Donors and board members also cast long shadows

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

Today we’re focusing on a post that John titled “Dr. Pepper’s Shadow“. In this post, he uses the example of how a CEO’s off-handed cafeteria comment resulted in an inadvertent major change in what was being offered in the beverage cooler.  As John masterfully explains, leaders need to be mindful that they are leaders who are always under the microscope just like the E.F. Hutton television commercials from the 1970s. (By the way, if you’re too young to understand the E.F. Hutton reference, click here for a YouTube reminder)

This happens ALL THE TIME in the non-profit sector. In fact, it is considered by some to be a best practice.

For example, when a donor off-handedly mentions that they value “education” because they were the first member of their family to go to college, many non-profit people are trained to recognize that as GOLD!!! The comment might get captured on a contact report and entered into the donor database. The mail solicitations start echoing messages about effective educational programming. The stewardship discussions with this donor start  revolving around the agency’s educational programming. The major gifts proposals focus on supporting educational programs to support the organization’s mission.

Non-profit fundraising professionals are trained to be like the people who appear in the background of that E. F. Hutton television commercial. Of course, there are consequences to this behavior as John points out in his Dr. Pepper’s Shadow blog post.

After all, isn’t it possible that in the fictitious example I just provided that the donor might “value” education but has fallen in love with your agency for a completely different reason? If so, then overreacting to the revelation that the donor values education might produce a chilling effect on the philanthropic relationship.

The solution is simple. Stop overreacting to isolated data points. Continue capturing whatever you can using contact reports. Continue collecting this interest-based information in your donor database. However, double down on stewardship activities and use this kind of data to drill deeper and develop stronger relationships with your donors.

For example, I can envision an in-person stewardship visit over a cup of coffee where the fundraising volunteer says to the donor, “I’ve heard you say that you cherish educational institutions and the idea of life-long learning, what do you think about some of the educational programs our organization offers clients?”

I can also see a fundraising volunteer in a pre-proposal cultivation meeting saying, “We would like to prepare a major gifts proposal for your consideration. I’ve heard you talk about your passion for education. Would you prefer we focus the proposal on educational programming opportunities or is there something else you’d be interested in hearing more about?”

I think John’s Dr. Pepper phenomenon is a real thing especially in non-profit fundraising circles. What are your thoughts?

In fact, I’ve also seen Dr. Pepper’s Shadow appear in the board room with something as simple as lunch. All it takes is one board member off-handedly saying that they wished there was a tuna sandwich option, and staff scurry around before the next board meeting dealing with menu changes. The consequence might seem inconsequential, but there literally can be a few hours wasted engaging people in tuna conversation. Don’t believe me? I’ve seen it happen!

Have you seen John Greco’s Dr. Pepper phenomenon in action at your agency or someplace else? What were the consequences of it? What do you do to guard against overreacting to comments from donors and board members that were only meant to be off-handed? Please scroll down and share your thoughts in the comment box.

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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http://www.linkedin.com/in/erikanderson847

Non-profit mergers aren’t the “easy way out”

At the end of 2011, I wrote a series of blog posts focused on predictions for the upcoming year. It seems as if my post on December 28, 2011 titled “2012 Non-Profit Trends and Predictions: Contraction Continues” hit a nerve with some of you. There isn’t a week that goes by without someone engaging me in a discussion around collaboration, strategic alliance, merger, acquisition, and outright sale.

None of this surprises me for all of the reasons I wrote about back on December 28th. However, the thing that is a little interesting has been the manner in which people are talking about the subject. At least in my conversations, this subject has been framed as the “perfect solution to get out from underneath our financial problems“.

While it is true that most non-profit mergers and acquisitions are inspired and motivated by financial crisis, it is important to remember that there isn’t a large group of non-profits sitting on the sidelines with a large wallet of cash just waiting to bail you out.  Let’s please get real for a moment.

  • There needs to be “benefit” on both sides of the merger equation. Figuring out what motivates each party is important, and it is one of the first steps.
  • Mergers don’t happen overnight. A due diligence process must be established with representation from all sides. This process will include discussions ranging from developing a case for change to addressing how to integrate systems (e.g. payroll, tech, etc) if the project gets green-lighted.
  • While discretion and confidentiality are important elements in such delicate discussions, there needs to be clear lines of communication with staff and both boards.

