posts – Page 83 – The Healthy Non-Profit

Capping nonprofit CEOs salaries and bonuses?

November 9, 2011 DonorDreams Board development, Fundraising

For the last two days, I have blogged about the impact of government funding on non-profit organizations’ fundraising programs. All of this talk about Uncle Sam and the non-profit sector got me thinking about government funding and the for-profit sector (e.g. bank bailouts, farm subsidies, Occupy Wall Street, etc). So, it wasn’t a big leap in my head when I jumped from for-profit corporations taking public funds to limiting CEO compensation and then back to how this all relates to compensation of non-profit CEOs who accept public funds.

LOL … yes, my mind has been wandering a lot lately. I blame the sugar rush from Halloween. 😉

You only need to go back a few years in the news cycle to recall that segments of the public were incensed by the federal government’s TARP program, which was our country’s bank re-liquidation and bailout program. Part of that public debate (and it is being rehashed by the Occupy Wall Street protesters) is that for-profit corporations that accept public funds subject themselves to a different level of accountability and regulation by “We The People”.

Well, if you buy into this argument, then don’t you need to logically do the same for non-profit organizations who accept government funding?

While the IRS is currently charged with monitoring 501(c)(3) non-profit organizations’ executive compensation to ensure it is in line with similar size agencies in similar sized communities through a provision called the “private inurement rule,” the question I pose goes a little bit further. The aforementioned question asks if local city councils, state legislatures and Congress can or should legislate concrete rules around non-profit executive compensation for those who accept public funding. For example, if “non-profit agency X” accepts a grant from their local city council, then that board of directors of “non-profit agency X” agrees to abide by a local ordinance that defines what the city council sees as reasonable and acceptable compensation.

This debate was well frame by two individuals who I saw commenting on a Charity Navigator blog post.

Here is how one side of the coin sounds:

“I would suggest that we put some of these salaries in context (just as you did with the American Red Cross). Some of these CEO’s are managing organizations that are multi-million dollar “businesses.” As such, their salary compensation is reflective of the size of the organization’s revenue and project stream.”

Here is how the other side of the coin sounds:

“Comparing these salaries to “for-profit” salaries is just ridiculous. These organizations exist out of the goodness of the people who contribute. We give under the impression that we are Helping others….NOT Helping CEOs to get rich.”

Of course, neither of these points-of-view deal with the issue of what to do with non-profit organizations who accept public sector funding like the for-profit banking sector did when they accepted TARP funds.

So, here is the deal . . . I sometimes write blog posts with a very specific point of view. Other times I’ll approach a subject without any idea of what my opinion is and organically let things unwind. I am approaching this subject with a very open-mind, and I’ll use tomorrow’s and Friday’s blog posts to focus on this subject.

What this means is that I would like a spirited discussion among the readership of this blog. Please use the comment box below to weigh-in with your thoughts. You are even encouraged to post questions if you’re as undecided as I am.

If you want to read more on non-profit compensation best practices, our friends at “Nonprofit Law Blog” did an outstanding job with their posts titled: “Compensation Strategies and Best Practices for Non-Profit Organizations” . . . click here for Part One and here for Part Two.

How does your agency currently ensure that its compensation is in-line with community standards and in compliance with IRS rules? Does the acceptance of public funding “change the math” in your head when you look at this issue? Do you see similarities or differences between the comparisons I draw between for-profit corporations accepting public funds and non-profit organizations doing the same? What role does the donor play in all of this? Should donors expect total transparency for the non-profit organizations they support?

Please take a few moments to weigh-in using the comment box below. It will only take a minute or two out of your day, and doing so will enrich the discussion tomorrow and Friday. Besides, as I always say, we can all learn from each other.

Here is to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
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Don’t blame the donor for the “crowding out” effect of govt funding

November 8, 2011 DonorDreams Fundraising

Yesterday’s blog post — “Does Government Funding Destroy Philanthropy” — was about the University of Notre Dame’s “Science of Generosity” initiative and the concept of “Crowding Out” when it comes to government funding and its effect on non-profit organization’s resource development programs. Since I posed more questions than I stated opinions, I’ve had this topic on my mind for the last 24 hours and engaged a number of people in this discussion. Not surprisingly, I’ve also been combing through the internet looking for some answers. Here is what the question boils down to :

Does accepting government funding impact a non-profit organization’s resource development program because: a) donors don’t see the need to contribute to an agency that appears to have adequate resource via federal, state or local government grants OR b) non-profit staff and board volunteers relax their efforts once these dollars are added to their revenue budget?

