Audit committee or no audit committee? That is the question.

July 30, 2013 erik Board governance, organizational development

audit When it comes to financial management, I’ve run into two types of non-profit organizations. There are those organizations who struggle with financial management and don’t have a strong and independent Finance committee in place. Then there are agencies whose Finance committee is the strongest voice in the boardroom. For the latter type of organization, the question about whether or not to form an audit committee always seems to linger in the air with a diversity of opinions spinning around it.

In my experience, strong finance committees have had a difficult time accepting the case for support for forming another standing committee focused on finance. After all, it is hard to argue with the “Why fix something that isn’t broken?” argument. Moreover, the “Our agency should stay ahead of Sarbanes-Oxley legislation” also seems to fall flat.

I fought these battles a decade ago when I was on the front line leading a local non-profit organization. I was successful in my quest to form an audit committee, and it allowed us to relieve the Finance Committee of the following roles and responsibilities:

Selecting the audit and periodically putting the audit work out for bid.
Reviewing the work of the auditor and making recommendations to the board based on this work.
Providing board oversight of the auditor so that management hasn’t his/her only point of contact.
Review and assessment of the agencies internal controls.

In hindsight, I loved this move for two big reasons:

It got some stuff off of the Finance Committee’s plate and allowed them to focus on important stuff.
It gave me another committee opportunity to engage board volunteers and recruit influential finance-minded non-board volunteers.

I must admit that in the beginning many people (including myself) still had a difficult time with the blurry line between these two committees. This issue recently reared its head at an agency where I am doing some work, and I really like the clarity that came out of the conversation. So, I thought I’d share it with you this morning.

Finance Committee – develops and monitors financial practice
Audit Committee – monitors the process in which financial practices are carried out

Are you still not feeling it? OK, the following is a list of resources that I really like and hopefully provide you with the answers for which you’re looking:

Minnesota Council of Nonprofits: “Nonprofit Finance vs Audit Committees“
BDO’s Nonprofit Standard blog: “Effective Audit Committees“
The Center for Association Leadership: “Nonprofit Audit Committees — A Toolkit“
American Institute of CPAs: “AICPA Not-for-Profit Audit Committee Toolkit Downloads“
Virginia Society of Certified Public Accountants: “Audit Guide for Audit Committees of Small Nonprofit Organizations“

I hope you find these links helpful.

Has your organization formed an audit committee? What was your experience? Did you develop two different committee charters with two different committee work plans? If so, how did you divide things up? How have things worked since you made the change? Does your audit committee feel like a superficial after-thought that you only did because people were telling you it was a best practice?

Please scroll down and share your thoughts and experiences in the comment box below. This is an important board governance question that always seems to fly under the radar. Let’s talk about it.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
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If you love me, you’d never ask me run another non-profit raffle again

July 29, 2013 erik Board development, Fundraising, volunteers

The other day it was hot in the Chicago area, and I decided to run to the grocery store to get some sugar-free ice cream for my diabetic spouse. As I trudged through the hot blacktop parking lot, I saw an unfortunate sight . . . a volunteer sweating his rear-end off standing behind a booth selling raffle tickets for the Knights of Columbus (see picture to the right). I was immediately reminded of a time not-so-long-ago when that used to be me.

The year was 2000 and I had just been hired as the new executive director of the Boys & Girls Club of Elgin. Just the year before this organization attempted to run its first Duck Race special event fundraiser. Without going into the details, it didn’t make them money. However, I was young and dumb. I was an inexperienced and a newly minted executive director. I had seen a very dear friend run a Duck Race in a different community, and he had been wildly successful netting close to $100,000.

If he could do it, then I could do it. After all, how hard could it be? All it seemed to entail was:

selling corporate sponsorships,
standing in high traffic areas and selling $5.00 duck adoptions to people who want a chance at winning a new car, and
putting numbers ducks in the river and pulling the winners out of the water to determine who wins which prizes.

What was the big deal? OMG . . . I wish I knew then what I know now.

As I approached the poor hot and sweaty Knights of Columbus volunteer, all of the pain came flooding back to me:

Recruiting 100 volunteers to help with every aspect of the race (e.g. marketing, tagging ducks, putting ducks in the water, taking ducks out of the water, data entry, and not to mention selling duck adoptions),
Organizing countless teams of volunteers to sell duck adoptions and trying every trick in the book to create a sense of fun-excitement-competition,
Chasing down volunteers to sign-up for weekend sales shifts (standing outside of the same grocery store where the Knights of Columbus volunteer was sweating),
Spending the entire weekend driving from sales location to sales location to support the volunteers by replenishing petty cash banks, restock merchandise, and fill gaps in between shifts where necessary, and
Personally filling holes in the schedule . . . standing outside of the grocery store or hardware store or bank . . . yelling out your sales pitch at people leaving the store . . . getting scowled at by people who don’t appreciate the disturbance . . . selling an adoption to approximately one-out-of-ten people.

ducks2 These five bullet points are just the tip of the iceberg. The fact of the matter is that we started planning next year’s Duck Race in the immediate days and weeks after wrapping one up. This special event raffle was a year-round affair.

