Non-Profit Social Enterprise: What You Need to Know

Today we have a guest post from Laurel Rogal of Klamp & Associates, a law firm dedicated to representing charitable organizations.  She walks us through some of the do’s and don’ts of non-profit social enterprise.

Nonprofits are increasingly seeking alternatives to their traditional dependence on donations and grants. While such contributions are often essential sources of revenue, exclusive reliance on them may make organizations susceptible to unpredictable economic fluctuations.

Revenue-generating activities are an effective way to diversify and sustain income for charitable programs. For example, a homeless shelter may earn revenue by selling products made by its residents. An art museum may rent its building for private events such as weddings. A humanitarian organization may license its logo to a national retailer in exchange for a portion of sale proceeds.

If not done carefully, however, revenue-generating activities can have adverse tax consequences. First, the IRS may impose an “unrelated business income tax” (UBIT) on otherwise exempt organizations that regularly conduct a trade or business that is not substantially related to their charitable mission. Second, and more seriously, nonprofits that engage in a substantial amount of “commercial” activity can lose their tax-exempt status. This is because the IRS takes the binary view that activities are either charitable or commercial and considers commercial activity incompatible with 501(c)(3) status. While the IRS has broad discretion to determine which category an activity falls into, it often emphasizes (1) whether it competes with for-profit businesses and (2) whether it is priced at or above cost.

Nonprofits have three options to generate earned income without jeopardizing their exemption:

  • First, nonprofits can conduct revenue-generating activities that are charitable rather than commercial in nature. This means conducting the activity in a manner distinct from for-profit businesses. For example, a microfinance activity may be considered charitable rather than commercial if it takes more risk, offers more generous terms, and/or provides more support to borrowers than commercial lenders. Likewise, a publishing activity may be considered educational rather than commercial if the charity avoids paying royalties, sells the publication through its website rather than sales agents and paid distributors, and/or subsidizes the publication with donations.
  • Second, nonprofits can earn revenue that will generally be treated as an exception to the commerciality rules, such as (1) sponsorship income and (2) passive income. Sponsorship income is paid by businesses in exchange for acknowledgment as the charity’s official sponsor. Passive income includes rents, royalties, interest, and other income that accrues without ongoing activity by the charity. Please note that if either of these undertakings becomes vastly excessive in relation to the nonprofit’s actual charitable activities, the nonprofit may face IRS scrutiny and/or penalties.
  • Third, nonprofits can engage in revenue-generating activities that are an insubstantial portion of the organizations’ overall operations. The IRS has considerable discretion to determine whether an activity is substantial, since this term is not defined. In some cases, an activity that amounts to 10% of the charity’s revenue may be considered substantial. Please note that, unlike the previous two options, income from an insubstantial activity may be subject to UBIT.

Nonprofits should consider these tax issues when designing and implementing revenue-generating activities. Careful planning can protect the nonprofit while increasing its capacity to serve the public good.

The Value Proposition of Cause Marketing

Picture 3Guest Blogger Cal Zarin discusses the value proposition of cause marketing and suggests some different ways for nonprofits to approach cause marketing.  Cal is Founder and CEO of Shared Value Media.

My background is in media buying and planning and then later in nonprofit development. I spent years being pitched the value proposition of cause marketing and spent almost as many years trying to convince others of its merit. Being on both ends, I have grown an appreciation for the nuances and challenges of this ‘ask’. In this post, we’ll break down how we, as Development Professionals, often present the marketing value of our nonprofit assets. We’ll offer our perspective on the inherent strengths and weaknesses of each position. And, then we’ll offer Shared Value Media’s somewhat different take on it.

THE STRONG:
Consumer Engagement

First the good: I am a big believer in the engagement proposition of nonprofits. Compared to other platforms, I think nonprofits offer a strong opportunity to drive action among a targeted consumer group.

According to the 2012 Edelman Trust Barometer, nonprofits are more trusted than business or media institutions by a margin of over 5%. According to Nielson 2011 Trends, 76% of people trust advertising from people they know, versus the next highest platform, which is opt-in email at 40%. In other words, when nonprofits communicate with our constituency base, they often listen and trust what we tell them.

