Bullies Within Charities?

The tragedy of Rehtaeh Parsons has me thinking about bullying. The sad fact is that bullying is not just done by kids, nor only on-line or at school. It is also done by adults at the workplace. What’s particularly interesting to me is that bullying happens even in workplaces where you might not expect it – for example within charitable and philanthropic organizations.

An interesting article in the latest issue of Advancing Philanthropy makes some interesting points on this theme of workplace bullying, and how it differs from the private sector to the charitable world.

1. Bullying not only happens in the philanthropic world, but the impact can actually be more intense: bullying runs counter to the expectation / assumption that people in the sector want to “help others” so when it happens it magnifies the negative / unexpected impact.
2. Since staff at the charity are there to help others and make a difference in the world, they may be more willing to endure or forgive the bullying, rationalizing that it is an expression of the passion the bully has for the cause and a desire to drive it to success at any cost.
3. Many charities are small, tight-knit organizations driven by Mission and collaboration, so standing up to a bully may be seen as risking the cohesion of the team and hurting the effectiveness of the team. Charity staff in particular don’t want to hurt impact.

Finally, since bullies are most often higher up on the organization than the victim, there may be relationships with Board members or donors at stake if it’s a senior staff member who is the bully and they get “called out”. This will make charity organization staff all the less likely to complain or raise the issue.

So not only is the charitable world just as much at risk of bullies, but the impact may even be worse than in the for-profit sector. My commitment, as a Board member and as someone who supports the charitable world, is to be more attentive to this risk and make sure that staff and volunteers I work with know where I stand on the issue – and that I’ll stand with them against any bullying.

3 Key Considerations for Last Minute Donors

A last-minute post for last-minute donors.  Whether you're seeking the tax break and the receipt for the year that is ending, or just trying to finish 2012 on a positive note, it's not too late to give. It's also not too late to give wisely.  Here are three key considerations before you make your year end gift.

1. PASSION
   Is this a cause you care passionately about? Has this organization touched your life or helped others you love? Is this a cause you truly believe needs your help?  Sometimes we're swayed by a powerful image, or a great charity marketing campaign, but that impulsive decision may not be the one that will bring you the most happiness. So while making a gift is better than none at all, consider if there isn't a better "fit" for your generousity.
2. RESEARCH
   What other organizations focus on the area(s) you're most passionate about? Is there a better fit, or more direct way, for your gift to work? Websites like Charity Navigator (focused on the USA) or Charity Intelligence (Canadian but with a much smaller database) can be a big help on this front. Even a quick review of these sites may provide you with new insights about how best to direct your charity giving.
3. IMPACT
   Most charities are very efficient with your donated money, but does your intended target really need your gift? How many years of operating funds does the organization have in reserve? More than just cost per dollar raised (e.g. cost of fundraising), it's important to know if you're getting real impact for every dollar donated. For example, if your charity helps students, has their cost per student been going up or going down over the last few years? And if the answer is up, have they been offering new and enhanced programs... Or are their costs going up at a rate faster than inflation? 

My point is that, as I've said before, giving from your heart and from your head is important. Even if you're making a last minute donation, there is still time to do it right! 

When Charities Fail

Over the last many months I've watched and listened with dismay as many charities have struggled in this economic and political climate.  This isn't a big surprise and clearly many people (including me) forecasted a tough year in 2012. However, like a death in the family, even when you know it's coming it's not easy.

Such is the case with Touchstone Youth Centre here in Toronto. This organization wasn't on my radar as a charity in trouble, but late last month this is what was shared with key partners and stakeholders:

Dear Sir or Madam,

It is with great regret we must inform you that Touchstone Youth Centre will be ending its service as of November 30th, 2012. We are closing due to ongoing financial challenges.

Touchstone Youth Centre has been providing services to youth between the ages of 16 and 24 years old since 1991. We have managed to provide emergency shelter services to over 400 youth each year while providing outreach services to more than 80 youth each month. Unfortunately, as a result of our current financial state, the Board of Directors made the difficult decision of discontinuing service.