Joshua Benton wrote a great post at the Nieman Journalism Lab blog that examined this question by looking at a study done by Jame Andreoni and A. Abigail Payne. Joshua Benton did a great job boiling it all down when he wrote this:

“The paper finds that for every $1,000 given through a government grant, nonprofits reduce their spending on fundraising by an average of $137. But that decrease leads to a drop of $772 in donor gifts. (The paper found that, contrary to the fears of some, government grants encourage outside donors to give instead of discouraging them — but the impact is small, only about $45 per $1,000 in government grants. In other words, adding it all together, $1,000 in government money only nets out to $410 in the end, on average.”

At first, I read this and thought . . . “Oh, the return on investment is still on the positive side and not something non-profits should worry about.” However, after thinking about it for two seconds, I believe non-profits SHOULD BE concerned.

I believe non-profit folks need to think about it this way:

$1,000 of government dollars really isn’t adding $1,000 to your revenue budget when you look at what you end up losing. So, for every $1,000 you are only “up” by $410.
The donors that stop contributing do so because non-profits (probably subconsciously) reduce their financial investment and focus on engaging donors.
Once these donors stop contributing and disengage, they can’t be easily “reactivated” once they’ve lapsed for 12 to 24 months. This essentially means the financial investment to reactivate a lapsed donor starts to look like the investment a non-profit makes to cultivate cold prospects.
When the government money dries up (which happens during tough economic times), a non-profit who has been dependant on public sector funding and under-invested in their resource development program is poorly positioned to survive. I liken this phenomenon to a human being who turned into a couch potato, stopped exercising, lost muscle mass and is suddenly called upon to run a marathon.

The bottom line is that non-profits cannot blame donors for the position they’re in today . . . many non-profit professionals and board volunteers took their foot off the accelerator and eased up on their fundraising efforts.

While assigning fault and blame is a common human reaction, the better question is what should non-profits who find themselves in this position start doing today if they want to survive this current economic downturn and the impact associated with shrinking government funding? Here are just a few of my thoughts:

STOP applying for “new” government funds as a strategy to make up for what you are losing from other government revenue streams.
START engaging board volunteers and donors in a conversation around how to reduce dependency on government funding and boost revenue from foundations, corporations and most importantly individuals. Make sure it isn’t just talk because talk is cheap. Put it down in writing and make sure action plans answer tactical questions pertaining to who, what, where, when, why, and how.
ENGAGE your current government funding agencies is honest conversations around the state of the funding programs your non-profit organization currently participates in. Do they anticipate cuts? If so, how large do they project those cuts to be. BE PROACTIVE.
RE-INVEST in board development efforts and start building a board with amazing “fundraising acumen”.

I believe government funding is damaging to your non-profit mission and suggest you get out of it as soon as possible. If you want help, you know how to get a hold of me. 😉

Have you done an analysis of your non-profit organization’s government funding trends and compared it to your investment in fundraising efforts and systems? If so, what do you see? What is the state of your government funding? Do you feel comfortable with where you are or do you have that infamous “knot in your stomach”? Where are you steering your agency’s resource development efforts as you look ahead to the next 3-years?

Please share your thoughts to one or more of these questions by using the comment box found below. We can all learn from each other!

Here is to your health!

Does Government Funding Destroy Philanthropy?

November 7, 2011 DonorDreams Fundraising, resource development

A few days ago an email washed into my inbox from the University of Notre Dame talking about the “Science of Generosity“. I scrolled down to the first block of text and saw they were talking about trying to provide the existence of a “selfish gene”. For those of you who know me well, you can probably guess that I wrinkled my eyebrow skeptically and closed the email. However, instead of sending the email to trash, I put it aside to investigate later … and I am glad I did.

Upon further review, this academic initiative has many interesting objectives including:

the sources, origins and causes of generosity,
the manifestations and expressions of generosity, and
the consequences of generosity for both donors and recipients.

