Wednesday, January 10, 2007

Board Complicity in "Founder-it is"

There's another thing that I have seen happen in nonprofits that are suffering from "founder-itis" in both early and later stages. That is the inability or the unwillingness of the members of the Board of Directors to take seriously their role as supervisors and managers of the organization's chief executive officer. This happens principally for the reason that the CEO is the founder who originally asked these board members to serve.

The CEO is the charismatic presence that dreamed up the idea, motivated other volunteers, put the organization together, and maybe even invented the methodology used in serving the target population. Thus the CEO is someone the Board members believe in, and someone to whom the Board members look for leadership. They believe in the founder's cause, in the person and the rationale for service. Why, then, should they want to manage, much less try to discipline, their founder/executive. They find themselves in a role that permits no easy solution. The result? They basically ignore that role, and let the founder/executive do as he/she pleases. And that's a major source of trouble on several fronts.

1. Board become micro-managers. The Board, having refused, albeit informally, to be the founder/executive's supervisor or manager, now becomes the micro-manager of the organization along with the founder/executive. Together they focus on the daily issues of program details, budget, hiring practices, the staff, and even staff hiring and performance. They focus on the special event details, and on the grant proposals written to foundations. They take apart, digest, mull over and discuss every aspect of the organization's life; every aspect, that is except the founder/executive; that position is left untouched, because it wasn't in the unwritten job description when they started, and the political situation doesn't lend itself to such work.

2. Board relinquishes the fundraising role. Since the Board is micro-managing the organization, it has little time, but also little inclination, to perform as the chief fundraising arm of the organization. Once you see all the inner workings of any nonprofit, all the bad stuff and the good stuff together, it's so complicated and so multi-dimensional, that a board member has a hard time climbing back up to the kind of eagle's-eye view of the organization's work that gives them the excitement and motivation necessary to go out and cultivate and solicit friends and colleagues. The view of all the minute details is also very often counter-productive for the continued personal giving by many of those board members. So they stop giving, and they stop cultivating and soliciting gifts.

3. Board never has time for strategic planning. Each meeting is full of micro-managing details of running the organization. It's the golf outing, it's the auction. Maybe it's the hiring of a new staff person. Maybe it's the production of the annual report. It could also be the new program, with the matching grant application to the local foundation. Whatever it is, no matter how often or how long the Board meets, this type of agenda fills the time.

They never give themselves a chance to step way back, take the eagle's-eye view and ask the strategic questions:
"What do we want to accomplish in the society."
"What steps must we take to ensure that this result happens?"
"What are the ways we will evaluate progress toward this goal," and
"How will be define and initiate mid-course corrections that need to be made in our strategies?"

By the time it gets to this stage, the Board is so mired down in daily operations that it cannot view the organization's situation strategically. Thus it does no strategic planning. After all, it's easier to leave that up to the charismatic founder who really has the answers on what we need to be doing and when and how and for what purpose. It's easy just to buy into that dream, that vision, as originally articulated very long ago. But that's going to spell no end of trouble for the nonprofit within a relatively short time. And this will be especially the case with regard to fundraising and the ability to build capacity in that area.

Still more on this to come on this complex aspect of "Founder-itis"….

Tuesday, January 9, 2007

Administrative Albatross

Another example of "my way is the best way" was an organization early on in my practice that asked me to do a development audit to show them new fundraising capacity. This was not by any means a new charity start-up, but it did have a bad case of "founder-it is." The founder/executive had been in place for more than thirty years. The genius of the organization was that it had developed an organization management model that successfully allowed it to continuously diversify its human service offerings to an increasing breadth of service recipients.

The problem was that this woman had stayed in place so long because she believed that her administrative style was working, that it was superior to any other management procedure, and that no one could learn it from her to her satisfaction.

Over time, this administrative or management style, which had in early years been so unusually helpful to the organization's life and growth, became something of an albatross. When changes in the style were needed to keep up with more modern management practices and the demand from funders and government for more accountability, she refused to change. By the time I got there 99% of the people interviewed for the development audit said it was long past the time when she should step down. But she wouldn't budge.

This is another example where you have both a "turf" issue and a "my way or the highway" issue working together. The lesson I learned from the encounter with this client was that you can have a Board that knows its work, wants to do its work, and is (relatively) independent of the founder/executive, but this is not always enough to provide the kind of supervision that has the political strength to fire the founder.

What was the sticking point? The roots the organization had in the local archdiocese – had that founder/executive been fired, the founder had the power to, effectively, replace enough of the Board members to keep her in office, and there would have been a community-wide upheaval that none of the Board leadership was prepared to endure.