As a result, when asked, these constituents are often willing to act on our behalf. As a nonprofit, we can confidently say we have the ability to drive traffic, promotion, attendance, click-throughs, content, etc. This is powerful stuff! If your corporate client will share what they are paying for each engagement (i.e., a click-through, a new fan on Facebook, a content submission) try to create a pricing structure that challenges those rates. If you can produce a stronger engagement ROI than some of your partner’s other marketing platforms, watch out! You could be in for a very different conversation in Round Two! And, you would be surprised through our celebrity partnerships, pro bono media, alumni groups, social platforms, etc. how successful we can be in driving engagement.

THE NOT-AS-STRONG:
Media Reach

I believe too often we, as nonprofits, try to sell our reach: We serve this many children. Our newsletter list is this big. Our Facebook page has this many fans. When competing against other more traditional media/marketing investments (TV, online, print, etc.), our reach proposition will often fall short. Unless we represent a large national or global nonprofit, we just can’t compete with the number of eyeballs that a marketer can reach through a more traditional platform. So, I recommend we do our best to represent our total numbers, but understand this isn’t our strongest ace in the hole.

Brand Association

Another value proposition that we often emphasize is that a cause association can help drive the business of our partner. On one hand, according to the 2010 Cone Cause Evolution Study, 79% of consumers claim they would likely switch brands, if price and quality were equal, if the other brand is associated with a cause. In addition, according to the 2010 Edelman Good Purpose Report, nearly half of Americans cite social purpose as the number one deciding factor in making a purchase. However, these studies represent consumer attitude, not necessarily consumer behavior, as do the majority of other studies on this topic.

I have only seen two studies that offer quantitative evidence that brand association can impact purchase intent: Cone Inc. and Duke U. Behavioral Study (2008) and Hiscox and Smyth (2005). Until we can reference the study/studies that demonstrate conclusively that purchase is driven by cause association, all we can do is put a fairly meaningless asterisk at the end of our presentations –

**And you have the benefit of being associated with a cause that is important to your consumer… for whatever that is worth**

Measurement

Probably the weakest part of our value proposition is measurement. We, as an industry, have no excuse for this one. Probably a separate topic for a different article, but unless we can offer an apples-to-apples measurement framework with other marketing platforms, we are severely handicapping our sell. Our pitch is dependent on our ability to say the quantitative impact we will have on our partner’s business and then explain how we will measure and benchmark against that impact. If we can’t do that, how can we ask their marketing department to re-allocate dollars to our platform?

In addition, we need to better understanding the demographics of our constituents and our donors. It is not enough to present the age, location, and ethnicity of the people we serve. We need to be able to provide information on the household income of our newsletter list and event attendees, the psychographics and consumer trends of our donors, etc. There is technology out there that helps with this. But, without it, we are going to the negotiating table with one arm tied behind our back.

The SHARED VALUE MEDIA APPROACH
The Cost Proposition:

The value proposition that Shared Value Media often leads with is that nonprofits can help our marketing counter-parts reduce costs. We can do this not necessarily by replacing our partner’s existing marketing efforts, but instead integrating into them.

Let me explain what we mean by applying this approach to a few different event-marketing examples. Why event marketing? Nonprofits can integrate seamlessly into an event marketing campaign and reduce costs consistently.

Trial / Sampling

For the sake of illustration, let us examine Brand Granola. Brand Granola wants to drive trial of their new granola bars. To accomplish this, they hire brand ambassadors to stand at busy intersections and hand out a granola bar to every person who walks by. For this service, Brand Granola will pay for every hour it takes their hired guns to hand out their sampling goal. In addition, Brand Granola may need to pay a permit fee to sample at their target destinations.

What would happen if Brand Granola took a different approach towards sampling? And, instead of hiring an event-marketing agency, Brand Granola forged a partnership (or numerous partnerships) with afterschool nonprofits who provide snacks every day to their constituents. These nonprofit will gladly agree to hand out Brand Granola’s granola bars (if they meet the nonprofit’s health criteria) to an extremely targeted demographic at no cost, since it will reduce the nonprofit’s costs. In addition, by agreeing to partner with Brand Granola, a trusted resource in the community will implicitly be endorsing the brand as a healthy snack option for the kids they serve.

A partnership structured in this way has a very clear, measurable ROI for Brand Granola. If they took even a portion of their trial/sampling budget and donated that product to the right nonprofit(s), Brand Granola would still reduce their marketing costs, meet their trial/sampling objectives, and launch a potentially more effective sampling strategy.

