Saturday, December 31, 2011

The Only Metric that Matters!

As my inbox has filled with requests for donations and gifts to deserving organizations over the waning days of 2011, I've been reminded of a few insights from my clients and conversations this month.

My first observation was in response to a query about why we all get so many "Asks" around the Holidays. The main reason we all get so many Asks this time of year (whether by e-mail, direct mail, phone calls or other ways) is that people give this time of year.  Whether it's the "spirit of the season" or just the fact that taxable deductions for the calendar year ending force donors' hands, some charities will receive the vast majority of their donations over the last many weeks of any calendar year.  Fundraisers know not to miss a single opportunity to raise funds (particularly as their fiscal year end comes up!), so if this is giving season then you can expect to get a lot of requests!

The other observation was based on a reminder from a client conversation a few weeks ago. I was asked to give advice on which metrics were best used in marketing and communication with prospects in order to get their attention and sell the organization's value. My reply was that ideally you would want to highlight areas that were of most concern to this potential donor.  And my client's response was that this meant that all the other important measures of impact, effectiveness and efficiency weren't much good if we weren't addressing needs that were important to that prospective donor.

And that's a simple truth. If your organization if making a difference and changing lives, doing so efficiently and using every dollar well, then in the end the only metric that matters is what the donor wants done with their money.  If you are busy saving whales, and the donor wants to end hunger, you're unlikely to get their donations. So at this time of year as you get so many asks for your giving, ask yourself what impact do you want to have? In the end, so long as the recipient organization meets certain "baseline" criteria, then the only metric that matters is what you most want to see changed!

Wishing you a happy, healthy and prosperous 2012.

Tuesday, November 29, 2011

Change for the Better?

In November of 2000 (exactly 11 years ago), a newsletter from one of Canada's largest health care foundations included a variety of observations about "changes that are occurring in the not-for-profit sector."  It struck me as I read them that we've come a long way on many of these topics, but in several cases actually gone in the wrong direction.  I invite you to consider whether we as a sector have addressed these items, and if so, have things gotten better or worse?  On on macro scale, how have we as a society fared with respect to some of these concerns? Here is a shortened (but otherwise unedited) version of the newsletter.

Donations are up, but the donor base is shrinking: In 1998, 202,000 fewer Canadians reported charitable donations to Revenue Canada than in 1991.

More Canadians are volunteering, but time is at a premium: In 1997, 72 percent of all volunteer hours in Canada came from only eight percent of Canadian adults, and average hours per volunteer had dropped 22 percent from 1987.

Fund raising competition is growing: More and bigger fund raising campaigns raise fears about 'crowding out' small charities. Do all boats rise on a high tide, or will some be swamped?

Values are shifting: Globalization seems to place competition ahead of communities, and consumers ahead of citizens - are compassion and sharing passe?

Our sense of community is fracturing: 'I'm OK, and you're not.' Rich and poor are growing farther apart, as poverty grows while the economy booms.

Charities have an identity crisis: Some are becoming more like businesses in order to 'earn' revenue; others are assuming the traditional roles of government.

'Impact' and 'outcomes' are in doubt: It's considered bad to be a 'do-gooder' who only applies band-aids, yet charities that work for structural, social or attitudinal change are branded as 'political'.


So, how far have we come in over a decade? Clearly the view from a major foundation in 2000 was that our sector and those we serve were under stress. I'm particularly concerned that rich and poor have only grown further apart over the 11 years, and now the economy is not booming.  In the end, this only underscores the vital nature of charitable work in all its forms.

Saturday, November 12, 2011

The Law of Unintended Consequences: Goal Setting 101

In September I wrote about the value of metrics and the importance of and processes for setting goals for organizations in both the for profit and not-for-profit worlds. However, this mindset can also have significant unintended negative consequences if the implications of the goals are not well thought out. We're all familiar with this idea in the context of the for profit world when goals or incentives are in place that inadvertently encourage short cuts or reduce safety. In the charitable world the impacts can be more insidious.

This is not to suggest that creativity in using data to set goals can't have wonderful effects. For example in sports a "re-thinking" of what makes a valuable player created new ways to manage a baseball team (as documented in Moneyball) and led to on-field successes. But in the charitable world we're often dealing with organizations that directly impact life and death - so how they're measured, funded and rewarded takes on an especially important meaning.

Consider these two examples.  Imagine you're a mental health organization and your provincial funding metrics include how quickly you "graduate" patients through your program. Sounds superficially like a good way to encourage efficiency. Or perhaps you're working with youth who have learning disabilities and you want to tout metrics with respect to successful "completion" of the entire process. You might argue that this helps keep the process moving along and encourages possible donors.

However, in both cases the leaders of these organizations may also be less likely to take on prospective patients or clients who present the most complex, most challenging and least likely to succeed characteristics.  Likely the very folks who need these services the most. This isn't to criticize those who have to make these tough decisions, but to highlight how metrics, efficiency incentives and goals need to be very carefully thought out.  Otherwise they can have the effect of leaving those who need it most out in the cold. Literally.

Saturday, October 29, 2011

The Corporatization of Charities?

