Recession Index

(Apologies to Harper's; thanks to the Business Journal for all the news.)

2 -- Number of initial public offerings that occurred in the entire world during the first quarter of 2009. One of those was in the United States.

40 -- Percentage of non-profit organizations that raised less money in 2008 than they did in 2007.

-4.5 -- Percentage by which the gross domestic product is predicted to decline during this quarter of 2009 by UCLA's Anderson School of Management.

2.2 -- Percentage increase in light beer sales in 2008 over 2007. Overall, alcohol consumption was up, largely fueled by increased consumption of inexpensive alcohol.

So, what happened?

Check out this awesome collection of 27 charts explaining the economic crisis at Flowing Data. Thanks once again to hot tipper Brad in Spokane for this link!

The Continuing Flap Over Obama's Charitable Deductions Proposal

In his Washington Post column today, E.J. Dionne notes that President Obama's proposed change to the charitable deduction rate "would reduce charitable contributions only marginally -- from $306 billion to $302 billion," according to "the liberal Center on Budget and Policy Priorities."

Dionne asks, "Is that too much for nonprofits to give up so the country can cover the costs of health care for the needy?"

Cyborg Implant!

If you haven't yet read the story of the man who replaced a missing half-finger with a USB drive-enhanced prosthetic, here it is. Please note the use of the phrase "beta finger" by Jerry Javala, software developer, and possessor of the beta finger.

For some reason, many find this gross (best subhead ever: "Technology has become so advanced that it can now be utilized in creepy and intriguing manners in the body." Thanks Australian Personal Computer!) when it is clearly AWESOME. So awesome.

I've recently come to the conclusion that the cyborg era will probably have more to do with thin conductive films that you can apply to your forehead (or something like that), than implants. This is a relief, as the prospect of surgery to put the internet in my brain was daunting.

However, if you have reason to use a prosthetic body part, why not make it into a digital multi-tool?

Anyway, dear readers, I am back from a long slog of moving and now it's out like a lamb!

RFM!

Quite some time ago, I promised to explain how to do a simple RFM scoring project. Here we go.

RFM stands for Recency, Frequency and Monetary. It is a method used by retailers to determine their best customers. This concept can be applied in the fundraising world to determine our best annual fund givers, which can help us prioritize upgrade and retention efforts.

Recency -- How recent was the last gift given to you?
(Database field: last gift date)

Frequency -- How frequently does the donor give to you?
(Database field: total number of gifts)

Monetary -- How much money has the donor given to you?
(Database field: cumulative giving total)

Creating the score is simple. Export an Excel list of your prospects including the three database fields listed above.

For each variable (Recency, Frequency, Monetary), divide the list into fifths, and score each fifth 1 - 5, with 5 being the high score. So, first, sort your list by last gift date, descending order (so the top of your list is the most recent last gift date). Create a column called "Recency." Assign a 5 to the first fifth of the list, 4 to second fifth, 3 for the middle fifth, and so on.

Do the same for Monetary and Frequency. When you have three columns (Recency, Frequency, Monetary), then name a column "RFM Score," and add up the individual scores from the R, F and M columns. This is your RFM Score.

Once you nail the basic concept, you can tweak the formula in lots of ways. An easy way to tweak it is weighting -- giving more points to certain factors. I often weight for recency and frequency, because I want to know who my up-and-coming prospects are. To weight, simply multiply one or more of the variables by a set value. I like to multiply recency x 3, and frequency x 2.

You can also play around with the variables. Use last gift amount instead of cumulative giving for Monetary. Look at number of gifts in the last five years for Frequency.

Of lions and last-minute announcements

Dear readers, I have been remiss in not touting WVDO's Advanced Skills
session with Josh Birkholz. It is tomorrow! I was going to encourage
you to go, but registration is now closed. Oh, me. March has
certainly roared in like a lion.

I wouldn't blame anyone for showing up at 8 am tomorrow at the
workshop, even if you haven't registered. (Bring cash.) But you
certainly didn't hear that from me.

Check it out at www.wvdo-or.org.

Sorry for no link -- I am blogging from my new love, I mean iPhone,
because my laptop is down. Don't ask -- in like a lion, I said.

And a new blog goal: announce events at least 7 days in advance.
Yikes, I guess this blog needs its own schedule.

www.amandajarman.net

More on Idea Killers (Moron Idea Killers?)

Huge thanks to F. for this image (shared in the comments from the NASA post). I decided it deserved its own post, especially now that the NASA video no longer works.

And, please pardon the pun in the title of this post. I just couldn't help myself.

Nay to the Idea Killers: NASA's Barriers to Innovation (An Instructive Lesson for Us All)

Another tip of the hat to Librarian in Black (and I swear I am going to come up with some original stuff soon), but this was too amazing to pass up:



[Update 3/5/09 -- It looks like this video's been made private. It must be all the attention from this blog, eh? It's really too bad; it is an instructive and fascinating look at how bureaucracy can stifle creativity.]

It's a report on barriers to innovation within NASA presented as a YouTube spoof on a popular TV show. I won't spoil the fun: watch it. It's absolutely worth the 10 minutes. If you don't recognize your workplace and the "idea killers" within (apologies to unknown CASE VIII Conference presenter who coined this phrase, and about whom my friend F. keeps raving), then I congratulate you on having a wonderful job.

And kudos to the NASA staff who produced this. What an amazing and instructive use of new media. I salute the folks who were brave enough to, ahem, produce an innovative report about innovation.

During this time of financial trouble, I predict that it is the people and organizations who are able to innovate who will emerge on top. And innovators will have to fight a tide of tried-and-true-comfort-zone thinking, as many people will respond to crisis by becoming risk-averse, when now is the exact time to try new things. To quote Warren Buffet: "Be fearful when others are greedy, and be greedy when others are fearful."

Obama's Proposal to Reduce Charitable Tax Deductions

The Chronicle of Philanthropy reports that President Obama has proposed reducing the amount of charitable deductions that wealthy individuals can claim on their taxes. So far, analysis of the potential effects is mixed, but the Indiana University Center on Philanthropy estimates that this proposal could cause giving by the wealthy to drop by several billion dollars annually.

The tax money gained by reducing the deduction would be used to fund affordable healthcare for Americans, certainly a noble cause.

This recalls the difference between European and American philanthropy. Philanthropy in Europe is much less established, in part due to a taxation structure that does not reward charitable donors, while providing a social safety net that is much more extensive than the one
we have in the U.S. (and thus decreasing the need for the nonprofit sector).

To me there are some pros and cons here. I appreciate that European governments provide so many services to their citizens, and I believe it is criminal that we do not provide healthcare to our people. At the same time, I can't help but think about the high level of innovation that flows from the United States' nonprofit sector, stimulated by human need and charitable donations.

Claire Gaudiani argues that American-style philanthropy is unique to our country. I saw her at an APRA conference a few years ago. She was a great speaker who really inspired me to think about the strengths of America's nonprofit sector. She spoke of the amazing things that American philanthropy has accomplished, from the eradication of polio to the establishment of some of the best universities in the world. I haven't yet read Gaudiani's book, The Greater Good, but it is definitely on my list. I'll report back when I do read it.

I'm curious to hear from you, dear readers. Will decreasing the charitable tax deduction discourage donations? Is a trade-off of some private philanthropy acceptable in return for a public healthcare system? Would you want to see a European-style safety net at the expense of the American-style nonprofit sector? Do you think these concepts are necessarily at odds?