The Third Sector Report By Jeffrey Wilcox

What's Working For Nonprofits: Lessons Learned From The Big GuysJeffrey Wilcox - The Third Sector Report

October 25 – While most people have heard of the “Fortune 500,” those mega-giants of business and industry that affect the entire American economy, few know about the “Philanthropy 400.”  It is a ranking of the nation’s largest charities according to private sources of contributions and is published annually by The Chronicle of Philanthropy, the Third Sector’s version of the Wall Street Journal.

Combined, the top 400 charitable organizations raised $70.3 billion in 2010 and represent roughly $1 out of every $4 contributed to causes in the United States. These organizations, like the Fortune 500, are household names; and because of their size and impact receive lots of attention for what they do and don’t do well, and what they could do better.

It also shouldn’t be surprising that hard-working people who share their generosity with these organizations are understandably critical of such things as their salaries, marketing, national service delivery systems and their relationships with local communities.

Putting criticism aside, however, there are several trends occurring in our country’s largest nonprofits that provide meaningful insight for even the smallest of grass-roots organizations. After all, the concept of people helping people doesn’t depend on size in order for the transaction to happen in meaningful ways.

During the current economic times, the headlines coming from “The Big Guys,” are not surprising: Cash contributions are generally flat except during times of natural disaster, and donations of stock have risen significantly as have contributions of products, services and other non-cash gifts.

What these numbers don’t tell the casual reader, however, is that it isn’t business as usual for the top charities. Keeping contributions at a constant has not been the result of doing what has always been done. Maintaining a “flat line” when every other economic indicator has been pointed downwards has been the result of risky innovation, breaking old nonprofit molds and hard work.

“The Big Guys” are managing their nonprofits based on five strategies that should catch the attention of any nonprofit leader. For the old-timers, these strategies underscore that there are new ideas about charity in the marketplace and within other generations. The first strategy is giving people “an experience” rather than “recognition.” Susan G. Komen, for example, brings contributors closer to their mission through field trips and overseas expeditions. The San Francisco Opera Association provides access to in-depth learning experiences about the art form, direct observation of each step of opera production, and personal interactions with performers.

The second strategy is a commitment to creating a pipeline of future contributors. The Combined Jewish Philanthropies of Greater Boston created an invitation-only “president’s circle” for givers in their 30s and offered a way to convene and empower this age group in social causes and social reform. Children’s Memorial Hospital in Chicago is spearheading a dance-a-thon mania across the city that provides safe, ongoing entertainment options for several age groups while building a steady stream of charitable income.

The third approach is the personal touch over mass communication. Even the John F. Kennedy Center for the Performing Arts realized a $200,000 growth in revenue when mass mailings gave way to personal letters.

The third reason is the belief that lobbying and advocating are the same things. They are not. Advocating is at the backbone of the work of nonprofits. What a nonprofit does in and for a community gives legs to what it believes is right and necessary for a community.

The fourth strategy is targeted minority community outreach and involvement. The Museum of Fine Arts in Houston developed special campaigns and convened leaders and contributors from minority communities to support special galleries representative of their cultures as well as relay messages to the public about these communities.

The fifth approach is aggressive use of and ongoing management of social media. The Big Guys are taking this seriously. Public Broadcasting Services (PBS), for example, has over 840,000 followers on Twitter and American Red Cross enjoys a following of 536,000. Today, community organizing and rallying are taking on new meaning as managed strategies both in the streets and through the airwaves.

In the nonprofit world, the key to success is sustainability. This year’s Philanthropy 400 are proving that it is possible to achieve sustainability even in an economic downturn. Their strategies also prove that cash can’t be the only tender for caring. The challenge for the rest of us is to accept the fact that their experiences and their results are applicable to any organization of any size.

Jeffrey R. Wilcox, CFRE, is president and chief executive officer of The Third Sector Company, Inc. Join in on the conversation about this article on Facebook or drop us a line at jwilcox@thirdsectorcompany.com