Comparing Two Types of Nonprofit Founders

The situation we were describing yesterday leaves the "individualistic" nonprofit founder with a severe dilemma. If you can't start up a business, you'd better be prepared to give up your individualistic approach and get with the community – both the board community and that of the donors you depend on. If and as you try to thwart this situation, you make a whole lot of trouble for your charity start-up right from the beginning with the first few strategic decisions you make: go for the easy money ("foundations and fun") and stay away from individual donors and getting the groundswell of community support and contributions you're going to have to have for the long haul.

Is it any wonder that these charity founders don't have the fundraising infrastructure and the orientation towards individual and family giving that could get the charity off to a good start?! To me, it looks like the problem begins with the "individualistic" impulse or type of founder who is not oriented towards people and communities.

Let's see what happens with the other type off charity founder/executive, the "people-oriented" type of person.

Here we might have a different scenario. Feeling more comfortable with the community, this founder/executive may well be more naturally oriented towards two types of activities: the first is going into the community to test his/her idea of service and perceived need. This person will, in many ways, ask the community to rally around the idea of service to the poor, education, dogs for pets, starving-artist exhibitions, or whatever. If the groundswell of community perception of need and support of service isn't there to start, this person will more than likely spend the time and effort necessary to educate and motivate the wider community into learning about that need and supporting that service.

The second type of activity the "people-oriented" charity founder is likely to take on more naturally is the motivation, cultivation and solicitation of many individuals within the community, whether these be community and business leaders, or individuals and families found within the wider community. It's kind of like running for office, going door-to-door, church-to-church. This person will be naturally oriented to doing this start-up work in order to ensure long-term community support.

Consequently, the drive towards "service first and fundraising second" may now be reversed so that the initial strategic decisions for "foundations and fun" can give way to a broader base of support for the charity start-up.

More than this, however, this people-oriented charity founder is going to be setting up a board of directors that represents the leadership of the community, not just a board composed of his/her cronies. And that board will most likely be given the power to really manage and control the founder/executive, because of the confidence the people-oriented founder has in the community's leaders from the start.

The result? We're likely to find here a charity start-up that has a somewhat better chance for success, and one for which fundraising infrastructure and best practices are of paramount importance. It will succeed because the community will rally; the community rallies because of the nature of the founder/executive.

The lesson? Well, I think we can say, and this is only based on my own limited experience in 27 years as a fundraiser and only 10 years as a private practitioner, that the "people-oriented" founder/executive may be more likely to succeed with a charity start-up, while the "individualistic," breakaway, entrepreneurial type, will have a better chance of running into trouble because fundraising will be given a priority lower than that of the personal satisfaction that comes from doing the service work. But remember Zig Zigler's maxim: There never was a time of plenty when someone didn't go broke, and there has never been a time of scarcity when someone couldn't make a lot of money. (Well, something like that!) So either the "individualist" or the "people-oriented" person can succeed or fail for other reasons than we've discussed here.

If you can understand these terms, we might say that the "priest" gets further than the "prophet" with a charity start-up. The so-called "prophet," or individualist with a strong message he/she wants people to hear regardless of whether they want to hear it, may well get better results with a business. Why? I think this happens because with a business the community can rally around and support an "individualistic" entrepreneur who gives an excellently crafted product or much-needed service for a fee. That is, the person gives something of value in exchange for value received. And even though we might also speculate that the "people-oriented" business owner might eventually become wealthier faster than the "rugged individualist," in fact the individualist does make a fairly good living without having to rely so much on the community from which he/she wants definition and separation.

Now, we have to deal with this: that there have been a lot of "rugged individualists" throughout American business history who have made millions and billions; but it has often been done at the expense of many others in the community and at the expense of the environment in which that community has to live in the future.

So what are we saying? It seems to come down to something like this: that those of us who like to consider ourselves "rugged individualists" and who seek the ways to survive and thrive without the community – to whatever degree we try to do that – (and I count myself among these fine folks) may well be in for something of a surprise when trying to start up a nonprofit organization.

But you might say, "What about Galileo, Newton, Edison, Barnard, Salk and all those whose individual work through the centuries of human development has so advanced humankind even though, and maybe even particularly because, they were 'individualists?' Have we all not prospered, eventually, as well from the work of the "robber barons" like Andrew Carnegie, Henry Ford and J.P. Morgan?" And I would have to say you're right.

