Founder-itis starts with the initial concept: "I can serve this need, I ought to serve this need, so therefore I will serve this need." Why is this wrong? Isn't that the way all great things start? Isn't that the way "better mousetraps" get invented? Well, in the past, yes, but founder-itis is older than the hills, too, and if we want to prevent that from happening, there is a better way to proceed, or at least I think so.
The reason a public charity in the U.S. works (back to Lawrence Lindsey's quote a few posts ago) is because a whole bunch of people come together to meet a community need. They all work on it; they volunteer for it; they give to it, they sustain it, they manage and govern it. It's a community effort; a team effort. People coming together, particularly in times of crisis, to meet a need; the community rallying around those of its members in need and helping ease pain or hardship or strife. That's the essence of the public charity: people coming together, forming a multi-faceted team, pooling resources of time, talent, skill and money.
What happens in a world where every Tom, Dick or Margaret is free to start up a "public charity" is that the founding person's individual idea (and ideal) forms the core of the new nonprofit. It isn't a community response at all; it's the response of one, single individual, or one small group of like-minded souls who think they see a need, feel compelled to meet that need, and then want to try to get others involved in doing what the founder wants done the way the founder says it should be done. In my view, that's not a valid public charity. It may be so legally, but it is not so in terms of functionality. Because what so often results is dysfunctionality.
So what we have here is a two-pronged problem: First, what is ideally a community response to a crisis or need is now manifested as a single person's idea of what should be taking place in the community, regardless of what the wider community perceives or feels. That's a problem, because it results in the formation of an organization that purports to be a "public trust" that is in fact based solely on putting the individual's values, perception of need and drive for action ahead of actual publicly held values, publicly perceived need and publicly supported action. The true public charity is an efficient way to deliver services. The individual's charity is a relatively inefficient way to deliver services because it ends up in so much duplication of time, effort and use of financial resources.
Second, this results in a plethora of little charitable fiefdoms across the fabric of society, each one out there trying to arrest our attention and grab our cash to do what they want to do with it. So it becomes a kind of turf battle, with many smaller charities being set up in a community, each of which may be serving similar and overlapping populations. Actually, this is a sort of "bum's paradise," if you're in the temporary shelter business. It means you can go to multiple charities and receive multiple benefits and instances of personal assistance.
I am going to get into further hot water tomorrow. My goose will be thoroughly cooked by the time this bit is finished! But we've got to deal with this.
Friday, April 27, 2007
Wednesday, April 25, 2007
Case Study in New Charity Start-up -- Part 2
So let's examine this case study a little more closely and see if we can identify some elements of founder-itis that might be avoidable with patience, thought and planning.
Before we do this, however, it must be said that this case is not that unusual. I can think of four other organizations with whom I have worked on similar problems where the essential ingredients were very nearly the same.
Here are some of the key ingredients found in this case study:
1. The charity is a one-person show: governed, managed, staffed and programmed by one person. Certainly there were volunteers, but they were recruited and trained by the founder to do her method of teaching her way. There were two staff persons who, again, were under the total control of the founder.
2. The Board of Directors was formed of persons loyal to and personal friends of the founder; they had little motivation other than the relationship, no training, experience or skills for nonprofit governance; they were willing to let the founder do whatever she needed to do. The Board was set up to satisfy the IRS rules and regulations that call for public charities to have a board of directors in order to be granted the 501-(c)-(3) designation.
3. Fundraising was limited to activities the founder approved and was able to carry out on her own. Her daily schedule was a whirl of crises and putting out fires. She had little or no time to spend on planning or careful, methodical execution. There were no resources that could be appropriated to enhance fundraising infrastructure. Grants, special events and one or two dear loyal friends plus the founder's own bank account were the key sources of revenue.
4. The founder's personal and management style was scattered and frenetic, one reminiscent of autism accompanied by attention deficit disorder; this became the style of doing business both at the staff level on a day-to-day basis and in the work of the board of directors. Consequently, there was little planning, few instances of deliberative thought, no consistent follow up on matters of business, and an inability to set even a meeting agenda without constant interruption.
5. The founder's word, preferences, style and scope of options became those of the organization, and everyone associated with that charity publicly avowed that essential posture.
So this was the set-up in our case study of founder-itis: a dysfunctional organization badly needing to have a productive fundraising effort, but unable to get a a process going.
Tomorrow we'll deal with some of these elements in more detail, looking for ways to advise new start-up clients and keep them from falling prey down the road to founder-itis
Before we do this, however, it must be said that this case is not that unusual. I can think of four other organizations with whom I have worked on similar problems where the essential ingredients were very nearly the same.
Here are some of the key ingredients found in this case study:
1. The charity is a one-person show: governed, managed, staffed and programmed by one person. Certainly there were volunteers, but they were recruited and trained by the founder to do her method of teaching her way. There were two staff persons who, again, were under the total control of the founder.
2. The Board of Directors was formed of persons loyal to and personal friends of the founder; they had little motivation other than the relationship, no training, experience or skills for nonprofit governance; they were willing to let the founder do whatever she needed to do. The Board was set up to satisfy the IRS rules and regulations that call for public charities to have a board of directors in order to be granted the 501-(c)-(3) designation.
3. Fundraising was limited to activities the founder approved and was able to carry out on her own. Her daily schedule was a whirl of crises and putting out fires. She had little or no time to spend on planning or careful, methodical execution. There were no resources that could be appropriated to enhance fundraising infrastructure. Grants, special events and one or two dear loyal friends plus the founder's own bank account were the key sources of revenue.
4. The founder's personal and management style was scattered and frenetic, one reminiscent of autism accompanied by attention deficit disorder; this became the style of doing business both at the staff level on a day-to-day basis and in the work of the board of directors. Consequently, there was little planning, few instances of deliberative thought, no consistent follow up on matters of business, and an inability to set even a meeting agenda without constant interruption.
5. The founder's word, preferences, style and scope of options became those of the organization, and everyone associated with that charity publicly avowed that essential posture.
So this was the set-up in our case study of founder-itis: a dysfunctional organization badly needing to have a productive fundraising effort, but unable to get a a process going.
Tomorrow we'll deal with some of these elements in more detail, looking for ways to advise new start-up clients and keep them from falling prey down the road to founder-itis
Tuesday, April 24, 2007
Case Study in New Charity Start-up
I am often approached by would-be start-up nonprofits. People come looking for whatever advice they need. Sometimes people seek fundraising advice, sometimes governance alternatives.
Other times they want to know how to set up the new charity with the IRS. But rarely, if ever, does someone come and say "I'm thinking about doing this kind of work. What are some of the blocks and barriers going to be, and do I stand a chance of surviving long term?"
Mostly people seem to want self-affirmation more than anything else; they want to know that their ideas about something are, generally, in the right direction. They are rarely prepared to accept criticism or negative comments; they don't seem to like a cautious approach and they seem to have little tolerance for much analysis, particularly if it cuts across their grain of an idea about how things should be.
One case I worked with is typical enough that I'll lift it up as a case study. The charity's request for assistance in fundraising involved a long-time school teacher who had developed over the years a marvelously effective method of teaching youngsters to read. This woman has some of the highest scores available today in teaching kids to read, write and think. The results this nonprofit gets each year are unbeatable, and they do improve over time. This gives the organization a great case for support.
I was enlisted by the founder's board to assist them in fundraising, with the first step in the process being a development audit to determine past and current fundraising practices and results. In the process of the development audit, it quickly became apparent that the organization had a serious case of founder-itis.
The founder was the executive director, as well as an officer and voting member of the board. The board members were all long-time personal friends of the founder, pretty much ready to approve whatever she wanted to do. The organization's management pattern tended to follow the founder's personal pattern of disjointed, unfocused thinking and planning. No idea was acceptable unless it fit the founder's personal preferences.
Fundraising had come virtually to a halt after the first six years of operation. The board was allowed not to give; personal friends couldn't be solicited for major gifts, simply because of the "embarrassment" that would accrue to the personal relationship.
As I explored further into the organization's history, it was revealed that the founder had early on became embroiled in local school politics around the issue of the knowledge gap between white and African American students, advocating that the school system should be responsible for bringing minority students back into the literate mainstream.
At some point the frustration of dealing with the political and bureaucratic process became too much, and this woman made a precipitous decision to go out and start a literacy charity on her own, letting the schools stew in their own juices, but moving ahead to solve the problem on her own, at least for a few youngsters. Direct service to a few was preferred over an institutional solution.
Whether because of impatience, lack of political skill, lack of supporters or whatever, this charity was created to get action, now. And the resulting situation gives us a good case study in which to see the ingredients that eventually can lead to Founder-itis. More on this tomorrow.
Other times they want to know how to set up the new charity with the IRS. But rarely, if ever, does someone come and say "I'm thinking about doing this kind of work. What are some of the blocks and barriers going to be, and do I stand a chance of surviving long term?"
Mostly people seem to want self-affirmation more than anything else; they want to know that their ideas about something are, generally, in the right direction. They are rarely prepared to accept criticism or negative comments; they don't seem to like a cautious approach and they seem to have little tolerance for much analysis, particularly if it cuts across their grain of an idea about how things should be.
One case I worked with is typical enough that I'll lift it up as a case study. The charity's request for assistance in fundraising involved a long-time school teacher who had developed over the years a marvelously effective method of teaching youngsters to read. This woman has some of the highest scores available today in teaching kids to read, write and think. The results this nonprofit gets each year are unbeatable, and they do improve over time. This gives the organization a great case for support.
I was enlisted by the founder's board to assist them in fundraising, with the first step in the process being a development audit to determine past and current fundraising practices and results. In the process of the development audit, it quickly became apparent that the organization had a serious case of founder-itis.
The founder was the executive director, as well as an officer and voting member of the board. The board members were all long-time personal friends of the founder, pretty much ready to approve whatever she wanted to do. The organization's management pattern tended to follow the founder's personal pattern of disjointed, unfocused thinking and planning. No idea was acceptable unless it fit the founder's personal preferences.
Fundraising had come virtually to a halt after the first six years of operation. The board was allowed not to give; personal friends couldn't be solicited for major gifts, simply because of the "embarrassment" that would accrue to the personal relationship.
As I explored further into the organization's history, it was revealed that the founder had early on became embroiled in local school politics around the issue of the knowledge gap between white and African American students, advocating that the school system should be responsible for bringing minority students back into the literate mainstream.
At some point the frustration of dealing with the political and bureaucratic process became too much, and this woman made a precipitous decision to go out and start a literacy charity on her own, letting the schools stew in their own juices, but moving ahead to solve the problem on her own, at least for a few youngsters. Direct service to a few was preferred over an institutional solution.
Whether because of impatience, lack of political skill, lack of supporters or whatever, this charity was created to get action, now. And the resulting situation gives us a good case study in which to see the ingredients that eventually can lead to Founder-itis. More on this tomorrow.
Monday, April 23, 2007
Why Not Start a Business?
Today we start a series on nonprofit startups. There are some issues here that need to be addressed, the first of which is found in an email I received from M. McElroy of Brighton, MI, the other day that speaks to this examination of start-up charities that get into fundraising problems early in the game. She related the following story, in which the names have been changed or deleted to protect everybody concerned:
“When I first started my career [in another state], I worked as a clinician with adolescent boys and girls at a place [that] has been in business for over 35 years.... It grew from a halfway house into a major nonprofit which focused on drug and alcohol rehabilitation. The innovation of programs were fantastic ....