Monday, January 8, 2007

"Nobody can do this as good as I can"

There's a corollary to "turf." If we say that "turf" is "stay off my property, don't tread on me," then the corollary to that is "My methods are the best; nobody can do this as well as I can." The level of self-investment by the founder/executive is a source of "founder-it is" down the road. For this reason: if you're convinced and invested in the belief that you're the only one who can do what your organization is doing, then any message – whether from donors, regulators or consultants – that there should be coordination, collaboration or merger with another existing charity – is going to fall on reluctant ears.

It may be the case that any given founder's methods really are "the best." Such methods may be recognized by those who are experts in the field; ot the measurement of "best" may be in terms of the results being obtained by these methods. I was once asked to serve as consultant to a nonprofit whose work with child literacy was simply outstanding. Year after year, their numbers were stellar; they could teach kids to read at incredible rates in unbelievably short times. That's what gave them an outstanding case for support.

But because the founder had developed this method, which involved enhancing the self-esteem of her students along with teaching them to think about what it was they were reading, that founder was reluctant to become involved with any of the six or seven other literacy charities in the area. She had an issue with the public schools locally, and it was a crusade with her. So much so that as funding dried up, it was impossible to move her to consider a wider geographic area or coordinating or combining with other literacy groups so that service could be delivered to more people in a more efficient way, and in a way that would involve and motivate more donors.

This meant that the organization's sphere of influence stayed the same and the number of students coming to the agency shrank, while its per-pupil expenditure each year increased. So the strength of the case for support as found in the results she could obtain with herpupils was diminished by the high cost and the limited number of illiterate children in the community she was able to reach each year. Not only did this founder/executive have a "turf" problem, she also had a "my way or the highway" attitude that impeded chances of enhancing and enlarging this nonprofit's base of funders. That provided trouble down the road in the form of limited fundraising capacity.

We'll delve more into this corollary to "turf" issues tomorrow, with another example.

Friday, January 5, 2007

Why Campaigns are "Board Cleaners"

So, talking about "turf" as a factor in new-charity startups, we've tried to delineate the meaning of turf, something of its possible origin, and how it operates in a general way. Now I want to describe some of the deleterious effects I see that this "turf" situation has on a nonprofit's fundraising activity and on the organization's ability to enhance and enlarge its fundraising capacity.

Right from the beginning "turf" allows a proliferation of nonprofits, all of whom want to accomplish relatively the same kind of work, but none of whom want to work with, and especially not work under, any other group like themselves. The effect this has on fundraising is that in the immediate geographic area where the charity is located, among donors and prospects who might be called upon to financially support that nonprofit, the waters become muddied by the proliferation of several, even many, nonprofits, who are all doing the same or similar work.

Questions like "Who do we give to?" or "Who's doing the best, most efficient work?" are increasingly difficult for a would-be donor to answer the more nonprofits there are in a given field. If a donor is trying to ferret out the best way to invest dollars for an anticipated result, the decision becomes more frustrating each year. Eventually, that donor may stop giving, or may choose another cause. The long-term effect is that there are fewer dollars with which to do charitable work, and fewer donors/prospects for whom our work is relevant. After a while, they just don't care and give up. So money is left on the table that could be given to charity, and the nonprofits go begging, have to tighten their belts further.

Another effect of "turf" on the life of a nonprofit is that it makes relying solely "foundations and fun" (foundation grants and special fundraising events) so much more of a temptation for local charity boards, executives and fundraisers. But the more they rely on foundations and fun, and the less they get involved with individual and family donors, the more these charities find their fundraising options restricted. Therefore, the result is stultified fundraising capacity.

Three strikes and you're out. If you get "turf" operating together with "foundations and fun," and this is, in turn, complicated by a management process that makes repeated decisions against investing in fundraising infrastructure, you have a combination that is certain to provide trouble for the nonprofit. And it is from this troubled position that many charities have contacted me through these last ten years as they need help in extricating themselves from this predicament so they can enlarge fundraising capacity. They're starved for revenue, but they can't make headway because they cannot undo the mindset that led to unidirectional fundraising, that was coupled with non-investment in fundraising. Sort of a vicious circle.

The problem, then, is that the intervention that must be made to rectify the situation is so major, and the changes required are so massive, that the executive and the board may well not hold together through the intervention. I don't think it's any accident that, as the old cliché goes, that "capital campaigns are notorious board cleaners."