Charities can and should learn a lot from their peers in the for-profit world about best practices and management models. As I've written here in the past this sharing is not without risk of translation errors, while at the same time clearly too valuable not to pursue.  However, there is a risk of something far more worrisome within this corporate - charity relationship on the horizon.

It's clear that governments are stepping back from previous granting levels as they seek to further reduce taxes and simultaneously address deficits (Globe & Mail). The unstated assumption appears to be that someone else will step in to fill the funding void, lest we find critical supports failing. However, there are only so many revenue avenues and they all have limits or issues.  For example, charitable donations by individuals in the USA are often cited as a benchmark for growth here in Canada, but the aggregate numbers are skewed since a significant part of US giving goes to churches and religious groups. Giving levels in many other charitable sectors are actually already quite close, so based on US benchmarks there may not be much room for growth.

Growth in Corporate donations is also frequently cited as an anticipated source to fill revenue shortfalls for charities. However, as various articles have pointed out, this is not without its own challenges.  Here are some of the issues that arise as we pursue corporate donations as the bulwark for charities:

  • Corporations are by definition focused on profits. Thus, for some corporations this will result in their "donations" being about what they can gain from their "gift". This has a real potential to mutate charities as they seek to obtain the funds they need.
  • Metrics matter, and measuring program Impact for charities is the new normal. However, what Corporate donors seek to measure may not actually be well aligned with the true Mission of recipient organizations. The catch is the Golden Rule - the one with the gold gets to make the rules.  So there is a real risk that charities will measure what their corporate donors say matters, not what needs to be measured.
  • Many issues that charities seek to address are highly complex and deeply rooted. These problems won't be solved quickly or easily. Corporations are well-schooled however in the world of ROI and quarterly results. This is not to suggest that there can't be learnings, but the risk is that as charities become ever more reliant on corporations this "short term" thinking will diminish true long-term Impact and solutions.
  • Some corporations provide their support to charities through provision of their services and expertise.  It's a great model, but if governments steadily erode their financial support to charities, and corporations shift increasingly into this model of pro-bono work, who will fund keeping the lights on and pay the rent?
Many Charities would and do welcome greater corporate support. And there are many corporations that are already generous, thoughtful, strategic and energetic partners with the charities they support. The question that needs to be asked is how much should charities be forced to rely on corporations, and how do we avoid the pitfalls noted above? Most importantly, a public debate on what kind and level of support we want charities to receive through our government is clearly needed in the near future.

Thursday, October 20, 2011

The Early Bird Gets the Worm

We've all heard the expression, the early bird gets the worm.  Except it might be more accurate to say that the bird gets the worm if it's early, or right after lunch, or even after a small snack!

According to a report earlier this year (which I read about in the NY Times Magazine) by Jonathan Levav of Stanford and Shai Danziger of Ben-Gurion University, something called "decision fatigue" can impede decision making.  Essentially this and other studies show that making many decisions can unconsciously make our brains "tired" and result in one of two situations. One, we make rash or poorly considered choices.  Or two, we defer the choice - in effect saying that anything that is risky should be put off until later in our present tired state.

The solution? It appears that a little break, particularly if accompanied by glucose (sugar) intake can recharge your tired neurons.

This presents some interesting implications for managers and salespeople / fundraisers...

  • Before the big launch of your new project / initiative / program, maybe provide a little juice or pop to the assembled team
  • Meet your prospect / buyer first thing in the morning or with a well-sweetened coffee (don't use artificial sweetener though as it has no effect)
  • If the leadership team needs to make some big decisions pick your time (first thing or immediately after lunch) carefully

In a totally non-scientific study last week we bought fruit, nuts and tim-bits before a Campaign meeting with one of my clients.  All I can say is that the meeting went very well!

So now the logic of buying lunch for your prospect before the big Ask becomes clear.  It's not about the social interaction or building a sense of gratitude in advance: it's all about getting the glucose levels up so they'll  be less likely to put off (or even decline) your invitation to donate!

Thursday, September 29, 2011

You Get What You Measure

With apologies to a certain rock band, you don't get what you need, you get what you measure. This expression, you get what you measure, is a favourite management maxim of mine (along with "good, fast and cheap: pick any two") and is often helpful to keep in mind.

Successful for-profit organizations like Procter & Gamble are experts at measurement, and almost as importantly, know exactly what to measure.  I was reminded of this recently when a staff member at a client proudly informed me they had 140 followers on Twitter.  My response was to congratulate her, and then ask whether this had exceeded their goal or if this was faster than she had hoped?  Her answer?  There was no goal, 140 just seemed like a lot...

And 140 followers in a couple of months may indeed be stellar, but unless you set up a goal and measure against it, you'll never actually know.  Here are some simple guidelines to help both charities and for-profit organizations set good goals and measure against them appropriately.

  • Set the target(s) before the activity - setting them afterwards doesn't count
  • You can adjust the target but don't discard the original - you'll want to learn from why you changed it
  • Document your goal and share it - it will make you more likely to achieve it and keep you honest!
  • Do some research about the goal - too stretching becomes demotivating, too easy adds little value
  • Make your goals / targets "SMART"
    • Specific
    • Measurable
    • Achievable
    • Relevant
    • Time-bound
  • Always do a post-mortem - this debrief will be extremely helpful to avoid future mistakes and cement best practices
The final point is to be careful what you measure.  You can drown in metrics, and I first heard the phrase "analysis paralysis" at P&G for a reason.  So do be selective.  And in being selective, seek to find the most fundamental drivers to your success.  In any organization there are many things that are important, but ultimately only a few key levers that you can use to drive the whole operation.  For example, in Fundraising you may want to measure how many Prospects you have, but its often more helpful to count how many Prospect Meetings are booked per month.