“The reason I left... was because the executive director / founder had a severe case of founder-itis. The board of directors were his friends, his entire family worked [there] and there was no oversight. Although his legacy will live on, he almost ran a great organization into the ground... Discussing founder-itis is very key because it can save nonprofits from possible destruction. [I witnessed] a tragic and severe example of founder-itis.”
In my practice, I see this kind of thing on a regular basis. It must be said that some of these nonprofits that develop founder-itis do manage to change, particularly when their boards seek help from a fundraising consultant. But it usually takes some kind of outside influence, working with the board and the founder/executive, to resolve and “fix” the strategic components of the situation that were ineptly put in place early on.
On quite a few occasions, when people contact me about providing them assistance with start-up charities, during the course of the conversation I have asked them, "Why don't you just start up a business in this area and come at the problem from an entrepreneurial stance?"
Generally, the response is shock and disbelief that a fundraising consultant would ask that question. Shock, because they desperately want a charity, not a business; disbelief because they come to me for help in fundraising and here I'm implying by my question that they should be in a business where they sell a product or service rather than give it free to those who need it. Most of the people who come to see me cannot understand why such a question is relevant. Their immediate answer is: "We want to set this up as a nonprofit so that people can give to us and get a tax deduction for their gift. Why in the world would we ever want to go into business with this idea?"
Well, there's a perfectly logical reason why you might consider doing that. More on this tomorrow. We're getting down into the heart of the issue here.
“When I first started my career [in another state], I worked as a clinician with adolescent boys and girls at a place [that] has been in business for over 35 years.... It grew from a halfway house into a major nonprofit which focused on drug and alcohol rehabilitation. The innovation of programs were fantastic ....
“The reason I left... was because the executive director / founder had a severe case of founder-itis. The board of directors were his friends, his entire family worked [there] and there was no oversight. Although his legacy will live on, he almost ran a great organization into the ground... Discussing founder-itis is very key because it can save nonprofits from possible destruction. [I witnessed] a tragic and severe example of founder-itis.”
In my practice, I see this kind of thing on a regular basis. It must be said that some of these nonprofits that develop founder-itis do manage to change, particularly when their boards seek help from a fundraising consultant. But it usually takes some kind of outside influence, working with the board and the founder/executive, to resolve and “fix” the strategic components of the situation that were ineptly put in place early on.
On quite a few occasions, when people contact me about providing them assistance with start-up charities, during the course of the conversation I have asked them, "Why don't you just start up a business in this area and come at the problem from an entrepreneurial stance?"
Generally, the response is shock and disbelief that a fundraising consultant would ask that question. Shock, because they desperately want a charity, not a business; disbelief because they come to me for help in fundraising and here I'm implying by my question that they should be in a business where they sell a product or service rather than give it free to those who need it. Most of the people who come to see me cannot understand why such a question is relevant. Their immediate answer is: "We want to set this up as a nonprofit so that people can give to us and get a tax deduction for their gift. Why in the world would we ever want to go into business with this idea?"
Well, there's a perfectly logical reason why you might consider doing that. More on this tomorrow. We're getting down into the heart of the issue here.
Thursday, April 19, 2007
Donors and the Economy
A recent client of mine, R. Hatter, sent me an email asking what the appropriate response would be to a key donor who had expressed irritation at the increased number of requests for contributions and the steady flow of information from that charity to his mailbox in recent months. "What can I tell him when he complains that we send him too many appeals and too much information?"
My response was this: On the guy who says "too much" -- I suspect the reason he's saying this is because his commitment to your charity is faltering a bit. He sounds like he's out of touch, hopefully only temporarily. What I would suggest is that you get him directly back in touch with "the kids." Let him touch and feel the urgency that these young lives contain, let him get back in touch with the urgent realities of their situation. And the reality is that the reason we ask more often, ask more people, and ask for more money is that the costs of keeping these kids moving towards being fully participating citizens (in a society that otherwise would just dump 'em in the garbage) is getting more expensive each year.
Let him see a "life on the mend," so to speak. Let him see that while "God don't make no junk" it's really generous and self-giving human beings who provide sustenance for the lives of these abused and neglected kids. Let him see that little girl's face, let him read the poem she wrote or see the video or view the new invention that was born in that young child's mind as a result of his past gifts. He's out of touch. That's all. And you can fix that.
My further suggestion is that you really don't need to answer his more "obvious" objection, having to do with mailings, and asking too much. That's not where the issue is. And arguing the "facts of the case," such as the number of mailings, etc., in the terms in which he has couched the discussion, won't really get anywhere because he will just continually come back with the same answer. His question sets it up that way. The increased efforts of your staff in fundraising can only encounter objections among those who haven't seen, felt, touched the power of these young lives. Because, for any of the rest of us, there is only one answer -- "ask more, get more, use more, save more kids."
Another thing to consider is whether all those mailings he's receiving and objecting to have been written as creatively as possible; whether the way you state your case for support is truly compelling and motivating, and whether you have the ability to capture peoples' imagination in your fundraising letters. Maybe his eyes have glazed over once too often when receiving your letters, and maybe he's really telling you he doesn't like what you're writing.
What would your response have been to this question, dear reader? Let us hear from you! Get in on the dialogue.
My response was this: On the guy who says "too much" -- I suspect the reason he's saying this is because his commitment to your charity is faltering a bit. He sounds like he's out of touch, hopefully only temporarily. What I would suggest is that you get him directly back in touch with "the kids." Let him touch and feel the urgency that these young lives contain, let him get back in touch with the urgent realities of their situation. And the reality is that the reason we ask more often, ask more people, and ask for more money is that the costs of keeping these kids moving towards being fully participating citizens (in a society that otherwise would just dump 'em in the garbage) is getting more expensive each year.
Let him see a "life on the mend," so to speak. Let him see that while "God don't make no junk" it's really generous and self-giving human beings who provide sustenance for the lives of these abused and neglected kids. Let him see that little girl's face, let him read the poem she wrote or see the video or view the new invention that was born in that young child's mind as a result of his past gifts. He's out of touch. That's all. And you can fix that.
My further suggestion is that you really don't need to answer his more "obvious" objection, having to do with mailings, and asking too much. That's not where the issue is. And arguing the "facts of the case," such as the number of mailings, etc., in the terms in which he has couched the discussion, won't really get anywhere because he will just continually come back with the same answer. His question sets it up that way. The increased efforts of your staff in fundraising can only encounter objections among those who haven't seen, felt, touched the power of these young lives. Because, for any of the rest of us, there is only one answer -- "ask more, get more, use more, save more kids."
Another thing to consider is whether all those mailings he's receiving and objecting to have been written as creatively as possible; whether the way you state your case for support is truly compelling and motivating, and whether you have the ability to capture peoples' imagination in your fundraising letters. Maybe his eyes have glazed over once too often when receiving your letters, and maybe he's really telling you he doesn't like what you're writing.
What would your response have been to this question, dear reader? Let us hear from you! Get in on the dialogue.
Wednesday, April 18, 2007
The Economy Gives Donors the Excuse Not to Give?
We've been discussing this problem with the economy and charitable giving, and I think we need to take a look at the donor's or prospect's view of this situation.
It seems to me that in a down economy it's pretty easy to get into a mode (or maybe it's just a mood) of "scarcity," as opposed to a mood of "plenty." Resources seem scarce, rather than plentiful. Whether this is reality or in the mind, mostly depends on the particular donor.
On the home front, for example, there's all the defensive budgeting we have to do to meet our decreased income level – tightening the belt and depriving ourselves of those expenditures we'd really like to make to achieve our various materialistic goals or obtain the kind of gadgets, environment or acoutrements we need to bolster our self image.
And then there are the cuts we experience in our places of work in both budget and programs, the re-prioritizing of objectives and the re-directing of scarce resources to the "things that count."
Together, on the home front and in the workplace, this begins to look like a wonderfully perfect excuse to also deal with those nonprofits that bug us for contributions but don't give us anything to be excited about. Now we can just tell them we simply don't have the cash to help them. And we can feel good inside about doing that because, after all, isn't that really the case? I can't afford to give to charity because I have to eat, right?
For example, for several years now, I've been giving to what in other times has been a favorite charity, my alma mater, in central Pennsylvania. Great place. They dealt with me, didn't they? Took a rough, provincial kid and drummed an education into his brain? This MUST be a great place. And they continue to take hundreds of central PA's rural and small-town, provincial, unfocused kids and make thinking, discerning, creative adults out of them. With what more laudable program could you ply a vision for our world's betterment?
But, truth to tell, in tight financial times, my giving there goes down. Why? Well, frankly, it's an excuse to save a little money for something else. Either that new computer I want, or maybe to get involved with a new charity that has captured my imagination. But what is really happening is that when I read the letters, when I read the bulletin, when I get on the website to see what's happening, and even though there's a whale of a lot happening there in terms of the type and quality of education you can get at this institution, the fact is that the way they describe it in the letters that ask for money make my eyes glaze over; it just wipes away all motivation to keep giving there.
So, does the economy affect fundraising? I think it does: it allows donors, and some of the people we think could be our best prospects, the perfect excuse to use the economy as a reason to give elsewhere or to use resources for things they want when we cannot come up with anything that sparks their continued interest, meets their needs, matches their values. Sure the economy affects fundraising….. or does it!? We take on another example tomorrow.
It seems to me that in a down economy it's pretty easy to get into a mode (or maybe it's just a mood) of "scarcity," as opposed to a mood of "plenty." Resources seem scarce, rather than plentiful. Whether this is reality or in the mind, mostly depends on the particular donor.
On the home front, for example, there's all the defensive budgeting we have to do to meet our decreased income level – tightening the belt and depriving ourselves of those expenditures we'd really like to make to achieve our various materialistic goals or obtain the kind of gadgets, environment or acoutrements we need to bolster our self image.
And then there are the cuts we experience in our places of work in both budget and programs, the re-prioritizing of objectives and the re-directing of scarce resources to the "things that count."
Together, on the home front and in the workplace, this begins to look like a wonderfully perfect excuse to also deal with those nonprofits that bug us for contributions but don't give us anything to be excited about. Now we can just tell them we simply don't have the cash to help them. And we can feel good inside about doing that because, after all, isn't that really the case? I can't afford to give to charity because I have to eat, right?
For example, for several years now, I've been giving to what in other times has been a favorite charity, my alma mater, in central Pennsylvania. Great place. They dealt with me, didn't they? Took a rough, provincial kid and drummed an education into his brain? This MUST be a great place. And they continue to take hundreds of central PA's rural and small-town, provincial, unfocused kids and make thinking, discerning, creative adults out of them. With what more laudable program could you ply a vision for our world's betterment?
But, truth to tell, in tight financial times, my giving there goes down. Why? Well, frankly, it's an excuse to save a little money for something else. Either that new computer I want, or maybe to get involved with a new charity that has captured my imagination. But what is really happening is that when I read the letters, when I read the bulletin, when I get on the website to see what's happening, and even though there's a whale of a lot happening there in terms of the type and quality of education you can get at this institution, the fact is that the way they describe it in the letters that ask for money make my eyes glaze over; it just wipes away all motivation to keep giving there.
So, does the economy affect fundraising? I think it does: it allows donors, and some of the people we think could be our best prospects, the perfect excuse to use the economy as a reason to give elsewhere or to use resources for things they want when we cannot come up with anything that sparks their continued interest, meets their needs, matches their values. Sure the economy affects fundraising….. or does it!? We take on another example tomorrow.
Tuesday, April 17, 2007
Philanthropy and the Economy -- Part 2
I well remember Robert F. Sharpe, Sr., who said to us back in about 1984, as we were in training to become major and planned gift officers in our respective nonprofits, that "giving follows compelling ideas."
