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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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Skilled Volunteerism: Why I volunteer and how to find a position that suits you

When I give skilled volunteerism presentations, I feel there is always a little bit of a disparity between how we talk about conventional volunteering as opposed to “skilled volunteering”. We frame skilled volunteering as this newfangled, shiny amazing thing.

And while the term is new, skilled volunteering is not a new phenomenon. So, it is important for the sustainability of organizations to look at people engagement in a new way and to understand the motivations of why skilled volunteers, volunteer.

At Volunteer Alberta, we believe volunteerism is a transformative and essential part of humanity and society. We are all committed to giving back in our own ways: whether it is formal or informal, and each of us have our own preferences.

A formal way of giving back: Skilled volunteering

Personally, I like to engage in skilled volunteering which is a more formal way of giving back. I like positions where I can use my unique skills and knowledge to help a cause that I am passionate about.

I like defined parameters of a role, but something where I can put my own stamp on my work, and clearly see how I as an individual volunteer am making a difference. I also like roles that have a flexible time commitment to allow me to both work, and participate in other social activities.

How I came to self-identify as a skilled volunteer

I realized skilled volunteering is for me through a lot of introspection, trial and error, and activities that provided me with more clarity of the type of volunteer position I am suited for. For example, I completed the Window of Work, which walks you through why you want to volunteer, what you want to share with organizations, what you’d like to gain, and what you are not interested in or able to do.

Volunteer Canada has a handy quiz that I found was spot on in describing the type of volunteer I am. The quiz identified me as a “roving consultant volunteer”. The quiz described me as, “incredibly focused and intense, wants to volunteer specialized skills, but it has to be at my discretion and within my timeframe.”

The quiz further described that roving consultant volunteers gravitate towards organizations that are clear and specific about what they need. The results also identified some things I should consider before volunteering based on my type and my main passion as international development, which is definitely true for me.

Benefits of skilled volunteering

Finding skilled volunteer opportunities became easier when I found out the type of volunteer I am. I enjoy skilled volunteering because I feel like I am valued as an individual for my own unique skills, aptitudes and experiences.

I am able to give back to my community, but also receive valuable experience and training to leverage in my career that as a young professional, I value. I have been told by some supervisors that I was considered for a position based on my volunteer experience!

I see volunteering as an important part of making me a whole person, and contributing to the resilience of my community. I don’t believe there is only one right way of volunteering, but skilled volunteering is the right way for me!

Do you want more information on skilled volunteerism? We offer a webinar on skilled volunteerism which discusses volunteer trends in the sector from the data available, as well as introducing tools to use going forward to support nonprofit people engagement. Check our learning calendar for the next scheduled webinar!

 

Victoria Hinderks

Volunteer Alberta

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Leading the way: 2018 Member Spotlight rewind

Volunteer Alberta Members are leaders in the nonprofit voluntary sector. Last year, we started a new blog series called Member Spotlight to highlight and share their successes and leading practices in our communities across Alberta.

By sharing each other’s knowledge and expertise, we hope to strengthen, promote and connect the sector. After all, we are better, together.

For January, we thought we’d kick off the New Year by celebrating the amazing work of our members. Here is how our members led the way in their communities in 2018.

Capacity building

Grande Prairie Volunteer Services Bureau (GPVSB) provides a range of services to nonprofits and recognition programs for volunteers in their community. “Our impact on the community becomes more visible as the fruits of our labour become more apparent,” says Carol-Anne Pasemko, Executive Director. “As people become more aware of what we offer, we’re getting busier and busier. When you’re successful with one organization, it brings two more in the door.”

Volunteer Lethbridge helps local nonprofits grow volunteer capacity is by promoting and leveraging the Serving Communities Internship Program (SCiP) in their community. SCiP connects nonprofits with post-secondary students by facilitating internship opportunities for students to apply their skills and knowledge.

Community outreach and services

Cold Lake & District FCSS is building a vibrant community with neighbourhood block parties. “Once somebody has a block party, they’re hooked,” says Leanne Draper, Volunteer Services Program Facilitator at Cold Lake & District FCSS. “Individuals and families get to meet each other and form social bonds that they might not have otherwise.”

The Information Volunteer Centre (IVC) for Strathcona County generously gives back to their community through their various programs and services. But, one program, in particular, is unique in how it supports other nonprofits in the community. The ‘We Care… so We Share!’ program helps to enhance the effectiveness of other nonprofits by providing much-needed equipment or items free of charge.

Through its various outreach programs, Stony Plain FCSS builds a local network that supports and establishes community resilience. Stony Plain FCSS’s most recent program, Cut it Out, leverages existing community relationships to create a safe haven for victims of family violence.

The Voice of Albertans with Disabilities is a provincial organization actively working to reduce barriers by encouraging and advocating for full participation, accessibility and equality. Through their programs and services, they are dedicated to improving the quality of life of people with disabilities, as well as ensuring people with disabilities’ voices are heard.

Youth engagement

carya encourages youth engagement by hosting a full day leadership conference for 12-18- year-old girls, called ‘HERstory’. Last December, HERstory provided young women the opportunity to connect with each other outside of their regular social circle and explore their power to make a positive difference in their community.

Vegreville and District FCSS takes a unique approach to encourage youth to volunteer through a program called, Youth Making a Change. The program successfully engages students in grades 10-12 in board governance, and as a result, encourages succession planning for the future of our sector.

Volunteer Airdrie breaks down barriers for youth engagement through the Leadership Empowerment and Achieving a Difference (LEAD) program. LEAD is a ten-week program that is free of charge for youth grades 7-12 with ten in-class sessions and 20 hours of community service or volunteering.

We hope our members’ stories from 2018 encourage and affirm your own organization’s initiatives and community outreach. Stay tuned for more inspiration and feel-good stories as we will continue to spotlight Volunteer Alberta Members in 2019.

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