Blue Sky Collaborative's Viral Fundraising Blog

CNN Heroes Recognizes Shin Fujiyama of Students Helping Honduras

Blue Sky Collaborative is proud to announce that Shin Fujiyama, the director of Students Helping Honduras was recognized as a CNN Hero.. 



Students helping Honduras is approaching $100,000 raised in its pledge fundraising campaign run on Blue Sky's SWEET Online Pledge Fundraising software platform. Student's Helping Honduras uses SWEET to run an unlimited number of pledge fundraising events at colleges throughout the country. Overall, Students Helping Honduras has raised $750,000 for education and community projects. The online pledge and team fundraising program is a significant part of their capital campaign.

You can get involved as a fundraiser or donor for Students Helping Honduras by visiting http://giving.studentshelpinghonduras.org/. Congrats, Shin!

A quick and easy way to tell if a nonprofit spends money wisely

I recently read a thought provoking article.  Donors want financial transparency for churches.  Some quotes form the article:

 "Christian nonprofit groups and churches are being urged by donors to be more forthcoming about their spending amid the economic downturn and massive alleged fraud cases involving money managers like Bernard Madoff."

"I'm not giving to pay some executives to pad their pockets," Young said. "I'm giving for people to do God's work. I don't think anybody needs to get paid half million or $1 million a year for running a 501c3 (nonprofit group). I think that would be excessive."

"In tight economic times when donors are hurting financially and they're stretching their dollars to give to churches and charities, they're just simply more concerned about their dollars making a difference," he said."

Even transparency may not be enough sometimes.  If the institutions that invested in Madoff's ponzi were completely transparent about it, would anyone have noticed?  Madoff was respected.  The point is, even if all expenses were fully disclosed, it's tough for  the average donor to tell if money is being spent most efficiently.

Here's is one way to quickly guage an organization's spending habits.  Look at the software and logo's on their online donation pages.  If you see logos from Kint*ra, Black*aud, or Con*io, you know that the org is significantly overpaying for their online fundraising.  You could also be certain that close to 10% of your donation will never make it to the charity.

Sometimes it's difficult to tell if a nonprofit spends wisely.  This little trick is a surefire way to know that you're supporting a nonprofit that doesn't mind overspending on software.  That's probably a good indicator that money is not being spent responsibly in the rest of its programs.

Security and online donations - some overlooked factors

Some standard guidelines for nonprofits accepting donations online are:

1. Use donation pages are 256-bit SSL encrypted
2. Protect your database by limiting access to it and hosting it with a reputable hosting provider
3. Hide Credit Card info.
4. Better yet, don't store credit card number.  Why do you need it?  Nothing good can come from a nonprofit saving a donor's credit card number.

These are fairly standard guidelines

But nonprofit managers overlook the donation trail.  Namely, the path that money from an online transaction takes at it makes its way to your organization's bank account?

Sometimes getting many different groups into the act is a good thing.  Take coffee for instance. The supply chain and complex.  But everyone involved from the farmer to the shippers, to the retailers themselves wring out the inefficiencies so I could buy some sweet fresh Columbian coffee for under $10 a pound.  It's magnificent.

But other times, like with your online donations, getting a lot of people into the act is a bad thing.  Several problems arise when an online donation makes too many stops on the way to your organization's beneficiaries. 

Let's follow the trail of a $100.00 donation made online through a typical nonprofit online donation system.

1. Day 1:  Donor retrieves credit card and submits an online donation to his friend who is running a marathon for charity
2. Day 1:  Data is transmitted to a payment processing firm that accepts the transaction
3. Day 3:  Payment processing firm deducts roughly $3.00 in fees
4. Day 3:  The remainder of the money is wired to the software company that hosts the web site where the donation was made
5. Day 5:  The software company deducts another $5 to $10 from the donation for their fees
6. Somewhere between Day 10-14:  Software company wires donations in batches to the nonprofits bank about
7. About 2 weeks later if your're lucky:  Most of the money is available to be used to run your organization's programs.

Steps 4 to 7 are unnecessary, costly, and inherently risky because:

The software company that is handling your money is typically a small, private company.  Lord only knows what their financial situation is.  What if they go out of business?  it shouldn't matter.  Your money should never be in the hands of the software company. 

The same rules apply for the public software companies too.  We know the one that was recently delisted  (starts with a "K "and rhymes with Schmintera).   We also know about the one that was supposed to go public but then pulled its offering (Starts with "C" and rhymes with Gronvio).  Delistings and IPO retractions don't happen at healthy companies.  The fact that they have your donors' money is a scary prospect for your organization. 

Plus, I'm sure these software companies, public or not, are not run like Swiss banks.  These are  software people (geeks like me) handling your money.  Why?  Would you have your accountants build your web site?  It's an unnecessary step.  

Your software vendor Absolutely does not need to handle your money

to populate your database with the information about the transaction. 