Just as in business and industry the money tends to follow the leading edge of ideas that make what we euphemistically refer to as "better mousetraps." If Google comes up with a better search engine, the money to develop that comes their way, then followed by hugely increasing use of that engine when developed, and then followed by the ad dollars as advertisers finally catch on. Better ideas lead to better products, lead to booming economy. Right?
Can we apply that to charities? I think we can. But from what I've seen, the boards and staffs of nonprofit organizations don't seem to share that point of view. For example, I've started collecting fundraising letters again this year. From the ones I've received so far, it's pretty obvious there are not too many compelling ideas for fundraising letters out there in the southeast Michigan philanthropic marketplace.
-- Over here we have another gala – "please give to our cause and come to our gala."
-- Over there we have another human service agency that writes a letter two pages long giving a long diatribe on all the aspects of their many-faceted program.
-- Then we have the dogs and cats that need homes, and the "gee-whiz" statistics that show what the organization is doing. Makes my eyes glaze over after the first paragraph!
-- Then we have the hospital campaign – they're short and sweet: never mind what we're doing with your money, just pay up! Your pledge is past due.
The case for support for most of these can be reduced to: "We do this, we do that, we do the other thing." or "We need, please give."
During last year's holiday season I racked up 57 fundraising letters that I got in the mail. I can't complain about this. Comparatively, not all that many have my name and address, in light of the fact that there are over 4000 agencies in southeastern Michigan that have the 501-c-3 IRS designation! But of the 57 letters, only 3 of them had any real appeal at all, to my way of thinking. The rest just didn't have the ideas, the program, or the way of describing their efforts or success that appealed to me as a donor.
So I gave to those three. I could have given to all 57, and would have, IF any of the other 54 had shown a spark of creativity about them, or presented their case for support in some way that was involving, compelling, motivating.
So my question on this is, does an economy in the tank mean, then, that all the creativity and all the good ideas suddenly vanish from the minds of those in charge of our nonprofits? Is the economy to blame for the fact that dull fundraising letters keep being produced? Does the economy dictate whether or not a given nonprofit thinks up a compelling, tantalizing or creative twist to its case for support?
I don't think so, because this stuff happens – the dull fundraising letters, the lackluster descriptions of program, the failure to talk about exciting results people are having with their program – these all happen in GOOD economic times as well as in bad. Somehow I don't think creativity and compelling cases for support are tied that much to the economy. I'll bet an agency head could come up with a creative and compelling way to capture a donor's heart in any kind of economic circumstance. What do you think, dear reader? Have you been reading the fundraising letters you get in the mail? Do your eyes glaze over after the first paragraph?
Bob Sharpe Sr. also said that there was never such a time of economic difficulty that someone couldn't raise a dollar, and there was never such a time of economic well-being and abundance that some nonprofit or other wasn't required to close its doors because of lack of contributions. And I'd like to add to that the comment that the most likely reason any nonprofit has to close its doors would be that it failed to create a compelling, motivating case for support that attracted resources to its cause.
We'll explore the donor's response to the economy tomorrow.
Just as in business and industry the money tends to follow the leading edge of ideas that make what we euphemistically refer to as "better mousetraps." If Google comes up with a better search engine, the money to develop that comes their way, then followed by hugely increasing use of that engine when developed, and then followed by the ad dollars as advertisers finally catch on. Better ideas lead to better products, lead to booming economy. Right?
Can we apply that to charities? I think we can. But from what I've seen, the boards and staffs of nonprofit organizations don't seem to share that point of view. For example, I've started collecting fundraising letters again this year. From the ones I've received so far, it's pretty obvious there are not too many compelling ideas for fundraising letters out there in the southeast Michigan philanthropic marketplace.
-- Over here we have another gala – "please give to our cause and come to our gala."
-- Over there we have another human service agency that writes a letter two pages long giving a long diatribe on all the aspects of their many-faceted program.
-- Then we have the dogs and cats that need homes, and the "gee-whiz" statistics that show what the organization is doing. Makes my eyes glaze over after the first paragraph!
-- Then we have the hospital campaign – they're short and sweet: never mind what we're doing with your money, just pay up! Your pledge is past due.
The case for support for most of these can be reduced to: "We do this, we do that, we do the other thing." or "We need, please give."
During last year's holiday season I racked up 57 fundraising letters that I got in the mail. I can't complain about this. Comparatively, not all that many have my name and address, in light of the fact that there are over 4000 agencies in southeastern Michigan that have the 501-c-3 IRS designation! But of the 57 letters, only 3 of them had any real appeal at all, to my way of thinking. The rest just didn't have the ideas, the program, or the way of describing their efforts or success that appealed to me as a donor.
So I gave to those three. I could have given to all 57, and would have, IF any of the other 54 had shown a spark of creativity about them, or presented their case for support in some way that was involving, compelling, motivating.
So my question on this is, does an economy in the tank mean, then, that all the creativity and all the good ideas suddenly vanish from the minds of those in charge of our nonprofits? Is the economy to blame for the fact that dull fundraising letters keep being produced? Does the economy dictate whether or not a given nonprofit thinks up a compelling, tantalizing or creative twist to its case for support?
I don't think so, because this stuff happens – the dull fundraising letters, the lackluster descriptions of program, the failure to talk about exciting results people are having with their program – these all happen in GOOD economic times as well as in bad. Somehow I don't think creativity and compelling cases for support are tied that much to the economy. I'll bet an agency head could come up with a creative and compelling way to capture a donor's heart in any kind of economic circumstance. What do you think, dear reader? Have you been reading the fundraising letters you get in the mail? Do your eyes glaze over after the first paragraph?
Bob Sharpe Sr. also said that there was never such a time of economic difficulty that someone couldn't raise a dollar, and there was never such a time of economic well-being and abundance that some nonprofit or other wasn't required to close its doors because of lack of contributions. And I'd like to add to that the comment that the most likely reason any nonprofit has to close its doors would be that it failed to create a compelling, motivating case for support that attracted resources to its cause.
We'll explore the donor's response to the economy tomorrow.
Monday, April 16, 2007
The Economy and Fundraising
We have a new topic today. It concerns the flagging economy. At least here in Michigan, we have an economy sorely in need of help.
In the past year, I have received many inquiries from clients and others about whether the slow economy, particularly slow here in Michigan, hurts fundraising. The most recent of these inquiries came in November from a prominent reporter for a business publication who was doing an article on philanthropy matters locally.
The proposition was this: "There are so many capital campaigns going on right now, but will a slow economy hurt these efforts? Shouldn't these nonprofits wait until we have improved economic circumstances? Are there more campaigns going on than there is money to fund them?"
My response to this was that philanthropy is not like a pizza. A pizza is a finite, unexpandable entity. You slice it up. When you eat all the slices, the pie is gone. If there are 8 pieces of pizza and Joe has three, Bill and Mary can't each have 3 pieces. Three people can't divide an 8-piece pizza evenly.
That's great for pizza, but that's not what philanthropy is. Many people I've talked to over the years, especially a lot of Board members of nonprofits, seem to assume that if there are "too many charities in town" then there just can't be enough money available to be donated by the local populace for all of them to survive and thrive.
But that's just not the case. Philanthropy is like an amoeba. An amoeba reaches out to where the food is, forms itself around the food, then ingests it. Philanthropy -- the love of humankind -- is similar: it grows out toward the "food" of good ideas; the more good, compelling ideas to give that there are out there in the marketplace, the more the "amoeba" of philanthropy thrives. The more compelling reasons there are to give, the more great and wonderful programs that really help people and achieve the ideals we all generally share about the advancement of humankind, the more people are willing to give to those ideas.
Conversely, when there is a paucity of food, the amoeba shrinks up and, eventually, dies. Similarly with philanthropy, to the degree there is a shortage of compelling and motivating ideas happening in an area's nonprofits, when all is more or less ho-hum and same-ole-same-ole, that is the degree to which more and more people find excuses not to give. They become disinterested. Or they flock to the nonprofit that has the most compelling case for support and the one that gets the best results.
So philanthropy is like an amoeba. We'll continue this tomorrow.
In the past year, I have received many inquiries from clients and others about whether the slow economy, particularly slow here in Michigan, hurts fundraising. The most recent of these inquiries came in November from a prominent reporter for a business publication who was doing an article on philanthropy matters locally.
The proposition was this: "There are so many capital campaigns going on right now, but will a slow economy hurt these efforts? Shouldn't these nonprofits wait until we have improved economic circumstances? Are there more campaigns going on than there is money to fund them?"
My response to this was that philanthropy is not like a pizza. A pizza is a finite, unexpandable entity. You slice it up. When you eat all the slices, the pie is gone. If there are 8 pieces of pizza and Joe has three, Bill and Mary can't each have 3 pieces. Three people can't divide an 8-piece pizza evenly.
That's great for pizza, but that's not what philanthropy is. Many people I've talked to over the years, especially a lot of Board members of nonprofits, seem to assume that if there are "too many charities in town" then there just can't be enough money available to be donated by the local populace for all of them to survive and thrive.
But that's just not the case. Philanthropy is like an amoeba. An amoeba reaches out to where the food is, forms itself around the food, then ingests it. Philanthropy -- the love of humankind -- is similar: it grows out toward the "food" of good ideas; the more good, compelling ideas to give that there are out there in the marketplace, the more the "amoeba" of philanthropy thrives. The more compelling reasons there are to give, the more great and wonderful programs that really help people and achieve the ideals we all generally share about the advancement of humankind, the more people are willing to give to those ideas.
Conversely, when there is a paucity of food, the amoeba shrinks up and, eventually, dies. Similarly with philanthropy, to the degree there is a shortage of compelling and motivating ideas happening in an area's nonprofits, when all is more or less ho-hum and same-ole-same-ole, that is the degree to which more and more people find excuses not to give. They become disinterested. Or they flock to the nonprofit that has the most compelling case for support and the one that gets the best results.
So philanthropy is like an amoeba. We'll continue this tomorrow.
Friday, April 13, 2007
Board Decision to Fund Infrastructure – Part 6
Should the CEO have his head examined? The size of his headache resulting from the discussion so far might give a clue that at least his method might need to be adjusted.
What will the CEO do next time there's something he wants from the Board? Bury it in the budget? Make a formal proposal? Take a board member to lunch? What are the learnings from this situation?
Will the CEO avail himself of the learnings? Will he sit down and write down what he has learned? Probably not. He doesn't see himself as a student, here, in the learning process. He sees himself as put upon, as underdog, continually having to wrestle the slightest advancement for the organization out of the Board's discussion.
What would you do different in this situation, dear reader?
You know what I would do?
First, I'd take my idea to each and every Board member individually, long in advance of the board meeting, and in advance of making up the budget that would include the proposed infrastructure expense. I would demonstrate the situation now and what it is producing; I would show the need our organization has to raise more money; I would clearly state what we could expect in the way of results from an infrastructure investment.
Then I would demonstrate the financial facts of the case, the situation as we now have it and how the financial picture could change significantly for the positive. Then I would show each board member the vision of what could happen in our organization with new revenue and why this is important to do. And then I would demonstrate how that vision could become IF we had that donor software and somebody to enter and massage the data.
In short, I'd build a case for support with each of those Board members, tailor-made to each board member's personality and understanding. I would make sure any questions they have are answered first. I'd ask each one whether they were ready to support the proposal unanimously, and if any said "no" I would not bring it to the Board until all objections were fully satisfied. I would wait until I knew I had board approval before even bringing it to a discussion.