For me personally, it represented an eight week period of my life every year when I worked seven days per week . . . 56 days in a row without a day off for good behavior. I did this for six years, and when I was weighing the options associated with another job offer, the Duck Race was one of the Top Five reasons I left for greener pastures.

As I passed by the Knights of Columbus booth for the refuge of an air conditioned store, I put my head down and refused to make eye contact with that poor volunteer (just like thousands of other people did to me when I was selling duck adoptions). The last thing that ran through my head was the promise I’ve made myself to never work for a non-profit agency that runs any kind of raffle. The following is a list of reasons for this decision:

Raffles are nothing more than gambling and there are laws, rules and regulations that don’t seem to be worth the time, energy or effort.
Raffles entice donors to make a contribution to your charity for reasons other than your mission and getting these donors to crossover to other campaigns or events is next to impossible.
Raffles involve prizes which means you better not mess things up or you run the risk of being sued.
The record keeping is overwhelming and can involve double and triple entry of financial data depending on how your donor database, financial management system and raffle software are configured.
Opportunity cost and return on investment calculations point to greener pastures when you look at using the same amount of time in other fundraising efforts (e.g. annual campaign pledge drives, etc).

The bottom line for me is that selling raffle tickets and chances should be an activity that is beneath every non-profit board volunteer. Their time is too valuable to ask them to sweat outside of a grocery store selling raffle tickets $5.00 at a time. How many donors could they have sat down with in the same amount of time and asked for a $250, $2,500 or $10,000 pledge?

Here is another way to think about it. If you don’t have the type of volunteers who feel comfortable sitting down individually with important donors and if your volunteers are more willing to sell raffle chances, then you probably have the wrong people sitting around your boardroom table. Perhaps, these people are well-intentioned fundraising volunteers, but they certainly aren’t good board prospects.

If this last revelation upsets you, please accept my apologies. However, don’t dismiss this thought too quickly. Like a good cup of tea, let this idea steep and then share your thoughts in the comment box below.

Here’s to your health!

Is your non-profit only living for today? Then you need Picasso!

July 26, 2013 erik organizational development

Welcome to O.D. Fridays at DonorDreams blog. Every Friday for the foreseeable future we will be looking at posts from John Greco’s blog called “johnponders ~ about life at work, mostly” and applying his organizational development messages to the non-profit community.

In a post titled “Not Pretty,” John talks about Pablo Picasso’s painting of Gertrude Stein and how it was a portrait of what he thought she would look like as an older woman. John used this story to springboard off into organizational development and change management themes. It was the following passage from his post that really got me thinking:

“First off, how the organization performs in the future may hardly resemble how the organization is performing today … Time — aging — will have its way. Things will change. Without the critical development of structure, process, culture, and talent, time — and change — will wreak havoc. Capabilities will erode. New capabilities will be needed.”

When I read this, I visualized rocks being pounded by ocean waves. In real-time, the rocks seem to win because waves disperse and scatter into mist and foam. However, the reality of the situation is the absolute opposite. The waves are actually winning. Right? Because in the long run those rocks turn into sand as a result of the pounding they take.

In this analogy, your non-profit agency is the rock and you’re more than likely eroding.

picasso2 As time passes, the waves of change crash against your seemingly rock solid organizational exterior, but change is slowly occurring. Here are just a few examples:

You lose employees
You lose board volunteers
Your strategic plan is aging (in fact, all of your plans are aging)
Your technology systems are becoming outdated and old
Your base of donors gets older and their individual capacities change
Best practices and cutting edge practices morph and refine themselves (e.g. who saw online giving as an option 50 years ago?)
Your community’s economic foundation is eroding and changing (e.g. industrialization to information, local to global, etc)

Whether you feel it or not, your non-profit organization is being pounded into one big pile of sand.

And you are more than likely making things worse!

In recent years, there has been a lot written about “The Nonprofit Starvation Cycle” by folks like Dan Pallotta (via his books Uncharitable and Charity Case) as well as the recent open letter titled “The Overhead Myth” from GuideStar, Charity Navigator and Better Business Bureau.

I think an article by Ann Goggins Gregory and Don Howard in Stanford Social Innovation sums up the mistake many of us are making very well:

“A vicious cycle is leaving nonprofits so hungry for decent infrastructure that they can barely function as organizations—let alone serve their beneficiaries. The cycle starts with funders’ unrealistic expectations about how much running a nonprofit costs, and results in nonprofits’ misrepresenting their costs while skimping on vital systems—acts that feed funders’ skewed beliefs. To break the nonprofit starvation cycle, funders must take the lead.”