So be sure to measure because it will directly influence what you get!

Wednesday, September 14, 2011

Database Evolution: Avoiding Costly Mistakes

The definition of insanity is doing the same thing over and and over again and expecting the results to be different.  In my experience charities generally follow four main evolutionary steps in managing their data and database software...  And oddly enough the results are generally the same for all those charities!  Here are the outlines for the four stages, and some tips on how to avoid some costly pitfalls.

PAPER:
The first step for most charities, often because they're small and don't need much more, or because they're trying to be really thrifty, is to use a manual or paper-based system.  This can actually work pretty well, unless the charity grows or until the sticky-notes and hanging files get out of control.  So eventually someone takes the time to migrate to...

SPREADSHEETS:
The next phase of database development is to use a spreadsheet (like Excel) or if there's a technically competent staffer or volunteer, some kind of pivot table.  Again, not a bad option for the right size organization with limited demands on its database, but usually someone (the Fundraisers, Board members, etc.) start wanting to actually use the data, and this forces the next evolutionary step.  This often leads to a...

PROPRIETARY SYSTEM:
Every charity is unique.  So it follows that each one needs its own unique database to meet its needs, right?  Wrong!  And yet so many charities spend loads of money pursuing their own special database path, sometimes creating unique campaign and fundraising events just to get started, or to build the next version.  Yet with few exceptions (e.g. large charities with the resources to keep up with costly code-writing and upgrades) these stand-alone systems rapidly become outdated, expensive to maintain, and very hard to use.  My strong advice is to avoid this step if at all possible and, if your charity needs this level of database support, move straight to...

OFF THE SHELF:
There are countless options for charities of all sizes and budgets to manage their databases effectively and efficiently.  And if you need something unique to support your specific needs, most of these packages can have modules "bolted on", or even new code written, for far less cost than sustaining a proprietary system.  And you get the benefit of thousands or even millions of other users helping to spread out the costs of upgrades and tech support, generating a truly robust system.  My other tip would be to not necessarily go with the best known brand: like many major purchases and little research and solid advice can go a long way to save money and provide better options.

Avoid costly mistakes by thinking carefully about your database needs, or else you could wind up owning a dinosaur or even facing an evolutionary "dead end"!

Saturday, August 20, 2011

The Science of Making the Ask

In case you're wondering, the "Ask" is fundraising-speak for closing the deal or putting your offer on the table.  It's when all your cultivation efforts to understand the interests and motivations of your prospective donor come together in one place.

My experiece, and all the training I've ever received, indicates that it's always best to go with another person to the meeting for the Ask.  If you're staff, the thinking is that you should go with a volunteer or contact of the prospect.  The logic is that:
  • One person can be watching the body language while the other speaks
  • Two people make for more accurate memory of the meeting and any points raised
  • The staff person can handle any "technical" questions, and the volunteer or contact reinforces the personal nature of the relationship
  • Since the volunteer or contact has also already made a gift this puts the Ask on a more authorative level (e.g. I've given and I invite you to do so as well)
  • Since "like gives to like" the volunteer or contact is assumed to be at the same "level" as the prospect
It turns out however that there is another, more important reason to have a second person present.  A variety of studies have shown that people are more likely to give, and feel better about their giving, when they are being watched!

The most recent issue of Advancing Philanthropy has an article that summarizes several examples where even having a pair of eyes printed on a poster asking for a donation generated higher giving.  And another example where the pleasure of giving is measurably higher for the donor when done while being watched.

So next time you're ready to make an Ask, be sure to bring a friend!

Monday, August 15, 2011

And Stanford Says...

Over the last many months I've written extensively about the worlds of charities, for-profit enterprises, management and where they all intersect.  Obviously, I'm not the only one thinking about these topics.  Here's a great article from the Stanford Social Innovation Review that makes some compelling and interesting points in the same areas.

Have a look at the article and then I'd invite to review some of my "back blogs" - I've had some other thoughts on these topics you might find interesting!

Wednesday, July 27, 2011

Social Enterprise: The REAL Truth

Accuse me of false advertising if you will, but while I've got some very interesting data to share, the fact is the "real" truth isn't in yet about Social Enterprise. So bear with me for second before we get to the interesting data...

Like Social Media (and apologies to all the evangelists out there who will disagree) I'm not convinced that Social Enterprise is a panacea either in terms of profile, fundraising, or any other metric for charities or for-profit organizations.  I'm currently consulting with an organization that is testing the waters of Social Enterprise, and so far so good.  But it's a vanishingly small part of the organization, and since the organization is so small to begin with there are barely enough systems and processes in place for the Mission-driven parts, let alone some little projects that make just a little bit of money.