While I am looking forward to hearing more from these researchers, one block of text really grabbed my attention as it relates to the idea of government funding:

“Crowding out,” or decreased donations as a result of government grants is an issue dealt with by many charities. But government grants to charities don’t decrease donations because donors consider themselves to have given indirectly as taxpayers; instead, they decrease because of the reduced fundraising that follows government grants (Andreoni, “The Inherent Sociality of Giving”).

Is it possible that non-profit staff and board members “ease up” on their fundraising focus and efforts in the wake of a big government grant coming in? Is that what accounts for what I’ve witnessed in so many board rooms when volunteers point their fingers at staff during fiscal crisis and say, “If you would just go write another grant, we wouldn’t be in this situation?”

Is it possible that a non-profit organization can get addicted to government funding that their board’s “fundraising muscles” atrophy so badly that they “forget how to fundraise” or refuse to engage in the hard work of resource development?

If this is all true, then I suspect it is because government funding warps the concepts of “urgency” and “accountability” that are two of the nine keys associated with engaging volunteers in the difficult activity we call fundraising. I look forward to hearing more from the University of Notre Dame about this philanthropy principle and so many others.

What do you think about this idea of “crowding out“? Do you think it is real? Have you seen this principle in action in your board room or others? If you think it does exist, what do you think can be done to counteract it and maintain a high level of volunteer engagement in fundraising activities? Should non-profits just stop pursuing government funding and pursue more traditional charitable giving audience such as individuals and corporations? Please take 30 seconds and weigh-in with your thoughts by using the comment box below. We can all learn from each other.

Here is to your health!

Magic words? Be ‘transparent’ and ask to be held ‘accountable’

November 4, 2011 DonorDreams nonprofit, Planning

When I think of non-profit organizations who embark upon a strategic planning process, I usually get a mental picture of Toy Story’s Buzz Lightyear standing on that bed post proclaiming “To infinity and beyond!” However, in my experience, many non-profit organizations jump and their results are not nearly as good.

What I am referring to is the phenomenon of: engaging stakeholders . . . building consensus around vision/goals/objectives/action steps . . . writing the plan . . . approving the plan . . . putting the plan on the shelf and letting it die a dusty death.

So, the question being begged here is: “What do non-profits leaders (board and staff) need to do in order to bring their plans to life and avoid that ‘dusty death’?”

The simple and straightforward answer can be captured in two words:

Transparency

and

Accountability

In a nutshell, “transparency” means that everyone can see your plan including: who has agreed to what, where, when, why and how. “Accountability” means that everyone can see your measurement indicators and how well (or not so well) you are doing at accomplishing the various aspects of your plan.

I love what my college alma mater — University of Illinois Urbana-Champaign — has done in the area of transparency with their strategic plan. Click here to check out how they’ve put everything on the internet for alumni, faculty, students, parents of students, residents of Urbana and Champaign, and especially donors to view.

I also like what Binghamton University did in the area of accountability with their online strategic planning dashboard. Click here to see that dashboard tool.

So, if you find yourself saying “Well, those are large university institutions and we’re different and unique,” let me help you bring these ideas into focus for your unique situation. The following is a short list of questions I encourage you to ask yourself about your specific non-profit situation:

Do I want my plans to be implemented or do I want them to sit on the shelf and collect dust?
Do I need other people to help with plan implementation or am I OK with doing it all myself?
Do the donors who support my organization deserve to see how well (or not well) we are doing with implementing the plan they helped create and pay for?

If you answered “YES” to these questions, then I encourage you to pull that dusty plan off the shelf, identify the measurements and indicators you likely built into the plan, and invest in creating tools like dashboard or scorecards that easily communicate implementation progress (or hire someone who knows how to do it . . . aka an external consultant). Once that tool is developed, post it online and integrate it into all of your committee and board meetings. To quote a number of very famous people who all take credit for this expression:

“What gets measured, gets done!”

These ideas don’t just apply to strategic planning. You can employ the ideas of accountability and transparency to your resource development plan, annual campaign plan, marketing plan, business plan, etc etc etc.

There is a whole flip side to this blog post pertaining to “measuring the right things to get the right results,” but let’s save that discussion for another time.