Mobile Tours

In addition, Brand Granola decides to launch a national mobile tour, where they hand out granola samples to parents and their children, ask the families to record a jingle in their traveling recording studio, and offer a number of on-site activities that bring the brand to life.  Again, traditionally Brand Granola would hire an event-marketing agency to build the experience, secure the venue permits, hire staff, and promote the event locally. The costs would be well over $10,000 / week to keep this campaign on the road.

So, what is the sell for a nonprofit? Its simple: we can help you launch the exact same campaign for a third of the cost.

If Brand A also partnered with a national nonprofit focused on youth health, that nonprofit could do the following to support the tour:

  • Reduce venue costs, by leveraging their 501c3 status and relationships to secure venues across the country at a free or reduced cost
  • Reduce staffing costs, by replacing in-market staff with volunteers
  • Reduce local marketing, by promoting the event to their constituents in each market and help to reach an engaged audience vs. random bystanders
  • Strengthen the campaign message by making the tour not only about the product, but also about the product’s values

For a fraction of the cost, Brand Granola could increase the effectiveness, impact, and attendance of their mobile tour.

Content-Gathering

Finally, Brand Granola wants to engage consumers around the country in a promotion that asks consumers to post jingles about their new product. Brand Granola’s goal is to drive traffic to their site, social engagement, and eventually produce content for their new ad campaign. Through numerous online buys and leveraging their event marketing tour, they intend to drive participation in the promotion.

Again, Brand Granola could dramatically reduce costs (and legwork) by finding a nonprofit partner that had an incentive in driving consumers to upload a jingle. There are thousands of nonprofits across the country teaching after-school music. Without any semblance of mission drift, these nonprofits could work with their children and families to record and submit jingles that brought the values of their nonprofit and programming to life. Finding alignment between the values of a nonprofit and the brand of a granola bar should not be difficult and would only enhance the positioning of a promotion like this.

Again, if Brand Granola even put a fraction of their promotional media spend towards a donation to one or more targeted nonprofit(s), Brand Granola would reduce costs and increase impact.

At the End of the Day…

There is no magic formula to selling in the cause marketing value proposition. However, the better we understand the business needs of the brands we are pitching and the strengths and weaknesses of the value we provide, the more likely we are to convince our marketing counter-part that we fill a need.

Good luck – I’ll be rooting for you! And, if you have any tidbits to share with us, we’re always anxious to hear.

About Shared Value Media

Shared Value Media (SVM) helps facilitate corporate partnerships through a network of national or geo-targeted nonprofit partners. Our partnerships are customized, and launched through numerous nonprofits, with a clear set of quantifiable outcomes. This allows us to craft corporate partnerships with reach, measurable deliverables, and clear campaign goals. If you’d like to know more about Shared Value Media you can watch our video here.

Why Not More Peer Learning at Conferences?

IFF2013

Last week I spent the last leg of a two week European business trip “presenting” at the International Fundraising Festival in Prague. I put presenting in quotes because so much of the value of this conference comes from the participants learning from each other. The festival, held every two years by the Czech Fundraising Center over three days at the Villa Gröbe, spends the entire second day in “open” sessions where the participants decide which topics they would like to discuss and facilitate the sessions themsleves with us presenters and experts participating and providing tips and guidance where we can.

At The Osborne Group we are privledged to work with many different types and sizes of NGOs including some very large organizations with affiliate structures that hold their own large scale conferences, both national and international. Interestingly, when surveyed, they all very consistently say that while they get lots out of the more formal sessions, they get equal value out of the conversations that develop in the hall between sessions, at dinner, at the bar, and around the coffee dispenser. Anyone who has attend a conference understands the basic truth in this. The IFF has very successfully created a conference that duplicates this informal experience formally, a conference in the spaces and gaps of a typical conference.

photoSo while I did present on Crowdfunding and Fundraising and Activism during the first and last days of the conference, I think the bulk of the real learning took place during the open sessions where topics were as myriad as dealing with stress in fundraising, running a social enterprise, the nature of and limits of corporate social responsibility, and many others. Overall, at least 16 different topics were discussed.