I think this happens because in a capital campaign most organizations will employ a fundraising consultant to play a variety of roles. First, there is the feasibility study, which requires a keen and objective view of what community leadership thinks about the organization and its campaign project and goal. Next there is the internal assessment of past and present fundraising practices and results, fundraising infrastructure, and board readiness to support and work hard in the campaign. There is also the training that makes plain the conditions under which nonprofits typically succeed in their campaigns. The result of these rolls played out by the fundraising consultant is an exposed, dead-honest, objective revelation of the organization's fundraising problems in expanding fundraising capacity. Many executives and board alike don't like what they see, and it's not uncommon for many to be asked to leave or simply to jump ship as the campaign swings into action.

I should acknowledge, however, that with the small or start-up nonprofits in their first five or more years of existence, it doesn't have to be a capital campaign that forms the intervention. These charities come to a fundraising consultant because they know something is "out of whack" but haven't the ability, the knowledge or perhaps even the political will to do what has to be done. As a recent client of mine put it in our initial interview, "We know what has to be done, but we have not been doing it. We want you to help us do what has to be done" And so we begin a process of organizational intervention that will undoubtedly have far-reaching implications for every aspect of the organization's life and work.

How does this relate to "founder-it is?" Because the trouble starts with "turf" in the original decision of the founder/executive to start a new charity in the first place, when that new charity is going to duplicate efforts already underway in the community. It is exacerbated by the founder/executive's choice of board members who are not coming on as true governors but simply because they're friends of the founder and are giving use of their name for IRS certification purposes. And it stems from the fact that many founders are either unknowledgeable about or unwilling to invest in fundraising infrastructure at the beginning of the venture and this becomes a habit. So "turf" + "Foundations and fun" + lack of infrastructure investment are major reasons why founder/executives get into fundraising trouble.

Thursday, January 4, 2007

The Issue of Turf – "Don't Tread on Me"

I will frankly admit that I don't know much of what the rest of the country's nonprofits experience with regard to personal and organizational "turf." But I do know this: that in Illinois, where I lived and worked in the 1960s thru 1980s, turf is secondary to progress. You can get all kinds of projects done because people from one camp will get together with people from another persuasion in order to get some new projects done. Whereas in Michigan, where I have practiced now for the last two decades, turf is held above all else. It is practicall7y impossible to accomplish a new project or achieve some new direction because people are falling all over themselves protecting their own personal, conceptual or organizational "turf."

This has a peculiar and often daunting effect on fundraising; and one can see it most clearly in start-up charities that get into fundraising problems relatively early in life. I will comment on how this works in a moment, but first let's take a look at a definition of "turf" as applied to nonprofit organizations:

My "turf" is my territory: my personal or organizational landscape and context; Turf is all that which I have built for myself within my nonprofit organization, including my accomplishments and the personal learnings that have resulted from my daily experience here.

Similarly, Our "turf," speaking as a group of people involved in the nonprofit, is our territory; the organization's landscape that we have built together, the missional area we have carved out for ourselves, the learnings, policies and procedures we have developed together as a result of our experience in the trenches of service delivery and fundraising. Turf is sacred ground, not to be violated. Turf is our "place" in the world. We protect our turf at all costs, including the cost of not getting anything progressive done.

Turf is seen among board members who vie for the CEO's attention, or who compete in their leadership of committees or auxiliary groups that support the organization. The turf battle becomes hot when a given committee's or auxiliary's work is seen to be duplicative and a move is made to try to combine or coordinate those competing bodies and make the organization more effective, efficient or streamlined.

Turf battles can be seen among nonprofit staff especially when budget is tight and departments need to be downsized. We're fighting for survival of an idea, a process, a department, as well as for our paycheck and personal privileges. No one wants to be the one who has to give up a function or combine that function with someone else's. There's not room enough in the world or enough things to do that there are any alternatives for me (or us) than doing just what we're doing in the present situation.

Turf battles take place between organizations when, for example, foundation grantmakers insist on coordination, collaboration or even combining and merging organizations operating in the same field, doing essentially the same work. The excuse might be methodology, or ideology. For example, if your organization and mine are both half-way houses for battered women, and we're at the table to try to combine and coordinate our services, both organizations may claim to have the best methodology for service delivery, and so neither wants to "give in to" the other.

In fact that's what "turf" often means: a worldview that insists that my approach is right while your approach is wrong. Or, we're the biggest and best, so you must give in to us. The phrase "give in to" is the key. One must win and the other must lose. There is only so much territory, we both claim that territory, therefore there must be winners and losers.