So clearly any organization considering starting Social Enterprise(s) needs to think critically about:

  • Size and capacity (including systems and processes) of the organization
  • The "opportunity cost" versus other initiatives
  • Natural "fit" of the proposed Social Enterprise projects
  • Skills and acumen required for success (lots of regular for-profit enterprises fail every year!)
  • Whether the goal is profit, profile, Mission, experience for participants, or some blend thereof - just be clear about the desired outcome(s) so you know when you've succeeded!
Now on to the data.  The good folks at the Ontario Nonprofit Network shared their "Social Finance Census 2010" back in December.  The full Executive Summary can be found via a link on the page here.  I just saw it the other day and one chart jumped out at me.  Turns out that in this survey (not sure how random and scientific it was) over 50% of respondents reported 10% or more of their revenue was from Social Enterprise.  Interesting.  That is more than I would have guessed.  

So is Social Enterprise the way to riches for your charity?  Maybe not.  But as Governments and and the economy continue to whittle away support, perhaps a prudent, measured introduction into Social Enterprise is in order for your organization.  It certainly looks as if a lot of charities are already trying to find the real truth about Social Enterprise.

Monday, July 4, 2011

Good, Fast and Cheap: Pick any Two

There are many expressions that clearly apply in both the for-profit and Charitable worlds, and one that I've been using with a client a lot lately is "good, fast and cheap: pick any two". For people hearing this aphorism for the first time tend to smile after they figure it out, mostly because it makes so much intuitive sense.

But while the expression applies in both the for-profit and Charitable worlds, it has some different implications when used on the Charitable side.

First, Charities are so often so tight for cash that they can’t buy their way out of a problem.  In other words, where a corporation (particularly a larger corporation) might throw money at a problem to ensure it gets resolved "well / good" and "quickly / fast", charities don’t usually have those resources. Projects sometimes get done poorly or executed without all aspects being done well in order to hit deadlines.

Second, and in a way arguing against the first difference, is the impact of volunteers. This is a tool for-profits generally can’t access, and has a huge equalizing effect in the quality of work that even the smallest of charities can do. The volunteer that leads a program, the book-keeper who works for free two days a week, or the HR expert who does some pro-bono work are all examples of volunteers I’m familiar with where the work is done for charities that is all of "good", "fast" AND "cheap".

So while for larger charities expecting volunteers to do all the work is likely not realistic, it is one key way for Charities to try and deliver on their Mission on a shoestring budget. For the Charitable leaders out there, are you using volunteers to their fullest potential?

The bottom like for all organizations is that clear plans, well thought out deadlines, and a focused set of priorities means that you’re not scrambling, and can resort to "fast" only rarely and instead rely on "good" and "cheap" more regularly!

Saturday, June 25, 2011

The 3 Laws of Growing any Organization

A late Friday afternoon conversation with one of my clients reminded me of some business fundamentals that I've never seen translated into the Charitable world.  So here, without too much fanfare and perhaps for the first time ever, are Goodworld's three Laws of Organizational Growth, and the related 3 Laws of Revenue Growth for the Charitable world.

Many of you are familiar with these frameworks from a for-profit point of view, and with so many models they are deceptively simple.  What makes the translation into the Charitable world particularly interesting is that on the Revenue side many organizations spend a lot of time focusing on the first option (increasing numbers of supporters), while the most efficient options might well be the next two.  Both Revenue option 2. and 3. are about enhancing relationships, and that's something that every successful charity should be very good at!

So there you have it - just like Newton's Laws, but inspired not by an apple but by too many spreadsheets!

Wednesday, June 15, 2011

Giving to the Charitable World: With your Heart and your Head

The topic of how best to have real impact in the charitable world came up in a conference last weekend. Obviously one way to make a positive difference in the world (charitable and otherwise), is to work in the sector. That’s what I chose, but years ago as I researched my options I got some advice that has stuck with me: you don’t have to work in a charity to make a difference for a charity.

So if you're not going to work in the sector how might you have your impact?

One great way to do that is to make a gift. You can give your time (volunteer), your talent (sit on a Board or do something related to your skills), or your "treasure" (making a monetary or in-kind gift). Millions of Canadians give very generously every year, and lives are transformed and saved through their kindness and spirit.

It’s usually our hearts that compel us to give, but I’d like to suggest that giving with your head is pretty smart too. Assuming you’ve found a charity that inspires your heart, here are three ways you can help ensure your gift is given with some forethought that you may not have thought about.

  1. Some charities need your gift more than others do. If you've got a few charities that might make your giving list, consider how much “surplus” each organization has generated in the previous few years. How much of a "reserve" do they have? You want some money for the lean times, but could they keep operating for years without your gift? Ask for each charities’ Audited Annual Financial Report – particularly if an abbreviated version isn't on-line.
  2. Dig deeper than just the numbers. Despite the first point, you’ll also want to understand a bit about how funds that are raised are used: do they offer robust, impactful programs and activities? Just knowing that a charity doesn't spend much on fundraising or operational costs actually tells you very little. A youth centre can show very low costs if they’re only open one day a week and have little to offer the youth they serve, but then would you really want to support such a meagre program?
  3. Lastly, get really close to your short-list of charities. Maybe you want to make a "trial gift", of a smaller amount to see how they respond. Or better yet, volunteer and spend some time at your top charities. Which one do you really like now that you know it better? And best yet, your gift will be that much more valuable to you once you know the people and programs you’ll be helping!
Happy giving! From the heart and the head.

