Can You Teach Generosity? Yes.

For so much of the country these past few weeks have offered plenty of time – way too kids-give-back_square_300x300much time! – to be inventing things to do with school-aged kids, who seem to be in a perpetual cycle of snow days…  We’ve cleaned closets.  We’ve gone through artwork, long stashed under the bed.  We’d played endless charades.  We’ve read.  And read.  And read.  We’re coming to the end of our rope!  Then The New York Times offered this great piece on engaging kids in a conversation about giving.  Can you teach generosity?  This article gave some great suggestions on how to answer, “yes!”  It spurred an interesting conversation for us and a great afternoon of research and weighing of options.

Kids at home or not, we’ve all got a stake in getting this right.

  • We wrote earlier this year about how much our organizations benefit when we engage the whole family in service.
  • So many organizations are looking for those “next generation” board members who embrace serving others and the community.
  • Universities are increasingly recognizing the difference they can make, in their own futures and in the citizens they produce, when they teach philanthropy throughout the curriculum.

I like to imagine a future where this generation knows how to give as well as they know how to manage a checking account and their Twitter feed!

 

Day of Service: Every. Day.

The Osborne Group will be closed on Monday – but we won’t be off.  Perhaps like you, we mlk day of service 2014honor Dr. Martin Luther King Jr. with a “day on” volunteering with our families, rather than a day off.  In the not-for-profit world, we recognize that every day is a Day of Service.  Or it could be…  To help you expand the ways that you engage the whole family of your donors, investors and volunteers in a Day of Service throughout the year, here are some ideas we’ve collected from the team:

  1. Host an on-site work day with a variety of projects that pile up over the year:  from raking leaves or clearing out and organizing closets, to identifying and calling volunteers from the past six months to thank them, or cataloging the collateral material you’ve created over the past five years in one neat file. Create a menu of options for a Saturday…
  2. Host a Philanthropy Forum for Families to discuss how families can help children and grandchildren embrace philanthropy, develop their own philosophy, or help other children and families in need.
  3. Establish volunteer opportunities where corporate partners’ staff, service club members, and other engaged groups and their families have the opportunity to work directly with the people, animals, and habitats you serve.  Later in the year, share with the individuals who volunteered pictures of recipients enjoying the facilities they helped improve.
  4. Create a series of one minute videos of the children of donors speaking about helping others.
  5. If you have a “Friends Asking Friends” event (i.e. run, walk, bowl, etc): create specific opportunities, materials, ideas for families to get involved.
  6. Help families achieve their resolution of being more financially responsible by teaching their kids about smart money planning (including budgeting for charity). Websites like Oink.com let parents give their kids a set amount of money which they then can budget and spend or give with their parent’s oversight.
  7. Lead a hike, run a program, give a tour geared to families – one for teens with ways to take this back to their middle school or high school, one for families with younger kids to introduce them to what you do.
  8. Share “three ways you can advocate for us” via social media; include a variety that includes calling a legislator, and speaking up for your cause among friends, neighbors, your employer or at school
  9. Develop an annual calendar of family-friendly activities to keep philanthropy top of mind all year round to send to donors and hand out at events. It might include things to do around certain holidays or tips for key times of year.
  10. Include a family volunteer/donor profile in your newsletter and/or annual report.
  11. Run a Volunteer Job Fair with other NFPs to recruit short term and long term volunteers.
  12. Look for ways to engage teen-aged of donors mentoring others – lots of schools require community service or service learning, many kids look for bar or bat mitzvah projects.
  13. Host a roundtable discussion with different stakeholder groups – or mixed stakeholder groups: What does our community need most from our community-based organizations? What does our community do well? Where are the holes?
  14. … or host a panel discussion on raising generous and grateful children; invite the community to participate.
  15. Invite major gift donors to an event being held in a program area where their gift made an impact. Instead of just inviting the donor, invite his or her family to the event and place them in volunteer roles during the event, through which they will be able to have meaningful interactions with clients.
  16. Create a special recognition category for family giving. Families that make your organization their family charity of choice are recognized as such and have a specific set of stewardship activities. Maybe develop a Family Giving Circle and hold special stewardship events for members.
  17. Establish a Family Giving Back Day; invite families of donors to a day of providing service to clients and their families – everything from reviewing resumes, job interview techniques, repairing and painting toys, organic gardening, healthy cooking, learning about social networking, and so forth.
  18. In all your donor visits, seek their advice about the best ways to engage the children of donors!
  19. Incorporate a golf clinic (or sport, or other talent clinic) into your special events, enabling donors to engage with your beneficiaries or their children.
  20. Look for ways that the recipients of your services can connect to and interact with your donors and investors – philanthropy is a two-way street.

