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The psychology behind the decline in giving and what you can do about it

It’s no secret that the number of people in Canada who give has been declining since 1990. This means charities and nonprofits have had to rely on a decreasing pool of donors for their fundraising and operational needs. But, the bigger question is why are fewer people donating than ever before and what can we do about it?

As a former psychology major, I wondered if any social psychology theories could help explain this phenomenon. During my research, I realized that my intuition was right. So, here are three social psychology theories that may point to why Canadians are donating less:

Social loafing

Have you ever been assigned a group project and noticed that some of your group members put in less effort than other group members? This is known as social loafing: the tendency for people to put in less effort because they are aware that there are more people to contribute to the same project or goal.

Now, imagine you send out a generic email asking for a donation. One of your potential donors receives the email and realizes that it was sent to numerous people. Based on the email content, there doesn’t seem to be much urgency to donate. So, your donor decides not to donate because “someone else will” eventually. This is social loafing in action.

What you can do about it

When you request a donation, it’s important to clearly articulate the donation’s impact (that every penny counts) and your financial need. Let your donors know that donations are low. Your donors may be more willing to help if they know how and why their contribution will make a difference.

Cognitive dissonance

Cognitive dissonance is the feeling of discomfort when you realize there’s an inconsistency between your attitudes and/or behaviours. So, you rationalize the attitude or behaviour to make yourself feel better.

For example, say someone donated once because they believe in your cause, but they decide against donating again and become uncomfortable. So, they justify their decision to make themselves feel better through objections like, “I needed the money more” or “my small donation won’t make much of difference.”

What you can do about it

Again, communicating the impact and value of a donation may motivate your donor to take action. But, consider taking it one step further by putting yourself in your donor’s shoes; tell your donor your organization understands not everyone can contribute monetarily. And instead, offer alternatives to cash donations such as volunteering or in-kind donations. Your donor may be more likely to give if they feel understood.

Social exchange theory

Social exchange theory is how we evaluate our relationships based on its costs and benefits, what we think we deserve, and whether there are better alternatives.

For example, if a friend doesn’t return your texts or calls, or cancels plans more frequently, we may wonder whether the friendship is worth our time. And if the costs outweigh what we put into the friendship, we will be more likely to end it. And it’s no different for your donors who will evaluate whether their social exchange (i.e., their donations, volunteer time, etc.) is reciprocated by your organization.

What you can do about it

Do you have a donor retention strategy? If not, now is the time to build one. And if you already have one, think of new or more ways you can thank your donors. For example, share your successful volunteer stories or your mission success stories that tell your donors how they helped to make a difference.

And when you ask for another donation, don’t start with big requests like legacy giving or large sums. Instead, build trust through the foot-in-the-door technique by asking for something small. As a result, your donor will be more likely to consider the big ask later on.

Are you looking for more funding ideas or resources? We can help!

Adrienne Vansevenandt

Volunteer Alberta

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Don’t wait for a crisis to diversify your revenue

For many nonprofits and charities, revenue diversification happens when a crisis strikes such as the loss of a primary funder or investor. But, if nonprofit organizations can be strategic and proactive in their revenue diversification, they can mitigate this risk.

At Volunteer Alberta, our leadership team has been working hard to diversify our funding. So, I sat down with our Executive Director, Karen Link, to discuss revenue diversification and how other nonprofits can get started.

What does revenue diversification mean to you?

Karen: It means financial sustainability – it’s looking at multiple revenue streams to mitigate risk and to reduce dependency on just a few sources of funding.

Why is it important for nonprofits?

Karen: Revenue diversification goes beyond risk mitigation and financial resilience. It’s demonstrating your relevance to more stakeholders. When you diversify your revenue, you have to think about who cares about what you care about. It’s not just the government. It ranges from ministries to corporations, to foundations, to individuals.

There are different sources of revenue such as:

  • Governments (federal, provincial, municipal)
  • Foundations (family, community or corporate)
  • Earned revenue (fee for programs and services)
  • Donations and fundraising (lotteries, casinos, donations)

And there are other emerging trends in revenue diversification including:

  • Saving costs by partnering on service provisions (shared staff, shared infrastructure, and shared programs and services).
  • New business models that are similar to social enterprises. For example, partnering with a private business that wants to do something that affects your clients. So, that’s something you could be a part of but not necessarily initiate.

How do organizations even begin the process of revenue diversification?

Karen: There are nine steps to revenue diversification. Step one is you need to understand the impetus for change. You need to understand the need to establish funding that’s reliable, flexible and varied from different sources. Your board needs to be on board as they have a role to play; they have to understand the vision and work their networks.

Once the need is clear, your organization undertakes other steps including a review of your funding sources within the last 10 years, identifying potential investors, evaluating the internal capacity you’ll need, consulting with others, and managing risk.