Let's not forget about the cash flow issue.  Why do you have to wait 10-15 business days to get your money?  This is a Pony Express timeline. What year is this?

So lets return to the plight of the poor $100 donation and its long journey to your organization's coffers.  This is the right way to do it.

1.  Day 1:  Donor retrieves credit card and submits an online donation to his friend who is running a marathon for charity

2.  Day 1:  Data is transmitted to a payment processing firm that accepts the transaction

3.  Day 3:  Payment processing firm deducts roughly $3.00 in fees

4.  Day 3:  The remainder of the money is wired to YOUR organization where you can use it for your programs.

If you're not doing it this way, what's your excuse?  Do your donor's know  bout the long journey that their money is about to embark on when they click submit?

Nonprofit technology blogarrhea

Here is a link to a blog post stating that there is another blog post about 10 other blogs that you should be reading.

http://ext337.org/article/which-nonprofit-technology-blogs-should-you-be-reading

Wow.  Can this be more pointless?  Oh yeah.  How about the one that you'e reading right now.

This one about a blog post that's about a blog post about blogs.  This is like Bob Loblaw's Law Blog.

Welcome to Google life.  Just make links, baby!  Do some networking with other bloggers and link like hell to each other.  It doesn't matter if you're wasting everyone's time because you might make some ad money or get a job out of it!

Fragmentation.  I'm not sure what to do about it in the blogosphere.  But it's a big problem in the nonprofit sector.  There are a lot of smaller orgs that are fighting for the same donor base and competing against bloated giants that overspend on marketing.  It's hard for the little guys to compete if they cannibalize each other.

Merging may be a great way to survive the down economy and it could give the new orgs a competitive advantage once things turn around.

The biggest factors preventing a lage-scale roll-up may be organizational culture and behavior.  Most startup nonprofits were launched by fiercely independent entrepreneurs who were fed up with the status quo or large national org committed to their cause (How many breast cancer nonprofits are there?). The attitude of the founder or director pervades the entire company.  And it's difficult to get 2 renegade groups to admit that it's better if they joined forces to fight the man.

But I think that as reality hits (and it will), merging may be a viable option for good, smart organizations that just need a little help to cross the chasm.

Considerations when Choosing an Online Donation Processor For Your Nonprofit

With the wealth of options on this commodity, nonprofits should choose based on fees, security, company stability and flexibility.

Fees

Network for Good fees are out of control. 7%. That's way to high. I don't know what happened. I used to promote them too but can't do it anymore in conscience.

Consider Google Checkout or Paypal.  Their fees are in the low 2's and their is no monthly fee. One misconception is that you need a nonprofit-centric payment pocessor. It's simply not true.  Many payment processors that target nonprofits mark up their transaction fees.

Company Stability & Security

Even worse, the nonprofit-centric payment processors are small, private companies. Who knows about their stability?  You can't see their financials and you may not want to. Google and Paypal are not going anywhere.  A big part of security is knowing that you will get you money.  The last thing you want is to lose donations because you payment processor folded.

Flexibility

Another great thing about Google and Paypal is that they are flexible enough to meet many payment needs. Donations, e-commerce, pledge events, event registration, auctions, etc... sky's the limit.   There ae also scores of developers who ae experts with the API's so finding developers is easier too.

Other Options

If yo'e simply not a fan of Google or Paypal, try Authorize.net , Cybersource (Bank of America), or First Data. These are big, stable, secure companies so you're money is safer with them than the upstarts.

Walkathon software demo

We have a demo!  Try it out for free.  SWEET works great for any type of "a-thon," road races, bike events, marathons, road races, etc...

See why so many nonprofit organizations rave about their SWEET fundraising software.  

http://www.blueskycollaborative.com/sweet/

• Test the online registrations
• View fundraising pages and test online donations
• View reports and more

Find the Perfect Fit Without Hassles.  Test the features. We won't ask you for an email address or contact information. It's completely free and easy.

Go green: Another advantage of adding software to your walkathon or pledge event

This post may seem obvious but I think it's worth it.

I spoke to an Executive Director of an org that runs a walkathon with over 1500 participants.  Everyone registers on paper and receives a pledge sheet and instructions via snail mail.  When it's all said an done, we're talking about at least 5000 sheets of paper, 2000 envelopes and stamps, and thousands of checks. 

This is not good considering there are much better and accessible ways to do this.  And I'm not even taking into account the inefficiencies of running an event manually.  Yet, the majority of walkathons and pledge events in th US are manually run affairs. 

Part of the reason might be the fear of losing money to expensive software vendors.  One way to hedge your risk is by choosing a vendor who won't charge transaction fees and won't stick you with surcharges if you exceed a certain number of registrants.  This way, as your event grows, your costs won't grow with it.

Regardless of who you choose, moving your event to a software platform is the responsible thing to do for many reasons.  And in a market that's driven by social responsibility, adding the right software to your walkathon or pledge event is the right thing to do.