So, why don’t we consultants and conference organizers employ this technique more? I think we tend to find it hard to loosen the reins when we feel that more basic and fundamental areas need to be addressed. In other words, there’s no way I’m going to let these affiliates decide to talk about the ins and outs of crowd funding when none of them have a table of gifts or can even tell me their year to year donor retention rates! I get it and there is merit to this. The fundamentals must be taught but I also think these fundamentals can come out in a more organic way when suggested and organized by the participants themselves. I had a great session where when ended up talking about many fundamentals including metrics, A/B testing, and discussing impact over just reporting news. The original topic centered around how the an organization might do better prospecting.

Many of us presenters use case studies and audience exercise in our workshops. This is admirable but I would like to take this further and again let participants really have more of a hand in the topics that get covered. This can be done in the format that IFF has done it but it would be fine I think if there was just time and space reserved at a conference for participants to organize themselves and talk about topics of their own choosing. So often at conferences there is almost no unstructured time between the formal workshops, dinner, and other “official” “must attend” events. Let’s build in some time for informal learning.

Moreover, when a group takes reponsibility for its own learning and participation (as opposed to just listening) is understood to be part of the format, participants are much more likely to ensure that their own questions get answered, that they will take practical and implementable advice back to their office with them, and that they’ll actually remember what they’ve learned for a much longer period of time.

We “experts” need to do more to promote this type of learning. I’m hopeful that the next time I encounter peer learning won’t be at the IFF 2015.

Real Social Innovation: The Dan Pallotta TED Talk Going Around…

Both Robert and Laura received emails from multiple friends and acquaintances with urgent pleas to “Watch this Dan Pallotta TED Talk RIGHT NOW!!!”  Being people who like our friends and acquaintances – and being intrigued by the fact that folks from very d5577fdfa6524f0b91a00fd8d9df84810fb5a10c_389x292different parts of our lives felt the need to pass this along – we did.  Perhaps you got some of these emails too?

We both had some things to say in response to this talk…  Our responses to Dan Pallotta in this TED 2013 talk follow this post.

Click here to open a new window and watch.  We bet that you will have some responses too after you see this…

Don’t have 18:51 to view this talk?  Here’s a synopsis in brief of the points Dan Pallotta makes:

  • The NFP sector has a serious role to play in social innovation and social entrepreneurship to address those 10% who will always be left behind by monetized market solutions.
  • The reasons that the NFP sector remains tiny compared to the massive scale of the social problems they seek to address are:
  1. Forced compensation disparity with the for-profit sector.
  2. Perception of investment in advertising and marketing among the NFP as “sinful”
  3. Lack of market for taking risks on new ideas…
  4. …tied to a lack of patience to allow organizations to build to scale…
  5. …tied to a lack of risk capital to invest in new ideas.
  • The sector is forced to remain a slave to low overhead costs at the expense of being able to scale their dreams to meet the need in society.

Our responses – and we hope yours… – follow.  Keep reading.

Raising More Money Before, After and During Your Special Events

Since special events take a lot of time and resources, let’s make them COUNT!  The Wall Street Journal reported that “Retention is the new acquisition and customer service is the new marketing.”  In other words, the keys to raising more money before, during Eventsand after special events, especially at leadership annual giving levels ($1,000+), are holding onto to past leadership event donors and sprinkling those donors with outstanding customer service.

The added benefit of this approach is that your message of high-touch, “WOW” customer service and great stewardship becomes contagious – word gets around your community and more people want to come to your events, learn about your cause, give and get involved. In a brand new book by Jonah Berger, the author tells us that “excitement is an activating emotion” that “increases sharing.”  The author points out that only 7% of word of mouth sharing happens online.  Most happens face-to-face.  The more we “WOW” our special event donors, the more they are going to share our story with others.  The result will be raising more money than ever before!Contagious

Here are six steps for maximizing every event, raising more leadership annual gifts and setting the stage for more major and planned gifts.