And of course… Be sure to include family members (when appropriate) in your stewardship in individual donors and volunteers!

“We’re very event-driven…”: And then a Leadership Giving Program was born…

the-phoenix-rises-from-the-ashes-john-edwardsDoes it sound familiar to you?  “You see… we haven’t really been able to build that part of our program because we’re very event driven…”  Rather than feeling sheepish and wringing your hands about the state of affairs, rejoice!  This is great news – you have done so much work already to build a strong leadership giving program.  In reality, you don’t need to either have strong event fundraising, or have relationship-based leadership giving… you can (and should!) have both!

Part One: Get Out of Your Own Way

As nice as it is to think that leadership giving (which, here, we use to mean gifts of $1,000 to $25,000 annually – though in your community it may be slightly larger or slightly smaller gifts…) will rise like a phoenix from your events, it’s not quite that simple.  Almost.  But not quite.

  1. Start with a quick scan of your events:  if you are the driver on more than two or three major events a year, this isn’t going to work.  (Having third-party planned and hosted events is a different story… but a topic for a future post.)  There is simply not enough time for the vast majority of organizations to devote staff or volunteers to the kind of “in between” work required to make leadership giving a reality with a event each quarter.  Or each month.  Or every couple of weeks.
  2. As you pare down, if you need to do that – or just review your already-limited number of events, check in on these criteria.  Do these events:
  • Align with your mission:  a great event does some of the work for you, in representing what you do and how you do it.  A raffle of a motorcycle doesn’t have much to do with disability services.  A golf outing that includes a putting clinic that pares golfers with children with a wide variety of abilities, learning to golf, does!
  • Tell the story:  does your marketing of the event – invitation, media placements, all of it – and your on-site event communicate what you do, why you do it, and how philanthropy supports you?  “Raising awareness” of your organization isn’t enough.  Too vague.  And events that take on a bigger stature than the sponsoring organization aren’t ideal:  who can name the organization that does Relay for Life?  Quick.  Click here for the answer.
  • Engage in your work:  Following on this theme, does the event structure allow you to infuse “mission moments” throughout the experience?  If one or two honorees are good, four or five are better, right?  Not so much.  One or two honorees who help fill the room and are passionate ambassadors for your organizations are a huge asset, but a lot of talking heads make for a very uninspiring evening of tuning out about your work.
  • Target the right audience:  events are a tool to get strategic things done in your fund development plan.  (Say that with me.  Embroider it on a pillow.  “Events are a TOOL, not a reason to raise money.”)  If you need more C-Suite decision makers knowing you, and at your event, a kayak race on your local lake may not be the best way to get there.  If your goal is to attract more young donors and volunteers, probably better.  (And… yes, my 70-year-old father is a great kayaker.  I know that I am generalizing.  You get my point.  Save your angry letters.)
  • Capture and converse:  this can be a place where events can seem great (and be great – but for a different end goal…)  Does your event enable you to capture information about participants and seek some out for conversation, to jumpstart a future relationship with the organization?  A giant craft festival that funnels all proceeds to the local youth development organization can be a huge money-maker, but not a win in the “Capture and Converse” column.  And what happens to that revenue if it rains?

Part Two:  Build on Assets

  • Plan for your events to be a “Point of Entry”.  So many scare themselves out of leveraging their events for leadership giving because “I don’t want to lose those events gifts next year.”  ALL MONEY IS GREEN.  OK, it would be great if they came back next year AND gave an additional gift to you.  And one of the things that your “in between” time relationship building is going to do is encourage them to get more deeply involved – perhaps as a volunteer? – in your event.  Beyond your own spreadsheet of goals, your program doesn’t care that their dollar were raised face-to-face, or through an event.
  • Steward them all the same.  Some of your event probably already have leadership donors giving to them – corporate sponsors, individuals who bought a table.  Treat them as a member of your leadership giving society; steward them accordingly.  Donors are much more likely to stick with you when you’ve treated them as a member of the club they already belong to (and may not have realized…)
  • Redeploy your board.  Using events to give birth to a leadership giving program is all about relationships – identifying the 10, 20, 50 attendees from your event who could become leadership donors in future.  That takes personal conversations – face-to-face.  And those take time.  If your board’s time and energy is spent on running registration and organizing the silent auction, choosing linens and working on AV, there is going to be very little time and energy left for relationship-building.  Build an event committee with some board representation, but send the clear message that you need your board doing what only boards can do:  Sending that powerful message – “I believe, I support, Please join me!