Risks associated with adding online fundraising software for your walkathon or any athon

Wow!  What a crazy week.  An hour ago the house rejected a $700 Billion bailout plan for failed financial institutions.  Immediately the Dow plunged 500 points. 

Unless you lived through the depression, you are like most investors in that you felt safe about where you put your hard-earned money.  I don't know if that's the case anymore.

For nonprofits, a great lesson to take from this is to make wise decisions about where you are allowing your money to go before it actually gets into your own bank accounts.

Most walkathon fundraising software vendors force organizations to process transactions on the vendor's own servers.  This allows these vendors to skim off the top of every donation as a transaction fee.  That's how they make their money.  They process an organization's donations, hold the money, and then send it to their clients quartlery or monthly. 

Some examples of these vendors are C****o, K*****a, and F***t G****g.  They are all either small, privately held firms or have experienced financial problems recently.  One was de-listed and another unexpectedly pulled an IPO off the table.

In uncertain times, it's really difficult to be sure whether these companies are on solid financial footing.   But it's more certain that if they go under, their nonprofit clients stand a good chance of losing their donations.

Other offerings, like SWEET, process donations with large, stable firms like Paypal, Google and Authorize.net.  These payment processors typically deliver funds to the nonprofit within 48 hours.  These types of systems have inherently less risk than the aforementioned payment processor solutions because your money is being handle by larger, more stable companies.  Who could argue that Google is not on solid ground?

Furthermore, the window of time in which Paypal and Google are holding your money is much shorter so the likelihood that anything bad would happen to your money in that shorter window is much lower.

Finally, don't let your organization's stability hinge on the fiscal responsbility of your software vendor.  If Blue Sky Collaborative went out of business, their clients would not lose any of their donations because the money is going through Google or Paypal.

Overall, the benefits to running your event using a software platform significantly outweigh the risks.  But nonprofits owe it to their donors and stakeholders to ensure that their money is as safe as possible and is in-house as quickly as possible.

Uplifting Athletes at Penn State

Big ups to ESPN blogger Adam Rittenberg for covering the Penn State Uplifting Athletes Lift for Life Event.

http://myespn.go.com/blogs/bigten/0-1-25/Lift-For-Life-recap.html

http://myespn.go.com/blogs/bigten/0-1-18/Penn-State-takes-on-weighty-cause.html?post=true

This isn't your run of the mill NCAA Division 1 athlete story that makes the ESPN home page.  There are no rules or laws broken.  No firearms were brandished.  No alcohol was involved.  Still, it's a story worth telling on ESPN. 

Former Penn State wide receiver Scott Shirley started the Lift for Life event in 2003 to raise money for his organization Uplifting Athletes.  The funds from the event - $300,000 to date - are sent to the Kidney Cancer Association.  You can learn more about Uplifting on their site.  At it's core, the story is about a son and his commitment to his Dad.  It's awesome.

The Lift for Life event was Scott Shirley's brainchild and is flat out brilliant. (http://liftforlife.upliftingathletes.org)  It's a typical a-thon in which participants collect pledges.  The similarities end there. 

The event day activities are a series of strength and fitness events in which teams of current and former Penn State football players compete.  When is the last time you've seen giant tire-flipping at a nonprofit event?  Fans and onlookers are treated to a good show and are likely to be watching some future NFL stars.   

The Lift for Life event is on the verge of scaling to other Big 10 schools and I don't see why it couldn't expand to other conferences and divisions for that matter.

In 2008, Uplifting Athletes took a huge leap forward by raising $75,000 in Lift for Life.  In 2007, they raised $14,500.  Not bad, Scott.  I know there are plans for other Lift for Life events at Colgate and Ohio State.

The readers of this blog know that I always bring things back to takeaways that help your fundraising.  There are so many here.  The main ones are:

1. Know your audience and tailor your events to their interests and "strengths"
2. Be patient.  Nothing of substance happens overnight.  This is the 6th year for this event and they've crossed the chasm.  Sky's the limit now.
3. Use the right a-thon software.  It does make a difference.  Lift for Life experienced a 5x revenue increase this year.  Event participants attributed some of the gains to the usability of SWEET software for fundraising events.
4. Be creative!  You know how many walks and bike rides there are out there??  You can make an a-thon out of ANYTHING.

Walkathon software that will increase your event revenue

We are seeing more and more examples of organizations increasing their pledge event revenue by using SWEET event fundraising software by Blue Sky Collaborative.  At first, I hesitated to attribute their success to the software.  But it has become difficult to ignore the real impact that SWEET is having on event revenue. 

Don't take my word for it.  Here is a note from Scott Shirley, the Executive Director of Uplifting Athletes.

Hey Guys!  Did you know that at this time last year, (our old fundraising software) had only received $1,995 (out of a total of $14,166)?  So far this year…the guys have raised $10,572 with Blue Sky (Collaborative).  I asked the guys last night and they said the biggest difference is the ease of use for the participants...

You can find their site at http://liftforlife.upliftingathletes.org.