  1. Fundraising for an annual event begins the minute the event is OVER.  Make sure your “thank-you-for-attending-and-giving” note and/or phone call is sent immediately after the gift or pledge is made and then again within 24 to 72 hours after the event is over.  Reiterate in the thank you the “promise” of what the leadership annual gift level will accomplish.  If the donor sponsored a $25,000 table, for example, tell the donor and all of the folks involved with securing and giving that gift what $25,000 will help you accomplish programmatically.  Be sure to include a story and let the donors know they will be hearing from you again once you’ve put the money to use. Thank you doesn’t equal stewardship.  It is only the first step.  Sharing impact and outcomes later in the year is the heart of great stewardship.
  2. Build a name-by-name realized and projected table of gifts for each eventPicture 3
  3. Wow and Engage. For the events you held last Fall, now is a great time to provide stewardship for their gifts and engage the top donors in planning for the upcoming event later this year.  For your spring events underway or about to come about, it is not too late to provide stewardship from last year. Start with your table of gifts and list of your best fundraisers. Make appointments and go see them. This is not a phone call.  It is an in-person visit.  It’s hard to wow someone on the phone.  Remember, “Customer service is the new marketing.” Bring pictures, an under two minute video on your tablet or smartphone, a story you can share, a card drawn or signed by a beneficiary, a letter from a program staff member.
  4. At the event, have impact messaging everywhere.  Loop a video. Dot the setting with posters and videos that speak to what the leadership annual giving levels accomplish. Have board members circulate at the event and personally thank donors and fundraisers.  Check out our “Hard Working Special Events” podcast for more ideas.
  5. End where we began.  Debrief immediately after the event.  Who needs a special phone call in addition to the thank you note?  Handwritten thank you notes stand out.  Make sure your best donors and your best fundraisers receive a personal, legible, handwritten thank you note that speaks to the “promise” as discussed in item number 1.  Plan how you will make your event donors say, “WOW.”
      • Exceed expectations
      • Do so in a timely manner
      • Make it personal
      • Add emotion
      • Surprise
      • Let the donors know they are valued and appreciation

by Karen Osborne

Empowering Others Through Generous Philanthropy

Picture 3Recently, I was in Albuquerque, NM speaking to 300 women and girls at Sandia Prep about the power of leadership philanthropy.  I framed the discussion by discussing the overarching goal – life-long inspired, joyful, generous giving of all our innate gifts, talents and expertise, time, networks and treasure.  The goal is important.  Too often, we only seek a volunteer’s talents and time.  Or, we think about the individual as a donor and only seek treasure and contacts.  True philanthropy is about giving one’s all so that together we change the world.

Once we all agreed on the goal, we discussed the importance of being inspired and inspiring. As philanthropy leaders, we seek causes that engender passion within us – causes that have touched us, moved us, worry us.  We look for problems we’d like to help fix.  Similarly, as not-for-profit leaders, we most offer big ideas that address important societal issues and thus inspire deep and lasting commitment.

Next, we spent time on the notion of joyful giving.  How we, as donor/volunteers, are engaged, solicited and stewarded matters. When done well, we do feel joy.  I can remember being solicited by Don Jackson when he was with national Easter Seals. The conversation was so empowering, personal and fun that I said yes with joy and gave more than he requested. A great solicitation is a wonderful thing.

But joy also comes from within each of us as leaders and donor/volunteers.  Yes, we need information, and facts, and trust.  But we must also come to the charity with an open mind, giving heart and smile.  It is an honor and privilege to help the people, animals, communities, faiths, ideals and environments the not-for-profits serve.

We then moved to the concept of generosity.  I asked the audience to share at their tables, “How did you learn to be generous (or how are you learning to be so)?” The spoke with each other for about five minutes – five minutes out of a 75 minute session.  Although we spoke about many things after this exercise, it was the discussion about generosity that received the most feedback, tears, laughter and action.

At the end of the program people queued-up to speak with me. One woman asked for advice about starting a scholarship fund for nurses. She wanted to make a difference a difference for others – the potential nurses but most importantly, all of the people the nurses would touch throughout their careers. Thinking about generosity and leadership empowered her to take action.  She didn’t have a hospital healthcare organization, medical school or community foundation in mind, but was ready to find the right place and make an investment.  That five minute conversation inspired a new and wonderful gift.

Another participant told me she was moved to tears because her colleague told her, “I learned to be generous from you.” She didn’t know her actions had been observed, admired and emulated by her colleague until they shared at the luncheon. Sometimes we don’t know we are empowering others.

A student from Sandia Prep said she learned from one of her teachers. Good for Sandia Prep. Many said their parents or grandparents taught them.  Others spoke of religious leaders, neighbors and friends. Everyone said the conversation got them thinking, feeling, wanting to do more or just made them feel proud that they already did so much.