What is stopping your agency from being bold and asking donors to hold you accountable for achieving your plans? How do you share your currently organizational progress with your donors, supporters and board volunteers? Can you use the comment box below to share examples of how you are transparent and ask others to hold you accountable? If you use online resources to accomplish these objectives, would you please include links to those examples in your comment so we can all see it?

Please take 30 seconds to weigh-in with a comment. We can and should all learn from each other.

Here is to your health!

Hey Mom, non-profits can have cavities too!

November 3, 2011 DonorDreams Fundraising, resource development

Last Monday, I made that dreaded trip to see the dentist. I am proud to say I have no cavities; however, I need to apparently stop biting my cheeks and grinding my teeth. While I am proud of my oral hygiene, the big news is that my dentist has gotten very good at stewarding his clients.

Right about now, I suspect that many of you are blinking at the screen and thinking something like: “Huh? A for-profit dentist is stewarding his clients like a non-profit organization stewards its donors? Whatcha talking about, Erik!”

This is what I am talking about:

A few weeks before my appointment I received a newsletter in my mailbox from the dentist. Of course, the newsletter contained some articles about dental services he provides. However, there was also interesting reading about the growing body of research between dental hygiene and heart disease as well as oral cancers and HPV. I walked away from that newsletter feeling better about my semi-annual investment in my mouth. Ah-ha . . . STEWARDSHIP!
By the time I got home from my dentist appointment, there were already two emails sitting in my inbox from my dentist. The first email thanked me for visiting and asked me to take an online survey. The rationale was that he values my business and wants to continue providing high quality service. Correct me if I’m wrong here, but . . . ah-ha . . . STEWARDSHIP!
The second email invited me to join his “online community” where members are able to: receive email appointment reminders; request appointments online; receive special announcements; write a review; refer a friend; watch a YouTube video of him talking about the overall health-ROI associated with investing in your mouth. I was directed to his website. I was directed to his Facebook page. I was directed to his Twitter account. OMG . . . this isn’t just STEWARDSHIP, but it was electronic stewardship (ala ePhilanthropy for non-profits).

Back in the old days, dentists used to clean your teeth and you wouldn’t hear from them again for another 6-months when someone called to remind you about your upcoming appointment. This got me thinking about the number of non-profit agencies out there who take a donor’s charitable contribution, fire out a generic computer generated recognition letter, and then do nothing until it is time to ask for the next gift.

Hmmmm . . . if my dentist can evolve, then so can many of those non-profit organizations who are still engaging in “transactional fundraising”.

What is your agency doing to enhance the “donor experience” and improve stewardship efforts? Have you ever considered sending donors a survey immediately after their solicitation to ask about the quality of their solicitation experience? Think about it for a moment . . . it starts to sound less and less silly the more you ponder it. Are you keeping your eyes open for how other non-profits and for-profits are changing the way they steward their donors and clients? What are you seeing?

Please use the comment box below and weigh-in with a your thoughts and observations. It doesn’t have to be a long comment . . . 30 seconds will suffice. We can all learn from each other.

Here is to your health (both non-profit health and dental health)!!!

Calling all wing nuts! Want to join my board of directors?

November 2, 2011 DonorDreams Board development, volunteers

A few weeks ago I received an odd email in my inbox. It was so foreign to me that I marked it “unopened” and let it sit there as I marinated on it. It wasn’t until just today that I felt willing to re-open it and share its contents with you. Here is how the first paragraph of this jarring email started (and I’ve changed the names to protect the innocent):

The board of directors of the XYZ non-profit agency is looking for leaders to help drive our further development. If interested, please contact John Doe, Board Secretary jdoe@gmail.com to receive an application /board questionnaire which is due by November 4, 2011; for terms that will run from January 1, 2012, through December 31, 2013 (2-year term limits).

The email went on to provide details about this organization’s goals and advertise its upcoming conference in downtown Chicago.

At first, I was flattered to be asked and then I realized that it was a eBlast and I was not special. So, I closed the email and went into “stewing mode” and here is what has been coming together in my head over the last few weeks:

Why is there a “general call for applications”? Why not target supporters and donors?
How did I get on this email list in the first place?
How desperate must this group be for quality board members?
Can they possibly learn enough about me from a paper application that would help them conclude whether or not I’d be a quality board member?