For more on building strong relationships through your events, check out our resource on “Hosting a Mission Infused Ask Event“.  Got a great event to donor story?  Share it on Facebook! (No donor names though, eh!)

Top 20 Clues that Your Workplace May Have Work/Life Balance Issues

We break here for a moment of levity from a friend of the firm who composed this list of all-too-familiar work/life balance issues faced, particularly, by remote and out-based workers.  Hope you find comfort in the company…

***

Work life balanceYour workplace may have work/life balance issues …

20. When you feel like you should turn on your “Out Of Office” if you aren’t going to work on a Saturday.

19. When a vendor says he shouldn’t schedule a meeting for noon Eastern because a lot of his staff go to lunch and you laugh loudly and then you realize he’s serious.

18. When you discover it’s quicker to tally the hours you work each day by simply subtracting your sleep hours from 24.

17. When you tally the hours spent “clearing a few projects” the weekend before your vacation week, hours spent “just responding to essential emails” during your vacation week, and “just putting my game plan together for next week” during the weekend after your vacation week, subtract them from 40 and get a negative number.  And then feel like you are cheating for turning in zero vacation hours to HR for your vacation week because seriously, 40 hours is not a work week.

16. When you fantasize about taking vacation time to get some project work done.

15. When you look forward to holidays because it means you can get some work done without all those co-worker distractions.

14. When your son can’t seem to remember whether Sunday is a regular work day for you or not.

13. When you apologize to one of your staff  for not being able to talk at that moment because you are supposed to be in another meeting. And it is Sunday.

12. When you eschew the two-ingredient baby green salad for lunch in favor of your usual handful of tortilla chips and spoonful of peanut butter because rinsing the salad bowl afterwards would make you late for your next meeting.

11. When a co-worker asks you if you can attend a meeting at 9:00 and you have to ask AM or PM.

10. When you schedule your mom in for a 30 minute slot two weeks from now so you can chat.

9. When you prepare an agenda for that call.

8. When you’ve heard yourself say this more than five times: “I have to hop off this call now because I just got to my therapist’s office.”

7. When one of your staff emails you to let you know he won’t be working tonight because he is going to the grocery store.

6. When you see a plastic bin at IKEA and note to yourself that it would make an excellent bus tub for your office.

5. When you regularly fantasize during conference calls about vacuuming the house.

4. When “make dentist appointment” has been on your to-do list for more than two years.

3. When your new extended-life laptop battery arrives and you get excited because you it means you can work ALL THE TIME EVERYWHERE FOREVER NO MATTER WHAT.

2. When you stop drinking water during the day because of all the wasted bathroom time.

1. When you divide your work day into two sections: “Before Alcohol” and “During Alcohol.”

***

You can get a grip on this.  Check out this post from Yolanda on first steps to take and go to our website for some of our Most Requested Tools in time management.

What I Did On My Summer Vacation: Travels in Philanthropy

No, I did not go on a “philanthropy tour” of the U.S. this summer…  As I am sure you do too, I did take notice of the ways that the not-for-profit sector showed up in the community where we were visiting.  And what I found fascinated me and challenged my thinking about the “philanthropy revenue engine” available to different kinds of organizations.  Perhaps some of you saw the companion pieces that came out in the New York Times this week on this very topic?  (We try not to be New York-centric, but hey, most of us live here.)  First this piece on ThinkImpact… and then these thoughtful responses.

Let me tell you about the two wonderful organizations I encountered:

header

Asticou Azalea Garden and Thuya Gardens are a meticulously maintained garden preserve in the very tony hamlet of Northeast Harbor, ME.  Planned by Charles Savage, owner of the Asticou Inn, and with the support of John D. Rockfeller, Jr., these two, interconnected gardens that bring together traditional Maine plantings with a Japanese aesthetic can safely be said to rest in the “luxury end” of the not-for-profit sector.

img_1274

Common Ground Soup Kitchen overlooks the Seawall in Manset, the last building just outside Acadia National Park, on the “quietside” of Mount Desert Island.  This community kitchen and meeting place serves the year-rounders, offering healthy food from local farmers, feeding those whose work happens seasonally and often have a hard time making it through the long, cold, off-season in Maine, and delivering meals (and companionship) to seniors who may be especially house-bound in the snowy, windy months.  Sounds like the kind of grassroots, “up by your bootstraps” kind of organization that every community has – and needs.