Engineering a merger is tough and takes a lot of time. It is NOT a quick fix nor is it the perfect solution from getting out from underneath your agency’s problems. The math supports this position. The Bridgespan Group published a paper presenting data and findings from a study that focused on non-profit mergers, and this is what they reported on the rate of success:

“We evaluated 11 years of merger filings in four states: Massachusetts, Florida, Arizona and North Carolina, and found that more than 3,300 organizations reported engaging in at least one merger or acquisition between 1996 and 2006, for a cumulative merger rate of 1.5 percent (number of deals divided by average number of organizations for 11 years).”

Does this mean non-profits aren’t as good at mergers and acquisitions as our for-profit cousins? Nope!

“This rate may seem low compared to the perceived ubiquity of M&A in the for-profit world, but it is not. The comparative cumulative total in the for-profit sector is a close 1.7 percent.”

If your non-profit organization is starting to chatter about collaborations, strategic alliances, mergers or acquisitions, I strongly suggest you: 1)  do your homework, 2) develop a process, 3) hire a consultant to help and facilitate, and 4) prepare for a long due diligence process.

I really like this online white paper by CCF National Resource Center that I found on the United Way of the Midlands’ website. Click here to read more about non-profit merger best practices.

Have you ever been part of a non-profit merger process? If so, what was your experience? Is your agency currently looking for a merger partner? If so, why and how are you going about it? Have you seen other merger attempts in your community succeed or fail? If so, what happened and why? How do you think donors should be included in a non-profit merger due diligence process without causing a crisis of confidence with lasting impact?

Please use the comment box below to weigh-in with your thoughts and opinions. Why? Because we can all learn from each other.

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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http://www.linkedin.com/in/erikanderson847

Where are all the new board members?

Let’s face facts . . . your non-profit board has gaps in it. How do you know that? You know it because you and your board members sat down with one of any number of different board composition gap assessment tools (available in the public domain) and you did the math. You looked at demographics, experiences, skill sets, interests, fundraising, and social networks, and everyone at that board development committee meeting was able to see gaps.

Guess what? This happens every time and it happens in every organization. There is no such thing as the perfect board.

Hopefully, your board development committee is doing a gap assessment every year before it goes out to recruit board members. While your gaps may not regularly change, the reality is that your circumstances and the external world around you is in a constant state of change, which affects how you look at your gaps and approach your prospecting and recruitment efforts.

For example, you might have built a very strong “governance board” with gaps around fundraising acumen. In most years, this might not have been an issue because you had very strong grant funding from key foundations. Unfortunately, let’s hypothetically say that Wall Street decides that a major market correction was necessary and the stock market takes a historic tumble. Where do many foundations secure the money they give away every year? Yep, they distribute their investment income. With your foundation income streams in a state of flux, your fundraising gaps on the board have become a major liability. Perhaps, this year’s board recruitment efforts should focus on identifying prospects who possess private sector fundraising acumen and experience and come from a diversity of different social networks.

It is at this point where I have personally sat in board development committee meetings and the conversation always seems to bog down. The brainstorming and prospecting dialog oftentimes lead to someone saying, “There isn’t anyone in our community who I know that fits that description.” Even better, I’ve heard people say, “That person doesn’t exist in our community.”

I suspect that these reactions are a result of:

  • The committee giving up after mentally examining all of the “usual suspects”.
  • The composition of the committee being such that there isn’t very much diversity from a social network perspective sitting around the table.
  • Being unsure of how to determine what skills and experiences people bring to the table.

Regardless, you need find ways to push past this obstacle and stimulate a dynamic brainstorming exercise around prospect identification.

I’ve seen some non-profit professionals bring lists of people to that meeting such as: Chamber of Commerce membership lists and Rotary Club (or Kiwanis, Lions, Jaycees, etc) rosters. In my opinion, this can definitely help people start thinking; however, I’m always left with this one question:

What about your donor database?

Many of us have these amazing database programs with thousands of names. These are people who must have liked us at least at some point in time. In fact, they liked us well enough to write a check. For some of those people, they love our mission so much that they support us regularly.

If you are an “excelling organization,” then you have more than just names and dollars in that donor database. You’ve been collecting data pertaining to birthdays (aka age), occupation (aka skill sets and acumen), interests and experiences, and service club participation (aka social networks). If you aren’t this good and haven’t been collecting and recording this type of information, my suggestion is that you figure out a way to start doing so immediately.

