We have a new topic today. It concerns the flagging economy. First in Michigan, with the auto makers, and now across the country, we have an economy sorely in need of repair, thanks to selfish and overreaching business interests getting out of control and being able to influence Congress to the point where we have little if any in the way of regulatory restraints to keep them in bounds.
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.
Wednesday, April 9, 2008
Tuesday, April 8, 2008
How Nonprofit Boards Can Make Good Decisions -- Part 12 of 12
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? I would make or find a way to do the deliberative thinking necessary to make a good decision, but use the board's brainstorming and story telling capability to help board members have input to and develop ownership of the decision.
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 pipe-dream. 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.
Tomorrow we'll see how this works in more detail.
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? I would make or find a way to do the deliberative thinking necessary to make a good decision, but use the board's brainstorming and story telling capability to help board members have input to and develop ownership of the decision.
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 pipe-dream. 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.
Tomorrow we'll see how this works in more detail.
Monday, April 7, 2008
How Nonprofit Boards Can Make Good Decisions -- Part 11 of 12
Picking up from Friday, we can see that 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 alienated 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 his/her 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 person is also 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, as well as constraints on and (mis-)management of time for each of the board members.
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 aspects. It's complex situation. But not unusual at all.
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 has 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 Charity 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 has already moved; she's putting on her coat to leave. She said her piece, her mind is no longer on the discussion at this point, she's in a rush to get outta there! Her boss is waiting. Besides, she's seen these kinds of discussions 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 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 infrastructure 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.
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 his/her 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 person is also 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, as well as constraints on and (mis-)management of time for each of the board members.
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 aspects. It's complex situation. But not unusual at all.
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 has 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 Charity 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 has already moved; she's putting on her coat to leave. She said her piece, her mind is no longer on the discussion at this point, she's in a rush to get outta there! Her boss is waiting. Besides, she's seen these kinds of discussions 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 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 infrastructure 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.
Friday, April 4, 2008
How Nonprofit Boards Can Make Good Decisions -- Part 10 of 12
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 substantial 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? We'll find out on Monday. In the meantime, have a great weekend.
Yesterday we saw that the CEO came to the board meeting with a budget that contained a substantial 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? We'll find out on Monday. In the meantime, have a great weekend.
Thursday, April 3, 2008
How Nonprofit Boards Can Make Good Decisions -- Part 9 of 12
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.
Wednesday, April 2, 2008
How Nonprofit Boards Can Make Good Decisions -- Part 8 of 12
So what's 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 is 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 husband 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 is 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 husband 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.
Tuesday, April 1, 2008
How Nonprofit Boards Can Make Good Decisions -- Part 7 of 12
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. That means this series on Board Development, where we're dealing with how boards can make fair, wise and practical decisions, will be extended to 12 parts rather than seven.
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 investment; above all, it takes organizational commitment to fundraising. 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 tomorrow.
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 investment; above all, it takes organizational commitment to fundraising. 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 tomorrow.
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