Is this you? Are you skimping? Are you living for today and ignoring tomorrow?

I really like the last sentence in this previous passage because it dovetails with John’s organizational development blog post about Pablo Picasso so very well.

In a previous post titled “Ending the ‘Overhead Myth’ is everywhere,” I was skeptical. I honestly don’t think an open letter to donors or a ton of online chatter will change donor perceptions about the value of investing in what John describes as “…structure, process, culture, and talent…”

If you’re going to engage your donors in this discussion because they are the key to allowing you to invest in what they perceive as “overhead,” then you’re going to need someone like Pablo Picasso to help you assess what your organization will look like in the future. This information will help you develop your case for support, which is what you need before engaging your donors in this conversation.

Is this way too much work for you to consider? No problem . . . I’ll see you at the beach! 😉

What is your agency doing to engage donors and win their hearts and minds when it comes to “The Overhead Myth” and the “Nonprofit Starvation Cycle”? Who is your Pablo Picasso helping you with organizational assessment (both present and future)? If you’re thinking about using an external consultant to help you with all of this . . . I think I know someone who wants to help you! 😉

Here’s to your health!

Kick-Ass 2 movie trailer prompts non-profit superpowers question

July 25, 2013 erik Fundraising

Sometimes when I burn the candle at both ends and work long hours, things that normally wouldn’t register with me end up hitting me in funny ways. More often than not, those weird thoughts find their way into my blog posts. For example, a few nights ago I crawled in late at night after a site visit with a client. I turned on the television for a few minutes to unwind, which is when I saw a commercial for a recently released movie titled “Kick-Ass 2: Balls to the Wall“.

Click here or on the video below if you’re now curious about what I saw.

[youtube=http://www.youtube.com/watch?v=G4p4VyP3tH4]

According to one of the movie websites I was researching, “Kick-Ass 2: Balls to the Wall” is about:

“The costumed high-school hero Kick-Ass joins with a group of normal citizens who have been inspired to fight crime in costume. Meanwhile, the Red Mist plots an act of revenge that will affect everyone Kick-Ass knows.”

OK . . . OK . . . OK . . . I am sure that many of you are probably wondering:

Has Erik gone insane? Has he lost it?
What does this silly sophomoric movie have to do with fundraising?
How will he tie this into a non-profit topic?

As I laid on my couch twitching from exhaustion watching that commercial for this movie, the following thoughts crossed my mind:

If I could have any superpower, which one would I want? And how would it make me a better non-profit or fundraising professional?

Silly question? Absolutely! But the answer might just be a little telling.

superpowers For example, I concluded that I would want the super human ability to “read people’s minds“. As I started thinking about why I might want that superpower, I concluded that knowing what a donor wants and how they want it would make me one of the best fundraising people on the planet.

This realization got me thinking even more about why this might be important to me, and I concluded that I’ve always struggled with the idea of donor research and getting some of the following questions answered before talking with a prospect (or even a current donor):

How much should we be asking for?
What are they passionate about and how does our case for support fit?
Who else do they support?
Are we in their top three favorite charities?
Do they have concerns about our agency that they’re holding back on asking?
What is their capacity? What is their willingness?

This list of questions can go on and on and on. While there are a number of ways that I’ve gone about getting answers to these questions throughout the years, the reality is that “mind reading” would make things so much easier.

Do you have a minute or two in your busy day to do something fun? If so, contemplate the following questions:

If you could have any one superpower, which one would it be?
How would it make you a better non-profit or fundraising professional?
Why did you choose that particular superpower? What insights into who you are (or what you struggle with) does this epiphany give you?
Since superpowers don’t really exist, what are you going to do now?

Take a minute to share the answers to these questions in the comment box below. We can all learn from each other.

Here’s to your health!

Is your non-profit good at the Why-How-What?

July 24, 2013 erik Board development, Board governance, Planning

A few days ago I bumped into a non-profit friend who had recently viewed a TED Talks video on YouTube featuring Simon Sinek titled “How great leaders inspire action“. It was obvious to me that this was a TED Talks video that I needed to view because it had inspired her to take action. Not only was she talking to everyone about what Simon calls the “Golden Circle,” but she had also shared the video with board volunteers as a precursor to a strategic discussion.

