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!

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.

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!

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!

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.