a carefully unfolding nonprofit sector. And foundations are in the front of this development.

The emergence of the first foundations is one of the most important developments of the Chinese nonprofit sector in recent years. Statistics show that Chinese foundations could accumulate in 2013 capital assets of 93 billion Yuan (11.3 billion EUR) and realizing annual revenues of 35 billion Yuan (4.3 billion EUR). A big share of the foundation’s funds is spent for educational projects (three out of ten funded projects come from this area). But Chinese foundations also like to promote health as well as children’s and women’s projects.

Foundations in China can be differentiated into public foundations, usually founded by the state, and private foundations, that were set up by individuals or companies. Public foundations are legitimized to raise funds. Private foundations this is only permitted within narrow limits and after a complicated application procedure. Hence, some private foundations are cooperating with public foundations and use them as a fundraising channel.

In theory, foreign foundations are allowed to open an office in China. So far, however, they have made little use of it – too high are the administrative barriers and too tedious is the registration process. In addition, foreign foundations – such as all foreign nonprofits – are not allowed in China to collect donations. One way to be active in China anyway, is the creation of specific funds within Chinese foundations that may only be used for specific, previously agreed upon philanthropic purposes.

The starting position for foundations in China is still difficult. According to a study by the China Research Institute of Philanthropy over 30 million new jobs in the nonprofit sector are prevented by the absence of the necessary regulatory framework for this sector. 300 billion Yuan (36.6 billion EUR) of potential donations remain unrealized. Often, the foundations themselves are not yet working professionally enough. He Daofeng, president of the China Foundation for Poverty Alleviation, recently presented admitted in an interview that foundations in China still have a rather poor image. Many do not reach their program goals, work sluggishly and hierarchically, and are far from offering total transparency.

Positive effects are attained by the launch of new private foundations by successful entrepreneurs and business people. The government is beginning to discover the potential of private philanthropy for the fight against poverty and social inequality. Against the background of growing social inequality, China is more dependent than ever on the development of a strong nonprofit sector – and foundations that make a difference.


The Guiding Principles of Strategic Fundraising (3/2014)

A strategic approach is always a long-term approach – or in other words: an early planning. Elements to be planned include according to the Swiss fundraising consultant Dr. Peter Buss primarily: addressees (i.e. target groups), offer (mission or project) and communication,i.e. the presentation of your organization to the outside. This process can be understood as the beginning of brand building.

The extent of such a brand management can be exemplified by the German development aid organization Welthungerhilfe. Its brand identity is composed of dozens of individual components. They include a clear mission (fight against hunger), a uniform corporate design – reaching from a defined green color scale to pre-defined keywords and sentence fragments – and a collection of well-defined stories. Donors – especially companies – no longer want to be asked for quick money. They look for long-term co-operation and sustainable projects.

Strategic Fundraising puts its eyes – like the strategic marketing – on the market (for donations) and thus considers the donor as a customer. The offer to him is the help to help others. It is scientifically proven that most people have the desire to support people who need help. Often, however, they are hindered to do so – due to distance, missing time and/or due to lack of the necessary expertise for help (e.g. medical knowledge). At this point the charity steps in and acts as an agent for help.

The perception of a donor being a charity’s customer has implications: No organization has to beg its customers for donations (begging is not an appropriate marketing strategy). But every NPO has to meet the needs of their customers (such as done by any successful company). Today most donors do not give out of sympathy or duty. Young donors rather wish to change personal lives and – just as important – seek to belong to a group that shares similar visions and values​​.

I believe nonprofit organization should follow a much more customer-oriented approach in fundraising. Strategic Fundraising does not need high-level marketing managers. Strategic Fundraising is first and foremost a philosophy and an attitude of mind which can be adopted by any organization, regardless of size and turnover.

The customer is always right. – Be prepared. Your donors might be always right, too.

Note: This article is a translated and slightly shortened version of my blog post 6/2013.

How are we Changing the World? A (very personal) Recap of the International Fundraising Congress 2013 (8/2013)

(The German version of this article can be found on the website of the Fundraiser Magazin.)