At the board meeting, I would present the issue with a one-page summary of what I had told each board member privately, detailing the need, the vision and the solution. I would bring this as a separate issue before the budget discussion, so that the issue could be addressed on its own as an infrastructure issue, not as a budget issue. By the time we got to the board meeting every board member would understand the relationship between budget and infrastructure clearly and completely, and would be assenting to the conclusion of my one-page description that the infrastructure was needed and would promise to produce effective results.
But you'll probably say, "John, that's a pipedream. It'll never happen. It takes up too much of the CEO's time and too much of each board member's time." Perhaps you're right; perhaps you know whereof you speak. But if you don't take this route to an affirmative headache-free decision by the board, tell me, send me an email, how else would you get a decision that's based on deliberative thought, one that involves the Board members around the issue of infrastructure and engages them where they are? How would you get a decision that will move the organization ahead in a positive direction?
Boards only do two things well: they can brainstorm and they can tell stories. Boards cannot do deliberative thought. There are too many impediments in the group's process to allow deliberative thought and sound reasoning.
See you next week. We'll start a new thread here on All Things Fundraising.
Have a great weekend. Hopefully spring will come..... sometime!
What will the CEO do next time there's something he wants from the Board? Bury it in the budget? Make a formal proposal? Take a board member to lunch? What are the learnings from this situation?
Will the CEO avail himself of the learnings? Will he sit down and write down what he has learned? Probably not. He doesn't see himself as a student, here, in the learning process. He sees himself as put upon, as underdog, continually having to wrestle the slightest advancement for the organization out of the Board's discussion.
What would you do different in this situation, dear reader?
You know what I would do?
First, I'd take my idea to each and every Board member individually, long in advance of the board meeting, and in advance of making up the budget that would include the proposed infrastructure expense. I would demonstrate the situation now and what it is producing; I would show the need our organization has to raise more money; I would clearly state what we could expect in the way of results from an infrastructure investment.
Then I would demonstrate the financial facts of the case, the situation as we now have it and how the financial picture could change significantly for the positive. Then I would show each board member the vision of what could happen in our organization with new revenue and why this is important to do. And then I would demonstrate how that vision could become IF we had that donor software and somebody to enter and massage the data.
In short, I'd build a case for support with each of those Board members, tailor-made to each board member's personality and understanding. I would make sure any questions they have are answered first. I'd ask each one whether they were ready to support the proposal unanimously, and if any said "no" I would not bring it to the Board until all objections were fully satisfied. I would wait until I knew I had board approval before even bringing it to a discussion.
At the board meeting, I would present the issue with a one-page summary of what I had told each board member privately, detailing the need, the vision and the solution. I would bring this as a separate issue before the budget discussion, so that the issue could be addressed on its own as an infrastructure issue, not as a budget issue. By the time we got to the board meeting every board member would understand the relationship between budget and infrastructure clearly and completely, and would be assenting to the conclusion of my one-page description that the infrastructure was needed and would promise to produce effective results.
But you'll probably say, "John, that's a pipedream. It'll never happen. It takes up too much of the CEO's time and too much of each board member's time." Perhaps you're right; perhaps you know whereof you speak. But if you don't take this route to an affirmative headache-free decision by the board, tell me, send me an email, how else would you get a decision that's based on deliberative thought, one that involves the Board members around the issue of infrastructure and engages them where they are? How would you get a decision that will move the organization ahead in a positive direction?
Boards only do two things well: they can brainstorm and they can tell stories. Boards cannot do deliberative thought. There are too many impediments in the group's process to allow deliberative thought and sound reasoning.
See you next week. We'll start a new thread here on All Things Fundraising.
Have a great weekend. Hopefully spring will come..... sometime!
Thursday, April 12, 2007
Board Decision to Fund Infrastructure – Part 5
Picking up from yesterday, everybody around the board table is getting into the act now. Paul made such a noise about the increase in spending for the Development Department's budget that he alienates his colleagues. Tempus fidgets and Gloria's got to leave, we've spent the hour allotted and still are nowhere close to a decision to approve the next year's budget. Even laid-back Sam is starting to feel some irritation and begins to say things that don't exactly lend themselves to constructive examination of the issues involved.
Each person has their own image of themselves and who they are, which needs constant polishing. Everyone in the group is either consciously or unconsciously working on this and the way they perceive others see them. Each is trying to get something done by way of enhancing their own role and standing in the group. To top it off, there are professional agendas operating, constraints on and mis-management of time. Then there's the politics of the situation: like the matter of the way the CEO "sprung" this on the Board through the budget process. There's also the demand that the budget be approved because of the fact that the fiscal year is about to end. We have at least three components in this discussion, each of which has multiple parts. Complex situation.
As the discussion proceeds, we have to ask a question: Can any of the Board members really see clearly enough through all the "stuff" that's on the table, all the fog generated in peoples' minds by all these factors, to suggest a way of proceeding that will lead to a decision that is wise and fair and effective at moving the organization ahead strategically? Can they, in other words, really settle down and do deliberative thought on this issue of fundraising infrastructure? My experience says that it's impossible. That's why boards do two things well: brainstorm and tell stories.
Paul's in a sweat to make himself heard, raise his point and keep it foremost. He now has a lot at stake and feels he must personally drive home a decision to scrap the database project, even if only because he first saw it as a "hidden agenda" by the CEO.
Gloria's really put off by that, has sided with the CEO, and now must bear the burden of the fact that he buried the bone in the budget even though she would rather have had it done another way. Neither she nor Paul can afford to "back off" for fear of losing "face" in the group.
Sam's really given it a try, he knows this is needed, but he's getting anxious because he sees not only the discussion falling apart, but the board's effectiveness as well. He's worried that, once again, Do-Good might be in for a resignation surprise, and he doesn't want that to happen. He's looking around for some sort of way to interject an alternate plan into the discussion.
Melinda is basically putting on her coat to leave. She said her piece, her mind's not on the discussion by this point, she's in a rush to get outta there! Her boss is waiting. Besides, she's seen these kinds of discussion before and knows this one is going nowhere; she's convinced that it's a waste of time.
Mary doesn't know what to do. She's never comfortable in a politicized situation like this. Her peers never do this kind of thing. Knife in the back, clever manipulation, power plays, she's seen it all, but never in a loud discussion. It's always done behind the scenes in her crowd. So she's at a loss to keep up appearances with this group.
Tom suddenly sees the incredible difference between business execs arguing like this and the members of a charity board doing it. With the business guys there 's a lot of money at stake and the guy who loses or wins the argument has a lot at stake. Even if the decision isn't made well and thoroughly, it will be made and the business will either sink or swim – people will either go broke or come out with unbelievable riches. In the charity, he sees, the argument is over a few thousands of dollars and no matter who wins the outcome won't cost anybody anything except some face, a few headaches and an ulcer.
In this situation, how can deliberative thought be done on an issue as complex as the enhancements planned for fundraising infrastructure? In fact, the board members have not really yet gotten any deeper into the infrastrucutre issue than to dicker about the price tag. They still don't know what infrastructure will do for the organization, what it is composed of, and how it is necessary for the organization to move ahead. So they haven't really come to grips with the issue at all, in terms of being able to understand the complexities and possibilities involved.
We'll finish this thread tomorrow.
Each person has their own image of themselves and who they are, which needs constant polishing. Everyone in the group is either consciously or unconsciously working on this and the way they perceive others see them. Each is trying to get something done by way of enhancing their own role and standing in the group. To top it off, there are professional agendas operating, constraints on and mis-management of time. Then there's the politics of the situation: like the matter of the way the CEO "sprung" this on the Board through the budget process. There's also the demand that the budget be approved because of the fact that the fiscal year is about to end. We have at least three components in this discussion, each of which has multiple parts. Complex situation.
As the discussion proceeds, we have to ask a question: Can any of the Board members really see clearly enough through all the "stuff" that's on the table, all the fog generated in peoples' minds by all these factors, to suggest a way of proceeding that will lead to a decision that is wise and fair and effective at moving the organization ahead strategically? Can they, in other words, really settle down and do deliberative thought on this issue of fundraising infrastructure? My experience says that it's impossible. That's why boards do two things well: brainstorm and tell stories.
Paul's in a sweat to make himself heard, raise his point and keep it foremost. He now has a lot at stake and feels he must personally drive home a decision to scrap the database project, even if only because he first saw it as a "hidden agenda" by the CEO.
Gloria's really put off by that, has sided with the CEO, and now must bear the burden of the fact that he buried the bone in the budget even though she would rather have had it done another way. Neither she nor Paul can afford to "back off" for fear of losing "face" in the group.
Sam's really given it a try, he knows this is needed, but he's getting anxious because he sees not only the discussion falling apart, but the board's effectiveness as well. He's worried that, once again, Do-Good might be in for a resignation surprise, and he doesn't want that to happen. He's looking around for some sort of way to interject an alternate plan into the discussion.
Melinda is basically putting on her coat to leave. She said her piece, her mind's not on the discussion by this point, she's in a rush to get outta there! Her boss is waiting. Besides, she's seen these kinds of discussion before and knows this one is going nowhere; she's convinced that it's a waste of time.
Mary doesn't know what to do. She's never comfortable in a politicized situation like this. Her peers never do this kind of thing. Knife in the back, clever manipulation, power plays, she's seen it all, but never in a loud discussion. It's always done behind the scenes in her crowd. So she's at a loss to keep up appearances with this group.
Tom suddenly sees the incredible difference between business execs arguing like this and the members of a charity board doing it. With the business guys there 's a lot of money at stake and the guy who loses or wins the argument has a lot at stake. Even if the decision isn't made well and thoroughly, it will be made and the business will either sink or swim – people will either go broke or come out with unbelievable riches. In the charity, he sees, the argument is over a few thousands of dollars and no matter who wins the outcome won't cost anybody anything except some face, a few headaches and an ulcer.
In this situation, how can deliberative thought be done on an issue as complex as the enhancements planned for fundraising infrastructure? In fact, the board members have not really yet gotten any deeper into the infrastrucutre issue than to dicker about the price tag. They still don't know what infrastructure will do for the organization, what it is composed of, and how it is necessary for the organization to move ahead. So they haven't really come to grips with the issue at all, in terms of being able to understand the complexities and possibilities involved.
We'll finish this thread tomorrow.
Wednesday, April 11, 2007
Board Decision to Fund Infrastructure – Part 4
More reactions of board members as they discover the real situation with the budget:
Yesterday we saw that the CEO came to the board meeting with a budget that contained a sugstantial increase in expenditures for fundraising infrastructure components. We've see what's on Paul's mind, and Melinda's. Now let's climb into the psyches of the other board members.
Mary's problem is that she's in a hurry. Not just today, but every day, any day. She breezed into the meeting about 15 minutes after the meeting started, which was a half hour after the meeting was supposed to begin. And she is ready to leave right after the budget discussion because her boss has an appointment lined up with a new client and she needs to be there. Mary's idea of giving priority to Do-Good's work is to allow about 2 hours for getting to, being in and getting back from any board meeting. Her office is a half hour's drive away from the board meeting location.
Now we're beginning to see just how the psycho-graphics are complicated by the board person's job responsibilities, their internal agenda and personal objectives, and their various levels of ability in managing time and attention. We're beginning to get to the heart of this issue of why boards (as groups larger than 2 or 3 people) can only brainstorm and tell stories, and cannot do deliberative thinking. Could you see it coming? The issue has been set up by the CEO in such a way that it doesn't have a prayer of succeeding. Or if it does, somebody's going to develop an ulcer over it. You've seen this before in board meetings you've attended?