We had a wonderful experience both places:  a sunny, morning tour of the Asticou and Thuya Gardens that delivered on their promise to provide a “quiet and contemplative setting” away from the hustle and bustle of daily life… and a delicious breakfast of fresh popovers and local blueberry jam at Common Ground, with a mix of other vacationers and a smattering of talk about the success of the July 4th fireworks display from other local business owners.

Here is what is so interesting…  How would you assume that each organization supports their work?  What would you guess is the revenue engine of each?

You probably assume that Asticou and Thuya Gardens probably has a membership program and charge an admissions fee for visitors.  And you might assume that Common Ground gets by on fundraising events, gifts-in-kind from local businesses and some “cash in a can” donations from local and out-of-town passers-by.

These two defy expectations.

Though they could easily run as a “fee based” business, the Gardens ask very subtly and gently for a voluntary contribution from those who visit.  Sure, it helps that they have “big money” in their history, but like so many others, that may be more perception than reality today.  And like so many others, “big money” often spawns a well-financed, year-round fund development and membership program.

Common Ground has found a for-profit-like niche that serves them (and served us!) well:  offer vacationers and campers hot coffee, wifi, fresh popovers and oatmeal and the voluntary donations will flow. (It helps that the donations “jar” was a big box with a glass top so we could see what others had given – and Marie, the popover delivery-person, was the friendliest, most assertive gift officer I have met in a long time.)  I know we ended up paying more for breakfast than we would have elsewhere, but did it with a joyful heart, inspired by the posters, pictures, and literature all around us – and by Marie’s persuasive powers – explaining what our popover purchase would support long after we had gone home.

We are challenged by our clients to think about how they can expand and diversify their revenue engine – and all of us in “third sector” work today must think about where our funding streams will come from, what is emerging in the future.  What a powerful reminder to challenge our assumptions of what our funding sources could or should be!  What is your organization best in the world at doing?  Is that something you could monetize?  Is that something you should?  Asticou has decided that quiet contemplation is not to be monetized… while serving those who serve the vacation travelers can be.  Fascinating!

The 72%ers: Individual Giving for Everyone

I admit it.  I wait for the Giving USA numbers to come out each June with perhaps more excitement than is due.  What will they tell us?  Are things really looking up, or does it just feel that way?  Will there be any big anomalies?  A big swing one way or another?  And then they come out and…  well, I’m not ever that surprised by the results, honestly.  At the 60,000 foot level, they tend to say the same thing every year: images most giving to religion and education; 72% from individual giving, outright with about 7-8% more through bequests each year.  I guess that what does surprise me is the conclusion that more organizational leaders do NOT take from these findings, year after year:  despite the fact that $227.7 billion dollars were given by individuals last year, and individuals gave $8.67 billion more than last year, so many anchor their growth strategy in corporate giving, the smallest part of the giving pie.

My hunch – from conversations with many of these organizations – is that the instinct is to go where the money is:  okaaaaay.  And the perception, often from the board, is that corporations are where the money is.  But, of course, we don’t have to go digging very far to find that the many millions of giving individuals in the country give about 2% of their disposable income each year while corporate giving has fallen and stagnated at levels not seen since 1977 – a mere 0.8% of corporate profits last year.  So, clearly individual giving IS where the money is, but building an individual giving portfolio feels unattainable to many organizations.

Why?

The reason I most often hear is, “I/we don’t know ‘those’ people”.  And with the proliferation of the Philanthropy 50, the Most Generous lists, the Forbes Titans of Philanthropy, the press on those who have taken the Giving Pledge, it is easy to understand why accessing “those people” does not feel like it is within the purview of the thousands of small and medium-sized organizations around the country.

But, who do you really need to know?  For sure, knowing and engaging high-net worth individuals who can and will give major gifts is critical and wonderful.  Giving USA confirms again that having volunteer opportunities that attract, inspire and engage these individuals is key:  88.5% report that their giving follows their volunteer involvement.