Perhaps the above examples have you thinking.  They got me reflecting and I thought I’d share several things worth noting:

  1. The reason I love the work we do.  Everyone at The Osborne Group is a philanthropist and volunteer. We love our clients’ missions.  We love teaching.  What a gift to be able to do work that is both meaningful and enjoyable.
  2. How smart it is for an organization to open its doors to others for a conversation not about the institution, but about societal topics with broad appeal. Yes, the room was filled with friends of the school, but also with people with no connection.  The Albuquerque AFP chapter, United Way, local businesses, fundraisers and board members from other organizations filled the seats.  They all left seeing the school at its best, and the experience created social capital.
  3. Asking provocative questions and listening to understand is one of the best ways we know to inspire action.  I asked them to think about how they learned to be generous and look at the results.  Asking a question is so much more effective that pitching and persuading. Great questions get people thinking.  If you would like our latest list of strategic questions tailored for your sector, contact me at Karen@theosbornegroup.com
  4. Modeling behavior is one of the best ways to teach, inspire and empower.  I remember reading an article about raising children who are avid readers.  When my children were little, I read to them every night, long after they could read the books themselves.  I attributed their excellent reading and writing skills to that nightly habit.  It turns out that reading to a child is the right thing to do, but what actually creates readers is seeing us enjoy reading. In the same way, by being joyful and generous investors ourselves, we inspire others to do the same.

So, don’t hide your generosity. Share your passion, joy and commitment.  Be an empowering, generous, joyful philanthropic leader and let your light lead.

by Karen Osborne

G. J. Hart’s Six Steps of Leadership Translated For Fundraisers

GJ-Hart-1G. J. Hart is the CEO of California Pizza Kitchen.  In an interview reported in New York Times he discusses each of his steps – fabulous steps that we can all use to lead with courage and effectiveness.

  1. He starts by saying we should all be the best we can be.  But what does that really mean? “You have to be honest with yourself.” This I definitely believe.  We have to start personal assessment which means seeking feedback from others.  My mother-in-law has a great expression.  “I talked it over with myself and decided I was right.”  If we only listen to ourselves, we’ll miss a lot. Take a management and leadership assessment.  Email Karen@theosbornegroup.com and I’ll send you one.  Then ask trusted others to fill it out for you as well.  Find a way to get a 360 degree review from above, peers, and those who report to you.  Then choose those areas you want to improve and set achievable timed goals.
  2. Dream big.  Love this one.  As leaders, we need big ideas.  We need to be ambitious for our missions, for our departments, for our teams.  Our job is to inspire action, loyalty, and advocacy.
  3. Lead with your heart.  Don Gray, major gift guru, identifies courage and consideration as top qualities for major gift officers.  In a study reported in The Harvard Business Review, empathy and professional will were cited as the top two competencies of outstanding salespeople.  Jim Collins in “Good to Great” found humility and professional will as the top qualities needed in leaders.  Empathy, humility, and consideration. Heart.
  4. Trust the people you lead.  Stephen M. R. Covey in “The Speed of Trust” points out how important it is to extend trust to others if you want to be trusted.  Leading by allowing others to try their own ideas, let them “fail forward,” as David Bornstein describes it.  This all sounds right to me.
  5. Do the right thing.  Sure.  We all think we do, but how do we know what is right?  Hart’s example is about giving people a second chance. Yes. But I also think, in our business, it’s about the grey areas we find ourselves in, or members of our team stumble into.  Conflicts connected to good donors, or powerful trustees, or presidents who make missteps.  One of the smartest things I did as a new VP was to form a small group of trusted other VPs.  We used each other as a sounding board, sought advice, shared.  Doing the right thing was a lot easier when I had smart people to weigh the issues with.
  6. Serve the people you lead.  This one is really important for us.  We are donor-focused, outward looking.  But as leaders, must also serve our teams.  They need us to fight for them, secure the resources needed to be successful, invest and believe in them.  As Mr. Hart says, “Create an environment where people can grow and prosper.”

by Karen Osborne

 

 

Balance Your Act with People Who Complement Your Competencies

I once worked for a charismatic and highly successful major gift fundraiser.  His most outstanding competencies included ego strength, intelligence, a driving force to succeed, quick decision-making, and verbal agility.  He liked being in front of the crowd rather than being a team member.  On the down-side, he tended to bulldoze rather than finesse. A quick-silver temper could leave the team reeling and a lack of good listening skills made it hard for the team to recover.  When it came time to hire leaders under him, he picked people who “looked” like him — same competencies and skills and many if not most from very similar backgrounds.

