Posts Tagged ‘development’

McKinsey on Non-Profits: Managing the Economic Downturn

I attended an event at McKinsey last night about non-profits managing during a downturn.

The main question of the night was: “How do you manage your organization with decreased revenue (through decreased foundation, government and individual giving) + increased demand for services?” Since many McKinsey alumni participate on boards of non-profit organizations (my husband included), McKinsey held this session as a way to be part of the conversation.

The speaker (Steve Davis of the Seattle McKinsey office) discussed several “checklist” items at a high level in 4 buckets –

  • strategy
  • finance
  • operations
  • organization

I am most interested in the marketing and development aspects of the conversation so that’s what I will focus on in this post.

A summary of his thoughts about marketing and development –

Fundraising – targeting is key to keep fundraising working during this time. Use very specific messaging to connect with your constituents.

For example, one of the largest universities in the countries made a commitment to need-blind admission. However, with this commitment they created a gap between income and spending.  To help alleviate this issue, they targeted their fundraising efforts with a specific message stressing this commitment even during the tough economic times.  And in doing so, they were able to fill in the gap through their alumni giving.

New community engagement – go out to the community, open up, be transparent.  Of course proprietary information should be kept that way, but whatever you can share, you should.  Now is not time to retrench. My favorite thought:  Engage the community online! Get away from the “we control the message” idea.  Let them be part of the conversation about philanthropy in their community. Steve is a web guy too, having worked with Bill Gates in a past life.

When asked the question, he didn’t know which orgs have used web 3.0-type tools successfully but I will follow up with him. I think there are many organizations using online tools well.

Here are three of my favorite examples.  Please feel free to add some of your own in the comments.

  • Kiva
  • NYPL
  • NPR

Comment from Nancy L. Raybin, Raybin Associates, Inc. (her firm publishes Giving USA, an annual report on fundraising trends) – Giving last year was $300 billion, which is still a big number, even in this environment.  Religious giving was up last year because people were scared so they went to their churches, mosques and synogogues for solace.  Public-society benefit* giving  was up.  Social service organizations didn’t have the means to organize in the same fashion as religious groups and public-society benefit organizations so they suffered.

I spoke to Nancy for a few minutes after the talk, and she said there is a huge opportunity to reach the under 30 set who are completely missed by direct mail.
I also chatted with Steve for a few minutes and he agreed that there is huge opportunity to foster the Obama-style community-driven giving like never before.  Besides fundraising potential, it fosters the community to support your work (as a volunteer, board member, donor, etc)

And of course, this requires engaging the community in conversation online and offline.

*organizations such as the United Way, Jewish federations, and freestanding donor-advised funds. It also includes organizations formed for research in the sciences or social sciences, policy institutions, advocacy groups focused on civil rights and voter education, community and economic development organizations, and groups working to serve veterans and military families.


Steve Davis, MA, JD, is a senior advisor for McKinsey & Company’s Social Sector Office, where he focuses on global health, development, and philanthropy. He is also a consultant and community volunteer active in many nonprofit organizations and business enterprises, and he recently served as interim CEO of the Infectious Disease Research Institute (IDRI) in Seattle. Mr. Davis is a lecturer at the University of Washington’s School of Law in the Intellectual Property Program. Until 2007, Mr. Davis was the president and CEO of Corbis, a global leader in creating, sourcing, and distributing digital media. Before joining Corbis in 1993, he practiced law with the firm of Preston Gates & Ellis in Seattle, specializing in intellectual property issues. Prior to that, he held various positions in international refugee and human rights organizations. Mr. Davis currently serves on the boards of PATH, IRDI, the Fred Hutchinson Cancer Research Center, The Seattle Foundation, Global Partnerships, Crucell, Intrepid Learning Solutions, and PlanetOut, and he is a member of the Council on Foreign Relations. He previously chaired the Technology Alliance, United Way of King County, and the International Practice Section of the Washington State Bar. Mr. Davis received his BA from Princeton University, his MA in Chinese studies from the University of Washington, and his JD from Columbia University School of Law, where he received the Faculty Prize in international law.