We live in an increasingly interconnected world — a fact that not even the fanatics behind the events of September 11 can change. Driving this accelerating trend is a new generation of information technologies that includes the Internet and World Wide Web. As Wired magazine co-founder Kevin Kelly notes in a recent Wall Street Journal article, more than three billion Web pages and 20 million Web sites have been created since the initial public offering of Netscape Communications in 1995. The growth of e-mail is even more startling: Internet users send some 3.5 trillion e-mail messages annually, and the number of messages sent daily is projected to pass 36 billion by 2005.
Faced with such numbers, many nonprofit leaders may well decide the train has left the station, taking his or her prospects for future success with it. Not so, says Michael Gilbert, the founder and executive director of the , a virtual think tank and nonprofit incubator dedicated to supporting and empowering nonprofit organizations and the people who work in them. Nonprofits are in the business of relationship building, says Gilbert, and relationship building is precisely what drove the expansion of the Internet. In fact, Gilbert adds, any nonprofit leader who despairs of having missed the Internet train is focused on the wrong thing.
Gilbert shared his views on nonprofits' use of e-mail and the Web, e-philanthropy, and a range of other topics in a series of lively e-mail exchanges with Philanthropy News Digest in the fall of 2001. While we don't agree with everything he had to say, we came away from the exchange with some new ideas and concepts and were inspired by Gilbert's candor, energy, and passionate commitment to the nonprofit sector.
Gilbert is a widely known consultant to foundations and nonprofits, an innovator and researcher in the field of nonprofit infrastructure, and a social entrepreneur. His recent work includes serving as editor of Nonprofit Online News and CEO of Social Ecology, a nonprofit software infrastructure company, and directing several influential research projects, including the Nonprofit SiteAnalyzer Reports, the Nonprofit Email Survey, and the Nonprofit Email Study.
Gilbert has served as executive director of three organizations, as a board member or officer of more than thirty, and as a consultant to nearly 700 organizations in over 20 countries over the last 19 years. He was born in Sweden, lives and works in Seattle, and counts both San Francisco and Berlin as his homes away from home.
Philanthropy News Digest: Hello, Michael. There may be a few readers out there who aren't familiar with your work. Why don't you tell us what the Gilbert Center is and how it got started?
Michael Gilbert: The is primarily an incubator of nonprofit communication and management projects. We also do original research and publication work, as well as occasional consultation. We're focused primarily on the nexus of organizational effectiveness and the widespread adoption of network information and communication technology.
I founded the center when my father died in 1996, although its origins date back well before that. My father was the person most responsible for inspiring me to do something I loved for a living and for nurturing an entrepreneurial spirit in me.
Our first major public accomplishment was the launch of in April 1997. It's been in continuous publication since, and we're quite proud of its reach, its independence, its lack of advertising, and the trust that people put in it.
PND: What is Nonprofit Online News?
MG: We're fond of pointing out that Nonprofit Online News is the highest-ranking site for "nonprofit news" on the Google search engine, which ranks sites by how many other well-established sites recommend you to their readers. It's a highly filtered, annotated stream of news and resources, with a focus on nonprofit infrastructure and organizational effectiveness, and it's available in both Web and e-mail form. We estimate that we have over 50,000 unique readers each month. We launched it in April 1997, which also makes us one of the very first Web logs on the Internet.
PND: That's quite an accomplishment. How is it funded?
MG: Nonprofit Online News is an old-style Internet phenomenon. Over eighty percent of the costs of the system are in news gathering, not design or distribution. We were already operating a large-scale news gathering operation before we ever launched the publication. The incremental costs of sharing the best results with the nonprofit community were something we just decided to absorb. But as Nonprofit Online News has grown, some of those other costs have increased, so we've instituted an online support campaign.
PND: I take it you're not a proponent of nonprofits earning income from advertising. In the increasingly competitive economic environment in which we all operate, do you think nonprofits can forgo ad revenues?
MG: Of course not, but I'll tell you my objections. First, it often costs more to sell ads successfully than a typical nonprofit publication could ever hope to earn. Second, the same effort put into additional fundraising may well yield much better returns. Third, selling ads distracts an organization from its mission and focus. Fourth, the conflicts of interest can be substantial and neither online journalism nor nonprofits are, as yet, well equipped to deal with those conflicts. Fifth, ad revenue must often be treated as unrelated business income, which, under U.S. law at least, is troublesome for many organizations.
PND: What other milestones can you point to in the evolution of the Center?