But then, what's this about global warming? Does "individualism" get us in the end?

But, on the other hand, what about Jared Diamond's "Collapse" (or even look at his "Guns, Germs and Steel") in which he details the struggles of "communities" to solve complex environmental problems, and these communities have failed to find the solutions that more "individualistic" entrepreneurs may have been able to ascertain?

Is it not a fact that, in the long run, we need both the types of founder/executives in the nonprofit sector? Don't we need charities founded on strong individual impulses to serve as well as charities that thrive on community support? But how can communities – whether boards or donors -- tolerate, nurture, support and healthily inform their "individualist" founder/executives? how can the "individualists" tolerate, receive nurture and gather support from their communities in such a way as to be able to make sound strategic decisions?

This is where I believe the two threads of this blog over the last 6 weeks come together: the fundraising problems experienced by charity start-ups, and the problems that Boards have doing deliberative thought. The two threads come together as follows:

In case you don't recall, we said, back about November 23, that nonprofit boards, like any gathering of 3 or more human beings, can only do two things well: they can brainstorm and they can tell stories. But they cannot do deliberative thought. Now we're saying that charity start-ups founded by people-oriented persons are not as likely to make the strategic mistakes that more "individualistic" founders typically make that get them into fundraising problems down the road. The two threads have a common theme. Here's how these two threads are connected:

Boards are communities or groups; founder/executives are individuals. Each has a role that is vitally important to the well-being of a nonprofit organization. If the community has the right self-discipline in its work, it will fulfill its role well. If the individual, particularly the founder/executive of the more "individualistic" type, has the self-discipline to keep focusing on doing the deliberative and strategic thought the Board needs to have done, and then letting the Board do its more general brainstorming and story-telling work it does best, then there is harmony. And the founder-executive must also be continually involved with and referring back to the community of donors that support the organization, even though that may not be his/her personal inclination. We can achieve not only harmony but success in nonprofit management and governance.

What needs to happen to keep both founders and boards working well and producing to capacity? I think there are four self-disciplinary functions that must be performed continuously:

1. Boards will give the organization better governance if they refrain from acting like individuals and trying to do deliberative thought, because doing that frequently ends up in micro-management of the organization, confusion over strategic direction of the organization, a lack of resources for the organization to use in its mission accomplishment, and a tendency to focus on internal politics, sometimes even internecine warfare.

2. Boards that have the self-discipline to stick to setting the strategic and policy context for the nonprofit's work, and who do not override the deliberative thought provided form them by the executive and staff, will produce a better "governance product" that is more useful to the organization. On the other hand, the executive and staff need to do the essential work of strategic planning, and find ways to involve the Board in doing what the Board does best: brainstorming alternatives and options, and telling stories. So the Board would not be asked to do the deliberative thought that individuals do best, but would focus on the essential tasks that can be accomplished by brainstorming and story-telling: determining what is good for the future well-being of the organization, setting policy and limits for the executive's work, gathering resources that undergird the organization's mission accomplishment, and managing the executive's conformance with policies set.

3. Individual charity founder/executives will do well to learn, especially when it doesn't already come naturally, to live within, and even thrive on, the boundaries and limitations set for them by the two critically important groups of people in the organization's life: boards and donors. They must have the self-discipline to help the board do its brainstorming and story-telling in creative ways that result in decisions that are truly helpful to the nonprofit. They must also be involved in the sometimes complicated process of preparing and setting up every decision the board must make in such a way as to assist the board to make the very best decision possible on each issue that comes before it.

4. Individualistic nonprofit founder/executives will also find greater success in moving ahead with deliberative thought and the strategic planning necessary to do things like investing in fundraising infrastructure from day one, staying away from too much "foundations and fun" and getting involved and engaged with the individual and family donors whose support is critical to the organization's work throughout its existence.

In the event, self-discipline within each of these two critical roles is the key to success for both boards and founder/executives of nonprofit organizations. Boards whose members are wise and self-disciplined enough to do what groups do best and stay away from trying to act like individuals, accomplish better governance. Founder/executives who learn how to mesh the individual effort of deliberative thought and laying strategies into the lives and process of governors and donors alike will steer clear of strategic and fundraising trouble down the road. It takes two to tangle, and the proper role of each involves a great deal of self-discipline.