Your donor database is an amazing tool on so many different front, and it isn’t just something you use for fundraising. It can and should be the best board development tool that your board development volunteers turn to every year when they start prospecting and brainstorming.

So, the next time someone on your board development committee suggests that your community has “run out of” board prospects, I encourage you to say poppycock and pivot quickly to your donor database for an endless supply of names to consider.

Does your organization use its donor database as part of its board development prospecting process? If so, what have been your experiences? Which board composition gap assessment tool do you use? Where did you find it, and can you point others in that direction? What is the biggest gap that you’re seeing on non-profit boards in your community (e.g. too many Baby Boomers and not enough young prospects or not enough people with fundraising skills, etc)?

Please scroll down and take 60 seconds out of your busy day to share an answer to one of these questions. Why? Because we can all learn from each other and something you share today might actually make a HUGE impact in someone else’s agency. It is time to “pay it forward”. Please?

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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http://www.linkedin.com/in/erikanderson847

Introducing “O.D. Fridays: Non-profit Style”

One of my dear friends recently joined the blogosphere. His name is John Greco, and he is an organizational development professional. His blog — “johnponders~ about life at work” — deals with issues like change, leadership, organizational structure, culture, and communication. Needless to say, I subscribed right away because I can listen to John talk about these things all day long. But then it struck me! Non-profit organizations deal with these issues every single day.

So, an idea was born. Every Friday for the foreseeable future, I will pick one of my favorite blog posts from johnponders~ about life at work and extrapolate on it from a non-profit perspective over here at DonorDreams blog. Thus, we should all now refer to Fridays as “O.D. Fridays”.   😉

Today, I want to talk about one of John’s posts titled: “The High Wire Act of Organizational Change“. When reading it, I found myself thinking about all the planning processes I’ve been a part of throughout the years (e.g. strategic planning, resource development planning, annual campaign planning, board development planning, succession planning, etc).

In my opinion, the common denominator to ALL planning processes is “CHANGE,” which many people seem to be allergic to undertaking. I wonder if it genetic or biological . . . hmmmm?

With so many non-profit organizations always stretching resources, it seems like many agencies are constantly trying to undertake some kind of change initiative (e.g. adding a program because of a grant, bringing on new board members, etc).

Whenever I’ve participated in planning processes, I’ve noted exactly what John references in his post. There is a dynamic tension between “preserving order” and “striving for change”.  It is those non-profit professionals who can walk this fine line that always seem to be successful. When I think about what I see those successful individuals doing, they always seem to be operating with a plan on how to conduct a planning process.  With this in mind, I’ve decided to share with you the “Six-Stage Process for Leading Change” that I once learned about at a Linkage training (source: predicated on the work of John Kotter and the works of Kouzes and Posner, Bennis, and Sayles):

  1. Make the case for change
  2. Enlist stakeholders to develop a vision and strategy
  3. Communicate the vision and strategy
  4. Remove barriers
  5. Set milestones and acknowledge progress
  6. Reinforce change

When you start a planning process at your agency, do you do so with a plan? To John’s point, how do you try to “preserve order amid change” AND “preserve change amid order”??? Please scroll down and use the comment section to share your thoughts, experiences and questions.

Oh yeah, by the way . . . if you have room in your inbox or RSS feed for one more blog, I strongly encourage you to flip over and subscribe to johnponders~ about life at work. I promise that you won’t be disappointed (and he doesn’t bite).  😉

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

What is your teachable point of view around fundraising?

This week at DonorDreams we are talking about what it looks like to be a fundraising “LEADER”. Today, we will continue our work from Tuesday and frame the issue using Noel Tichy’s ideas around creating a “teachable point of view”. The rest of the week we will examine other points of view on the subject as well as examples of good leaders.

According to Tichy, every effective leader operates with what he describes as a “teachable point of view” (TPOV), which breaks down into the following components:

  • Ideas — these are your thoughts on whatever it takes to win at whatever you are trying to accomplish
  • Values — these guiding principles anchor your pursuit
  • Emotional Energy — this is the inner strength you draw upon to fuel your pursuit
  • Edge — this is courage to advocate with the strength of your convictions . . .  it can also be a mantra that describes tough decision-making

It doesn’t matter if you are the CEO of a major multi-national corporation or a fundraising professional in a small one person shop. If you want to be a leader, you need to construct your personal TPOV for your agency’s unique situation in this universe.

