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.

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!

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.

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”.

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 Laliberté’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 – 3.7 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.

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!

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!