Who else is around the table? Can the CEO look to Mary? Well, that's a matter of some speculation. She didn't notice the increase in the Development Department budget. She doesn't like that area; she concentrates on service delivery and likes to see how her gifts, which are not insubstantial, are being used, as represented in the various service delivery budget categories. She likes to imagine all the people being served, since it gives her a sense of satisfaction and "return on investment."
The fact that Mary didn't notice the budget increase is, of course, embarrassing; so when Paul brings this up, she has to find a way to adjust her own image of herself within the group and get their perceptions back on track. So she's working on that, plus it's doubly irritating that, once again, she's going to have to try to tone down the Development Department's penchant for bothering her wealthy friends for more money. She's preparing her multi-point speech as the discussion proceeds, looking for the right opportunity to jump in, but carefully choosing her words. She's nothing if not a diplomat in these circumstances.
Sam didn't see it coming either. But once the CEO began his explanation he could see that what is being asked for is not only reasonable but will have a long-term payoff that is very much needed by the organization for its future health. Sam is laid back on this one, because he knows the homework has been done. He also considers that he is "one up" on most of the rest of the board because he just committed to a five-year pledge and feels a little smug about it. But he won't play that trump-card in the discussion unless he needs to.
Gloria, too, is in the CEO's corner, because she knows the financial need. She hasn't yet connected with the fact that sooner or later she, too, is going to be asked for a really big multiple-year commitment, because she still feels safe hiding behind the old standby that "accountants don't get paid that much." Besides, Paul really ticks her off, the way he comes on, the way he talks about things. The two of them have knocked heads before. And she lost the last bout with him, so this time she's got it in for this arrogant attorney.
So what's your thought, dear reader? Does the CEO have a prayer of succeeding with this group? Is he going to get his database software and his new-hire?
Yesterday we saw that the CEO came to the board meeting with a budget that contained a sugstantial increase in expenditures for fundraising infrastructure components. We've see what's on Paul's mind, and Melinda's. Now let's climb into the psyches of the other board members.
Mary's problem is that she's in a hurry. Not just today, but every day, any day. She breezed into the meeting about 15 minutes after the meeting started, which was a half hour after the meeting was supposed to begin. And she is ready to leave right after the budget discussion because her boss has an appointment lined up with a new client and she needs to be there. Mary's idea of giving priority to Do-Good's work is to allow about 2 hours for getting to, being in and getting back from any board meeting. Her office is a half hour's drive away from the board meeting location.
Now we're beginning to see just how the psycho-graphics are complicated by the board person's job responsibilities, their internal agenda and personal objectives, and their various levels of ability in managing time and attention. We're beginning to get to the heart of this issue of why boards (as groups larger than 2 or 3 people) can only brainstorm and tell stories, and cannot do deliberative thinking. Could you see it coming? The issue has been set up by the CEO in such a way that it doesn't have a prayer of succeeding. Or if it does, somebody's going to develop an ulcer over it. You've seen this before in board meetings you've attended?
Who else is around the table? Can the CEO look to Mary? Well, that's a matter of some speculation. She didn't notice the increase in the Development Department budget. She doesn't like that area; she concentrates on service delivery and likes to see how her gifts, which are not insubstantial, are being used, as represented in the various service delivery budget categories. She likes to imagine all the people being served, since it gives her a sense of satisfaction and "return on investment."
The fact that Mary didn't notice the budget increase is, of course, embarrassing; so when Paul brings this up, she has to find a way to adjust her own image of herself within the group and get their perceptions back on track. So she's working on that, plus it's doubly irritating that, once again, she's going to have to try to tone down the Development Department's penchant for bothering her wealthy friends for more money. She's preparing her multi-point speech as the discussion proceeds, looking for the right opportunity to jump in, but carefully choosing her words. She's nothing if not a diplomat in these circumstances.
Sam didn't see it coming either. But once the CEO began his explanation he could see that what is being asked for is not only reasonable but will have a long-term payoff that is very much needed by the organization for its future health. Sam is laid back on this one, because he knows the homework has been done. He also considers that he is "one up" on most of the rest of the board because he just committed to a five-year pledge and feels a little smug about it. But he won't play that trump-card in the discussion unless he needs to.
Gloria, too, is in the CEO's corner, because she knows the financial need. She hasn't yet connected with the fact that sooner or later she, too, is going to be asked for a really big multiple-year commitment, because she still feels safe hiding behind the old standby that "accountants don't get paid that much." Besides, Paul really ticks her off, the way he comes on, the way he talks about things. The two of them have knocked heads before. And she lost the last bout with him, so this time she's got it in for this arrogant attorney.
So what's your thought, dear reader? Does the CEO have a prayer of succeeding with this group? Is he going to get his database software and his new-hire?
Tuesday, April 10, 2007
Board Decision to Fund Infrastructure – Part 3
OK, so we know who some of the players are as we come to the Board table to discuss whether or not to use significant resources this year to purchase donor software and hire a data entry and retrieval person.
How has the CEO, working with the Chair of the Board, set up the decision? It's buried in the budget figures for the Fund Development department. Anyone who has read the proposed budget in advance will have seen that, compared to previous years, there are significant increases in the Development Department's budget.
There is no formal proposal for this change of management direction. It's predicted to be brought up by whoever first sees the budget increase and asks about it. Then the CEO plans to explain what he sees as necessary and why. If no one raises the question, so much the better, and the budget will be passed, and this, then, gives the CEO and staff license to move ahead with the plan. If questions are raised, "we'll deal with them as they arise," said the Executive.
So Paul gets his budget, and immediately sees the increase over last year (the figures are presented side-by-side in a spreadsheet exhibit prepared specifically for the Board's consideration and approval of the budget, and because the auditors have traditionally presented the financial figures this way. (Having annually audited financial statements resulted from Gloria's work with the financial staff.)
Paul is curious to see what this expense will mean, so the first thing he does is calculate the cost of fundraising. And he discovers that the cost of raising $1 has risen from about 21 cents to about 50 cents. And he wants to know why.
Here's the first hint that not only are the psycho-graphic factors working here, but additional factors as well. Pauls' job is business, law, knowing quickly the effect of changes in the balance sheet. He also has some personal objectives he wants to accomplish in Do-Good Charity. He has felt for a long time that charities typically spend "too much" on setting up to raise money. He has had some lunch conversations with Tom, who has complained about "always being dunned for money" and, to some extent, shares that viewpoint. So the discovery of the new Development Department budget figures set off alarm bells and give him a surefire bully pulpit from which to set and accomplish his own agenda.
Melinda, on the other hand, takes the opposite viewpoint. She saw the increase, too, and called the CEO and talked with him about it. She very much supports what he wants to do, because she has the ability to think business, think long term, and she wants Do-Good to be able to double it's operating budget within 5 years, so she knows it has to raise more money. She understands just enough about fundraising to know that multiple-year commitments from individuals is the way to go on this.
We'll explore the reactions/responses of the other board members tomorrow.
How has the CEO, working with the Chair of the Board, set up the decision? It's buried in the budget figures for the Fund Development department. Anyone who has read the proposed budget in advance will have seen that, compared to previous years, there are significant increases in the Development Department's budget.
There is no formal proposal for this change of management direction. It's predicted to be brought up by whoever first sees the budget increase and asks about it. Then the CEO plans to explain what he sees as necessary and why. If no one raises the question, so much the better, and the budget will be passed, and this, then, gives the CEO and staff license to move ahead with the plan. If questions are raised, "we'll deal with them as they arise," said the Executive.
So Paul gets his budget, and immediately sees the increase over last year (the figures are presented side-by-side in a spreadsheet exhibit prepared specifically for the Board's consideration and approval of the budget, and because the auditors have traditionally presented the financial figures this way. (Having annually audited financial statements resulted from Gloria's work with the financial staff.)
Paul is curious to see what this expense will mean, so the first thing he does is calculate the cost of fundraising. And he discovers that the cost of raising $1 has risen from about 21 cents to about 50 cents. And he wants to know why.
Here's the first hint that not only are the psycho-graphic factors working here, but additional factors as well. Pauls' job is business, law, knowing quickly the effect of changes in the balance sheet. He also has some personal objectives he wants to accomplish in Do-Good Charity. He has felt for a long time that charities typically spend "too much" on setting up to raise money. He has had some lunch conversations with Tom, who has complained about "always being dunned for money" and, to some extent, shares that viewpoint. So the discovery of the new Development Department budget figures set off alarm bells and give him a surefire bully pulpit from which to set and accomplish his own agenda.
Melinda, on the other hand, takes the opposite viewpoint. She saw the increase, too, and called the CEO and talked with him about it. She very much supports what he wants to do, because she has the ability to think business, think long term, and she wants Do-Good to be able to double it's operating budget within 5 years, so she knows it has to raise more money. She understands just enough about fundraising to know that multiple-year commitments from individuals is the way to go on this.
We'll explore the reactions/responses of the other board members tomorrow.
Monday, April 9, 2007
Board Decision to Fund Infrastructure – Part 2
So what do we have going on around the boardroom table?
Here's Paul: Paul's a lawyer. Corporate: mergers and acquisitions. He knows a business proposition when he sees it, has seen it all in terms of financial investments gone sour or turned for the good. He's hooked on Do-Good because he knows that if you don't pay at least some attention to the poor down-and-outers, you haven't fulfilled your obligation to society. And he wants to be seen as doing that. He's a bit rough around the edges with people when he isn't in a negotiating position. He claims that "being totally honest even if it's brutal" is the way to go. Inside, Paul is a born contrarian; whatever position someone else has, he labors to find the opposing viewpoint and offer it for everyone to see.
Here's Gloria: Gloria is an accountant. She's here because she is involved as a volunteer keeping an eye on the finances of the organization and giving frequent bits of advice to the financial officer and her staff. She came in 8 years ago when financial matters had deteriorated a bit and helped straighten things out and get Do-Good back on the right fiscal track. Inside, Gloria suspicious of any new expense that is proposed; she lives with a constant perception of scarcity.
Here's Sam: Sam is a retired school superintendent who has been on this Board for 15 years, since its founding. He's a rock, a stalwart, volunteering for many kinds of jobs in the organization's life over the years. He has confidence in the management team presently in place because he helped put them there. He's a little more laid back, too, and very accepting of many kinds of people and their personalities. Inside, Sam has a geologist's sense of time and knows the nonprofit is likely to progress in little steps, but will take great strides over long periods of time.
Here's Melinda: She's in marketing, a principal in a firm she helped found, and very successful in the radio and TV marketing business. She has a very heavy schedule but takes time out of her busy day to attend at least 4 of the 8 Board meetings that occur each year. A little high strung, Melinda knows business, and knows nonprofits. She has been a board member on one or another of the community's nonprofits for 18 years, and says she loves it. Inside, she's glad for this outlet for her energies, because she often thinks she would like working in the nonprofit sector better than in business.
Here's Mary: She's the wife of a very wealthy businessman in the community. She and her husgband are scions of wealth. She's a socialite, knows everybody worth knowing, and is marvelously defensive about protecting all her friends from being, as she says, "pestered" by all the charities in town. She will not fundraise with them; she refuses to open doors with her friends for the organization. But she wants to be on the Board as part of what she sees as fulfilling her "duty" to charity. Inside, she's wary of the fact that if she asks for money from her friends, they will all come looking to her to share her own wealth.
Here's Tom: He's a manufacturer's rep, and very successful at what he does. He's high-powered in his approach to everything, always punctual, always involved in a lot of things, always the "driver." He knows business inside and out. He also knows he's sick and tired of so many charities asking for more and more money, and wishes they would stop pestering him about giving and giving more. Inside, he feels guilty that he can't give more, but his cash flow is often fairly thin because of his investment in his business.