Finally, you develop your implementation strategy and put it into action. After that, it’s all about assessment and continuous improvement. Improve, scale slowly, and keep building within your means; you need the capacity and the time to do it.

What are the common barriers nonprofits experience when they seek to diversify their revenue?

Karen: Internal capacity is often the biggest barrier. You’ll have to be able to identify prospective new funding streams or investors and establish and maintain those relationships. You need dedicated people for any type of business development. You need to invest in the right people to generate more revenue.

Most times, people try to focus on business development with existing resources, but they don’t realize it takes additional resources to develop those business models and establish/maintain those relationships. You have to spend money to make money.

What tips/recommendations would you give to nonprofits struggling to find other sources of revenue?

Karen: The number one thing is to consult – talk to others about what they’ve done, talk to other organizations, engage your board, engage your staff, and think outside the box. Think about who cares about what you care about. Look at how people are making money and saving money.

There’s no one size fits all. But, when you talk to other people about how they’re diversifying their revenue and how they’re generating revenue, you can get ideas for your fund development plan.

Another important thing is to have a clear aspirational goal – what is it that you want to see? And then make and test your assumptions. This is your theory of change.

For example, your assumption could be I believe people would pay more for our services. And your theory of change could be if we build a platform where the reporting and resources would be so valuable, people will be inclined to pay. Be bold and put those assumptions out there and test them.

Are you ready to diversify your revenue? Get started with the 9 steps to revenue diversification!

Adrienne Vansevenandt

Volunteer Alberta

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Guest blog: Event liability tips from The Co-operators

Hosting an event can be an important part of any nonprofit’s activities; whether it’s to build awareness about your organization or to fundraise for a specific cause. Making sure you have the right insurance coverage for your event is important to protect you and your organization. But what kind of insurance do you need? Does your Commercial General Liability (CGL) policy cover your event?

Depending on the nature of your event, there are a couple of options available. For single or multi-day events, it may be best to purchase a Party Alcohol Liability (PAL). This coverage is available with or without the service of alcohol. Any claims from this event would be made against the PAL policy; therefore, protecting the claims experience of your organization’s CGL policy. This policy needs to be in place ahead of your event and there is an additional cost for the policy.

If you host events more frequently, insuring your events as a part of your CGL policy may be a better fit; provided that your insurer is aware. By doing so, you are not required to submit a new application for every event that you host, but in some cases, it could increase the cost of your policy.

No matter the event, your insurance advisor is there to help make sure you have the right coverage – it’s always best to discuss the details of your event with them ahead of time.

If you have questions or would like to learn more about insurance for nonprofits, please don’t hesitate to contact us or visit our website.

Dominique Nadeau

The Co-operators

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Giving back: The benefits of getting involved with nonprofits during your post-secondary education

“What do you want to do when you graduate?”

September means a few things: green leaves and grass begin turning yellow and gold, the wind is a little crisper, pumpkin-spiced drinks are back, and of course, students are back in school.

As a recent grad, I reflect on my post-secondary and employment journey often. The truth is, I didn’t always know I would be working in the nonprofit sector. That’s because I had no idea what it was, and the important role it plays in civil society.

When I graduated in 2015 with a Bachelor of Arts degree, I was unsure of where and how to apply the important theories I learned. And once I left the campus environment, it felt like there were no options.

So, I went back to school and finished another Bachelor’s degree in 2018 following a failed attempt at being a barista along with a string of other odd jobs.

Praxis makes perfect

In the last year of my first degree, I enrolled in a course with a Community Service-Learning component, which paired me with a nonprofit organization for a 20 hour volunteer placement.

During my placement, I had to reflect on my volunteer experiences, and draw connections from course materials and content. As a post-secondary student, this was exactly what I was looking for – a way to apply concepts and theories that appeared abstract and intangible to real life.

I also developed practical skills that expanded my interests in addition to my capabilities. The organization I was matched with was looking for someone to develop marketing materials, which I happily took on. The work I did ended up sparking an interest that I didn’t realize I had in graphic design and outreach.

I realized that Praxis, or the bridge between theory and practice, was the ‘thing’ that was missing from my education.

I continued to pursue other experiential learning opportunities, and by the end of my second degree, I accumulated over 150 volunteer hours to complete a certificate in Community Engagement and Service-Learning in addition to my degree. It also encouraged me to pursue other volunteer opportunities in areas that were relevant to my degree.

Although not every post-secondary institution has Community Service-Learning, more institutions are realizing the importance of experiential learning. Talk to your respective career centres about similar opportunities on your campus.

3 ways giving back gives you an enriched experience

So what can my story tell you? By making the extra effort to give back to your communities through volunteerism, you’ll receive an enriching experience to learn new skills and more about yourself.

