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!

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!

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!

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.

Is the Donor Always Right?

A few years back I had the pleasure of having Penelope Burk (of Donor-Centered Fundraising fame at http://www.cygresearch.com/) consult with the team I was on over a period of time.  If you haven't read her work I highly recommend it, and if you can afford her in person I recommend that even more highly, but her focus on doing right by the donor, and adhering to their wishes makes eminent sense.

Or does it?  Maybe not all the time, or at least not if the donor doesn't have the full picture...

I had a chat last week with someone who works at a large university, in a faculty that has a large number of affluent graduates.  Her lament was that funds were going to "naming this wing" or "supporting that special project", but the basic infrastructure of the department, the tools that the students use and the ability of administrators to efficiently do their work, was woefully underfunded.  Her phrase was, "we don't see a dime".

It's easier to fundraise when you can sell the naming rights or have a sexy special project, but fundraisers do their organizations a disservice if they also don't have a strong Case for support for all aspects of their organizations.  I know first-hand that unallocated funds are hard to raise, but if the only thing the prospective donor is aware of is the hot new project then my friend and her department ultimately suffer.

And if that's the case the donor really isn't right, even if it's not their fault.

Time in the Charitable World

Most charities are lean to the point of anorexia, driven in large part by a legitimate desire to fund their Mission but compounded in an unhealthy way by a fear that donors will revolt if "too much" is spent on staff, systems and back-of-house activities to support their Mission.  This paradox would be bad enough on its own, but can actually be compounded by the drive to be more like for-profit organizations.

Charities and their Boards often admire good for-profit concepts and want to adopt them, but end up misusing or misapplying them.  First, what sounds like a good idea may simply not translate well into a world of philanthropic giving.  Second, given a lack of experience or misunderstanding with the concept may result in damaging outcomes.

A great example is the for-profit mantra of quarterly results, and being driven by short-term payback.  ROI is valuable concept, but one to be used with great caution in the charitable world.  Simply put, the problems that most charities are seeking to address took generations to create, and likely won't be solved by the end of Q3.  But Boards and inexperienced leaders (particularly ones newly arrived from the for-profit world) may be tempted to treat their charity this way.  After all, they reason, it's a good concept for the for-profit world, and if the pay back doesn't come within 12 months it likely isn't worth doing...

So investments in resource development or fundraising can have unreasonably or even unattainably short payback time-frames associated with them, or the investments don't get approved at all.  Which inevitably leads to the further "starvation" of the organization.

In the end, a longer term view, a little patience, and some courage to make smart investments with some carefully considered risk can have huge benefits.

The Elephant in the Room

Imagine you're running a business and you're told you can't invest in your production lines, pay your office heating and cooling bills, and even staff training and salary increases are subject to outside approval.  Now you know what it's like for many charities who find it virtually impossible to generate financial support for "core operations". 

Understandably most funders and donors want impact for their donations.  So they tend to want to fund programs, projects, new activities and "externally" focused costs.  But we all know you need to keep the lights on and pay "overhead" costs just to run those programs... I give full credit to organizations like the United Way of Toronto that does continue to fund "core operations" because without them many worthy organizations would be in real financial trouble.

And I don't think we'll resolve this issue until common standards are set, books are made fully transparent, and charities volunteer to show the "real" costs to donors and funders.  Once the philanthropic world has met this end of the bargain we need to talk about the elephant in the room: that there are legitimate costs to running a charity that need funding.  The alternative is to continue the current cycle of self-inflicted starvation (or funny games with how the numbers get reported) where every charity seeks to look like cheapest operator in town.