I think there are three things that make this video so contagious and easy to watch:

The idea of the “golden circle” is easy . . . What-How-Why.
These ideas are woven into many non-profit professionals’ DNA.
The speaker does a nice job of relating What-How-Why to other companies and their successes (e.g Apple)

Early in the video Simon says,

“Every single organization on the planet knows WHAT they do . . . Some know HOW they do it. Whether you call it your differentiating value proposition, you proprietary process or your USP . . . But very, very few people or organizations know WHY they do what they do. And by WHY, I don’t mean ‘to make a profit’. That is a result. It is always a result. By WHY I mean what is your purpose? What’s your cause? What’s your belief? Why does your organization exist?“

I’ve done a lot of strategic planning over the years. I’ve also done lots of tactical planning. And Simon hits on a super powerful idea with his What-How-Why.

what how why Those organizations that excel at strategic planning have a very clear understanding of what they do, how they do it, and why they exist. However, those organizations that are little fuzzy on these ideas do a lot of wrestling with themselves. Sometimes countless hours are spent at the 50,000 foot view talking about these issues . . . and for good reason! Without clarity on What-How-Why, there is no way you can set goals, develop objectives and write action plans that are meaningful in any way, shape or form.

Some of you might be scoffing right now and asking, “How in the world can a non-profit agency not know ‘WHY’ they exist? It is as simple as revisiting their mission statement!”

Well, not so fast, my friend. There are at least two situations that come to mind where this simple idea starts to get blurry.

Some organizations have LONG histories and over the course of time their mission changes. For example, the March of Dimes was founded to address polio and today it exists to improve the health of mothers and babies. When this happens, sometimes the shift isn’t as clear as it was for March of Dimes . . . the ‘WHY’ gets fuzzy . . . and the challenges ensue.
Some organizations experience mission creep because their resource development strategy wasn’t well-defined and board members let staff chase all sorts of funding opportunities regardless of what it was for or what they do. The end result kind of looks like a McDonald’s restaurant that also sells electronics and chiropractic adjustments. In short, the ‘WHY’ gets fuzzy.

I believe that good non-profits revisit the questions of What-How-Why on a somewhat regular basis. I applaud my non-profit friend for using this YouTube video to frame and stage an engaging boardroom discussion. If you have a little time today, I suggest you click-through to YouTube and view the video. If you like it, then forward it to your board president and have a discussion with them about its value. If you’re both excited and engaged, then share it with your board and talk about it as a group.

[youtube=http://www.youtube.com/watch?v=qp0HIF3SfI4]

If you end up doing any of what I just suggested, please circle back around to this blog post and share your experience in the comment box below. We can all learn from each other.

Here’s to your health!

Has your non-profit discovered Quora yet?

July 22, 2013 erik Board development, Board governance, Fundraising, technology

questions When I used to work at Boys & Girls Clubs of America (BGCA), my colleagues were responsible for the existence of something called theFUNDRAI$INGbank, which is a special webpage embedded inside of the intranet accessible to local affiliates. We outsourced maintenance of this page to FundRaisingInfo.com. There were many different resources located on “The Bank” including a free service called “Ask The Expert“.

Whenever I talk to agencies who aren’t Boys & Girls Clubs about “Ask The Expert,” I’m typically told how lucky local Boys & Girls Clubs are to have such a service (and to have access to it for free). Usually, somewhere in those conversations, the person with whom I’m speaking says they wish they had access to such a thing.

For those of you who don’t have a national organization behind them offering such resources and services, I’ve always told them not to fret because we now live in the 21st Century and answers are mostly just a click away. I’ve encouraged non-profit friends to open their minds to the full potential that Google search offers them. I’ve also reminded them about how many non-profit bloggers are out there begging for comments, questions and engagement (this blogger not withstanding).

Now I am adding another suggestion to those non-profit staff and board volunteers who are in search of answers for free . . .

QUORA

Have you checked out this new online Q&A webpage yet? If not, I suggest you do so because it looks like a great resource for non-profit folks with questions. Here is what Wikipedia says about Quora:

Quora is a question-and-answer website created, edited and organized by its community of users. The company was founded in June 2009, and the website was made available to the public on June 21, 2010.^[3]

Quora aggregates questions and answers to topics. Users can collaborate by editing questions and suggesting edits to other users’ answers.^[4] Quora’s main competitors are social bookmarking sites like reddit, social networking sites like ChaCha, and numerous question and answer websites.

Unlike BGCA’s “Ask The Expert” service, the answers and advice you get from Quora might not necessarily be from an amazing expert like the folks at FundRaisingInfo.com. However, if you go into it with the right mindset and an understanding that the answers you receive might just be from your peers, then this could be a great resource for you. At the very least, it represents a good starting point for finding answers.

Here are just some of the non-profit and fundraising questions that I see being asked on Quora:

What are some good platforms for online fundraising?
How do you manage memberships and donation drives in a small or medium size non-profit?
What cutting edge fundraising techniques are charities using?
What are the characteristics of high-performing non-profits?
How much power does a non-profit board have?

Interesting questions!

Of course, there is the obvious question, “What are some of the best ways non-profits can use Quora?” Click here if you want to see responses.

