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Tuesday, August 22, 2017

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The Problem With Emergency Appeals
Nell Edgington

February, 2010


At the risk of going against the crowd, I’d like to add my perspective to the Idealist crisis.  Idealist.org is a job site for nonprofit organizations that has been around for 10 years.  It’s a great site that brings nonprofit organizations and aspiring nonprofit job seekers together.  It has launched many a great career, including that of Rosetta Thurman, nonprofit consultant and Gen Y leader who is a huge supporter of the site.

Earlier last week Ami Dar, Executive Director of Idealist, sent out an emergency appeal for funding to Idealist supporters.  It seems that the recession has taken a serious toll on the nonprofit organization, and they are desperate for funding to stay afloat.  Ami’s impassioned appeal has made its way around social media sites and raised quite a stir. They are hoping it will bring in some serious donations.  And it seems to be doing that–you can see the running tally of recent donations on their homepage.

I admire what Idealist does and think they serve a real need, but with this campaign they are making a mistake that nonprofits sometimes make when they hit a crisis like this.  An appeal for emergency funding can raise quite a bit of money, for a time, but then what?  What is the long-term plan? How will Idealist overcome the obstacles that got them to this place so that they can emerge stronger, more effective and more financial sustainable in the future?

In his appeal, Ami says that the weak economy got them to this place because of a significant decrease in job posting revenue over the past 16 months.  That is completely understandable.  But over those past 16 months what has Idealist done to diversify their funding model?  What has been the result of those changes?  And what are their plans for the future?  Ami is fairly vague on these points:

Very briefly, here’s what happened. Over the past ten years, most of our funding has come from the small fees we charge organizations for posting their jobs on Idealist. By September 2008, after years of steady growth, these little drops were covering 70% of our budget. Then, in October of that year, the financial crisis exploded, many organizations understandably froze their hiring, and from one week to the next our earned income was cut almost in half, leaving us with a hole of more than $100,000 each month. That was 16 months ago, and since then we’ve survived on faith and fumes, by cutting expenses, and by getting a few large gifts from new and old friends. But now we are about to hit a wall, and this is why I am reaching out to you.

I understand why they are in this position. But what I don’t understand is how they are going to get out of this position after the emergency funds that they are attempting to raise dry up.  According to Ami, their plans for the future are:

If in the next week or two we can reach everyone who’d give us a hand if they knew we are in trouble, I believe we’ll come out of this crisis even stronger than before. I believe this because while this has been a tough stretch, I’ve never been more optimistic about the future. The content on Idealist has never been richer, our traffic is surging, we are building a whole new Idealist.org that will be released later this year, and the potential for connecting people, ideas, and resources around the world has never been more urgent or more exciting. Your contribution will allow us to maintain all our services…and it will also give us some time to diversify our funding. Being able to breathe, recover, and plan ahead for a few months will be an incredible blessing.

If Idealist hasn’t been able to figure out financial sustainability in the last 16 months, why should I think that they will be able to do it in “a few months”?  And scarier still is the fact that economist are predicting that the jobless economic recovery will continue for the foreseeable future.  So I’m not sure “a few months” is really going to change things all that much.

What I would like to see from Idealist is a bold plan for action, a revamped business model that will allow them to continue to provide needed services to the nonprofit community in a financially viable way.  Emergency funding is great, but only if it is a stop gap measure that will get an organization through a very specific, finite period of time and that on the other side of the crisis is a new business model for a viable way forward.

I think the nonprofit sector can learn something from Idealist’s crisis.  There are many other nonprofits in this same position.  And many who are contemplating or have launched an emergency appeal.  But keep in mind, you can only cry wolf once.  So while you are working to stay afloat, you also need to be taking a hard look at how to radically change your approach, your business model, your funding streams. And you need to put those changes into a comprehensive plan and communicate that plan to your funders. In that way, you all will know that you won’t be back here again.

// : The Tactical Philanthropy Blog hosted a debate between Nell Edgington and Rich Polt from Louder Than Words about the Idealist appeal.  You can read the debate and comments here.  

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