Get the picture? We'll see something of their interaction tomorrow.
Here's Paul: Paul's a lawyer. Corporate: mergers and acquisitions. He knows a business proposition when he sees it, has seen it all in terms of financial investments gone sour or turned for the good. He's hooked on Do-Good because he knows that if you don't pay at least some attention to the poor down-and-outers, you haven't fulfilled your obligation to society. And he wants to be seen as doing that. He's a bit rough around the edges with people when he isn't in a negotiating position. He claims that "being totally honest even if it's brutal" is the way to go. Inside, Paul is a born contrarian; whatever position someone else has, he labors to find the opposing viewpoint and offer it for everyone to see.
Here's Gloria: Gloria is an accountant. She's here because she is involved as a volunteer keeping an eye on the finances of the organization and giving frequent bits of advice to the financial officer and her staff. She came in 8 years ago when financial matters had deteriorated a bit and helped straighten things out and get Do-Good back on the right fiscal track. Inside, Gloria suspicious of any new expense that is proposed; she lives with a constant perception of scarcity.
Here's Sam: Sam is a retired school superintendent who has been on this Board for 15 years, since its founding. He's a rock, a stalwart, volunteering for many kinds of jobs in the organization's life over the years. He has confidence in the management team presently in place because he helped put them there. He's a little more laid back, too, and very accepting of many kinds of people and their personalities. Inside, Sam has a geologist's sense of time and knows the nonprofit is likely to progress in little steps, but will take great strides over long periods of time.
Here's Melinda: She's in marketing, a principal in a firm she helped found, and very successful in the radio and TV marketing business. She has a very heavy schedule but takes time out of her busy day to attend at least 4 of the 8 Board meetings that occur each year. A little high strung, Melinda knows business, and knows nonprofits. She has been a board member on one or another of the community's nonprofits for 18 years, and says she loves it. Inside, she's glad for this outlet for her energies, because she often thinks she would like working in the nonprofit sector better than in business.
Here's Mary: She's the wife of a very wealthy businessman in the community. She and her husgband are scions of wealth. She's a socialite, knows everybody worth knowing, and is marvelously defensive about protecting all her friends from being, as she says, "pestered" by all the charities in town. She will not fundraise with them; she refuses to open doors with her friends for the organization. But she wants to be on the Board as part of what she sees as fulfilling her "duty" to charity. Inside, she's wary of the fact that if she asks for money from her friends, they will all come looking to her to share her own wealth.
Here's Tom: He's a manufacturer's rep, and very successful at what he does. He's high-powered in his approach to everything, always punctual, always involved in a lot of things, always the "driver." He knows business inside and out. He also knows he's sick and tired of so many charities asking for more and more money, and wishes they would stop pestering him about giving and giving more. Inside, he feels guilty that he can't give more, but his cash flow is often fairly thin because of his investment in his business.
Get the picture? We'll see something of their interaction tomorrow.
Friday, April 6, 2007
Board Makes Decision about Infrastructure
Now, for our Example #2, we’re going to do an analysis of a more complicated board decision: the decision whether or not to give some major resources to bolster the organization’s fundraising infrastructure.
First, let's do a short review, just in case you've joined us recently and haven't had a chance to read previous posts on this subject:
In a previous post, Example #1 concerned a Board making a decision about enhancing its own level of giving to their nonprofit organization. What we dealt with there was a set of psycho-dynamic factors that make it literally impossible for a board, or any other group of more than 2 or 3 people, to do deliberative thinking. And we've tried to describe the kinds of effects these psycho-dynamics have in the context of this decision about the board's own giving. We've had a few digressions along the way, but, ultimately, I think the best way to help a board do what it does best – which is to brainstorm and tell stories – is to be prepared to do most of the work on any serious issue coming before a nonprofit board in the background, outside the board meeting, but in a way that involves board members and takes seriously their various kinds of input, needs, wants, values and their points of view.
Now, in Example #2, this decision about whether to invest in fundraising infrastructure, and how much, we are going to see an additional set of factors that, once again, make it impossible for a board or any group of people to do deliberative thinking.
Previously, we enumerated the following elements of the psycho-dynamics affecting each board member's ability to do deliberative thinking:
Factor 1: my view of myself,
Factor 2: my view of you,
Factor 3: my understanding of how you view me,
Factor 4: my grasp to whatever degree on the image of me held by the group, and
Factor 5: my desire and strategies for changing, to one degree or another, either your view of me or my image within the group.
The effect of these, for each member around the table, tends to overpower each person's ability to do deliberative thought on a complex issue or problem facing the group.
Now, we're going to see how some additional factors come into play in a decision about funding fundraising infrastructure. As you can see, when we combine the psycho-dynamics of the board's process with additional factors, this is going to get a little complicated. But that's precisely why we say "boards can only do two things: brainstorm and tell stories." Let me set up the situation as I have seen it many times over the last 27 years of fundraising.
It's budget time, once again. The Board of Directors for Do-Good Charity is assembled for a regular meeting of the board, in which the budget discussion has been given a generous 2-hour slot. Typically, for this board, and many others, items are given 15 minutes. But today the CEO has something special in mind.
There's a proposal, represented in significantly adjusted budget figures for the fund development department, to expand fundraising infrastructure by purchasing new donor software and hiring a person to do both data entry and data retrieval. This will, as the CEO believes – and rightly so – facilitate the stewardship of donors and the start of a major gifts program that will cultivate and solicit a whole new group of donors for major 5-year commitments to the institution.
The CEO plans, over time, to turn this little investment in infrastructure into a $5.5 million increase in revenues for the organization through multiple-year commitments. Got the picture? You've probably seen it yourself, either as a fundraising professional or as a volunteer serving on a board.
You think $5.5 million is impossible? Not at all. We recently helped a client find that much in their present donor database and start cultivating and soliciting major five-year gifts. And that client was doing about $30k per year in direct mail and another $500k in special events along with a substantial grants program. Pretty elementary, yet they had enough friends to whom they had not been attending carefully but whose potential amounted to that much. Your organization may similarly be missing the boat by not carefully analyzing the giving patterns of your donors. It takes time, it takes some money, but if you don't do it, you're leaving a ton of money on the table. This CEO in our example is taking the budgeting step necessary to make it happen for Do-Good Charity.
We continue our example on Monday. Have a great weekend! And have fun in fundraising!
First, let's do a short review, just in case you've joined us recently and haven't had a chance to read previous posts on this subject:
In a previous post, Example #1 concerned a Board making a decision about enhancing its own level of giving to their nonprofit organization. What we dealt with there was a set of psycho-dynamic factors that make it literally impossible for a board, or any other group of more than 2 or 3 people, to do deliberative thinking. And we've tried to describe the kinds of effects these psycho-dynamics have in the context of this decision about the board's own giving. We've had a few digressions along the way, but, ultimately, I think the best way to help a board do what it does best – which is to brainstorm and tell stories – is to be prepared to do most of the work on any serious issue coming before a nonprofit board in the background, outside the board meeting, but in a way that involves board members and takes seriously their various kinds of input, needs, wants, values and their points of view.
Now, in Example #2, this decision about whether to invest in fundraising infrastructure, and how much, we are going to see an additional set of factors that, once again, make it impossible for a board or any group of people to do deliberative thinking.
Previously, we enumerated the following elements of the psycho-dynamics affecting each board member's ability to do deliberative thinking:
Factor 1: my view of myself,
Factor 2: my view of you,
Factor 3: my understanding of how you view me,
Factor 4: my grasp to whatever degree on the image of me held by the group, and
Factor 5: my desire and strategies for changing, to one degree or another, either your view of me or my image within the group.
The effect of these, for each member around the table, tends to overpower each person's ability to do deliberative thought on a complex issue or problem facing the group.
Now, we're going to see how some additional factors come into play in a decision about funding fundraising infrastructure. As you can see, when we combine the psycho-dynamics of the board's process with additional factors, this is going to get a little complicated. But that's precisely why we say "boards can only do two things: brainstorm and tell stories." Let me set up the situation as I have seen it many times over the last 27 years of fundraising.
It's budget time, once again. The Board of Directors for Do-Good Charity is assembled for a regular meeting of the board, in which the budget discussion has been given a generous 2-hour slot. Typically, for this board, and many others, items are given 15 minutes. But today the CEO has something special in mind.
There's a proposal, represented in significantly adjusted budget figures for the fund development department, to expand fundraising infrastructure by purchasing new donor software and hiring a person to do both data entry and data retrieval. This will, as the CEO believes – and rightly so – facilitate the stewardship of donors and the start of a major gifts program that will cultivate and solicit a whole new group of donors for major 5-year commitments to the institution.
The CEO plans, over time, to turn this little investment in infrastructure into a $5.5 million increase in revenues for the organization through multiple-year commitments. Got the picture? You've probably seen it yourself, either as a fundraising professional or as a volunteer serving on a board.
You think $5.5 million is impossible? Not at all. We recently helped a client find that much in their present donor database and start cultivating and soliciting major five-year gifts. And that client was doing about $30k per year in direct mail and another $500k in special events along with a substantial grants program. Pretty elementary, yet they had enough friends to whom they had not been attending carefully but whose potential amounted to that much. Your organization may similarly be missing the boat by not carefully analyzing the giving patterns of your donors. It takes time, it takes some money, but if you don't do it, you're leaving a ton of money on the table. This CEO in our example is taking the budgeting step necessary to make it happen for Do-Good Charity.
We continue our example on Monday. Have a great weekend! And have fun in fundraising!
Thursday, April 5, 2007
Six-Step Process, continued
Having set a small group to work, a group that really can do deliberative thinking because they have the kind of time and assignment that gets them pasty the psycho-dynamics that normally impede deliberative thought, let’s go to step #4.
4. Small group recommends action. They look at the problem or issue from all sides, getting input from individual Board members they know will have a point of view. Looking at what other organizations do or have done with the same problem. They examine a variety of possible solutions, and, with that, a series of outcomes that will result from each of the possible solutions. And my thought is that it is only at this point that they can choose one of those possible solutions to recommend for Board action and implementation. You’ve got to know the field well before you can really understand which solution will work best for this organization at this time and in these particular circumstances.
It can’t be a solution based on anecdotal evidence. It can’t be a solution based on hearsay and opinion. This type of thing is typically what is going to be heard in a full-board discussion. People working in larger groups do only two things well: they can brainstorm and they can tell stories. But they can’t do deliberative thought. So they brainstorm, and, in so doing, they’re going to give you what’s on the top of their head that moment, on that day. The stories, the anecdotal evidence, and “I’ve heard that...” and so forth. But that’s just a start, just a suggestion of a direction. It’s not the basis for a good decision. So that’s why the small group is so necessary. It gets down below that superficial level and ferrets out the facts, the alternatives, then makes a solid, workable recommendation that we know in advance will meet the needs of everyone involved.
5. Executive and small group work individually with each Board member in advance. Even though we’ve had Board input on this through the small group, we still want to be sure we have everyone’s buy-in on the recommendation coming from that small group BEFORE we get to the Board meeting. Why? Because it’s important that the needs, wants and values of each particular individual board member be met by the final action the Board produces. Why? Because that keeps the Board working together, it supports governance, avoids divisions and ensures consensus.