It’s natural to want surround oneself with people who share our strengths and point of view.  But it’s often not the right path for sustainable fundraising success.

  • Know your strengths, weaknesses, communication and leadership style.  Figure out your “blind spots” – those areas that trip you up but you don’t see coming.  Seek honest feedback. As your peers, team members and supervisor about your strengths and weaknesses.  Listen! We recommend taking a personality profile like DiSC or Myers Briggs.  Email us for a free copy of our Management and Leadership IQ™ assessment tool at Karen@theosbornegroup.com
  • Then, when it is time to hire or form a working group, look for people who complement your skills, experiences, competencies and style rather than have the same set.  If you are an idea person, for example, like I am, you have a new “great” idea at least once a day.  If everyone around you is an enthusiastic follower, or focused on the how to get the idea implemented, you need someone nearby who will ask, “And why is that such a good idea?” “Is that the right thing for us to do at this time?”
  • Diversity makes us all better.  Seek diversity in backgrounds, experiences, ethnicity, geography, worldview, and communication styles.
  • Strengths overused often become weaknesses.  A hard driver often needs someone on the team who has the courage to say “whoa.” A quick decision-maker often needs a thoughtful investigator as a partner.

Ask strategic questions that help you uncover the qualities of the possible team member, board member, volunteer, or new hire. Remember to “balance your act” for greater fundraising success.

By Karen Osborne

Three New Year’s Resolutions That Will Pay Off in More Major Gifts (and a happier you)!

Picture 4

We do this: the annual New Year’s Resolutions to do more, be better.  We make a list of things we want to accomplish and hope sheer will power will overcome all the reasons we didn’t get there before. This list is different.

  • The payoff for each one is huge
  • You can start small and still win big
  • You can make each one fun, collaborative and personally rewarding
  1. Make February Donor Appreciation Month – 20 days, 20 personal “Thank You” calls.
    • If you’re in a small not-for-profit, get everyone involved.  If you’re in a large, complex institution get a small group from each school or division to participate.  Definitely enroll the mission staff (i.e. program, physicians, or faculty) and senior staff.
    • In January, identify your most important donors as well as your most loyal donors at each leadership and major gift level ($500+ for small shops; higher in bigger shops with more robust fundraising).  Put together a very short, quick brief on each — name, address, phone number, relationship (i.e. donor for x years, parent, trustee, alumnus, volunteer).  That’s all.  No research.  It’s just an appreciation call. 
    • Recruit your team.  Make it a contest, something fun.  Big announcement. Start with a few champions and go from there.
    • Assign 20 to each participating team member.  All they have to do is call and say, “Thank you again for all you do for our organization” – one person each day.
    • For the fund development staff, make 25% or more of them personal visits.
    • The results – happier donors, more leadership and major gifts, more staff members participating in fund development.

    2.   Make March Staff Appreciation Month

    • Say “Thank You” to every member of the “Thank You Calls Team,” to everyone who helped in fund development in any way.  “Thank you for your help.  Your contributions helped us serve and transform the lives of more people.  We appreciate you.”
    • The results – more collaboration, therefore more staff members participating in fund development resulting in more leadership and major gifts.

3.  Make 2013 Your Year to Say “Yes” to You (and therefore “No” to some other folks)

    • You know you should make more visits to more major gift donors and prospective donors.  Or maybe you have a hard time getting those contact reports written.  Perhaps you work too late in the office and therefore can’t workout, or date your spouse, or read to your children, or go to a movie with a friend.
    • What are you saying yes to that is neither “Important and Urgent,”* nor “Important but not Urgent?”* (*Stephen M. Covey). Is it a priority of someone else, a constant interrupter, meetings that drag on without clear outcomes, emails that are not important?  Pick one thing each day that falls into Covey’s “Not Important but Urgent”* box and just say “No.
    • The results – you will get more done, have better work/life balance, feel better, and, yes, therefore, raise more leadership and major gifts.  Guaranteed!

By Karen E. Osborne, President

 

 

 

Stress and the Whole Human Fundraiser

Overheard in an advancement office near you:  “It’s business, not personal.”… “A pro learns to compartmentalize.”…“A bit of fear keeps them sharp.”  Is that true?  Or are we whole humans whom fear makes dull?  What impact does stress have on our ability to be not just good, but truly great at our important work?