Where do we get that? I've spent the last 20 years looking for the answer to that question. At this point, I would have to say that it seems to have come from two sources: the first source would be those settlers who cam e to the Michigan area from Boston and New York in the 18th century to claim new territory for the making of their own personal fortunes. These folks staked out their territory first against the indians, then against each other. Ideology was definietely a part of the process. The scond source would seem to be the major rift between "labor" and "management" that has expressed itself in the countless battles between unions and, most especially, the auto companies.

It is instructive to reflect that "turf" is a by-product of the desire to exploit resources and fellow human beings for one's own gain. Through timber, shipbuilding, railroads and automobiles, our state of Michigan has been noted for the exploitative capacity of its leading citizens and business operators to take and to use our natural resources, along with the lives of the people who did the work, for individual personal and company gain.

But that was not a phenomenon exclusive to Michigan. Yet we're the ones who have the turf problem today while other areas, like Chicago, among mid-west areas, do not. Why is that? I imagine that it has to do with an understanding that life is win/lose rather than win/win. In Chicago, where progress generally trumps turf, one can see alliances forming between otherwise very unlikely partners just to get a project or an advancement accomplished. Referring the famous lifelong (Richard J.) Daley Democrat, I've heard it said, "Even Ed Verdolyak can become a Republican when there's progress to be made." He made this switch briefly to achieve ends that benefited the whole Chicago community, then went back to being a Democrat. But here in Michigan, turf trumps progress, and "you stay off my turf" is more important than "I'll come join you so we can be more effective together getting this project done."

More about the effects of this on nonprofits tomorrow….

Wednesday, January 3, 2007

The Mind is a Terrible Thing

While religious practice and belief is one exterior route that has been tried to help us human beings allow our better qualities ascendancy over baser instincts, some thinkers have prompted us to look inward and explore the internal qualities of our spiritual nature as a way to do this. But the mind is a terrible thing: its deviousness defies our attempts to reform it, and relatively few have succeeded in reaching a state of internal balance and peace.

Meanwhile the rest of us struggle to find ways to harness our good qualities and transform our greed and selfishness into socially acceptable patterns. Some among us do better than others, of course, but even in the midst of the wealthiest, most stable and most successful experiment with democracy the world has ever known, we are still very close to the anarchy and mob rule of the jungles from which we evolved. This is evidenced by such visible markers as our penchant for war, our drive for personal or group control, the avarice and deception of our corporate leaders, and our ability to discriminate against our fellows for the sake of our own advancement.

Self-discipline may be the answer, but that in itself is a product of a mind that is essentially bi-polar in nature: as it thinks, it employs two modes simultaneously: goodness and evil. Any scheme we invent within our mind (religion, government, education, business, high tech information) to try to alter our own nature -- or that of others, as in the case of religion -- is bound to have within it both the seeds of the greatest good and those of the most avaricious greed and deceit.

If we couple the qualities of this internal bi-polar human nature with what Cotter terms the "unfathomable disparities of fortune" among members of our race, it is indeed a miracle when we see persons or groups who are able to allow the kindness, creativity, justice and productivity aspects of our nature to have more permanent sway in their lives.

How, then, is charity possible at all? How can we go into the marketplace expecting any person to give significantly to our cause, or any cause? How can we ever expect the members of nonprofit boards to be self-disciplined enough to eschew micro-management and be comfortable doing strategic planning, or giving and soliciting funds? How reasonable is it to expect that an "individualistic" type of person starting a new charity will have the ability and self-discipline to plan first, get the community behind him/her, and then be satisfied with achieving personal gratification later, thus preventing trouble down the road? Are these not, given human nature, unrasonable expectations?

One answer may be that we simplymust "have faith" that sometimes the system works in a way that permits these phenomena to occur. Another perspective may be that we simply "play the numbers" and hope that "this time it will be better." Yet another view could be that we simply let human good and evil have their sway, however it happens, and do the best we can with what we have at the moment but not strive for anything better. But another yearning is to try to give people the excuse, the reasons and the information they need to make better decisions.

This raises the question with which I will end today's post: "In light of the condition in which human gbeings of even the most altruistic motives find themselves, what should be the fundraising consultant's essential task when working with a client nonprofit?"

1. Is the fundraising consultant's task simply to scatter as much educational and informational seed about good fundraising practice as possible in the client organization regardless of the ground on which that seed falls, and heedless of whether client's objectives are likely to produce positive results?

2. Or is the fundraising consultant's task to simply go ahead and help any client achieve whatever objective that client defines for their operation, even though that objective may be rooted in a process that is ill-conceived, or may be delivering an outcome to the client that is unproductive or even self-destructive over the long haul?

3. Or is the fundraising consultant's task one of intervention in a client's process, regardless of objective and desired outcome, to correct that process and help the client create a better, more achievable, more positive objective before assisting in the achievement of that objective?