While many people will tell you there is a right way for a non-profit organization to set-up its board development process, I know that I’ve seen many different variations throughout the years. However, every process regardless of how it is set-up should probably include elements of the following: prospect identification, prospect evaluation, prospect ranking, prospect recruiting, orientation, training, annual evaluation, and celebration/recognition. There are many different ways to do each of these steps, and I suppose a “general cattle call” could be one way. Needless to say, I am skeptical.

Building your non-profit organization’s board of directors is like building a family. Perhaps, a better analogy would be it is like baking a soufflé. You need to be deliberate and careful. Here are just a few considerations I suggest your board development committee look at during the prospecting phase:

What does the prospect’s social network look like? Does it overlap too much with existing board volunteer’s circle of friends and influence?
Does the prospect’s network provide fertile ground for new fundraising efforts and provide opportunity for the organization to expand its donor base?
Does the prospect have the skill sets and experiences that you are looking for to fill gaps on your board to be an effective fundraisers?
Is the prospect a “wing nut” whose personality will upset the balance of personalities who already sit around your board room table?
What general skills sets and interests does this person bring to the table? How are they willing to leverage those things on behalf of the organization? What committee, task force or project(s) will the prospect bring value and are they willing to do so?
Is the prospect a donor? If not, are they willing to be a donor who is open-minded to “sacrificial giving” every year to your organization?
How many other boards does the prospect serve on? If they have other board commitments, do they have a firm grasp on the concepts of “fiduciary responsibility” and “conflict of interest”? How do they plan on mitigating their conflicts and how have they done so in the past?

If you’re not careful from the very beginning of your board development process with identification, evaluation, and ranking, then you run the very real risk of your board soufflé falling. In real world terms, this typically means dysfunction and the worst case scenario using ends with some sort of board room conflict (with “someone” possibly getting fired).

If you want to read more about board development, please read my recent blog post titled: “Don’t put Dorothy on your board of directors“.

What does your non-profit organization’s board development process look like? How do you keep the conversation from naturally drifting to: “I know this person who would just be great on our board. Let’s just go ask them before someone else grabs them!”? Do you use a committee to do your board development work? If so, what does that committee look like? What are your thoughts about the aforementioned non-profit’s “cattle call” application process? Are you skeptical like me or am I missing something?

It only takes 30 seconds to scroll down your computer screen and weigh-in with a quick comment to one of these questions. Please take a moment to do so because we can and should all learn from each other.

Here is to your health!

How much Klout does your nonprofit have?

November 1, 2011 DonorDreams Fundraising

This morning I awoke to a present in my email inbox. My good friend and fellow-blogger at One World One Plate, Marissa Garza, gave me a +K point in the topic area of “non-profit” on Klout. I know some of you may be wondering “What is Klout?” In a nutshell, it is a website that measures your influence in the social media world through the use of a complicated algorithm. There are a number of different measurement instruments including an “overall Klout score” based on a scale of 1 to 100. My current score is 42 and Marissa’s +K point helped bump my score up a little.

I know what some of you are thinking . . . this is a passing fad . . . this is a subjective measurement gimmick . . . or even “uh-oh” another social media thing to suck my time.

My response to all of these reactions is: “Let’s not be so quick to rush to judgment on this one”. After playing with Klout for a few months, here are a few conclusions I’ve reached:

Many non-profit friends ask me how they should measure the “return” on their resource development investment when it comes to social media (e.g. Twitter, Facebook, LinkedIn, Google+, blogging, etc). Well, Klout is the first tool I’ve seen that begins to answer this question. So, now non-profits can invest their resource development time, energy, and money with peace of mind that they can measure the return.
Going beyond the idea of measuring ROI, Klout gives non-profits a barometer when it comes to social media efforts (e.g. similar to analytics tools attached to websites, blogs, and email marketing services). If what you’re Tweeting or posting on Facebook or blogging isn’t being looked at and shared, then your Klout score will reflect it. So, as your Klout score drops, you’ll be able to stop doing those things that aren’t being well received and start Tweeting and posting other things that might be better received. It is kind of like “being in a donor’s head” . . . something every fundraising professional has periodically wished for.
Going beyond ROI and measurement, I think I’ve become enamoured by Klout mostly because it allows you see other people’s and agency’s Klout scores. While this site probably appeals to the social media voyeurism in all of us, I encourage you to embrace this feeling. So, one non-profit can look for another non-profit who has a higher Klout score. Once they find someone who is similar to them (e.g. budget size, approach to resource development, social media savvy, etc) and who has a higher Klout score, then they have the ability to start benchmarking that agency. I oftentimes end my blogs by saying something like “We can all learn from each other”. Well, Klout embraces this idea and I must admit that I LOVE IT. Click here to read a post by NonProfit Nate and see who the top non-profits are on Twitter based on their Klout scores.