When you have a question with which you’d like other people’s opinions, where do you go online? Google? WordPress? Blogger? Facebook? LinkedIn? Quora? Where do you find the most value in your search for answers? Have you used Quora yet? If so, what was your experience? Please scroll down and share your thoughts and experiences in the comment box below because we can all learn from each other.

Here’s to your health!

Don’t put Dorothy on your board of directors

July 19, 2013 erik Board development, Board governance, organizational development

On Monday, I shared with you a few observations from The Wizard of Oz and Oz: The Great and Powerful as I think it pertains to non-profit work. At the end of Monday’s post I promised to take you further down the Yellow Brick Road by revisiting a series of Oz-inspired posts from two years ago. Today’s post is about board composition and board development. Enjoy . . . here’s to your health! ~Erik

Don’t put Dorothy on your board of directors

Originally published on October 27, 2011

dorothy September 15, 2008 . . . do you remember where you were and what you were doing? It was the day the world changed. It was what some people have called an “economic 9-11″. Regardless of how you characterize the day that Lehman Brothers filed for bankruptcy and the stock market started its crash, it is hard to argue the following: 1) the economic paradigm we all used to live in shifted and 2) nothing will ever be the same again.

This week I have used characters from “The Wizard of Oz” to talk about current challenges facing the non-profit sector. Today, we will spend a moment talking about Dorothy.

Dorothy is an iconic character who has been described as a “level-headed, plucky, resourceful, determined, all-American, populist”. However, I’ve always seen her as a traditional “conservative”. Don’t believe me? Refresh your memory with this quick YouTube clip. Of course, I don’t mean this in any kind of political way, but more of the traditional meaning of “holding to traditional attitudes and values and cautious about change or innovation”.

You cannot afford to have Dorothy on your board of directors during these tough and turbulent economic times!

Mentally take a look around your board room and see if you can identify how many Dorothy-like volunteers occupy chairs. They are kind folks (dare I say friends) who look and sound like the following:

They are frightened by the economic “tornado” whirling throughout the world. They talk about economic news constantly.
They wish for yesteryear and reminisce about times when your non-profit was facing a different set of circumstances. They fixate on making things better . . . just like they “used to be”. They’re focused on making that formerly kick-butt special event awesome again. They’re insistent that you can hold onto all of your government grants if you just tried a little harder. After all, there is no place like home.
They are visibly closed to new and innovative ideas that have not been tried. They believe ePhilanthropy is a passing fad. They won’t entertain ideas around merger, acquisition, or strategic alliances that share back office functions. After all, that is not the Kansas they so fondly remember.

Don’t get me wrong. I am not suggesting a “witch hunt” to root out these folks and fire them. Dorothy serves an important role on your board. She is that cautious voice that keeps you from getting into trouble. She will stop you from pulling the plug on your annual campaign and direct mail appeals and “going all in” on ePhilanthropy efforts. Valuable? YES! However, what happens when you have too many Dorothy-like board members? Or what if you have those well-intentioned people serving in the wrong roles (e.g. board president, annual campaign chair, strategic planning committee, etc)?

My best two pieces of advice for non-profit staff and board volunteers this morning are:

Be especially strategic and thoughtful about where you ask these people to serve in your organization. This means that you need to: a) identify who these folks are and b) have a clear understanding of which volunteer opportunities are acceptable for conservative personalities.
Focus your board development efforts over the next year on recruiting people in your community who don’t resemble Dorothy to serve on your board. This is not the time to pine for Kansas! This means your board development committee needs to double down on the “prospect identification” and “prospect evaluation” elements of the board recruitment process. Gone are the days when everyone sits around a table and tosses out names of good, kind and resourceful people. BE STRATEGIC!

I suggest that the type of people your board development committee should look for exhibit some of the following characteristics:

They don’t appear to be “personally” economically impacted by the Great Recession
Their business or line of work seems to be doing fine
They are naturally positive and have a decent outlook on the future
They seem to be open to new ideas (as evidenced in their personal and professional lives)
They are “outside-of-the-box thinkers (as evidenced in their personal and professional lives)

Remember, if you want to keep the flying monkeys away from your non-profit agency, STAY AWAY FROM DOROTHY.

OK — if you aren’t buying into my cheesy “Wizard of Oz” analogy, then please go to the library and borrow the book “Who Moved My Cheese“. You’ll thank me later.

How has your agency adapted to the new realities? Have you changed your resource development model or are you still trying to do things the old way? Do you see your board development efforts changing or focusing on different types of prospects? Please use the comment box below and weigh-in. Please remember that we can all learn from each other. In fact, it is probably the most effective way many of us learn.

Here is to your health!

If I only had a heart . . .