6. Bring the issue to the Board with full documentation passed out in advance and only when we know in advance that all members can support the action. No surprises, right? Board chair and executive working hand-in-hand; small group gets input from Board members as part of its process; small group and Executive “shop” the proposed solution around the board informally to get input and make sure all needs, wants and values are heard and taken into consideration; then the decision and its documentation is published to the Board members in advance of their action meeting. The item is clearly on the agenda; it gets introduced thoroughly at Board meeting. The Board chair explains where this has been, what’s going on, what’s needed, calls for a motion, entertains “last minute” questions for clarification only, and then takes the vote.
I think the most essential work is going to be done OUTSIDE Board meeting, but in a way that involves Board members and takes seriously their opinions, points of view, stories, prejudices, experiences and all the input they have to give, and then focuses that input on a deliberately thought out solution that has the best interests of the institution at heart and is workable given the strategic plan, the resources, the personnel and the situation at hand. Here’s where the payoff is that compensates the organization for the fact that the whole Board would be incapable of doing the deliberative thought that would bring about this quality of decision-making.
Here is a high-quality decision that I think will work, that will have participation and buy-in from all concerned, and one that will have good results for the organization.
Now, I promise that tomorrow we’re going to get over to Example #2 – that’s where the Board is considering an investment of resources in fundraising infrastructure. Tricky question, right? And you know it will come only at BUDGET TIME! Thoroughly confusing the issue.
4. Small group recommends action. They look at the problem or issue from all sides, getting input from individual Board members they know will have a point of view. Looking at what other organizations do or have done with the same problem. They examine a variety of possible solutions, and, with that, a series of outcomes that will result from each of the possible solutions. And my thought is that it is only at this point that they can choose one of those possible solutions to recommend for Board action and implementation. You’ve got to know the field well before you can really understand which solution will work best for this organization at this time and in these particular circumstances.
It can’t be a solution based on anecdotal evidence. It can’t be a solution based on hearsay and opinion. This type of thing is typically what is going to be heard in a full-board discussion. People working in larger groups do only two things well: they can brainstorm and they can tell stories. But they can’t do deliberative thought. So they brainstorm, and, in so doing, they’re going to give you what’s on the top of their head that moment, on that day. The stories, the anecdotal evidence, and “I’ve heard that...” and so forth. But that’s just a start, just a suggestion of a direction. It’s not the basis for a good decision. So that’s why the small group is so necessary. It gets down below that superficial level and ferrets out the facts, the alternatives, then makes a solid, workable recommendation that we know in advance will meet the needs of everyone involved.
5. Executive and small group work individually with each Board member in advance. Even though we’ve had Board input on this through the small group, we still want to be sure we have everyone’s buy-in on the recommendation coming from that small group BEFORE we get to the Board meeting. Why? Because it’s important that the needs, wants and values of each particular individual board member be met by the final action the Board produces. Why? Because that keeps the Board working together, it supports governance, avoids divisions and ensures consensus.
6. Bring the issue to the Board with full documentation passed out in advance and only when we know in advance that all members can support the action. No surprises, right? Board chair and executive working hand-in-hand; small group gets input from Board members as part of its process; small group and Executive “shop” the proposed solution around the board informally to get input and make sure all needs, wants and values are heard and taken into consideration; then the decision and its documentation is published to the Board members in advance of their action meeting. The item is clearly on the agenda; it gets introduced thoroughly at Board meeting. The Board chair explains where this has been, what’s going on, what’s needed, calls for a motion, entertains “last minute” questions for clarification only, and then takes the vote.
I think the most essential work is going to be done OUTSIDE Board meeting, but in a way that involves Board members and takes seriously their opinions, points of view, stories, prejudices, experiences and all the input they have to give, and then focuses that input on a deliberately thought out solution that has the best interests of the institution at heart and is workable given the strategic plan, the resources, the personnel and the situation at hand. Here’s where the payoff is that compensates the organization for the fact that the whole Board would be incapable of doing the deliberative thought that would bring about this quality of decision-making.
Here is a high-quality decision that I think will work, that will have participation and buy-in from all concerned, and one that will have good results for the organization.
Now, I promise that tomorrow we’re going to get over to Example #2 – that’s where the Board is considering an investment of resources in fundraising infrastructure. Tricky question, right? And you know it will come only at BUDGET TIME! Thoroughly confusing the issue.
Wednesday, April 4, 2007
Six-Step Process for Board Decision-Making
BRAIN, n. An apparatus with which we think what we think. That which distinguishes the man who is content to be something from the man who wishes to do something. A man of great wealth, or one who has been pitchforked into high station, has commonly such a headful of brain that his neighbors cannot keep their hats on. In our civilization, and under our republican form of government, brain is so highly honored that it is rewarded by exemption from the cares of office.
-- from "Devil's Dictionary" written by Ambrose Bierce about 1868
I said yesterday that there were six steps that I believe will lead to a just and equitable solution for almost any issue or problem facing a board, and will give a solution that’s workable and focuses on the long-term good of the nonprofit organization.
I’m going to just lay it right out there. I know the first thing most of you will say is “it’s too time-consuming.” Right? But we’ll deal with that. Let’s just see what could produce a really satisfactory result on any issue for everyone involved and for the nonprofit’s health and well-being.
1. Executive and staff explore the issue among themselves, looking into what’s wrong with the present situation, what effects it is having on the organization. They also make suggestions as to the various strategies and tactics that might be used to correct the situation and the kind of desirable outcomes they envision.
2. Executive and staff lay out a plan for the Board’s work with Board chair or a committee chair. Here’s where you get the leadership involved in an informal way, giving them the information they need to see that the problem is real, that staff are in the process of thinking it through and coming up with a solution. Here is where true Board leadership begins to have a direct impact on the institution, and where real leadership can be exercised. I think that when the planning process for how to deal with the issue or problem starts with this kind of teamwork between Board leadership and staff, you set the wheels in motion for a wise, fair and just decision that works and has everyone’s support.
3. Board chair or committee chair appoints 2 Board members to work with staff. Why such a small group? Why another committee? Don’t we have enough already? Probably, yes, but if you want a quality solution it needs to be addressed by a small group dedicated to ferreting out all the nuances of the issue, seeing all the possible solutions, then doing the deliberative thought necessary to judiciously select one or two solutions that will work with this organization at this time with the available resources and the prevailing points of view of various board members at that time.
You might be saying, “Isn’t this getting rather complicated? This is more than I have time for in my shop” And you’d be right. That’s why I suspect 90% of the time we just go ahead and bring the matter before the whole board, have a helter-skelter discussion and take whatever we can get quickly from the Board. “We’ll live with it as is,” right? But did you get the best you could? And did you get the solution that meets everyone’s needs and is most appropriate for the organization’s abilities, people and resources?
That’s the rub, isn’t it?Besides, if a problem exists for which we need the Board to create a solution, and it’s that important, then it’s worth doing well, wouldn’t you say? We've done three steps out of six, so let’s finish the process tomorrow.
-- from "Devil's Dictionary" written by Ambrose Bierce about 1868
I said yesterday that there were six steps that I believe will lead to a just and equitable solution for almost any issue or problem facing a board, and will give a solution that’s workable and focuses on the long-term good of the nonprofit organization.
I’m going to just lay it right out there. I know the first thing most of you will say is “it’s too time-consuming.” Right? But we’ll deal with that. Let’s just see what could produce a really satisfactory result on any issue for everyone involved and for the nonprofit’s health and well-being.
1. Executive and staff explore the issue among themselves, looking into what’s wrong with the present situation, what effects it is having on the organization. They also make suggestions as to the various strategies and tactics that might be used to correct the situation and the kind of desirable outcomes they envision.
2. Executive and staff lay out a plan for the Board’s work with Board chair or a committee chair. Here’s where you get the leadership involved in an informal way, giving them the information they need to see that the problem is real, that staff are in the process of thinking it through and coming up with a solution. Here is where true Board leadership begins to have a direct impact on the institution, and where real leadership can be exercised. I think that when the planning process for how to deal with the issue or problem starts with this kind of teamwork between Board leadership and staff, you set the wheels in motion for a wise, fair and just decision that works and has everyone’s support.
3. Board chair or committee chair appoints 2 Board members to work with staff. Why such a small group? Why another committee? Don’t we have enough already? Probably, yes, but if you want a quality solution it needs to be addressed by a small group dedicated to ferreting out all the nuances of the issue, seeing all the possible solutions, then doing the deliberative thought necessary to judiciously select one or two solutions that will work with this organization at this time with the available resources and the prevailing points of view of various board members at that time.
You might be saying, “Isn’t this getting rather complicated? This is more than I have time for in my shop” And you’d be right. That’s why I suspect 90% of the time we just go ahead and bring the matter before the whole board, have a helter-skelter discussion and take whatever we can get quickly from the Board. “We’ll live with it as is,” right? But did you get the best you could? And did you get the solution that meets everyone’s needs and is most appropriate for the organization’s abilities, people and resources?
That’s the rub, isn’t it?Besides, if a problem exists for which we need the Board to create a solution, and it’s that important, then it’s worth doing well, wouldn’t you say? We've done three steps out of six, so let’s finish the process tomorrow.
Tuesday, April 3, 2007
Too Little for Board Members to Do?
BENEFACTOR, n. One who makes heavy purchases of ingratitude, without, however, materially affecting the price, which is still within the means of all.
-- from Ambrose Bierce's "Devil's Dictionary" publ. ca. 1868
Continuing from yesterday, my thought is that if you want a fair, just and equitable solution that's workable and focuses on the long-term good of the nonprofit organization, then you would use a process constructed to produce that kind of result. That means we need to work harder and do our homework. There are at least six steps to such a procedure, and I'm going to give those to you in just a minute, but bear with me, there's another issue we have to deal with here.
Why is it that board members can come onto a nonprofit board with the belief that so little will be expected from them?
If you look at the way nonprofits are set up, it's contradictory to the way we recruit board members, isn't it? Nonprofit boards serve a wonderful social purpose. I heard a speech by Lawrence Lindsey, a governor of the Federal Reserve Board, many years ago in Kansas City. He addressed one of the first assemblies of the National Conference on Planned Giving and said that if you give a charity a dollar, they'll most likely return about 6 dollars’ worth of service to the society. But if you give the government $6 in taxes, you're going to be lucky if you get a dollar of service in return. I assumed he knew whereof he spoke
So charities are effective and efficient, right? They serve a social purpose. What's the root of their effectiveness? VOLUNTEER BOARDS. The charities are run by volunteers who have philanthropic motivations – the love of human kind – at heart. They're self-policing. The United Way scandal a number of years ago was handled INTERNALLY, by their Board members who blew the whistle on the exorbitant salary of the national executive. They cleaned it up themselves.
So charity boards serve a distinct social purpose, right? Their volunteer governance is responsible for achieving the social objectives of social services, arts, medical, environmental, educational and many other groups. Who in their right mind would, then, assume, that the work of the individual board member on the individual nonprofit board would be easy or without responsibility? It just doesn't make sense.
But that's what seems to happen in all too many nonprofits: board members are recruited on the flimsiest of excuses, seldom trained, frequently not told what they must do and how they should do it, never told they have to give. But yet we expect the board to perform. We expect the board to do strategic planning that directs the nonprofit in ways that will assure its achievement of its goals and purposes. We expect the board to provide the financial resources necessary to carry out that strategic plan. We expect the board members to be community leaders who give at a leadership level. But when we recruit them, what do we tell them? "Oh, it won't take that much out of your schedule, it won't be a hassle."
Contradictory! Why does this happen? I think it happens only where there is not a well-thought-out process for populating our boards.
What I think should happen is this:
1. Board has a job description written out, known in advance, repeatedly emphasized in board meetings. One that includes all the board responsibilities, including meetings, committees, giving, advocacy in the community, leadership among volunteers, etc.