Leadership donors – those who can give between $1,000 and $10,000 or $25,000 a year – are the bread and butter not only of these Giving USA numbers, but of strong, small and mid-sized organizations around the country.  (After all $1,000 is $83 a month.  $83.  How much was your cell phone bill?)  The “big dog” organizations have known that for years and have invested staffing and fund development strategies to find and keep this cohort above all others.  What can the little guys do to catch up?  The details in Giving USA this year point the way:

  • Leadership donors report that they often give to inspire others.  Do you give your current leadership donors (at whatever level) a voice in your communications?  Do you seek out some who are willing to be showcased to share their story of inspiration with others?  It’s not just about finding those who will be solicitors for you (nice though that is!) but those who are willing to tell your story to others… or have their story told.multi-channel-marketing-fueled-by-crm-increases-member-giving_16001162_800926552_0_0_14057469_500
  • 66% of individuals report that they give regularly to a few organizations they really care about.  Are you offering the opportunity to give multiple times a year?  Through different channels?  To many parts of your core mission that matter to your donors?  I am not advocating a constant, unceasing barrage of mail and email to your donors, asking and asking, always with a hand out.  But, I do know that small and mid-size organizations can cut back – waaaay back on the number of times they invite people “to the table”, either because of fear or just a lack of staff or volunteers to get appeals out the door.  Could you divide the impact of what you do into four or five different pieces and send an appeal, an email, a link to a video on your website quarterly or about every other month?  What and who would it take to do that?  $200 at a time builds up quickly.
  • 90.8% report that they have some or great confidence that the not-for-profit sector can solve problems in society.  That’s HUGE confidence, especially given the much more dismal numbers we were seeing just five or six years ago… (And much greater confidence than Congress currently enjoys, yet they don’t seem to have pulled back the political fundraising…hum.)  Here’s the “But” and it’s big:  the Fundraising Effectiveness Project found that the not-for-profit sector has a crisis of donor retention.  Those who believe in your organization give regularly; however, there is a huge number – on average, 59% of donors – who are getting passed around from organization to organization, year after year.  Notice that I say “passed around”, not “jumping around”:  so often we’re complicit in letting them go by not paying attention to donor stewardship and reporting back on the impact of giving in a way that matters and gets noticed. (Check out our podcast #7 and #15 for more on stewardship.)  Recoiling at the thought of soliciting four times a year?  What if you communicated a powerful stewardship message in between each of those appeals?  Much more palatable, right?  And your donor retention will move closer to those few who top 70% – and you’ll build stronger leadership giving along the way.

In the end, I know what keeps a commitment to individual giving off the table for many organizations:  the reality is that individual giving is a “people to people” business and that can be messy, it doesn’t have a tidy recipe that bakes up every single time.  It is like cooking – you throw yourself into it with good ingredients, you tinker with what works and what doesn’t, you ask others how they’ve made it come out so well and try again and again.  Lots of people know how to cook.  You can too.

The Three Most Important Board Roles

Type “board roles” into your favorite search engine and you will come up with a wealth of topics and purveyors of The Answer.  Still the question persists:  “But WHAT should my board be DOING?”  With so much information already out there, why is there such confusion, hand-wringing, frustration on the part of the staff team – executive and imagesdevelopment –  and on the part of the board about what a high-performing board should be doing to support the fund development efforts of the organization or institution?  I don’t want to devolve into a marketing pitch here, but we strive to deliver practical solutions here – and I think the problem with many of these resources is that they are not answering the practical question being asked… and maybe we’re not always clear on what we’re asking about board roles.

Here is what the answer is NOT:  the answer is not about whether you have a “hands on” or “rubber stamp” board, whether this board is a working board or a governing board.  In reality, all boards should be hands-on sometimes – and occasionally rubber-stamp a wise strategy.  Governing is hard work so I have never understood that distinction.  The answer doesn’t come from a pretty flow chart (…and anyone who knows me knows that I love a good flow chart – though a less popular approach when making a point with my spouse.  Different post.  Different day.)