July 18, 2013 erik Fundraising

On Monday, I shared with you a few observations from The Wizard of Oz and Oz: The Great and Powerful as I think it pertains to non-profit work. At the end of Monday’s post I promised to take you further down the Yellow Brick Road by revisiting a series of Oz-inspired posts from two years ago. Today’s post is about mission-focus. Enjoy . . . here’s to your health! ~Erik

If I only had a heart . . .

Originally posted on October 26, 2011

tin man There are 9-keys to “inspiring and managing yours board for fundraising success”. In fact, the reality is that these 9-keys are the same nine things you need to do to “engage” anyone in anything. However, I believe that these nine concepts are not all equal. While all are important, I have come to realize that the most important and most difficult engagement tool was best summed up by the “Wizard of Oz’s” Tim Man in this YouTube video.

The most important engagement tool in your nonprofit toolbox in my humble opinion is “MISSION-FOCUS”.

I personally learned this lesson more than 7-years ago when one of my more influential board volunteers (I’ll omit his name for privacy purposes, but let’s just say he was really good with other people’s money) resigned from the Boys & Girls Club of Elgin’s board of directors. While he resigned for personal reasons and still supported the Club, I didn’t see the train wreck coming until it was too late.

This board volunteer was infamous for taking 15+ prospects’ pledge cards as part of the annual campaign every year. His reasoning seemed sound: 1) they were clients of his, 2) they were friends of his, and 3) he had always solicited these donors. I’d be lying if I tried to tell you that I ever tried to talk him out of being such an overachiever. However, in hindsight I wish that I had.

The first year this individual wasn’t on our board, we tried to redistribute his annual campaign prospects to other volunteers. I finally understood how big of a fool I had been when my phone rang a few weeks after our annual campaign kickoff meeting. The call came in from one of our more steady donors who had always been solicited by this former board volunteer.

The call started off nice enough. “Hi . . . how are you . . . how are things down at the Club?” However, pleasant conversation quickly turned into a cross-examination: “why is so-and-so calling me for my annual campaign pledge this year . . . what happened to he-who-I-loved-to-get-solicited-by . . . is there something wrong at the Club whereby he just walked away from your board of directors?” And as if that wasn’t enough to cause me to run to the restroom and vomit, most of the calls ended with the donor talking to me like I was a kindergartener and telling me that they didn’t donate to the Club because of our mission but because of who had been asking.

The lesson I painfully learned was that stewardship was very important in the resource development process. Successful stewardship and relationship building meant transitioning a donor-relationship from their the volunteer-solicitor connection to a love affair with the organization’s mission. While it might not happen overnight, working on it symbolized a commitment to sustainability and a donor-centered paradigm. The Tin Man was 100% correct when he sang about the value of his heart.

Being “MISSION-FOCUSED” goes beyond stewardship . . . here are just a few ideas for infusing mission in everything you do at your non-profit organization:

Host your board meetings, committee meetings and fundraising meeting at your service facility as a way of reminding everyone what their volunteer time commitments are all about.
Focus newsletter content on return on investment messaging and all things related to your agency’s mission. Skip the boring advertisements for the next opportunity to make a contribution.
Don’t let your annual campaign volunteer solicitors go on important solicitations by themselves. Staff should do everything possible to get invited on important solicitations and ensure: 1) the ask is not being done in a “quid pro quo” manner and 2) mission-oriented reasons are infused throughout the solicitation call.
Find ways to bring the idea of your clients into important meetings. For example, ask agency clients to participate in an essay contest about what they value most about your organization, its programs and mission. Share those essays with board volunteers, fundraising volunteers and donors.
Incorporate a “mission moment” into ALL MEETINGS as a way to keep the focus on why you’re asking others to do what they do.

Failure to inject “MISSION-FOCUS” into all of your meetings and fundraising campaigns can be disastrous. It can lead to volunteer-fatigue and donor turnover. It can create a sense of disengagement that results in staff doing everything. Do I need to go on? Come on . . . if a Tim Man can get it, then surely we all understand the importance of this concept. Right?

I can go on and on, but I’d rather you share with your fellow DonorDreams blog subscribers what you do to maintain a healthy dose of “MISSION-FOCUS” in everything you do. Please use the comment box below to share your example because we can all learn from each other. There are no right or wrong answers. Please jump in.

Here is to your health!

Are you King of your non-profit forest?

July 17, 2013 erik Board governance, Fundraising

On Monday, I shared with you a few observations from The Wizard of Oz and Oz: The Great and Powerful as I think it pertains to non-profit work. At the end of Monday’s post I promised to take you further down the Yellow Brick Road by revisiting a series of Oz-inspired posts from two years ago. Today’s post is about leadership. Enjoy . . . here’s to your health! ~Erik

Are you King of your non-profit forest?