The City is seeking a replacement operator for the facility to be in place as soon as possible. It is not possible to have one in place by November 30th. The City and Touchstone Youth Centre will work co-operatively to find safe places for existing clients. Admissions to the shelter will be suspended November 1st to facilitate this process. As soon as the City can choose an appropriate operator, a re-opening date will be announced. This is expected to be late January.

We thank you for your hard work, dedication and commitment to Touchstone Youth Centre. Our partnership with you made us able to make a difference in the lives of homeless youth.

The next few weeks will be extremely difficult for all stakeholders including staff and clients. However, Touchstone Youth Centre will provide quality service up to the last day of service. Any support you can provide us to accomplish this goal would be greatly appreciated. Thank you for all your work and the support you provided us over the past 21 years!

Sincerely,
Susette Clunis
Executive Director


In brief, a vital organization helping homeless youth is effectively going out of business.  I don't know the details or causes behind their "current financial state", but my main concern relates to the similarities and the differences between charities and for-profit organizations.  When a for-profit organization fails and closes its doors, the employees suffer, and in general terms their customers / clients are inconvenienced.  Sort of like the old riddle with a pig and a chicken discussing a bacon and egg breakfast, with a for-profit model the clients are involved but the employees are committed.

Sadly, in the case of charities that fail - for whatever reason - the impact is greater and broader. The employees suffer, but their customers / clients suffer even moreso.  And in most cases these clients are the ones who can least afford the loss.  I appreciate this is an simplification (and for example ignores suppliers to for-profits who suffer as well), but the simple fact is this: a safe and supportive space for homeless youth is discontinuing its services.  By any measure that's not good news.

And it begs the question about how to respond.  My response is to ensure that my donations go where they're needed most, that I vote for officials who will seek and support innovative, effective and efficient ways to deliver services to those who need it most, and that I speak out so that others know what's happening in a vital sector that touches us all.

Penny Wise and Pound Foolish: Expensive Spaces for Charities

There has been some press coverage about the impending rate changes to rent space in Toronto District School Board (TDSB) schools and auditoriums, particularly with respect to the impact on religious groups. For example, rates for unsubsidized groups can be from 5 to over 10 times higher per hour than they are for subsidized groups. I believe the implications of this decision are bad today, and will only get worse over time.

While I appreciate TDSB's desire to address their $110 million budget shortfall, there are two significant issues that such massive increases (even if they don't come into effect for several months) present to all sorts of organizations, the TDSB, and ultimately the entire City of Toronto.

1. If organizations can't afford the increase, they won't rent the space, resulting not in a decrease to the budget shortfall, but actually an increase (having some rental income on a property with utility costs is better than no income at all)
2. Even if organizations in the Subsidized Level 2 tier (not to mention the unsubsidized groups) can find the extra funds required, they may be forced to cut back in other areas, reduce hours or staff levels, or cut back on locations (e.g. for some groups there is a maximum of 3 locations before the subsidy does not apply)

In brief, this means fewer services by organizations that in many cases are trying to serve those who need it most.  For example, you can imagine that some of these people being served in TDSB spaces may ultimately face choices around criminal activity, and due to a lack of supports make a bad choice that winds them up in jail, then this is indeed "penny wise and pound foolish".  It costs hundreds of thousands of dollars per year to incarcerate someone, while ensuring robust organizations are in place to help reduce criminality and incarceration only costs (from the point of view of TDSB rents) a few dollars per hour.

It's truly a shame that our way of calculating the "bottom line" only looks at one number - in this case the TDSB's budget shortfall.  This forces short-sighted choices that cost us more as a society in the future.  Surely the better budget is one that includes societal costs and allows groups that save money over time to flourish. Calculating the true value of organizational and program impacts today in years ahead is hard to do, but surely worth doing if we seek maximum value for our donations and tax dollars.

Charities: The Model of Efficiency?