Saturday, May 28, 2011

Top 5 Considerations Before you Make the Move

So the time has come for you to make the transition from the for-profit world into the charitable sector? Congratulations!  Before you take the plunge and whatever stage in the process you're at, here’s a "Top 5 Considerations" checklist for you to review. It draws on previous posts of my own, plus a variety of the conversations I’ve been having just in the last few weeks.

  1. What’s your motivation? Are you trying to "fix" a charity or charities? Are you trying to "give back" from your years of for-profit expertise? If so you may find your reception is less warm than you hope. Charities of all kinds need your skills, but the cornerstone of success is passion, a passion for the cause and a genuine desire to support the Mission.
  2. How big a paycheck do you need? Remember there’s a general correlation between the size of the charity and the size of the paycheque. So the larger Universities and Colleges, the Hospitals, and the bigger health charities (Heart, Cancer, etc.) generally have the capacity to pay more.
  3. Does the charity speak your language? This is a little subtler, but organizations that already have some for-profit thinking in their "bloodstream" may be an easier place for you to initially make your transition. Is their CEO or Executive Director from the for-profit world? Do they have a social venture aspect like Habitat for Humanity? Do they have membership that requires business concepts in the same way as the YMCA’s Health and Fitness centres?
  4. Have you lived some of the charitable life already? If you haven’t sat on a charitable Board, or volunteered for key events or committees over an extended period of time you’re likely not ready for the move. First, you’ll likely get asked about it in the interview process, and just as important it will give you a sense of whether you really want to move in this direction in the first place.
  5. How’s your network? Not only will finding the right role be much easier if you know people in the charitable world and on charitable Boards, but being successful is much easier too if you have experienced resources to draw upon. In a way that that is quite different from most highly competitive for-profit sectors the ability to liaise, connect and even partner with "competitors" is important in the charitable world, and only going to get more so.
Good luck in the search and always remember you don’t have to work in a charity to make a difference FOR a charity!

Wednesday, May 4, 2011

Marketing: Gold-plated Charitable Dreams

In the Consumer Packaged Goods (CPG) world marketing is king. It may be the first budget to get trimmed when sales volumes are soft, but it’s still king. Many charitable leaders look with envy at those impressive ad campaigns and dream of running such a gold-plated media campaign in support of their organizations

Sadly for those charitable leaders it’s actually not that easy, nor possibly even that advisable to launch the campaign even if the funds are available, and here’s why:
  • For any charity to spend that much on any media vehicle might well scare off new donors, let alone offend existing donors. If you publish too glossy an Annual Report some donors worry about mis-spent gifts, so just imagine the questions about your new TV and print campaign. "If they have that much money why do they need more of mine
  • Charities are complex. Getting your whites whiter, or selling "fewer cavities", are simple messages. Charities do need to figure out effective ways to communicate a simple and impactful version of their message – but even once that’s done how much time and effort (and money) do you want to spend educating the broad mass of prospects on the real complexities of your activities
  • CPG marketing departments are full of bright minds who spend a lot of time figuring out the "key message", and once that’s done spend a lot more time and money with their agency figuring out how to most cost effectively reach their target audience. Very few charities have those resources, so there is a very real risk of spending money on media that doesn’t reach your target audience. In other words a shotgun approach is expensive and may be doomed to failure anyhow
In the end, for most charities the biggest distinction on the Marketing side is about products versus feelings. CPG Marketing is fundamentally about meeting an unmet need, real or perceived, by trading the consumer’s money for a product. By definition every charity meets a need, but charities ultimately trade a donor’s money for a good feeling. And selling a feeling is a very tricky thing. Done well both CPG Marketers and charities can achieve greatness through selling feelings (just ask Apple or Nike). But its hard to do well, particularly on a small budget

That’s why most charities stick to marketing in ways they know best. For example, stewarding donors well, getting articles in the local paper, or sharing a well-written newsletter. Solid, less glamorous but certainly less risky ways to consistently build a charitable brand.

Tuesday, April 26, 2011

Charitable Mergers: A recipe for change, challenge and opportunity

Here’s a recipe we should all be thinking about… Take thousands of charities, dozens of great causes, and bring to a boil through limited financial resources and increasing demand. Blend in a desire to leverage for-profit best practices around mergers and you have the potential for a tasty dish to serve many new stakeholders. But how do you ensure that the dish ever even gets made, and if so how do you ensure it doesn’t boil over to make a huge mess?

Corporate mergers often fail. And charities that have been poorly merged have failed too. Moreover, the same passion that is at the core of every successful charity can actively resist the kind of change required for a merger. Worse yet, very real issues of maintaining donors and ensuring long-time supporters don’t leave can scare off even veteran Boards and charitable leaders.

Here are three top ways to help make this process less intimidating and more likely to succeed.

First, seek what is common in the charities in question as opposed to strictly what is different. Craig Dearden-Phillips’ article http://www.guardian.co.uk/society/2010/feb/17/charity-merger-journey
sheds light on this perspective.

Second, seek engagement from corporate funders in particular early in the process. With the growing trend towards Collective Impact http://www.ssireview.org/articles/entry/collective_impact/ corporate funders are beginning to "reward" organizations that are considering ways to "do more" with combined resources.