2. Board members are brought on the board with a process that includes a full nine-step process:
- identifying many prospective members,
- recruiting only the best of those,
- fully disclosing to those prospective members all aspects of the board's life,
- installing them with public ceremony,
- training them in what they must do for the organization,
- evaluating their performance,
- re-training periodically in the various responsibilities, and, finally, at the end of the line,
- de-briefing them before they leave after their stated tenure is finished.
But it seems very few nonprofits do this. The really successful ones do. But of the more than 4000 groups and organizations in southeast Michigan that have 501-c-3 nonprofit status from the IRS, how many do you think engage in this kind of rigorous board recruitment process? From what I've seen in 21 years here, practicing actively among the charities for the past 10 years, my bet is that maybe 30 organizations have such a process in place.
No wonder we have a tough time getting board members to give!
But now we really MUST get to our Example #2.
-- from Ambrose Bierce's "Devil's Dictionary" publ. ca. 1868
Continuing from yesterday, my thought is that if you want a fair, just and equitable solution that's workable and focuses on the long-term good of the nonprofit organization, then you would use a process constructed to produce that kind of result. That means we need to work harder and do our homework. There are at least six steps to such a procedure, and I'm going to give those to you in just a minute, but bear with me, there's another issue we have to deal with here.
Why is it that board members can come onto a nonprofit board with the belief that so little will be expected from them?
If you look at the way nonprofits are set up, it's contradictory to the way we recruit board members, isn't it? Nonprofit boards serve a wonderful social purpose. I heard a speech by Lawrence Lindsey, a governor of the Federal Reserve Board, many years ago in Kansas City. He addressed one of the first assemblies of the National Conference on Planned Giving and said that if you give a charity a dollar, they'll most likely return about 6 dollars’ worth of service to the society. But if you give the government $6 in taxes, you're going to be lucky if you get a dollar of service in return. I assumed he knew whereof he spoke
So charities are effective and efficient, right? They serve a social purpose. What's the root of their effectiveness? VOLUNTEER BOARDS. The charities are run by volunteers who have philanthropic motivations – the love of human kind – at heart. They're self-policing. The United Way scandal a number of years ago was handled INTERNALLY, by their Board members who blew the whistle on the exorbitant salary of the national executive. They cleaned it up themselves.
So charity boards serve a distinct social purpose, right? Their volunteer governance is responsible for achieving the social objectives of social services, arts, medical, environmental, educational and many other groups. Who in their right mind would, then, assume, that the work of the individual board member on the individual nonprofit board would be easy or without responsibility? It just doesn't make sense.
But that's what seems to happen in all too many nonprofits: board members are recruited on the flimsiest of excuses, seldom trained, frequently not told what they must do and how they should do it, never told they have to give. But yet we expect the board to perform. We expect the board to do strategic planning that directs the nonprofit in ways that will assure its achievement of its goals and purposes. We expect the board to provide the financial resources necessary to carry out that strategic plan. We expect the board members to be community leaders who give at a leadership level. But when we recruit them, what do we tell them? "Oh, it won't take that much out of your schedule, it won't be a hassle."
Contradictory! Why does this happen? I think it happens only where there is not a well-thought-out process for populating our boards.
What I think should happen is this:
1. Board has a job description written out, known in advance, repeatedly emphasized in board meetings. One that includes all the board responsibilities, including meetings, committees, giving, advocacy in the community, leadership among volunteers, etc.
2. Board members are brought on the board with a process that includes a full nine-step process:
- identifying many prospective members,
- recruiting only the best of those,
- fully disclosing to those prospective members all aspects of the board's life,
- installing them with public ceremony,
- training them in what they must do for the organization,
- evaluating their performance,
- re-training periodically in the various responsibilities, and, finally, at the end of the line,
- de-briefing them before they leave after their stated tenure is finished.
But it seems very few nonprofits do this. The really successful ones do. But of the more than 4000 groups and organizations in southeast Michigan that have 501-c-3 nonprofit status from the IRS, how many do you think engage in this kind of rigorous board recruitment process? From what I've seen in 21 years here, practicing actively among the charities for the past 10 years, my bet is that maybe 30 organizations have such a process in place.
No wonder we have a tough time getting board members to give!
But now we really MUST get to our Example #2.
Monday, April 2, 2007
Board Members Deciding About Board Giving
BATTLE, n. A method of untying with the teeth of a political knot that would not yield to the tongue.
from Ambrose Bierce's "Devil's Dictionary" publ. ca. 1868
Well, we can't really go on to Example #2 before we give Board members their due. After all, they're human beings, too! Right?
So what do we hear around the Board table when the subject of "Board giving" comes up? Well, we hear things like: "You can't force me to give" or "I give my time, isn't that enough?" and "The approach you're using to get this done really turns me off." and "not everyone can give at the same rate?" and "nobody ever told me I'd have to be a fundraiser to serve on this board" and then there's the all-time favorite reaction "we've never had any rules about board members giving before; we don't need them now."
And each of these points of view does have a kernel of truth in it. That's what is so confusing to development staff and their executives. Each board member does have a point to make. There really can't be any force involved – it's counterproductive. Yes, people really do sacrifice other kinds of goals to give time to our non-profit and they deserve recognition of that because without that service we couldn't, as nonprofits, achieve what we do.
And, yes, there are some ways I've seen some board members lay it on their fellows in such a demanding, almost obnoxious way that the rest of the board is pretty much turned off to the idea of giving or of setting a board giving goal just as a way of reacting to that demand.
And, yes, not everyone can give at the same level. No doubt about it, some are more capable than others of both giving and "getting." Of course, if you go around the table and analyze who is likely, because of their profession or other factors, to have more capability than others, no one wants to admit they really COULD give more. But, generally speaking, you can figure that the attorneys and the business owners on a board will have greater capacity than the social workers, right?
And, yes, it is probably the case that when the board member took on this assignment he/she was NOT told they'd have to give a certain amount or at a certain level, or go out and cultivate and solicit gifts. Nonprofit staff tend to recruit anything that can fog a mirror as a board member. $500 gift? Make him a board member. Volunteered last year for the auction and did a great job? Make her a board member. Expressed interest in the cause? Make that one a board member, too! It's no wonder board members think they can be on the board without giving at leadership levels! We just put 'em on the board for the slightest of reasons, tell them "you won't have to take much time, you won't have to do anything very much." And we let it go at that, thankful that we filled the board roster again this year, now let's go on to all the other things we have to do.
So all these reactions have half a grain of truth in them. And the other half grain is more or less an excuse, a reaction to process, an internal response to the operation of the psycho-dynamics and other pressures within the board and within each board member. This is a mixture of internal and external "stuff" that mostly resides in the mind of each board member, but which also has a very real effect on the work of the whole body.
Point is, if we're going to make an intelligent decision and come up with a workable long-term solution that truly benefits the ORGANIZATION itself, we have to get beyond the half-truths and analyze the full situation, get all the issues out on the table, expose them, delve into them, find out the facts. But boards typically can't do that. They don't have the time – they're in a rush to get out of there and back to work or wherever it is they need to go after the meeting (golf, anyone?).
They don't have the inclination, either – they've got an agenda they need to accomplish before they leave the room early for their next appointment. And, even if they had the time and the inclination, you could put them in a room together all day and still not come up with a resolution on board giving that was fair, equitable and just, and that focused on the long-term good and welfare of the organization. It's just not something they're able to do because they are a group of people, and they tend to operate with the dynamics of a group, rather than being able to do deliberative thought, as an individual can do when working alone or with one other person.
Question: if all this is the case, then why do we persist – as development staffs and executives – in trying to get our boards to make decisions like this? If we know it's impossible, if we suspect there's another way to do it, why do we just waltz in there with this kind of an agenda item and hope and pray something positive happens? That's a mystery we'll delve into further tomorrow.
Your comments are appreciated. This blog is designed to be a little sharp and provocative, so if you're dander is up, that's good, and let's hear from you. Give us your thoughts.
from Ambrose Bierce's "Devil's Dictionary" publ. ca. 1868
Well, we can't really go on to Example #2 before we give Board members their due. After all, they're human beings, too! Right?
So what do we hear around the Board table when the subject of "Board giving" comes up? Well, we hear things like: "You can't force me to give" or "I give my time, isn't that enough?" and "The approach you're using to get this done really turns me off." and "not everyone can give at the same rate?" and "nobody ever told me I'd have to be a fundraiser to serve on this board" and then there's the all-time favorite reaction "we've never had any rules about board members giving before; we don't need them now."
And each of these points of view does have a kernel of truth in it. That's what is so confusing to development staff and their executives. Each board member does have a point to make. There really can't be any force involved – it's counterproductive. Yes, people really do sacrifice other kinds of goals to give time to our non-profit and they deserve recognition of that because without that service we couldn't, as nonprofits, achieve what we do.
And, yes, there are some ways I've seen some board members lay it on their fellows in such a demanding, almost obnoxious way that the rest of the board is pretty much turned off to the idea of giving or of setting a board giving goal just as a way of reacting to that demand.
And, yes, not everyone can give at the same level. No doubt about it, some are more capable than others of both giving and "getting." Of course, if you go around the table and analyze who is likely, because of their profession or other factors, to have more capability than others, no one wants to admit they really COULD give more. But, generally speaking, you can figure that the attorneys and the business owners on a board will have greater capacity than the social workers, right?
And, yes, it is probably the case that when the board member took on this assignment he/she was NOT told they'd have to give a certain amount or at a certain level, or go out and cultivate and solicit gifts. Nonprofit staff tend to recruit anything that can fog a mirror as a board member. $500 gift? Make him a board member. Volunteered last year for the auction and did a great job? Make her a board member. Expressed interest in the cause? Make that one a board member, too! It's no wonder board members think they can be on the board without giving at leadership levels! We just put 'em on the board for the slightest of reasons, tell them "you won't have to take much time, you won't have to do anything very much." And we let it go at that, thankful that we filled the board roster again this year, now let's go on to all the other things we have to do.
So all these reactions have half a grain of truth in them. And the other half grain is more or less an excuse, a reaction to process, an internal response to the operation of the psycho-dynamics and other pressures within the board and within each board member. This is a mixture of internal and external "stuff" that mostly resides in the mind of each board member, but which also has a very real effect on the work of the whole body.
Point is, if we're going to make an intelligent decision and come up with a workable long-term solution that truly benefits the ORGANIZATION itself, we have to get beyond the half-truths and analyze the full situation, get all the issues out on the table, expose them, delve into them, find out the facts. But boards typically can't do that. They don't have the time – they're in a rush to get out of there and back to work or wherever it is they need to go after the meeting (golf, anyone?).
They don't have the inclination, either – they've got an agenda they need to accomplish before they leave the room early for their next appointment. And, even if they had the time and the inclination, you could put them in a room together all day and still not come up with a resolution on board giving that was fair, equitable and just, and that focused on the long-term good and welfare of the organization. It's just not something they're able to do because they are a group of people, and they tend to operate with the dynamics of a group, rather than being able to do deliberative thought, as an individual can do when working alone or with one other person.
Question: if all this is the case, then why do we persist – as development staffs and executives – in trying to get our boards to make decisions like this? If we know it's impossible, if we suspect there's another way to do it, why do we just waltz in there with this kind of an agenda item and hope and pray something positive happens? That's a mystery we'll delve into further tomorrow.
Your comments are appreciated. This blog is designed to be a little sharp and provocative, so if you're dander is up, that's good, and let's hear from you. Give us your thoughts.
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