A feedback loop of learning

Volunteering with nonprofits can have a tremendous impact on post-secondary students as well as the nonprofits they participate in. In my case, I had the chance to impact social issues I care about by getting involved with nonprofits that address those issues.

That is, you get to help create the change that you want to see in the world. Organizations also have a chance to be exposed to the newest forms of thinking that come out of post-secondary institutions.

Exploring untapped potential

While the possibility to work on things beyond what your volunteer job description ranges from organization to organization, being immersed in a professional setting can give you a chance to practice skills that you already have or can help you realize skills that you didn’t even know you had!

Awards for community-oriented students

While many awards exist for high GPAs and other scholarly achievements, being involved in your community through volunteerism also pays off.

For example, the Edmonton Community Foundation provides bursaries to Edmonton and/or Northern Alberta students with financial need who have a history of community involvement or leadership.

In addition to specific post-secondary institutions and awards for non-campus related activities, the Government of Alberta also has a comprehensive list of awards for community-oriented students.

For some institutions, being involved with nonprofit organizations can also give you extra credentials that will make you stand out after you graduate.

How can you get involved?

The first step to finding the right opportunity to get involved with nonprofits is a tricky task. Luckily, Volunteer Connector has made finding volunteer opportunities easy for Albertans. The opportunities posted on the site can be filtered by your interests, skills and time commitment.

Eunice Doroni

Volunteer Alberta

Low Ropes Course at Alberta 4-H Centre

Member Spotlight: 4-H Alberta invite youths’ imaginations to soar

Has the belief that youth can change the world disappeared? Nowadays, people seem more pessimistic than ever towards youth – that youth today are more apathetic and consumed by their phones and social networks.

As a result, a lot of people tend to overlook how to motivate youth to participate. But, 4-H Alberta still believes that youth can change the world and they’re helping them do it with a unique approach to engaging youth.

4-H Alberta is a youth-oriented organization offering both urban and rural youth a dynamic and inspiring environment to learn and grow by doing. In their 2018 program year, 4-H had 5,885 youth members from ages 6 to 20 across Alberta. And, it’s not hard to see why youth sign up.

The 4-H approach to youth: Learn to do by doing

What 4-H does differently is that they create a safe and supportive environment that invites youth to not only govern their own clubs but also direct their own learning and skills development in any subject that interests them.

“The possibilities are endless and limited only by the imaginations of the members themselves,” says Bernadette Sereda, Leader Screening Coordinator at 4-H Council of Alberta (the nonprofit division of 4-H Alberta that handles risk management). “4-H members can pursue whatever projects they can dream up so that potential is perhaps the most appealing reason for youth to join 4-H.”

Some of the possibilities include community service, summer or winter camp, projects, clubs, conferences, travel exchanges, and so much more. In fact, community service and public speaking are member requirements while projects can range broadly from computer coding and woodworking to horticulture and other food and agriculture related projects.

Youth members also elect their own club leaders and mentors based on who they want to further their learning and growth. By providing a solid and safe framework for young people to run the show, 4-H teaches youth life-long leadership skills.

Why youth join, return and become 4-H alumni

And, 4-H’s approach is working as youth keep joining or returning. According to their 2018 youth member survey, some of main reasons youth join are because they thought the events, programs, and projects sounded interesting, they wanted to develop or learn a new skill and/or they wanted to meet new people.

Interestingly, youth’s top five reasons for why they come back to participate are similar to why they joined:

  1. It was fun.
  2. I developed friendships with other members.
  3. I want to improve my leadership skills.
  4. I enjoy project competitions/I want to go to camp.
  5. My parents have encouraged me to continue.

4-H also attracts youth by engaging entire families into the program. “4-H leaders and families are vital to the program,” says Bernadette. “We engage families as volunteer leaders, parent volunteers or some simply show up for their children to help, support, share and celebrate.”

However, it is mainly youths’ experiences within 4-H that keep bringing them back even as alumni (age 20+). Beyond their programs, 4-H rewards youth through awards, trips, scholarships, and recognition of their accomplishments.

“Many members once aged out of the program return as leaders themselves as they are inspired to provide the sort of mentorship that they enjoyed,” shares Bernadette. “One of the reasons that 4-H is great is because it can be whatever it needs to be to serve and enrich individual lives and communities at large.”

4-H Alberta’s program year for 2019/2020 opens this October.

Are you looking for more ideas to captivate youth? Check out Volunteer Canada’s youth engagement resources.

About 4-H Alberta

This Alberta institution and popular program has been around since 1917. Over the years, 4-H has quietly evolved into a dynamic program whose projects encompass everything from active living, arts, science and technology, crafts, cooking, agriculture and so much more!  Today’s exciting 4-H program gives urban and rural youth and adults life-long skills such as co-operation, leadership, interpersonal relations, critical thinking, decision making, organization, public speaking and community service.

Adrienne Vansevenandt

Volunteer Alberta

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