Finally, consider all your stakeholders and communicate a vision that underscores benefits (even if it may only be survival) for all concerned. Collaboration, transparency and openness have helped other organizations achieve success http://www.insidetoronto.com/print/43149 and are the key ingredients of successful corporate mergers as well.

Not undertaken lightly or without risk, a charitable merger – even of one function or via shared space – might be worth your consideration on the menu at least as “food for thought”.

Thursday, April 14, 2011

Of Stars and Charities

Every year well meaning people start up new charities, some of them stars who have the ability to donate large sums or use their fame to encourage others to do so. For example (albeit not a Canadian one), you may have heard about Madonna’s costly exploits in Malawi where £2.4 million has been spent, but her school project has not even broken ground (www.guardian.co.uk/world/2011/mar/25/madonna-malawi-charity-squandered-millions). Perhaps this is an example of what can happen when a well-intentioned star takes up a cause or starts an organization without any real understanding of charitable processes or what’s required to deliver programs.

However I believe that even stars who create well-run, impactful and successful charities may be inadvertently undermining their own potential results. Unless there is truly no other organization addressing the need that the star’s new charity seeks to address, however different the new group may be it is (by definition) adding a new set of costs and infrastructure to address their cause.

One example is Guy Lalibert√©’s One Drop (http://www.onedrop.org/). Having visited their website and read their Annual Report it seems to be a wonderful organization, supporting much-needed work supplying fresh water and related project work in many parts of the world. In 2009, One Drop raised over $10 million. And of note, the "Founder’s Contribution" was over $7 million – generous and wonderful indeed! However, notwithstanding the One Drop partnership with Oxfam, One Drop also spent almost $2 million on Fundraising Costs and Administration. Don’t get me wrong, One Drop seems to be a lean and apparently efficient organization, so I’m not suggesting almost $2 million is too much to spend on the operational side.

But it is $1,900,000 that could have gone towards another, already existing organization that pursues the same mission, and not added the incremental costs of this new organizational infrastructure. There are already lots of charities that seek to improve water availability around the world Р3.7 million hits to a Google search under "charity clean water". Imagine the influence (and impact) stars like Guy Laliberté could have if they focused this kind of support and passion on an existing, effective and efficient, organization, and simply generated the full $10 million to support one of them...

In the end, perhaps our stars should first consider if there isn’t a way to achieve their vision through partnership or being a spokesperson rather than through creating something entirely new.

Monday, April 4, 2011

Many more social ventures for many more Charities?

Saturday's Globe and Mail newspaper in Toronto had an article discussing social enterprises (a.k.a. social ventures).  Examples ranged from a bakery that employs people "at the edges of society" to a group helping aboriginal carpenters get experience towards full-time work.  You can read the article at the Globe and Mail on Social Enterprises.

Let me state for the record that the concept of social enterprises is one that I support, and as a business-person I can certainly appreciate the benefits that can accrue to employees and the organization from a well run operation. What struck me about the article however was what was not covered in detail.

First, the article certainly mentions declining donations and government funding.  And it's clear this is already an impetus for charities to seek out new revenue streams.  But I'd hate for charities to see social enterprises (or any other "business model" that raises funds) as a saviour and charge into the fray unprepared.  While the article touches on "bumps along the way", business can (and sadly do) fail every day, and already overstretched charities are poorly equipped to try something as challenging as a start-up business. At least not without lots of expert advice or conversely very modest expectations...

But the article also mentions the 150+ social ventures that are in Toronto today, with "half of them [having been created] in the last 5 years".  So in addition to the risk mentioned above, we are already seeing a trend towards creating more social enterprises. I offer that with 80,000+ charities (and over 150,000 not-for-profits) in Canada we need to be seeking synergies, efficiencies, and ways to deliver on charitable "Mission" that don't create yet more new entities.  Maybe there's room in Toronto for thousands more new social enterprises, but what I'd really like to see is far fewer such a projects, and each one run by multiple charities in a collaborative fashion.

The overlap in charitable Missions and still growing numbers of charities combined with declining revenues is creating a perfect storm.  Charities that come together, spread the risk and cost among them, and cooperatively seek the support needed to launch a successful business, would be a model worth replicating across the country.  For my money that would be truly newsworthy!

Friday, April 1, 2011

A bit of a Fool but No Joke

An early morning meeting this week reminded me that as specialists in our respective fields we can forget or even be unaware of how big and/or complex other sectors may be.  But I am guilty (and maybe you are too) of assuming that I know lots about the sectors I know best.  And we all know the saying about people who assume things...

So I'm always pleased (but not entirely surprised!) to find great new resources and tools that shed light on the charitable world.  In particular the blog below has the added benefit of a variety of links to other resources and bloggers.  If you'd like to learn more about Corporate Social Responsibility (CSR) and sustainability I suggest you take a look.

http://makingsenseofresponsibility.com/

So it may be April 1st, but there's no joke here!

Saturday, March 19, 2011

For Profit Best Practice or Charitable Frivolity?

The last couple of weeks I’ve been pondering a simple question: are all for profit sector “best practices” applicable to the charitable sector? What has spurred my musings has been the recent case where Toronto Community Housing Corporation (TCHC) has been vilified for some of their spending on celebrating successes and team motivation.