If this sounds complicated, it really doesn’t have to be. For example, a long time ago I met someone who had just been named the executive director of a small non-profit organization. They were young, charismatic and willing to run through a wall for their agency’s mission. In spite of all their program experience, they had never really fundraised. Now, this person found themselves in a situation where board volunteers, who already were very reluctant about this “fundraising thing,” were looking to them for leadership to get the agency’s fundraising program on track.

After trying all sorts of things in their first few months, we came to the conclusion that they knew lots of textbook stuff about fundraising, but they didn’t have a TPOV around resource development. So, one afternoon over a cup of Starbucks coffee and a series of simple questions, we developed their TPOV around fundraising. Here are just a few of the questions I asked:

  • What do you believe in your heart and soul when it comes to resource development (RD) and fundraising?
  • What principles/values guide your interactions with donors and how you handle their charitable contributions?
  • What are some emotional statements that you want to become a “mantra” for your board members when it comes to fundraising?

Sure, there were follow-up questions and lots of fine tuning, but I think you get the idea. In the end, we integrated their answers into a TPOV diagram that looked like this:

In the end, this simple exercise provided that new executive director with something invaluable — a compass. A tool that would guide every resource development decision that they’d ever make and inform every fundraising conversation they’d ever have with a board member.

What is your teachable point of view around fundraising? Do you have one? If not, then please share some of your core ideas or values that you associate with resource development. Use the comment box below and take a minute out your day to response because you never know who your feedback will inspire.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

Are you and your non-profit agency a fundraising leader?

This week at DonorDreams we are talking about what it looks like to be a fundraising “LEADER”. Today, we will frame the issue using a few of Noel Tichy’s ideas around leadership. The rest of the week we will examine other points of view on the subject as well as examples of good leaders.

Noel Tichy is an iconic figure in the field of leadership. He has authored and co-authored the following books on this very popular subject: Control Your Destiny or Someone Else Will, The Leadership Engine, and Judgment: How Winning Leaders Make Great Calls. While it would be impossible to summarize all of what Tichy believes about leadership into this very small blog post, I believe the following key principles from chapter three of The Leadership Engine captures some of it nicely:

  • Leaders accomplish their goals through the people they teach
  • Leaders teach others to be leaders, not followers
  • Leaders consider teaching on their primary roles
  • Leaders use every opportunity to learn and to teach
  • Leaders have clear ideas and values, based on knowledge and experience
  • Leaders articulate those lessons to others

In that same chapter of the book, Tichy quotes former Honeywell CEO, Larry Bossidy, as saying:

“How am I doing as a leader? The answer is how are the people you lead doing?”

Hmmmm . . . all of this got me thinking! If leaders teach and if leaders can be evaluated by those they lead, then would Tichy advocate that a non-profit and fundraising leader be evaluated through a “donor lens”?

After some careful consideration, I think Tichy would probably agree and I think the following questions can shed lots of light on whether you are leading or just raising money:

  • Do your donors know what the goals of your agency are?
  • Do you know what your key donors’ personal goals are with regards to their philanthropy?
  • In your efforts to cultivate new prospective donors, do you teach them what to expect as a donor to your agency and how to engage your organization in being accountable to them and their fellow donors?
  • Do your donors know what your  agency’s values are? Do they see and echo your edge and emotional energy around your mission?
  • Do your donors enthusiastically go out into the community and teach others about your mission and enlist the support of new prospective donors?

If you can answer ‘YES’ to many of these questions, then congratulations . . . “You very well might be a fundraising leader.” If you fall a little short, then there might be a little bit of work for you to do.

And what does this work look like? Well, I’m happy to say it is probably something you should fold into your existing donor stewardship efforts (e.g. focus groups, donor surveys, stewardship receptions with a mission-focus, engaging donors in prospect cultivation efforts, etc).

How do you propose we take measure of whether or not you and your agency are non-profit and fundraising leaders? Does it even matter to you or do you think it is more important to just focus on fundraising outputs (e.g. cash raised, goals attained, etc)? Are you trying to create what Tichy refers to as a “virtuous teaching cycle” with your donors? If so, what does that look like?

Please scroll down and share your thoughts on some of these questions in the comment box because we can all learn from each other.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

Are you King of your nonprofit forest?

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:

  1. 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.
  2. 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 tot hose 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 executuve director. Vive Le France!
  3. 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.
  4. 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!
  5. 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!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847|
http://www.linkedin.com/in/erikanderson847