Originally published October 25, 2011

cowardly lion As a new business owner who just opened up a nonprofit & fundraising consulting practice, I’ve made it my business to “get around”. In addition to visiting with many of my oldest and dearest non-profit friends in Elgin, Illinois, I recently attended a regional Boys & Girls Club conference and engaged countless staff and board volunteers from around the country through a very aggressive social media strategy including Twitter, Facebook, LinkedIn and this blog. While I don’t want to exaggerate, I was surprised at how many conversations looked and sounded like this“Wizard of Oz” YouTube clip.

Here were some of the things heard I nonprofit CEOs, fundraising professionals, and board volunteers saying that leaves me wondering “King or Coward”:

“Erik, I am so sick and tired of my board volunteers passing the buck on fundraising and expecting staff to pick-up the pieces. I’m just gonna tell them ‘how it is’.”
“Erik, our staff has let us down and not provided the necessary leadership during these tough economic times. I’m afraid the board will just need to look at making draconian cuts and muddle through these tough times.”
“Erik, donors are cutting their charitable giving during these tough economic times. So, the only thing left to do is tell donors and anyone who will listen that our agency is on the brink of closing its doors if people don’t start stepping up.”
“Erik, I know we need to invest heavily in capacity building activities during this economic down turn if we have any chance at making it out the other side. However, I just know that the board isn’t up for this kind of work at this time, and I won’t use my influence to push for something that doesn’t have legs.”
“Erik, I refuse to invest in ‘planning’ activities because they just don’t work. We once wrote this amazing plan, and it just ended up on the shelf collecting dust.”
Erik, fundraising is the board’s job, and I am hesitant to offer my opinion on what needs to be done because then it becomes ‘my idea’. And if ‘my idea’ falls short, then it just becomes one more reason for the board to fire me. Remember . . . board volunteers don’t fire themselves, they always fire the executive director.”

I understand that tough economic times has a chilling effect on leadership, but your only chance at surviving these strange and new times is by eating an extra bowl of Wheaties in the morning and showing up for work ready to take some smart risks and actively lead. Here are a few observations and suggestions I have for the non-profit community as my “listening tour” comes to a close:

My kindergarten teacher always taught me that “telling people” isn’t very effective if you want them to be your friend. I suggest sharpening your listening skills and do more asking than telling when it comes to engaging donors, volunteers and board members.
The “blame game” is an old and tired game. If the board is unsatisfied with the agency’s performance and is feels inclined to play this game, my advice to those board volunteers is skip it, save your breath, fire the executive director (because you know you’re going to do it regardless of what anyone tells you), and get on with the business with digging out of your hole. Brutal? Sure it is, and I’m uncomfortable with the recommendation. However, how many times have you seen board and staff struggle through tough times with lots of finger-pointing and it all worked out “happily ever after”??? Never! So, be decisive and move on to what is important — survival. By the way, after the hatchet job and search for a new leader, it is probably important the board turn the mirror on itself, dust off the guillotine and quickly get rid of non-performing, poor fundraising members. I suspect many of those soon to be headless board volunteers were leading the charge to fire the executive director. Vive Le France!
Pointing the finger at donors is the quickest way to lose a finger. I don’t care if it is an individual, corporation, foundation or government agency. I’ve seen “the little boy who cried wolf” fundraising strategy work once, but it gets more difficult to fundraise the more you use this tactic. Of course, the reason for the fast diminishing return is because no one likes to invest their charitable giving in what they perceive to be a “sinking ship”. Stay positive and double down on stewardship efforts. People like to see the good things their contributions helped produce. So, show it to them.
Written plans that fall short are most likely the result of: a) a poorly designed planning process that did not appropriately ‘engage’ those you needed to step forward during the action plans part of the process, b) thin-skinned leadership who didn’t like what they saw during the evaluation phase and dismissed the call to action by putting their heads in the sand, or c) a poorly designed implementation tools (e.g. committee work plans, staff performance plans, dashboards, scorecards, etc). Don’t toss one of your few ‘engagement tools’ out the window. Instead, double down on do it differently and better!
Attention agency staff: If you find yourself treading water and paralyzed by fear of failure, then please do the honorable thing and resign. I don’t say this to be mean, but board volunteers need strong leaders who know how to LEAD. With leadership, sometimes comes failure. Right? So, don’t be the “Emperor who walks into the room without any clothes on“. (Please accept my apology for this last YouTube link. It was salty and unprofessional, but it was sooooo funny I just had to share it because this uncomfortable and funny video is exactly the same feeling we all share when a non-profit staff person is paralyzed and unwilling yet pretending to lead)

I could go on and on, but I’ve gone on too long. Please use the comment box below and share a story on how you are “king” of your non-profit castle and not a “coward”. How are you investing in capacity building efforts? How are you engaging others who seem to be stuck in neutral during these tough times? Please weigh-in because we can all learn from each other. Your words can also serve as inspiration to others who are struggling.