I’m not going to defend any of TCHC’s spending habits (many seem to be rightly questionable and needing of better controls), and I’m very clear TCHC isn’t a charity in most aspects. However, one thing they did do as a public agency is something charities have been dabbling in, and they’ve received a lot of heat for it.

What I’m talking about is their following of a for-profit best practice of giving employees morale-building holiday parties and modest incentive gifts. In the Consumer Packaged Goods world where I grew up there are (to this day) major “Sales Conferences” where big bucks are spent to motivate the troops. And the level of “team building” only gets more expensive and crazy in the Pharmaceutical world… Pick your sector, most every for-profit organization spends money on celebrating with (and thereby building or motivating) the team

You might argue that this spending is wasted or misguided, and you might be right. But for profit companies large and small keep doing it, so surely there must be some payback or rationale for the spending? And would that rationale/benefit apply to the charitable world?

You might argue that it really is only done for the sales team. Maybe, but then would that apply to only the Fundraisers on the charitable side receiving the same motivation?

For once I don’t have an answer. But what is clear is that charities that seek to motivate or team-build using the same best practices as their for-profit peers do so at their peril.

Saturday, March 5, 2011

Barbarians at the Gates

Imagine you’ve spent the last 10 or 20 years working very hard in your role, delivering great results with extremely limited resources, and someone who’s never even worked in your sector comes along saying, "move over, I’ve arrived to fix what you’ve been doing." You might be just a little put-out and resistant, no?

Sadly, that can be the unspoken attitude from some folks in the for-profit world as they explore career opportunities in the charitable world.

Or imagine you’re the same hard-working charitable leader, and applicants say, "I’ve reached a stage in my life where I’m thinking of retiring, but first I think I’d actually like to give back." Is that code for:
  • I’ve made my money (all while you were making much less), so now that I’m at a stage where I can afford to make less money, I’d like your job?
  • I’m ready to slow down (but not fully retire) so now I’d like to come and work in your sleepy little world?

Of course it’s not usually code for either message, but can you imagine how your charitable audience might infer these messages?

There are plenty of horror stories in the charitable sector about for-profit folks who simply don’t fit, or fail for any number of other legitimate reasons, but it does fuel fears about why "outsiders" just don’t "get" the sector.

All this to say that if you’ve heard that breaking into the charitable world can be tough, there are both real historical reasons (e.g. previous failures) and perceptual reasons (e.g. attitude for joining the sector) that exist for resistance. And also to say that for many reasons the charitable world really needs the talents, new blood and passion "outsiders" bring.

Just bear in mind that if you’re one of those "outsiders" eager to get inside the charitable world, do think carefully about your motivations and your messaging, or you’ll be treated like a barbarian at the gate.

Wednesday, February 23, 2011

Communications 101

Whether working for a charity or for profit, and whatever the sector, good communication skills are a vital element.  A million years ago when I started with Procter & Gamble as a Salesman we were drilled on communication skills - so some of the techniques have actually stuck with me!

For your use prior to your next performance meeting with one of your staff, an introductory meeting with a prospect, or just at the dinner table tonight, I offer what we were trained on...

This aspect of communication skills was all about eliciting more input from the "buyer" and had five elements, and they went from techniques that were "least sensitive" to potentially "most sensitive":
1/ General Lead (e.g. "go on", "say more", even "yes...")
2/ Pause (a little more sensitive since it could lead to an awkward silence)
3/ Restatement (in my old world that would be something like the Buyer says "it's not selling", and you reply with "it's not selling?")
4/ Probe (e.g. "how is that selling?")
5/ Interpretation (e.g. "so when you say it's not selling, you mean the Marketing plan isn't working?" or something like that...)

Learning more about prospective donors, buyers, or just one another is always helpful, so maybe this will make your next conversation just that little bit more productive!

Thursday, February 3, 2011

Not Lost in Translation

In a meeting this morning I scribbled down a quick diagram to try and illustrate a point I was making around leadership, and strategic development in particular.  The people I was chatting with seemed to like how it captured some key concepts in a simple way, so I'm sharing it with you.

Obviously there could be more "pros" for each end of the diagram, but for simplicity's sake I've limited it to two.  At the top is "Top Down" leadership, the model of do-as-I-say and autocracy.  At the bottom is the opposite, a purely democratic, consultative and consensus-driven style.

To the far left lurks "Seat of Your Pants"; a pure gut-feel style of passion and hunches, while its opposite extreme of "Analysis Paralysis" patiently crunches numbers off on the far right.



Clearly there are other variables to consider, and where you sit on each axis is based on context or the issue of the day, but I'm glad my little scribble proved a helpful model for our conversation... And what struck me was that this sort of model applies in both the charitable world as well as the for-profit world.  A definite case where nothing is lost in translation!

Friday, January 28, 2011

New Year's Top 10 List - Differences in the Charitable World

I got off the phone this morning with a woman who is thinking about making the move from the for profit world into the charitable world. At the root of most of our conversation was the question "just how do the two differ?" So in the spirit of New Year "Top 10" lists, here’s my Top 10 List of for-profit versus charitable differences. Note that I’m not going for the obviously different aspects, but what might surprise you on the "other side"….