The answer is found in discerning what we’re really asking about:  are you looking to understand and agree on the board’s fund development roles or their fund development jobs

Fund Development jobs are relatively simple – and we should keep them that way.  This is not to say they don’t need support and training, but there are just five JOBS we need board members to fulfill, each in different measure, and according to their skills and abilities:

Slide1When board members support the fund development program by doing those five jobs, we’re in good shape.  No matter what size your staff is now, you’ve got “force multiplication” and the potential for peer-to-peer outreach, even if most of the solicitation is done (or supported) by staff members.  It takes training to make sure board members have the skills and abilities to those jobs well.  (Go here for an easy-to-adapt tool on engaging your board in stewardship.  And go here for a past webinar on engaging your board in fund development.)

It is true that you can focus on those jobs and still not get anywhere in your fund development program…  It causes the plaintive cry where I started this post.  In my experience, that cri de coeur often comes from the fact that board members didn’t first embrace the ROLES that enable the jobs to get done well.

We need to allocate the right people to the right specific jobs once we have them.  First we must recruit for these roles, and not be shy about stating explicitly what role every board member must play in fund development.  Lucky for us, there are only three really important roles for you to share with your board:

1)   Give generously and be willing to talk passionately and convincingly about why you invest.  To be a good “fund developer” and carry out those five jobs, every board member must identify with those they are reaching out to, know what a good donor looks like, be proud and vocal about their support of this organization.

2)   Assess the risk of your fundraising approach, creating balance and mitigating risk.  Every board member – whether you are trained in fund development or not – should be able to recognize that holding ONE fundraising event on which all or a significant percentage of the year’s revenue rides is RISKY.  That’s really, really risky.  So, do not do it.   Same goes for relying on one donor, or one source of giving.  Something happens to one donor or one sector and…. pppphhhft.  Equally, every board member should be able to recognize that doing 17 events or campaigns is probably not a good use of resources and splits attention in too many directions.  And, with a little education, most board members can embrace the wisdom of focusing on building a robust pool of leadership donors who provide significant investment each year.

3)  Be available, demand that your availability is used well.  Agreeing to take on those five roles – or some of those five roles – but then neeeeeeever quite getting around to doing what you are asked shirks this role. Promise what you will deliver.  Then, you can and should demand (Staff: talking to you now…) that your time be used well, on the right jobs with the right donors and that everyone measures the effectiveness of what they’re doing, not to punish anyone, but to see what works best and do more of that.

What should a high-performing board being doing?  Embracing three roles that lead the way to five effective jobs.  Practical?  I think so.

“Know Something Important…”: Stewardship for Board Members

A very wise client of ours shared this story with me:  The day he was being inaugurated as the new leader of his school, the retiring, long-time head of school advised him that his most important role from that day forward was to “know something important about every member of this community.”  His advice was not to know everyone…  Or to manage his board…  Or to placate his faculty.  He was to make it his business to know something important about everyone.  This, in one elegant, simple story, guides my thinking today on stewardship – especially board stewardship.

We know that when we stop with “thank you” we haven’t really delivered stewardship.  And we know that when we thank and list donors in an annual report or on a donor wall , we haven’t really delivered stewardship.  AND we know that when we steward thoimagesse “easy” donors who give restricted or designated gifts, we also haven’t delivered stewardship.  (We know this, right?  Of course we do.)  Even the most thoughtful offices and officers can be stymied by board members… They are always THERE, right?  We discuss strategy; they know our organization from the inside out; they give because they believe in all we are doing.

Not so.

Board members who receive great stewardship themselves will share it with others.  We must model the kind of stewardship experience we want them to deliver on our behalf.  That’s important but that’s the smallest reason.

Precisely because they are always there, Board members should receive the best we’ve got in the stewardship category:

  1. Are they being deployed well?  Do they feel their service is being well used?  Are they on the right committees and doing things that are personally satisfying for the organization?
  2. Why does their gift matter?  Sure, board members care about all that you do, but there is probably some aspect of your institution that makes their heart beat a little faster, that they especially love that you all accomplish together…
  3. And that bring us back around to that good advice:  know something important.  What did each member of your board bring to the table – expertise, insight, willingness to take a stand on a tough subject, lead an effort, be diplomatic when diplomacy was difficult?

Great board stewardship rolls together that old adage:  “Time, Talent, and Treasure”.  We are strongest when the board brings all three.  Our relationship is strongest when we steward all three.

Board members:  what is the best stewardship you have received from your organization?  Share here!  To listen in on the best stewardship, we have received – check out this podcast.

