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!