  1. Passion – in the charitable world it’s about wanting to make a difference. People, inspired by their experiences or insight into a need, set out to change the world. Not make a profit: change the world.
  2. Mission – most corporate employees don’t know their corporate Mission statement. Most charitable employees live their Mission statement every day. This affects every aspect of the charity.
  3. Volunteers – are a key defining difference. Most charities simply could not exist without what volunteers bring: their skills, their passion, their heart and they’re free. This all has its own set of intrinsic pros and cons, but whatever the case I don’t remember many volunteers helping out the corporations where I worked
  4. Boards – sure big corporations often have Boards, but unlike the vast majority of businesses charities of all sizes have Boards
  5. Complexity – given that charities have Boards and volunteers, and structures or staff that parallel virtually all for-profit activities, charities of roughly the same operating budgets (size) as a for-profit business are more complex
  6. Structure – at the same time, in comparing most organizations of a similar size, my experience is that charities are relatively unstructured for their size (e.g. fewer policies and manuals, less robust Human Resources practices, etc.)
  7. Lean – if you think your for-profit experience was with a lean organization, I’m pretty sure there are still charities that can show you a trick or two. All funds (for better and for worse) are often pushed to the furtherance of the Mission
  8. Intangible – a bit of an "obvious" difference but with important implications, unlike many for-profit organizations what is "sold" in a charity is a feeling or outcome, not a "thing". For example, this difference results in different skills for fundraisers versus salespeople
  9. Voice – manufacturing has a sector voice, but in Canada non-profit is even bigger but with less "clout" (and same as the automotive sector) – Imagine Canada does great work as one voice (and in U.S. not even a single voice at all), but as evidence of this difference no Federal bail-out money was coming to struggling charities in this economic downturn
  10. Understanding – most Canadians have a fairly good sense of the ingredients in the food they buy, or the "value" of property they live in, but most don’t understand the causes they support as well. If buying something and making a gift are both transactions of a kind, the difference here is that purchases are often made first through the head, while donations are often made first through the heart.
Not better or worse, but very different indeed!

Monday, January 17, 2011

One Way Out of the Box

My last post before Christmas raised the issue of adhering to donor wishes, and given most people’s understandably imperfect knowledge of every charity, questioned whether the "donor always does know best". Since this generated some interesting conversations, and ultimately a question of what might be done to address the issues raised, today I’m revisiting this topic.

One conversation was effectively about what is known as the "Charity starvation cycle". This is the process where either due to the Charity’s desire to see every penny raised go to programs, or due to a lack of donor support for infrastructure and capacity (or a combination thereof), charities are "starved" of the basic necessities to effectively and efficiently run their operations. This harms long-term sustainability and even the actual impact of the very programs that are being supported so aggressively. One suggested solution was to aggregate infrastructure and capacity needs to make them more interesting to donors.

The other conversation was about donors, and in particular the expectations of donors of larger gifts as compared to annual campaign or "smaller" donors. We all know that different things motivate different donors to give, but the point was made that larger donations often come with expectations. Special recognition might be part of it (e.g. naming rights within Capital Campaigns, etc.), but it was argued that primarily larger donors primarily expect more "impact" from their gift. The sense was that their goal is to be "transformational", hoping to move the Charity to entirely new heights or in new underserved directions. The suggestion was that unless the annual campaign and "smaller" donors took care of the infrastructure the charity couldn’t expect these larger gifts.

And to a point I agree. By definition annual campaigns are all about funding the day-to-day operations of the charity. Yet if the annual campaign is only enabling the charity to live "hand to mouth" are they forever trapped without access to "big" gifts?

Obviously there are other fundraising streams to consider, and creative tools generate more revenue from existing streams. But I believe even within this big donor / small donor paradigm there is the potential to break out of this box. While I was with Junior Achievement we were successful in receiving a significant multi-year corporate gift that included infrastructure funding elements required to help implement the desired programs. I appreciate this isn’t exactly the same as an individual donor making a transformational gift, but there are applicable insights.

First, fundraising is a relationship game. You need to get to know your prospect long before they become a donor, and that allows for two-way communication, including discussing the existing capacity of your charity. In our case we were able to show we were very lean already, and without support for capacity we wouldn’t be able to act on the gift.  Thus, in some rare cases a charity may have to walk away from gifts that don't include the right balance of support, or are simply unexecutable at the time. And I note as a sidebar that this can actually be a big positive in the long run: http://www.dwb.org/news/article.cfm?id=1644&cat=field-news

Second, truly deep donor relationships allow for education. This opens a whole new avenue for skilled fundraisers. I believe there’s an opportunity for good communication to show prospective donors of larger gifts how part of their gift can have even more impact – be even more transformational – if some portion of their gift goes to infrastructure and capacity building. So it need not be about aggregating the infrastructure needs or trying to ‘sexy’ them up in some way: simply being clear on the need can go a long way. Certainly that was my observation of the corporate gift we received.

Deep relationships. Solid communication. Complete transparency. Doing these things takes time, time that may not be cost-effective with every donor. But ultimately it’s the charity’s responsibility to help donors of all sizes to understand the charity's unique needs. And this is a key part of the solution to finding the way out of this particular box.