Accountability and Transparency: A Must for All Israel-Based Organizations in the “New Normal”

by Avrum D. Lapin

Recently, I had the privilege to co-organize and co-present (along with Shuey Fogel from the wonderful site nonprofitbanker.com) a seminar for Israeli nonprofits entitled, “Adjusting to the New Normal: Putting Transparency into Practice.” My presentation was on the need for nonprofits to tailor their fundraising strategies to an evolving American audience, entitled: “Preparing Nonprofits to Succeed in the New U.S. Marketplace.” This is a timely topic, and one that I greatly enjoy presenting on, as changes in the contemporary U.S. funding arena are affecting international non-profit organizations (NPO’s) evermore since The Great Recession.

Donors in the U.S. are still recovering their confidence after the economic downturn of 2008-2012. This slow recovery creates hesitation and more due diligence from individual and corporate donors. Likewise, charitable organizations, reading the tea leaves or just adjusting to the “New Normal,” are beginning to pick up steam again, bolstering their staff and fundraising capacity after a long period of belt-tightening, which has resulted in increased competition for charitable dollars.

Today’s funders and donors seek more involvement, information, and innovation from nonprofit organizations. They are looking for tangible results that they can experience immediately. At EHL Consulting, we are seeing that contemporary major donors have committed to those organizations that offer them personal engagement with their philanthropy, and donors are becoming increasingly savvy with their investments. They expect good governance from the organizations they support, and demand clear evidence of how their dollars are making an impact.

As we’ve seen from the recent Giving USA Report, contributions to international organizations by American donors continue to be on the rise, both in those years where major disasters have hit (Hurricane Katrina, for example) but more importantly, also in those years where these types of events are absent. Israel-focused NPOs still raised hundreds of millions of dollars despite the struggling U.S. economy, but that effort is becoming more challenging for NPOs. Specifically, emerging major donors in the American Jewish community must be approached in a new way, and have a unique perspective on Israel-based charitable organizations. These donors hold a different view of Israel than previous generations.

Historically, fundraising for Israel-focused organizations was predicated on a sense of Jewish pride and a passionate connection to the survival of the State of Israel. The Holocaust survivor generation of Jewish leaders and donors gave to Israel-related causes almost unconditionally. Similar to the overall trend toward diversified donor allegiance seen in the larger philanthropic arena, the unconditional support of past generations is gone.

Support in our hyper-competitive charitable environment must be earned, and Israel as a society and as a fundraising destination must earn its access to donors as well. Today’s donors are seeking ways to strengthen Israelis’ moral fiber and the country’s infrastructure and stability with their charitable contributions, especially through the support of highly-regarded, effective service-related, educational, health, mental health and advocacy organizations.

In this new marketplace, nonprofits have a special responsibility to earn and maintain trust of donors to fulfill their stated missions. The five key components of a strong fundraising strategy are a strict adherence to accountability, transparency, clarity, trust, and partnership.

Accountability

Donors are looking for organizations that they can trust. The emerging trend is for funders and donors to carefully examine how an organization is operated. Donors are increasingly smart and know what to look for to ensure proper financial controls are in place. As Shuey Fogel pointed out in his recent article, for NPOs, accuracy in financial reporting is a must.

Transparency

Stakeholders, funder, and donors expect all NPOs to tell them about their organizations in an honest, understandable, and timely manner. Complete compliance with all governmental regulations (e.g. I.R.S. Form 990) is expected. Donors increasingly check Charity Navigator, even for “American Friends” organizations, before they give. Donors want to be involved, and sharing information builds trust and leads to more donors with more commitment. An environment of transparency and open communication is critical.

Clarity

Before they give, donors must be confident that they understand what specific goals NPOs are trying to achieve. These goals must be linked to a compelling mission, Case for Giving, and vision. Donors expect NPOs to clearly articulate the intended impact of their giving. Success must be well-defined and measurable.

Trust

It is now expected that Board members will take an active and engaged leadership role in monitoring an NGO’s activities. Board members must institute policies and procedures that ensure responsible management. Board members are expected to serve as organizational stewards. Without trust, opportunities are missed and expectations go unfulfilled.

Partnership

Professionals from the U.S. and from Israel must have an understanding of the value and expertise that each collaborator brings to the fundraising process. Successful fundraising strategies to attract U.S. philanthropic support developed by today’s Israel-based organizations, both large and small, are built on equality. It was formerly the case that the Israelis were the “consumers” and set the expectations for what services and resources were needed, and Americans were the “leaders” and “implementers” in determining (and funding) the solution. This is no longer the reality.

Israeli philanthropic leaders – staff and Board members alike – are becoming full and active participants in the fund development process. Expectations of success that are determined by the disconnected activity of U.S.-based “American friends” organizations independent of their Israeli counterparts have to change. Both teams must be represented in identifying and defining the parameters for success.

EHL Consulting’s Top Ten Tips for Israel-based Nonprofits

  1. Create both a short and long term Business Plan, and have it available for viewing.
  2. Show R.O.I. – accountability requires new approaches to fundraising in the U.S. and nonprofits must demonstrate clear and direct impacts and how individual giving makes a difference.
  3. Undertake assertive donor engagement and stewardship.
  4. Be prepared to answer piercing questions from donors, both mission-based and financially motivated.
  5. Use social media to expand accessibility, communication, and outreach. Online tools such as Facebook, LinkedIn, and Twitter can engage American donors with a new voice.
  6. Personalize your organization and its work to the expectations of donors (within the mission).
  7. “American Friends” and Israeli organizational leaders must be “in sync” and committed to partnership.
  8. Create definitions of success together and evaluate progress towards defined goals often. Genuine collaboration is the key to creating buy-in from all participants
  9. Fundraising efforts must be aggressively pursued in America and in Israel. Ensure that there is a strong “value proposition” for both sides.
  10. Identify challenges and solutions that involve both American and Israeli stakeholders and supporter.

This new paradigm in the U.S./Israel philanthropic environment requires careful evaluation of the current strategy in each nonprofit seeking to solicit funds from American donors, and then a deliberate restructuring of current and future action items. Relationships need to be cultivated and nurtured, leadership capacity must be built and trained, and permanence and sustainability need to be created so that short-term results do not come at the cost of long-term gains. When NPOs provide services with a strong “selling proposition” and collaborate with their partners overseas, successful Israel-focused fundraising will be the “new normal” as we head into the last half of 2012 and beyond.

Avrum D. Lapin is the Director and Principal Consultant at The EHL Consulting Group, an international fundraising consulting firm located in suburban Philadelphia. He is a frequent contributor to eJewishPhilanthropy.com. The EHL Consulting Group is one of only 34 member firms of The Giving Institute. The EHL Consulting Group works with dozens of nonprofits on fundraising, strategic planning, and nonprofit business practices and strategies. Become a fan of The EHL Consulting Group on Facebook; TWITTER: @EHLConsultGrp; EHL Consulting Group Blog: biggiver.wordpress.com

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