Do you try to avoid messy emotions in the workplace?  Make goals and metrics scary- ambitious to drive effort in yourself and your team?

I get it—I’ve done it—we got here honestly.  From first grade on, we learned to ignore discomfort, focus on our left verbal brain, and ignore the wisdom of our right brain, our bodies, our emotions.  But advancement work requires that we learn to engage both sides again.

Living exclusively in the left, verbal brain ignores a big chunk of an advancement professional’s whole human system.  Anxiety results when our bodies get left behind.  As we pursue enormous campaign goals in competitive times,  neuroscience and positive psychology have much to share about the corrosive effects of unacknowledged anxiety in our development shops—and much to teach about learning to work with mindfulness and ease.

Human beings run on three operating systems—cognitive, emotional, and physical—that are designed to work in sophisticated synchrony.  When your mind has a thought, it creates an emotion that is felt in the body.  The body reacts.  The mind may overlook this response or heed its message.  We can learn to use this finely tuned system of checks and balances to achieve delicious productivity—but only if the system is kept healthy, open, and clean.

As a lifelong fundraiser, now a consultant and coach, I help my clients ensure that their thoughts, feelings, and physical sensations are not ruled by toxins like fear and harsh self-judgments that can inhibit their performance and cause exhaustion and pain.

Many campaign consultants sidestep the emotional and physical components of the human machine, providing benchmark reports and prescribing big jumps in total gift income and visits per month before fully understanding why fundraising progress is slow.  At organizations that anticipate this approach, my first visit can suck the air out of a room—until I breathe, make eye contact, and state my purpose.

I find in many under-performing advancement shops triple, intertwined threats: diffuse focus, insufficient training, and subterranean fear.  Sadly, the pervasive, contagious anxiety often starts within the very person who cares most about success—that dedicated leader semi-consciously driving herself with punitive internal messages every day.

You know that deer-in-the-headlights feeling that wears you out over time?  It starts in a flash.

Richard E. Boyatzis and Annie McKee (2005) and others have shown that in stressful situations, fear-based thoughts activate the oldest, most primitive part of our mind—the limbic system or “lizard brain.”   The almond-shaped amygdala at the base of the brain sounds the alarm and the sympathetic nervous system kicks in, releasing Epinephrine, Norepinephrine, and Cortisol that prepare us to fight, flee, or freeze.  Blood flow is directed away from the cerebral cortex to the large muscles, inhibiting memory and the creation of new neurons.

Living in our sympathetic nervous system erodes thinking and health. Ironically, the first casualty in the development operation’s stress fest quite often are those courageous, delicate major gift conversations we need most.   Survival anxiety keeps us busy rewriting metrics and churning reports instead of seeking out those crucial conversations that spell campaign success.   To the lizard brain, big solicitations seem black or white, all or nothing, win or lose.  Even if we know that solicitation is a process, not an event.

This energy impacts the donor interview.  Without proper preparation, those subconscious “win/lose, make/break, do/die” messages can narrow your visual field and aural acuity so timing suffers and subtle feedback is missed.  Adrenaline spikes blunt your ability to remember details and feel the donor’s truth.  The human body easily confuses excitement and anxiety—this is true for donors, too.

There’s a better way to build transformational gifts.

Joyful, stretch gifts are inspired by love, not fear—and they are born in the present, whole-hearted conversations that only become possible when the fundraiser’s thoughts, emotions, and feelings are calm, clean and clear.

Understanding and improving work teams’ emotional experience—their inner work lives—can seem a daunting investment.  But it pays off big both on, and off, the road.

It may feel risky to explore internal messages and odd to intentionally engage the parasympathetic nervous system at work – but the payoff is huge when your team gels, trusts, and stays.  The payoff magnifies as your committed team facilitates aspirational gifts that delight donors and heal the world.

So next time you sit down with a potential donor or a new hire, slow down.  Notice, with presence and compassion, how he is a whole human, and so are you.

You can follow Beth at: @EBHermanCoach

By Beth Herman, Principal, EBH Consulting   Guest blogger Beth Herman is an advancement consultant, advancement trainer and personal coach.  She specializes in how organizations can build their capacity by focusing on the individuals within the team.