MG: In 1998, we launched the , the first large-scale statistical studies of nonprofit Web sites. We looked at the accessibility of disability sites, the interactivity of environmental sites, the freshness of content on children and youth sites, and so on. Those studies are still the only ones of their kind, and even today there are lessons to be learned from them.
Later that year, I keynoted the very first Silicon Valley Conference on Nonprofits and Technology. In that speech, I warned that the secret to the successful implementation of technology by nonprofit organizations was to focus on practices, not technological gimmicks.
In 1999, we launched , a technology provider to the nonprofit sector. We were committed to several principles with Social Ecology. First, that nonprofits must remain in control of their own destiny and data. Second, that the most important expertise resides in the sector, not in technology companies. And third, that technology providers must be deeply accountable to their nonprofit customers. We think these principles have paid off. While most of the technology companies launched to serve nonprofits in the last few years have gone out of business, Social Ecology is emerging as one of the few exceptions.
In 2000, we devoted a lot of our effort to the support of other organizations. I was recruited to the boards of the and the Open Philanthropy Exchange, after making a nuisance of myself as a public critic of both of them.
And earlier this year, we launched our most important research project to date, a series of studies related to the successful use of e-mail by nonprofit organizations. It started with the and continued with a 900-organization survey, followed by the key insights from that research, which were documented in . Looking ahead, we're setting our sights even higher with our forthcoming , which will enroll major consultants and nonprofits in an exploration of what actually works to build a nonprofit organization's relationships with its stakeholders.
We've also initiated a on the subject of "The Future of Nonprofit Technology" that has taken me to Chicago, Seattle, San Francisco, Washington, D.C., and New York City. It's been a smashing success so far.
Finally, I should mention , our 2001 April Fools project. You have to see it yourself.
PND: That's quite a list. How does the center choose the issues in which it gets involved? Do you rely on a formal planning process, or do new ideas and activities evolve organically from things you happen to be working on at the moment?
MG: We have a healthy entrepreneurial mix. We have regular evaluations and benchmarks that we expect projects to meet. We have an idea-rich environment and we capture those ideas and nurture them.
Of course, not every project gets pursued. We select projects by a number of criteria, the most important of which are impact — that is, how many organizations could benefit from it — and synergy — how well can we leverage our other work.
PND: As you mentioned, one of your newer projects is Social Ecology. What exactly is Social Ecology and what motivated you to start it?
|"...We felt the sector needed a technology provider that didn't think it knew more about nonprofit work than its customers...."|
MG: Social Ecology is a technology provider whose focus is to leverage and enhance the tremendous expertise of people doing nonprofit work, rather than to try to supplant that expertise. It was formed because the technological hype generated by the dot-com bubble was obscuring genuine opportunities. We felt the nonprofit sector needed a technology provider that didn't think it knew more about nonprofit work than its customers. The sector needed a provider that partnered closely and creatively with nonprofits and consultants. We also felt the nonprofit sector needed a technology provider that was truly accountable to the sector itself and not to venture capital firms. Social Ecology is owned by foundations, nonprofit organizations, individual socially responsible investors, and its staff.
More concretely, Social Ecology provides relationship management and content management software that can be tailored to a nonprofit organization's own needs and work flow. And it has the best email marketing software currently being offered to the nonprofit sector.
PND: How do you price your offerings to the sector?
MG: Pricing varies according to a whole range of factors. I recommend people take a look at the Social Ecology Web site. Unlike a great many other companies, Social Ecology actually advertises its process and doesn't require that you hear from a salesperson in order to learn what they are. You can start using some of the more powerful tools for less than $100 a month.
PND: You've made it something of a personal crusade to get nonprofit organizations to understand the importance of e-mail. Why? Isn't e-mail already the "killer app" of the Internet — something that most nonprofit organizations use and rely on every day?
MG: That's exactly the point. Nonprofits use e-mail every day but most of them fail miserably to capitalize on its power. There are organizations that have spent hundreds of thousands of dollars on Web sites to communicate with their stakeholders. Most of the time, e-mail would have been much more effective.
Just ask this simple question of yourself: Are you more likely to go searching for the Web site of a nonprofit to donate to, or to respond to an e-mail solicitation from a nonprofit that gives you a good reason to donate to that organization as well as a link to a secure online donation form?
PND: What were you trying to accomplish with the Gilbert Email Manifesto and Disconnected: The First Nonprofit Email Survey?
MG: To wake people up! The Web-centric nature of nonprofit technology was costing the sector millions of dollars and leaving us in a creative rut.
PND: And the reaction?