In order to avoid unnecessary tensions to anyone I start with my overall judgment: The International Fundraising Congress 2013 – from 15th October to 18th October in Nordwijkerhout/Netherlands – was the best fundraising congress, I have visited so far in my (fundraiser’s) life. By far.

“How are we changing the world?” asked the motto of the congress the participants. A question,  that any fundraiser should be able to answer blindfold. But, firstly, we know that not every fundraiser actually gets this question exactly answered by the front-line staff and, secondly, that’s a tricky question that most organizations indeed cannot explain – even less prove – fully.

In short, the issue of “impact” was high on the agenda at this congress – like at many other fundraising conferences lately. Consequently, also the recipients of help have been on the podium. And they were giving three beautiful and very personal (success) stories. Fundraisers have been fairly moved – at least I was told so, since, unfortunately, I could not be present at the opening of the congress.

For me the International Fundraising Congress (IFC) – organized by The Ressource Alliance – started on Thursday morning. And I felt very at home: Prof. Michael Urselmann from Cologne (Germany) presented in his session “Is your fundraising budget too high or too low?” with risk manager Dr. Roland Demmel a sophisticated and highly mathematical analysis tool, that spits out a few ingenious numbers: How high should my fundraising budget be in order to maximize the profit (i.e. fundraising revenue minus fundraising costs)? And how should I spent my resources optimally on the different target groups and fundraising tools? From this perspective, the fundraising budgets of most organizations are way too low. In short: an exciting and useful tool for larger NPOs with huge amounts of data, which made me – as a statistic freak – enthusiastic.

Then, next session, one of my topics of heart, “The virtues and vagaries of volunteer led fundraising ” by Jennifer Coleman, Head of Philanthropy at the Children’s Museum of London, and Gemma Sherrington , Head of Volunteer Development at Save the Children UK (see also the contribution”. And, of course, this session actually did touch my heart. Volunteers are the bridge to the donors. Hence, we fundraisers have to be careful with them – and give them a lot of responsibility. The message from Jennifer Coleman and Gemma Sherrington: Volunteers in Fundraising – yes, it is hard work . Yes, there is always something going wrong. And so what? Their fundraising success – be it in major donor fundraising or in charity shops – proves both right.

Quick sleep , and I find myself on the third seminar: “Truly global legacies – perspectives and best practices from around the world” with Emma Jhita (WSPA UK) . For me, a benchmark a successful workshop: a presentation reduced on keywords and key figures which stimulate thoughts, that are then discussed in small groups and with the help of excellent best practice materials. A method recommended for imitation.

Only the example of a legacy mailing of WSPA UK I did not understand. On two closely written pages it was formulated like this: “On many bear farms the bears get a hole cut in the abdomen. From there the bile is collected in a bag.” Etc. Maybe disaster donors can stand so much emotional stress. For legacy donors this wording seems to me at least questionabl., Anyway, the mailing was very successful.

At this point a good recap should say something about the organization. I do not. It was not worth mentioning. It was simply perfect.

Regarding atmosphere and overall impression: Overwhelming! After one day I was in this highly – concentrated euphoric state one (not me!) knows from free climbing: an energetic flow carrying me from seminar to seminar and discussion to discussion. Completely immersed in the wondrous and wonderful world of fundraising, full of new ideas, impressions and stories, together with fundraisers from Australia to Israel.

For me it was the most impressive fundraising congress of my professional life. For many fundraising globetrotters with whom I was talking it is the best fundraising congress in the world. I believe so.

Anything else? Oh, yes! Many thanks to the Fundraiser Magazin that has sent me as a “foreign correspondent” to Nordwijkerhout, making this great experience possible to me.

That’s it. Not quite yet. I met someone. A hero of my childhood: He-Man was sitting right next to me at the gala dinner! The “Master of the Universe” in person!  I have to go up to my attic looking for my old figure collection.

„Alles für die Katz?“ – der Test von Stiftung Warentest auf dem Prüfstand (7/2013)

Alljährlich zur Weihnachtszeit das gleiche Spiel in den Medien: In einer Zeit, in der Menschen eigentlich gerne spenden, werden die Spendenorganisationen ins kritische Licht der Öffentlichkeit gezerrt. Darüber dürfen wir uns nicht beschweren. So funktionieren Medien eben.