As governments at all levels decrease support of the charities and non-profits I see both risk and some potential for positive impact on these sectors. However, for the record I believe that strategically guided government funding provides unique efficiencies that no other amount of individual or corporate giving can match.  By its very nature the gifts of individuals and corporations are guided by their unique scope, which is unlikely to be as encompassing as that of government.  For the same reason that schools and roads are deemed public goods and thus funded through taxes, I argue that some degree of government / tax funded support is required to support the public good delivered by way of charities and non-profits. The real debate is how much of these good works should be funded by - if you will - forced donations through the use of taxes.

This debate is informed at least in part by the argument that for-profit businesses are more efficient than charities and non-profits. Certainly that was the case made recently page 9 of the Globe and Mail’s Report on Small Business by Catherine Swift of the CFIB. Her suggestions that reduced government support to charities will result in greater small and medium size business donations is plausible and may actually prove true.  While this doesn't mitigate my concern over sufficient funding for the best organizations guided by a broad strategic view, she also highlights the “more efficient” private sector.

And on that front I argue that the most efficient model is often already found in the charitable and non-profit world.  I’m not suggesting that learnings can’t be found in the for profit world, but here’s why many charities already win on the efficiency front:

1. Charities and non-profits leverage volunteers – this keeps costs down and multiplies the effectiveness of the organization
2. Charities and non-profits generally pay less for talent and staff than their for profit peers, and have a reputation for passion and commitment from these same staffers
3. Charities and non-profits by their very definition don’t seek profit – this eliminates a “middleman” who desires maximum profit as opposed to maximum impact, which increases efficiency

So while I would welcome increased support by small and medium sized business with or without decreased government support, I also hope we won’t confuse this with a sign that these same generous donors are by their nature more efficient than the recipients. The learnings around efficiency can actually flow both ways.

The Drummond Report: Thoughts on Charitable Impacts

The recent publication of the Commission on the Reform of Ontario's Public Services' (Chaired by Don Drummond) report, "Public Services for Ontarians: A Path to Sustainability and Excellence" has generated a lot of press.  Having reviewed the full report, here are few thoughts on implications to the charitable sector.

There are 3 Chapters that have the most relevance to charities and non-profits.

Chapter 3 discusses the Commission's Mandate and Approach.  The recommendations in this section suggest that the provincial government not make across-the-board cuts, and seek to preserve investments where good value for money is being achieved.  The trick here will be determining what metrics are used, and who determines what "value" is important. The Report also clearly supports "privatizing assets and moving to the private delivery of services wherever feasible", but also suggests that this not be done "for ideological reasons".  While it is Federal government example, the track record with respect to Bill C10 (for example) suggests this may be easier said than done.  Regardless, charities should be aware that this paradigm of privatization is now firmly established as the model going forward.

Chapter 8 is all about Social Programs. Since many charities and non-profits operate in this arena the recommendations are of particular interest. My perspective is that most of these recommendations seem reasonable and align with current initiatives / themes already under discussion in our sector.

• Reform funding practices in the non-profit sector... reduce administrative costs by focusing on measuring outcomes rather than inputs. My only concern here is that measuring only outcomes can have unintended consequences!
• Improve the responsiveness of the government to the non-profit sector by creating one "window" through which all non-profits can engage all provincial ministries. This seems desirable so long as we don't create another huge ministry that actually adds costs and inefficiencies!
• Explore the use of Social Impact Bonds. They're all the rage right now, so we might as well jump on the bandwagon... And maybe they'll be a truly valuable addition to our funding toolbox.

Chapter 16 is focused on Operating and Back-Office Expenditures. The report gets a bit technical here and yet from my point of view misses a key opportunity.  While the Report is not focused on the charitable and non-profit sector, a clearer message that provincial funding would be looking to support organizations that were seeking "back of house" efficiencies through mergers, "hubs" and formal partnerships with other like-minded organizations would have been a big step.  Recommendation 16-9 does say that "consideration should be given to rationalizing and consolidating programs that regulate inter-related sectors or that could otherwise gain efficiencies from greater integration", but does not speak specifically to our sector nor to these sorts of efficiency opportunities.

The main message? That for better and for worse cut-backs and change are coming to the charitable world.  But then, you already knew that!

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.

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.

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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'.

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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.

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.

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.

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”.