Are they all gone? Did those companies — those who said they were going to do philanthropy work better than we did — finally close all their doors? Almost. And you know why? Those companies couldn’t make philanthropy profitable quickly enough to make a decent living. They took the $200 billion dollar a year figure from the AAFRC, did some calculations on what piece of it they could own, what they could charge against that small percentage and came out with stellar business plans.
But they had to be able to turn their P and L sheets from red to black in three years. We all know that in start up business, if the “return on investment” is too small, the have no choice but to close up shop and go elsewhere. Isn’t that called “opportunity costs?”
What about all the rest of us who are still working in this business, raising funds, managing nonprofits, serving a mission, talking to donors, establishing relationships, being stewards of big and small gifts and looking over the horizon to better economic times? My guess is that, mostly, we are still here. We were in it for the long haul before, and we are in it still. We do this work because we like this business. We like philanthropy, the people, the work, the mission of our organizations and personal benefit we derive from our jobs. Our ROI is largely psychic. And we know that.
I remember being amazed repeatedly when the entrepreneurs who walked in and out of my office realized that us nonprofit folks are smart. Not just smart, we are creative, work with minuscule budgets and raise millions of dollars and make tons of friends while we do our work.
So, who is still left? It is the “brick and click” businesses. What are they? Those are the companies, like DonorPerfect, who already had a tried and true fundraising system or other service and adapted that system to the Internet. They didn’t try to re-invent anything or tell us we didn’t understand our work. They already knew the nonprofit world, they knew their clients, they understood fundraising or philanthropy and its costs and nuances. They also knew how to translate those needs into the web.
Those companies already had a P and L sheet in the black. They have much respect for their clients. I don’t think I ever ran into someone who assumed that because their clients were from the nonprofit world, they must not be very bright.
And where did those other people go? I guess they went back to worlds they knew best, to re-embrace a body of knowledge they had before they thought they could “reinvent philanthropy.” With the economy the way it is, I hope they are all employed.
Where does it leave us employees of charitable nonprofits? We sure learned a lot. We saw that the gold rush didn’t produce a lot of gold. Mostly, I hope that we learned to trust our instincts better. Also, we learned much more about this new tool called the Internet and how it would affect our world. We keep learning how websites work to make our case; and we painfully learned about how an event like 9/11 can wreak havoc on what the public thinks is good philanthropy.
The short term tough news is that we have a tough stock market, the threat of war and still the 9/11 ripple affects. All of those factors have left many of us with shrinking operating budgets. Our endowments are down, our fundraising has suffered and our souls feel wounded.
But I would guess, even bet, that three years from now, most of us will still be toiling at work and still thinking we are making the world a better place. Now it’s time to look for the future, tuck those great lessons in the right spot and keep our eye on what matters most.