Diesmal war mal wieder Stiftung Warentest dran und knöpfte sich gleich die vermeintlichen „Schwarzen Schafe“ der Branche vor: die Tier- und Naturschutzverbände. Ergebnis: Nur 6 (von 46) arbeiten wirtschaftlich, 6 werden als unwirtschaftlich getestet. Darunter renommierte Organisationen wie „PETA“ und „Vier Pfoten“ (siehe auch Bericht im Fundraiser Magazin).

Der Aufschrei unter uns Fundraisern ist mal wieder groß (wie ebenfalls jedes Jahr). Auch der DFRV meldet sich löblicherweise zu Wort.

Was ist passiert?

Stiftung Warentest hat 46 Organisationen nach genau 3 Kriterien bewertet: Wirtschaftlichkeit, Transparenz und Organisation/Kontrolle. Damit hat es aber – das alte und bekannte Leid – genau wie das DZI (mit dem es beim Test zusammengearbeitet hat) im Grunde nur „Sekundärtugenden“ bewertet. Die entscheidende Frage – auch für Spender –, wie erfolgreich Mission und Projektziele der NPOs erreicht werden, bewertet Stiftung Warentest nicht.

Warum nicht? Klar, aus demselben Grund, aus dem auch das DZI ganz ähnlich verfährt: Alles andere wäre schlicht viel zu aufwendig. Wirtschaftlichkeit, Transparenz und Kontrolle sind wichtig für Spendenorganisationen – keine Frage. Aber es sollte doch klargestellt werden, dass sie für die Gesamtbeurteilung der Arbeit einer Nonprofit-Organisationen nur einen – eben sekundären – Teilbereich darstellen. Sonst läuft eine solche Berichterstattung Gefahr, Organisationen mit höchst erfolgreichen Projekten anhand von Kriterien, die nur mittelbar Einfluss auf den (Missions-)Erfolg nehmen, öffentlich an den Pranger zu stellen.

Gut, nehmen wir einmal an, jedem Leser ist bewusst, dass es bei dem Test nur um „Sekundärtugenden“ gemeinnütziger Organisationen geht. Sind die dann wenigstens fair und mit validen Kriterien bewertet worden?

Beim Prüfpunkt Wirtschaftlichkeit macht man es sich einfach und verwendet die vom DZI bekannte 35%-Formel, sprich eine Obergrenze für die Verwaltungskosten. Wir alle wissen, dass wir hier aber eigentlich nichts wissen: Was sind Verwaltungskosten? Wie unterscheiden diese sich je nach Branche und Tätigkeitsschwerpunkt? Verhindern niedrige Verwaltungskosten nicht sogar Wachstum? Die Tierschutz- und Kampagnen-Organisation PETA musste so natürlich als unwirtschaftlich gewertet werden – klar die machen ja hauptsächlich Kampagnenarbeit, schicken Briefe raus, arbeiten sehr personalintensiv. Aber: Sie sind höchst erfolgreich damit! Sie tun für den weltweiten Tierschutz meines Ermessens mehr, als wenn sie mit den Spenden hunderte Tierheime bauen würden. Also in puncto „Wirtschaftlichkeit“ definitiv keine faire und valide Bewertung.

Beim Thema Transparenz arbeitet Stiftung Warentest mit Blick auf die Internetseite eine kurze Checkliste ab: Einnahmen-Ausgabenrechnung vorhanden, Leitungsorgane genannt, Aufsichtsorgane genannt, Website aktuell, Mitarbeitervergütungen aufgeführt? Sehr, sehr kurz, diese Checkliste… Wo ist die Transparenz der Projekte? Wo wird bewertet, wie auf Anfragen nach Information reagiert wird? Und warum scheint das DZI-Spendensiegel quasi vollständige Absolution in Sachen Transparenz zu erteilen? Urteil: guter Ansatz, aber viel zu kurz gesprungen!