Laura’s Response to Dan Pallotta

Oh, Dan Pallotta… How I love what you have to say – and how troubled am I by the conclusions you draw!   For those who have read his first breakout work Uncharitable, you will recognize the introduction to this work in the 2013 TED talk that got so much play in Bob’s and my in-box.  Watching Dan Pallotta at work live gave me much of that same heady rush as when I first read that book:  here is someone saying out loud that the ill-conceived and misplaced vow of poverty that not-for-profit organizations are required to take is hampering social innovation!  Whoopee!

But, I thought, surely he will have moved beyond the conclusions he drew from what

was a devastating – and ultimately fatal – blow to his AIDS Ride organization?  He will have a more nuanced response to that now, right?  You can see in the video itself how choked up he still becomes by the memory of laying off his 350 employees.  I am entirely sympathetic and quite touched by how personally he still takes this moment in his life; how could he not?  However, I think this is where he’s got a blind spot that unnecessarily weakens his

argument about unleashing the social capital necessary to truly transform the world.

Let’s work through it:

Blackbaud Online Giving Trends by Sector

  • Are there some social challenges that defy monetizing?  Are there some problems that business will never find a financial advantage – or enough of a financial advantage in ameliorating?  Yup.  Check.  Totally agree.
  • Is the public pillorying of not-for-profit leadership compensation not only misguided but downright hypocritical, especially in light of recent for-profit debacles?  Oh yeah.  (I actually would like to intensify that agreement with a slightly more profane word, but not on the blog.)
  • Is the devotion to irresponsible expectations for overhead keeping many organizations ineffective and impoverished?  Yes, oh yes.
  • Should not-for-profit organizations have greater leeway in advertising and marketing?  Maybe.  But here is where things start to go off the rails for me.  I have found that the social sector is more complicit in this one, often seeking to move into advertising without a clear goal or measurable outcomes for “increased visibility”.  And, this point begins to unpack Dan’s prejudice within the not-for-profit sector:  huge money is only unleashed through wide-spread, grassroots fundraising.  Perhaps because of his brave movement in this arena, organizations that rely on grassroots fundraising (think American Cancer Society, Susan G. Komen For the Cure, other organizations that do walks, etc…) do have a visible marketing presence that doesn’t occur at 4am on public access TV.
  • Following on this fear of moving boldly into the marketing space, Dan also identifies an aversion to taking risk on new ideas.  Again, here’s a place where we could agree.  But we don’t.  Dan identifies the problem as an aversion to risky fundraising ideas.  That is not the problem.  The core problem is an aversion to planning and underwriting risky, innovative solutions to problems.  

He is right in recognizing that the same principles of venture capital need to apply to social innovation:  “risk capital”, investors with patience for a longer time horizon, ability and tolerance for trying and failing and trying again to solve social problems.  If the solutions were easy, we would have found them already.  Trite.  True.  But the challenge holding us back from solving these problems doesn’t lie in the fact that we don’t raise money for them in the right way.  Early attempts at crowdfunding not withstanding, social venture capital comes from a few, very rich, bold people at a much greater rate than it does.  Maybe funding from a broad swath of society will be the answer in the future, but it’s not now.  New ideas in the for-profit realm are started and nurtured by a few venture capitalists.  Why would the NFP market work differently?

Innovation in the social sector comes when leadership and bold investors team up to develop new ideas grounded in data and measurable outcomes, agree that the ability to fail is equally useful as succeeding in solving problems and that investing in the ability to go to scale in the impact realm (which may or may not include costly fundraising programs) is what really matters.

This also takes apart Dan Pallotta’s belief that “bigger is better” in all instances.  Is becoming a $50M+ organization the root to solving all problems?  Not necessarily.  Some problems may require big, centralized investment: diseases, social policy movements.  (But I think we can argue on that point too…)  Other problems are best solved at the local level, but small but appropriately well-capitalized organizations who know their market, know their community, know the issues they need to solve intimately and are nimble enough to be able to address that.   Or put another way, is the only beer we need brewed by Miller and Budweiser?  No way.  Keep my microbrews – and my micro-organizations – safe (and delicious.)

Agree?  Disagree?  I’d love to hear.

Build the Better Budget: Non-Profit Budget Tools from Consultant-Land…and Reality.