The way I have been practicing these past ten years is a combination of the three. I have tried to sow as much educational and informational seed as possible, but have tried to plant those seeds in as many open and fertile minds as I can find. I have helped clients achieve objectives they have defined for their operations, but have endeavored to point out potential trouble that exists or that I see on the horizon given the facts of their organizational life as I can determine them. And I have attempted to provide intervention processes when clients indicate a willingness to undergo the changes necessary to achieve greater fundraising potential.

We'll get back to our main theme of start-up nonprofits tomorrow. There will be no afternoon post today.

Tuesday, January 2, 2007

Generosity

As we get started in the New Year, I'd like to share with you a perspective on giving that comes from two inputs during the holidays.

The first input comes from a wonderful article by New York Times art critic Holland Carter in the newspaper's art section for Friday, December 22, 2006. He was writing about the various art exhibitions available in New York museums, and prefaced his catalog with a quote from Tolstoy and a reflection on the meaning of philanthropy. He wrote:
"What's ours? 'With one hand I take thousands of rubles from the poor, and with the other I hand back a few kopecks,' wrote Tolstoy late in his life, when he was in despair about how life worked and how he, rich and famous, master of servants and serfs, had lived it. In the end he wanted nothing. He wanted to give back everything, give everything away….
"Generosity means different things to different people… For them giving may be pleasurable, but it is never optional. In a world with unfathomable disparities in fortune, generosity is simply justice."

To me this is the one of the simplest and most profound "cases for support" I have ever seen. Whether your cause is kidney disease or cancer, feeding the homeless or camp for the kids, art in the schools or the gift of a collection, indigent care or a new hospital wing, education for those less fortunate or scholarships for study abroad, the simple reason any donor would give, that is, "the case for support," ultimately comes down to the fact that "generosity is simply justice."

The second input is a reflection derived from Cotter's "disparities in fortune" theme. I have had the privilege to meet and work with many people, at home and abroad, throughout my lifetime in both the business and nonprofit worlds. My reading has augmented this experience with much richer panoply of characters from ages past and places around the globe. One thing comes crystal clear: humanity has two sides to its nature. On one side, we are capable of the basest immorality, ignorance, superstition, greed, injustice and inhumanity to our fellows. On the other side, we are equally capable of incredible kindness, creativity, justice, invention, productivity and technical advancement. Let's take a look at these two aspects of our nature.

On the one hand, if we consider that true "progress" for our race might be defined as gaining the ability to reinforce and enhance our better nature while subduing the worst, then I would suggest that we have not progressed very far in the last 10,000 years or so. We have, indeed, generated much knowledge about ourselves and our world, and have enhanced our technology and tool-making incredibly.

But the human being in the Jericho of today in not far advanced from his/her predecessor of 8,000 BC; the militants of Iraq and Iran today are only further advanced technologically from the conquerors of Persia, Babylon and Mesopotamia of biblical times, but they are just as wonton in their destruction and greed and desire for killing and revenge. We fare no better as a race whether we are in the United States or China, whether in Kabul, Nairobi or Paris when it comes to giving our better side ascendancy.

What we seem to lack, as a race, is the ability to gain some solid control over our baser nature that would allow our essential goodness and creativity to advance and become dominant. We seemingly have not been able to develop an effective mechanism of exerting and enforcing that kind of internal control and self-discipline that can become a shield against greed, avarice and envy.

For many centuries we have sought to repress and impose order on the human character from outside, by the artifice of religion. Whether we look at Christianity, Islam, Judaism or Hinduism, these religions have given us rules and regulations, myths and liturgies that are palliatives for life's unanswered questions. But they have also brought us dire threats from religion's version of mob rule, like jail, torture, death and hell-in-an-after-life if anyone didn't believe just like everyone else. Religion has only succeeded, then, in providing more stages on which our baser nature is declaimed with ever greater violence.

Many individual journeys to the contrary, as a race of human beings we have succeed, under religion's influence, only in confusing our internal spiritual development with the external practices of religious "faith" or "belief" as defined by "leaders" who themselves are principally motivated by greed, avarice and envy. It seems we still conform all too readily to the cultural, regional or family/clan greed, envy, avarice of the mob, and have not lessened the stranglehold of our baser nature so that we more naturally strive for qualities like peace and justice.

So war continues to be the ultimate way to settle disputes; greed determines when and where we invest, and in what; we harbor and seek revenge for slights and wrongs over generations; and envy moves us to accomplish great technological progress at our neighbor's/brother's loss.

Now, what about the other side? More this afternoon…