Bleibt die Bewertung der Kontrolle der NPOs durch Stiftung Warentest. Und tatsächlich, hier zeigen die Tester: Sie können es auch besser! Denn die Kriterien, die hier geprüft wurden machen Sinn und sollten ruhig einmal in das Bewusstsein der Spender gelangen. Denn es spricht sehr viel dafür, per Satzung und faktischer Besetzung der Organe nicht nur In-Sich-Geschäfte auszuschließen, sondern auch Spendern die Möglichkeit zu geben, eine Fördermitgliedschaft widerrufen und jederzeit kündigen zu können. Und ja, Organisationen sollten guten Spendern auch die Möglichkeit geben, ein stimmberechtigtes Mitglied zu werden! Spender stehen nicht außerhalb der Organisation. Sie gehören dazu! Auch die anderen zahlreichen Kriterien dieses Beurteilungsfeldes überzeugen: Vier-Augen-Prinzip, Reisekostenrichtlinien, Vergaberichtlinien, Rechnungsprüfung durch Wirtschaftsprüfer. Hier mangelt es tatsächlich vielen Organisation an Kontroll-Regularienm, und Stiftung Warentest zeigt mit ihren Kriterien die Richtung auf!

Alles in allem: Gut, dass sich Stiftung Warentest unserer Spendenorganisationen annimmt. Denn nur durch jemanden, der immer wieder den Finger in unsere (noch immer) zahlreichen Wunden steckt, werden wir Organisationen und Fundraiser immer besser und vertrauenswürdiger.

Aber: Die unkommentierte Fokussierung auf „Sekundärtugenden“ der Spendenorganisationen und pauschale, unreflektierte Kriterien – insbesondere bei der Beurteilung der Wirtschaftlichkeit – erweisen uns dann doch einen Bärendienst. Schade. Chance einmal wieder verpasst!

Fundraising Award for Donors (5/2013)

A few weeks ago Jörg Eisfeld-Reschke wrote a remarkable blog about the shortcomings of the annual German Fundraising Prize awarded by the German Fundraising Association and pleaded for a new concept (http://sozialmarketing.de/uberlegungen-zu-fundraisingpreisen) .

The fundraising award is a nice and important recognition for fundraisers and went so far to many worthy winners. The fundraising prize is a very good idea!

At the same time we are, I think , aware of the shortcomings of the prize in its current form. The fundraising prizes in the categories “Honorary Award Lifetime Achievement”, ” Best Campaign ” and ” Best Innovation ” aim – apart from the first category – on short-term success and lead in particular to applications from service providers. Overall, the number of applications remains very low. Neither the selection of the jury nor the selection of the winners follow – as far as I know – transparent criteria .

Above all, I ask myself one thing: Why do we honor ourselves and not those who would really deserve to be honored – our donors ? It is them who finance a playroom in the hospital or follow our vision of re-building the Berlin Palace again . The donors are the ones who help our many campaigns to be successful. Again, we fundraisers should remember that humility suits us well. Without donors there would be no fundraiser, but without us fundraisers there would be very well donors.

Therefore, I would like to propose a fundraising award, which takes fundraisers AND donors into account and focuses on people not instruments. I could imagine , for example, the following categories:

  • Donor of the Year (criteria: amount of donations , creativity of donations , sustainability of donations, promotion of philanthropy / third sector / civil society)
  • Fundraiser of the Year (criteria: fundraising success, creativity of fundraising , sustainability of fundraising promotion of philanthropy / third sector / civil society)
  • Honorary Award Lifetime Achievement, donors (criteria : see “Donor of the Year”)
  • Honorary Award Lifetime Achievement, fundraisers (criteria : see ” Fundraiser of the Year”)

Equivalently, the jury should be composed equally by donors and fundraisers . Such a fundraising award recognizes the achievements of individual donors and fundraisers , emphasizes relationship building and sustainable success and points out that donors and fundraisers are one team that wants to reach common goals.

An award does not primarily serve the honoring of individuals (this of course as well) , but the fostering of good ideas and deeds. Let us in this spirit re-think the German Fundraising Award.