Here is to your health!

If I only had a brain . . .

July 16, 2013 erik Fundraising

On Monday, I shared with you a few observations from The Wizard of Oz and Oz: The Great and Powerful as I think it pertains to non-profit work. At the end of Monday’s post I promised to take you further down the Yellow Brick Road by revisiting a series of Oz-inspired posts from two years ago. Today’s post is about ROI and engaging donors. Enjoy . . . here’s to your health! ~Erik

If I only had a brain . . .

Originally published on October 24, 2011

scarecrow So, last week was an amazing week for my blog. It appears that I struck upon a topic of interest for the non-profit community when I focused on special events and how some agencies make poor decisions around return on investment (ROI) decisions and volunteer utilization. While I promised myself that I would end that discussion thread about zombies, I decided this morning over coffee to continue down “the yellow brick road” a little further by changing metaphors. It is Halloween season after all. LOL

Interestingly, approximately 97-percent of all the emails, comments and discussions last week were very supportive of the positions I staked out in the blog. However, in spite of the support I still periodically heard things like this:

Erik, I totally agree with you that non-profit leaders too often invest money and energy into special events that provide a poor ROI. We really need to do a better job. However, my agency runs this one event that has a bad ROI but we just LOVE IT. We just need to give it a little more time and it will be one of this community’s signature events. What do you think?
Erik, as a board member I am not an expert on non-profit operations and fundraising. I rely on our agency’s staff to make good decisions, and I do as I am told. I agree with everything you’ve written and would never run my business that way, but it just isn’t my call.
Erik, we knew this event wasn’t a good idea for non-profits, but what were we supposed to do? Non-profit agencies pushed us to include them in our event plans.

Again . . . let me attach this disclaimer before saying anything else. 1) Not all special events are bad. 2) Some special events can have a decent ROI. 3) There are non-monetary objectives and benefits to planning and running a special event (e.g. awareness, prospect cultivation, volunteer engagement, etc). 4) I believe all non-profit organizations should include one or two well-oiled special events in their annual written resource development plan.

With that being said, I found this iconic song from the Wizard of Oz’s Scarecrow running through my head after each of the aforementioned comments. I am not sure how you feel, but here were a few of my reactions and conclusions:

It is probably common for agency staff and board volunteers to “fall in love with” their own special event ideas. Finding perspective is not an easy thing to do with anything in life including evaluating events and resource development programs. With this in mind, I recommend that non-profits involve external people in their evaluation process. What is so wrong with recruiting local business people to volunteer for a critique meeting or evaluation session? Ask donors to participate. Heck . . . spend a few dollars and engage an external consultant to help.
The mysterious world of “non-profit” business models probably seems a bit strange to board volunteers who live in the for-profit world, but fiduciary responsibility is the same on both sides of the fence. I have a few thoughts here: 1) board volunteers must be engaged and cannot abdicate oversight and evaluation to staff, 2) while there are differences between for-profit and non-profit corporations, you should stop and think hard about something your agency is doing if you find yourself thinking “huh, I would never do that back at my shop,” 3) we don’t need zombies serving on our boards . . . we need leaders, and 4) non-profit staff really need to do a better job supporting their board development committees throughout the prospect identification, evaluation, recruitment, and orientation processes or they will get what they deserve which is a board room full of “yes men (and women)” who serve in an echo chamber.
Eeeeeek! You knew it was a “bad idea,” but you did it because they asked for it? This comment almost sent me into orbit. So, answer me this question please: would you hand an addict a crack pipe? Or even better . . . do you give your kids everything they ask for? Now, please don’t get upset. I don’t mean to say that non-profits are addicts or children, but I make these analogies to get your attention. The answer is OF COURSE NOT! If you love someone (or in this case that someone is a non-profit agency and its mission), then you don’t enable them to do harm to themselves.

I believe that donors are more than just ATMs. I believe donors are leaders and accountability agents for the non-profit organizations they support. However, non-profit CEOs and fundraising professionals need to play a major role in empowering donors and volunteers. In the movie, “the wizard” bestows a diploma upon the Scarecrow as proof that he has a brain. What can agency staff bestow upon volunteers, donors and board members that will help them suddenly realize that their thoughts and wisdom are so desperately needed as part of the process?

Non-profit staff — Do you engage donors and external volunteers in the evaluation process? What about engaging them in the planning process? Do you have any examples of where you stopped doing something or changed it because of feedback from donors?

Donors — What stops you from sharing your thoughts and opinions about questionable things you see your favorite non-profits doing? Have you ever just stopped contributing to a charity as a result of a poor business decision that you saw a non-profit undertaking?

Board members — What can agency staff do to better empower you to speak-up and engage?

Please use the comment box below to share your thoughts and opinions because we can all learn from each other.

Here is to your health!