OK . . . I am done braggin’ on Klout and I encourage you to sign up (because it is FREE). You don’t need to go wild from the start. I know how busy many of you are. So, just sign-up and visit your Klout page once per week for approximately 30 seconds. Watch your Klout score (and other various metrics) and marinade on what you see happening. When you are ready to start doing something about the numbers, your “inner fundraising voice” will tell you.

You might also want to bookmark some of these links and circle back from time-to-time and read up on Klout:

Is your agency dabbling in social media? If so, what are your objectives? How are you measuring your success? Can you share any anecdotal stories about donors you acquired online who have since migrated into other areas of your resource development program? What kind of things are you Tweeting and posting? What material seems to be well-received?

Please weigh-in using the comment box below. We can all learn from each other. Please take 30 seconds to share.

Here is to your health! Oh yeah . . . I am not beneath begging my readers for some more +K points. 😉 Please?

BOO: Halloween is a Non-Profit Holiday

October 31, 2011 DonorDreams Fundraising

I just love this time of the year. The temperature outside is lovely. Trees are turning colors and putting on a show. Charity is coming into focus for millions of Americans. Last year approximately 174 million Americans donated approximately $50 billion to charities during the holiday season. While most resource development people will tell you this all starts with Thanksgiving, I contend that Halloween is when the starters gun goes off in my head.

I was reminded this past Saturday afternoon when two kids came to my door holding a small orange box and asked if I’d consider donating some pocket change to UNICEF. Not only do I have fond memories of doing the same thing as a child, but I realized that it might have been the very first time I ever solicited anyone for anything on behalf of a child.

My passion for charity and professional career path might have started all because of a UNICEF box more than 35 years ago.

This realization got me thinking . . . perhaps the year-end charitable giving season starts with Halloween and not Thanksgiving. If I am “stretching” this point, then consider this thought: “Perhaps, Halloween offers non-profit organizations a great opportunity to position itself for the season of charity.

Halloween can be a stewardship opportunity. In fact, non-profit organizations can turn most holidays into stewardship opportunities for their donors as I wrote in my post titled “Stewardship opportunity on Labor Day” which is one of my better read posts of all time. Go figure!

Here are just a few thoughts I have for how your agency can use Halloween to frame your case for support during the holiday season:

Host a Halloween costume party for your top 100 donors. Don’t solicit them. Just invite them to come to a free event, have some fun, and hear a few short testimonials about how your agency is using their investment from earlier this year to do good things. End everything by saying you hope they will consider reinvesting with a contribution to your year-end holiday mail appeal that is sure to appear in their mailbox in a few weeks.
Organize a phone-a-thon where volunteers call donors to whom you plan on mailing your holiday mail appeal. Use a “trick-or-treat” script that talks about how your non-profit doesn’t believe in “tricks” which is why you are calling with a Halloween “treat,” and then read a small snippet of outcomes measurement data that you’ve recently been collected. Thank the donor for helping your agency achieve that specific accomplishment and then end by saying you hope they will consider re-investing when your year-end holiday mail appeal arrives in their mailbox in a few weeks.
Simply organize a Halloween theme inspired stewardship mailing (e.g. a ghoulish looking impact report). Don’t ask for any money. Just communicate some return on investment information and thank them for their previous charitable contribution. This can softly frame your case for support in donors minds just a few weeks before you send a solicitation mailing.

As I said in my Labor Day blog post . . .

Many non-profit organizations struggle with stewarding their donors and instead become solicitation machines (which ironically burns out donors and creates a cycle of turnover). When I’ve talked to my non-profit friends and asked WHY, the most common answer I’ve heard is that time is a limited resource.

So, take a look at your stewardship calendar and ask yourself how you can do a better job of aligning these activities with holidays.