MG: We succeeded! I can confidently say that we changed the nature of the conversation about online communication for nonprofits. Resource pages relating to e-mail use started springing up where they had never been seen before. We also received fantastic positive feedback. We documented some of the first responses in an article called Email Manifesto Firestorm, the title of which should give you some idea of the response we got.
But we still have a long way to go. For example, the Association of Fundraising Professionals has an award for Internet fundraising, but if you read the guidelines you realize it would be pretty much impossible for anything other than a Web-centric strategy to win.
PND: Tell us more specifically what you learned from the survey.
MG: One of the things we were doing with the survey was rebuilding our research capacity. It had been some time since we had done the Nonprofit SiteAnalyzer reports, but we learned that we could easily survey nearly a thousand organizations at a time. We also learned that we had tapped into a tremendous interest in such research.
But the key thing we learned was that there was a strong correlation of five practices that characterize an email-savvy organization. The five correlated practices clearly fit into a marketing practice that includes eight components. I spell out the relationship between these components in my on the subject.
In brief, the survey concludes that the email-savvy organization collects e-mail addresses on its Web site, often on the front page; sends one or more electronic newsletters to its stakeholders; gathers surveys and other information that segments its stakeholders into sub-audiences; sends fundraising appeals by e-mail; and ties it all together with an e-mail strategy.
PND: Are these practices mutually exclusive of other communications activities or are they pieces of a bigger strategy?
MG: They definitely fit together. The best way to show how they fit together is to use the illustration from The Email Savvy Organization. It shows how a smart organization has a complete and continuous loop of communication with its stakeholders.
PND: Which result from the survey surprised you the most?
MG: I think I was surprised by the fact that such a clear pattern emerged so quickly. I was confident that important patterns would emerge, but the fact that it all made sense so quickly was delightful.
I also want to share an unpublished result concerning the role of mid-sized organizations: It appears that the greatest innovation in the area of online marketing is happening among mid-sized nonprofit organizations. I suspect the reason for this is that the largest organizations have classic problems of bureaucratic inertia and that smaller organizations lack the resources to experiment.
PND: The was criticized by some for seeming to discount the importance of the Web and Web sites for nonprofit organizations? Is that criticism justified, and have you changed your position vis-a-vis the Web in light of such criticism?
MG: Some Webmasters were a little bothered. Some organizations that have spent a lot of money on Web development were a little defensive. But most people — including both of those groups — said basically, "It's about time someone said this."
|"...Choosing between e-mail and the Web is a false choice, but if I had to I would choose e-mail over the Web any time...."|
Listen, choosing between e-mail and the Web is a false choice, but if I had to, if the goal was relationship building, I would still choose e-mail over the Web any time. If an organization had only one hundred hours worth of staff time to devote to thinking about the Internet, I would devote almost all of that to thinking about e-mail.
I recently returned from a colloquium on the subject of online activism where I learned that people can succeed with e-mail alone. In one small group we compared a couple of real-world examples: a small e-mail-only campaign trying to pass a campaign finance reform law versus a large, content-heavy, Web-focused campaign to recruit millions of people to end world poverty. The former succeeded and the latter is widely regarded as a failure.
PND: And that's because e-mail is a better relationship-building tool than a Web site?
MG: Absolutely! Relationship building is what drove the expansion of the Internet and e-mail is the most powerful relationship-building tool online. With a few exceptions, content has always taken a back seat to the relationships mediated by that content.
Look at all the obvious nonprofit examples: Philanthropy is relationship building. Activism is relationship building. Fundraising is relationship building. Working with clients is relationship building. I'm not against pretty Web sites. But nonprofits that ignore the fact that their success depends upon relationship building and therefore pursue pretty Web sites at the expense of e-mail are making very expensive mistakes.
PND: Can you give us an example of an organization that has integrated both e-mail and the Web to its benefit? What are the hallmarks of a successful integration?
MG: I think is doing a fabulous job of that right now. And by their own admission, e-mail has catapulted them to a whole new level of success. The e-mail bulletin is starting to help them build the Nonprofit FAQ, but of course they have long been plugged into mailings lists. And I think Nonprofit Online News is pretty good at it too, but of course I'm biased.
But you asked about the hallmarks of successful integration. In my view, they include whether information provided by a stakeholder on a Web site is reflected in e-mail communication and vice versa — in other words, does the stakeholder feel listened to, across both media? Does the Web site occupy an appropriate place of support vis-a-vis e-mail communication, rather than the other way around? That is, is it used to recruit new contacts, get new information from existing contacts, and support e-mail communication with deeper information or rewards?
PND: And how do you respond to those people who feel completely overwhelmed by the amount of e-mail they already receive and say, "No More!"