An old friend and I were catching up the other day and she observed, “Your approach to philanthropy has really changed since you joined a board, hasn’t it?”  While I’m not sure that it’s been a change in only one direction, I do know that leading a board has made me a better consultant, more cognizant of the tough realities of non-profit management and tied into the calendar.  And that means it’s budget planning time…  I’ve been diving through the waves and waves of non-profit budget planning tools available, both to make sure we’re doing the best possible job as a board, and to take a look at what’s out there, as I wear my “consultant” hat.  But first, a few thoughts on the budget process before the tools are needed…

It may be cold comfort for those who recognize themselves in these situations, but here are the budget and goal-setting processes we hear too often:

  • The budget is set as a mandate from on high and the goal is delivered, Moses-like on tablets carried from the top the mountain.Buried-in-Paperwork-300x200..
  • The year’s impact goals are never really set and the budget is forced to fit the fund development projections…
  • …and that projected goal is developed with a shrug of the shoulders – “Who knows what we can raise next year?  We’ll know when we do it…”
  • …or the budget and goals for the coming year are dictated by donor interest, “We’ll do what our donors support.  How should I know what our budget should be until our donors tell us what they want?”

Being a responsive organization that can build visionary plans and achievable goals does not involve carrying stone tablets, delivering divine proclamations.  And being a donor-centric organization stops considerably short of doing whatever “The Donor” – whoever that mythical being is – wants accomplished.

On to the ideal!, says the consultant side of me.

Ideally, the organization’s leadership will begin with an annual review of the strategic plan:  where has progress been made?  What progress is next?  Which strategic goals need adjustment?  Which have been accomplished?  And from this review of the agreed upon, multi-year strategic plan, the year’s tactical goals for creating impact and outcomes should emerge.  Then the team asks themselves:  what is needed?  What investment of time, equipment, or resources is needed to achieve this goal?  Is it new staff?  New phone system?  And a first pass at the budget is developed from the strategic goals to the impact goals sought in the next fiscal year.

Simultaneously, the fund development team is building their goal from their gifts received and name-by-name projections (you are doing name-by-name projections on your table of gifts, right?!).  The projected goal is hand-built and movement toward key thresholds like reaching 20% of the philanthropy goal from board giving is established. This name-by-name projection is added to the projections for the broader channels of funding, based on program tweaks or overhauls (and the budget costs for those factored on too!) to arrive at an achievable goal.

THEN, these two are compared and any gap is discussed calmly, with a spirit of “Can Do!” give and take.  Cuts are made or more cost-efficient ways to do things are uncovered and the goal grows with innovative ways to increase giving and other revenue sources.

Isn’t that exactly the way it happens every year?  Riiiight.  Perhaps in consultant-land…  Back here in reality, it is seldom that tidy.  But that doesn’t mean we can’t strive for it.

Here are the TWO things (just 2!) we can’t cut corners on:

  1. You must create impact goals tied to the revenue needed to achieve them.  We are doomed to bad business planning and low sights when we don’t know what it costs to deliver the change we seek to make.
  2. You must hand-build that philanthropy goal from the ground up, person by person at the top of your table of gifts and campaign by campaign

If you find yourself applying a flat percentage increase to your fundraising goals or to build your new budget number:

STOP RIGHT NOW. 

TURN AROUND AND GO IN ANOTHER DIRECTION. 

Success in impact and in fund development requires that your goals must be tied to reality.  If you’re having trouble writing a persuasive case for support or convincing donors to give, it’s probably because you don’t have a great answer to this question.

So, to those tools to get this done:

I mentioned in an earlier blog piece, the embarrassment of riches that the wonderful folks at the Wallace Foundation have provided through their new Financial Planning Toolkit.

  • For those going through the budget planning process – especially board leaders – here’s a practical, step-by-step guide for leading this in your organization:  Five Step Guide to Budget Development from the FMA.  This readable .pdf is suitable for sharing with the whole board.

I was also happy to find a thoughtful piece on when to run a surplus budget, break-even budget, or deficit budget from Blue Avocado written by Jeanne Bell called “Nonprofit Budgets Have to Balance: False!”. Did you know you had a choice?  You do.

Need even more?  The National Council of Non-Profits has an extensive toolkit specifically on the budget building process.

A final thought:  my board experience has also taught me that it is just as important that your fund development committee (and fund development staff!) be conversant about your 990 – the ultimate reflection of this entire process – as your finance committee.  Donors deserve to know how your budgeting and spending choices will carry out their giving wishes – that’s the best stewardship and the right way to be donor-centric.