Does your non-profit organization have any fun and effective stewardship activities and best practices wrapped around holidays? If so, please use the comment box to share because we can all learn from each other.

Here is to your health! And oh yeah . . . BOO . . . Happy Halloween!!!

Here is to your health!

The Great Oz, Community Impact, and Snake Oil

October 28, 2011 DonorDreams Uncategorized

I’ll never forget the day after watching “The Wizard of Oz” for the umpteenth time that I finally realized that the Wizard character was a snake oil salesman. He could sell ice to Eskimos, and he indeed sold the Tim Man, the Cowardly Lion, and the Scarecrow exactly what they wanted in this final scene of the movie. It is exactly for this reason that I believe non-profit organizations need to hire the “Great and Powerful Oz” to sell donors on the idea of “community impact”.

In the nonprofit community, everyone is going nuts over this idea. We need to “measure our impact” so we can demonstrate to stakeholders and donors that change is being made. Even I have gotten wrapped up in this Kansas tornado from time-to-time on this blog. Please don’t misunderstand. I firmly believe that every non-profit organization needs to create an impact agenda, measurement tools, and indicators. How else can they ever be sure that they are fulfilling their mission?

However, what I am starting to worry about is how carried away everyone seems to be getting with this idea. It gets bigger and bigger with every passing day. Here is the progression that I’ve seen recently with one national non-profit whose mission focuses on helping kids reach their full potential by offering after-school programming:

It started a few decades ago with a program focused on helping kids do better on their homework. Impact conversations focused around the simple idea of “are they doing better with their homework assignments now compared to before they started participating in the homework assistance program?”
It then morphed to High Yield Learning Activities (aka fun games with educational objectives like Math Bingo). Impact conversations evolved and started involving the idea of designing and implementing a pre- and post-test strategy to actually measure change and improvement.
The conversation then quickly jumped to “collecting report cards” and claiming credit for kids who participate in these after-school program and who also seem to be maintaining or improving their grades in school.
Today, the impact conversation is now focused on three HUGE “priority outcomes,” one of which is for their clients to “graduate from high school ready for college, trade school, military or employment”.

Again . . . you will get no argument from me that an impact agenda and outcomes measurement are important. However, at what point does it get too big and impossible to measure? At what point are we selling snake oil to donors and supporters just like the Wizard of Oz did?

There is NO WAY one non-profit organization can guarantee that even one of their clients will do better in school or even graduate all because that child walked into their facility and participated in their programs. When non-profits set an impact agenda that is wide enough to fly the space shuttle through it, then they set themselves up to be exposed. Just like the Wizard of Oz did in this YouTube clip.

The reality is that it takes one huge massive collaboration and partnership of many different non-profit organizations, schools, teachers, parents, and even taxpayers to all be pulling in the same direction if you want to achieve an impact like: “graduate X% of kids from high school who are ready for college, trade school, military or employment”.

There are so many variables that go into these HUGE impact agenda outcomes that I begin to wonder if funding one non-profit organization or one school district to do one small program with one small subset of kids makes any sense? Is it the right strategy? Or should non-profits and schools and parents and teachers be financially incented by donors to “collaborate”?

I am not smart enough to know what that looks like . . . however, I know when a dialog needs to be opened and I suspect it is this subject at this point in time.

I applaud the United Way for tackling this issue because impact assessment is the right thing for non-profits to be doing and talking with donors about. However, who is going to step in and moderate this discussion because this path feels too big and too wide for the average size agency to walk down. Perhaps, it will be the United Way that finds its voice and leads everyone down the yellow brick road to a collaboration-based solution rather than focusing on individual programs.

Is your nonprofit in the impact agenda and outcomes measurement business? What is working for you? What isn’t working? Are you honestly measuring things that demonstrate your success around mission? If so, how? Is there another road for the United Way to go down rather than funding odds and ends programs and claiming that this approach is helping close major gaps in our communities (e.g. academic failure, homelessness, joblessness, health care, etc)?

I’ve heard too many people in the last few months complain behind closed doors about this subject. It is time to bring the discussion into the open because we can learn from each other. Why not use the comment box below to start the conversation?

Here is to your health!

Don’t put Dorothy on your board of directors

October 27, 2011 DonorDreams Board development, volunteers

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!