MG: Most of them will get used to filtering out the stuff they don't want to read. The number-one reason people are online is to exchange e-mail and that shows no sign of changing.
The result of the increase in the volume of e-mail is that genuine, relevant, and personal e-mail will get more and more attention. This won't benefit those nonprofits which engage in spamming people or getting insufficient permission in the process of sending e-mail. But it will dramatically benefit those organizations that take e-mail relationship building seriously and really try to listen to the people to whom they send e-mail.
PND: Do you think online communication technologies — e-mail, Web sites, streaming multimedia — will eventually supplant more traditional communication vehicles such as direct mail, annual reports, and print newsletters?
MG: For some organizations, the Internet will supplant them. Print isn't going away, but more and more it will become a prestige medium, because of its cost and its tangible, material nature.
PND: Was September 11 a catalytic event for e-philanthropy, as some have said, or more of an aberration fueled by raw emotion?
MG: I'm not sure I would frame it as that choice. I think the flood of donations will represent two steps forward and one step back. The two steps forward are obvious. The one step back is the fallout of the quality of giving that resulted from the huge response.
If the definition of "e-philanthropy" is whether people will donate money online, then I'm sure September 11 will be remembered as a watershed of sorts. But honestly, I think that definition is terribly narrow and boring, don't you?
Isn't e-philanthropy most accurately described as the use of network computing to carry out all aspects of nonprofit work for which it may be suited? If that's the case, there can be no single catalytic event. There can only be a catalytic strategy: the mapping of a nonprofit's most powerful work methods into the new media. This has to be done more by people who have a powerful understanding of nonprofit systems than by technologists.
PND: And what happens if the majority of nonprofit organizations fail, as you put it, to map their methods to these new media?
MG: As you probably know, I'm not fond of alarmism when it comes to new technologies. Indeed, alarmism led a lot of nonprofits to spend a lot of money on inappropriate software systems in the last few years.
In the next year or two, I think that organizations should learn to master e-mail relationship management. In most cases, with most constituencies, it will be terribly important.
PND: Where will nonprofits find the money to keep up with and master these rapidly evolving technologies?
|"...The most expensive thing that nonprofits have spent money on in the last three years has been bad strategy...."|
MG: It's not as expensive as we think.
The most expensive thing that nonprofits have spent money on in the last three years has been bad strategy. If they invest up front in understanding their own work flow and looking for ways to map that to new media, they'll end up wasting a lot less money.
I think a balance has been restored in the area of nonprofit technology. We saw a huge influx of new commercial organizations whose mission, it seemed, was to supplant nonprofits, rather than support them. The dot-com bust has put an end to most of that, thank goodness.
PND: Do you subscribe to the argument made by communications consultant that online communications technologies are likely to benefit large national or international nonprofits and smaller niche organizations at the expense of mid-sized organizations?
MG: Andrew has a lot of interesting and valuable things to say, and the , which funded his report, has succeeded in stimulating a lot of conversation. I think many of Andrew's observations are dead on. The "winner takes all" conclusion is his weakest conclusion, but it is one that has garnered the most attention.
The societies and economies of the nonprofit world are very complex and they thrive on diversity. Just as we are finding a great many successful small businesses online, we will see the same thing in the nonprofit world. I believe that consolidation is the exception, not the rule.
PND: Would a technology-driven restructuring of the sector be a bad thing?
MG: To me that's not the point. I'm a biologist by training. I believe in the tremendous evolutionary power of diverse ecosystems. Therefore, I believe that funders and leaders need to look at each area of potential consolidation and take the long view: Is the innovation that comes from diversity needed in this area? If they find that to be the case, then they should fund innovation, not consolidation.
PND: What's up next for you and the Gilbert Center?
MG: We'll be developing a number of programs to continue to emphasize the connection between technology and organizational effectiveness, particularly among leaders in the nonprofit sector. I have a busy conference speaking schedule and we'll be sending other staff on the road to do workshops. We have enhancements to Nonprofit Online News coming. The Email Study will be rolled out in the first part of the year. We have new research projects in the works. We'll probably have to figure out a way to offer other nonprofit organizations access to the consulting services that we've largely restricted to our own projects.
PND: It sounds like you'll be busy. I hope we get a chance to do this again in the not-too-distant future.
MG: It would be my pleasure. Check in with us over the summer.
PND: We'll do that. And thanks again for taking the time to speak with us.
MG: Thank you.
Mitch Nauffts, PND's editorial director, initiated a conversation with Michael Gilbert via e-mail just before Labor Day and concluded it in November. For more information on the Newsmakers series, please contact Mitch at [email protected].