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Individual donors

When Individual Donor Fundraising Goes Well

Fundraising Bright SpotsThis week the Evelyn and Walter Haas, Jr. Fund released the second in their series of reports about fundraising.  Their Fundraising Bright Spots report, by Kim Klein from Klein & Roth Consulting and Jeanne Bell from CompassPoint, joins their Beyond Fundraising report, released last month.

These two reports are part of the Haas, Jr. Fund’s larger “Resetting Development” effort “to ‘learn out loud’ about how to…help put the sector on a surer path to sustainability and long-term success.” Given my concerns about their Beyond Fundraising report, the Haas, Jr. Fund very graciously asked me to review this latest report.

This new report analyzes 16 social change organizations that have been successful at individual fundraising to determine what the sector can learn from them.

I am always a huge fan of case studies. I think there is much to be gained by looking at others who have done things well, so I applaud the Haas, Jr. Fund for moving from theory into practice to see what is working in individual fundraising.

But first, we have to understand this report for what it is. This report only looks at nonprofits that have been successful with individual donor fundraising, which is just one of several ways that nonprofits bring money in the door. And the report only looks at “progressive organizations with limited budgets and small staffs.” So I would argue that this report and the case studies contained within it will only be applicable to similar types of nonprofits that have individual fundraising as part of their financial model.

Nevertheless, the report finds four themes present in these 16 social change organizations, which are that fundraising:

  1. Is core to the organization’s identity
  2. Is distributed broadly across staff, board and volunteers
  3. Succeeds because of authentic relationships with donors
  4. Is characterized by persistence, discipline, and intentionality

Many, if not all, of these themes make up the “culture of philanthropy” that the Beyond Fundraising report described.

There were several things I liked about the Bright Spots report.

First, I love the report’s focus on making fundraising part of the job of an entire organization’s board and staff. Two case studies in particular, Jewish Voice for Peace and Mujeres Unidas y Activas, demonstrate how major donor fundraising should be shared among senior staff and board members. For example Jewish Voice for Peace “has 57 portfolio managers from across the staff, board, and volunteers who together manage 600 major donor relationships in addition to other roles they play within the organization.”

Indeed the report points out that in these 16 organizations the head fundraiser’s role is to marshal staff, board and other organization resources toward fundraising, which I love: “Time and again, we heard from the development directors at these organizations that their job is to coordinate, to teach, to coach, and to inspire. The individuals in this role are highly relational and they take deep satisfaction in enabling staff, board, volunteers, and members to be successful fundraisers.”

Second, I really appreciate the Breast Cancer Action case study, which emphasizes creating a give/get fundraising requirement for the entire board:

At Karuna [Jaggar]’s first in-person board meeting as the new executive director, she laid out her desire to establish a board give-and-get policy to her board members, each of whom had been told explicitly upon recruitment that they did not have to participate in fundraising…After an in-depth discussion, they set a give-and-get policy of $10,000 per board member. “Maybe we lost some potential board members who felt they couldn’t do it,” said [board chair] Tracy [Weitz], “but only in the first year. Now, our veteran board members can share their fundraising stories with prospective members and say, ‘I’ve been fine, and you’re going to be fine.’” It’s important to note that BCAction does not prioritize personal wealth now more than it did before this policy change, but rather invests the time to support board members’ success, regardless of personal financial capacity, in the fundraising program.”

Yes! That’s exactly the way to get every board member involved in fundraising, of which I am a huge proponent.

Third, the Bright Spots report points out the need to fully integrate marketing and fundraising in a nonprofit: “A critical aspect of building and refining an individual donor program is tending to the intersection of communications and fundraising…development and communications are inextricably linked and staff driving these efforts work extremely collaboratively.” Agreed, fundraising can not sit on the sidelines of anything an organization does, but must be fully integrated throughout the organization.

Now, let’s get to where I think the report falls short.

First, I would have liked to understand better how these 16 organizations were selected as “bright spots.” I think in holding up organizations as exemplars it is critical to understand in what ways they are exemplars. While the beginning of the report describes what these organizations have in common: “a deep commitment to and strong track record with raising money from individuals,” and “individual support is a consistent part of their overall revenue strategy,” and the report highlights some of their individual donor fundraising successes, it is unclear why these 16 organizations in particular are held out as bright spots.

In my mind, I would select case study organizations that achieved: individual giving growth year over year, and/or higher than average donor retention rates, and/or more profitable than average fundraising activities, and/or demonstrated long-term financial viability. While some of the 16 organizations had significant individual donor growth, not all of them did, so I’m not sure what selection metrics were used. I would like to understand how the Bright Spot organizations’ fundraising metrics compare to their most fundraising-successful peers.

It is particularly important to understand what makes these organizations bright spots when the report points out that some of the 16 social change organizations are struggling with scaling or making sustainable their individual fundraising efforts:

“We heard from the Bright Spot leaders who want to grow their organizations that they are grappling with how to scale this organizational highly relational approach to fundraising. And many of them acknowledge how dependent their success is on long-time leaders, despite their distributed approach to fundraising…Many of the Bright Spots will soon have to adapt to very long-time leaders moving on.”

Second, the report does not make a clear distinction between small donor fundraising (one-to-many cultivation and solicitation of donors) versus major donor fundraising (one-to-one cultivation and solicitation). I wonder if the four themes that the report uncovers differ, and if so how, between fundraising activities targeting many small donors versus fundraising activities targeting a few large donors.

Third, the report touches briefly on the 16 organizations’ fundraising systems and use of data and metrics, but not in a robust way. I would have loved to understand better the kinds of systems these bright spot organizations use and what metrics they are tracking and trends they are seeing. While I understand the report’s overall emphasis on some of the “soft” skills of fundraising (“authentic relationships with donors,” “culture of philanthropy”) I also think that understanding the “hard” skills (systems, metrics) is key to replicating fundraising success (and overall financial sustainability).

Fourth, just as the Beyond Fundraising report did, the Bright Spots report continues to leave the problems (and in this case, the successes) with fundraising largely in the hands of individual nonprofits and their leaders. I am still hungry for case studies and research about how nonprofits (and their funders) can overcome the more systemic financial flaws inherent in our social change sector.

In the end, I would say that the Bright Spots report gives us a glimpse into a piece of what works to bring money in the door. For social movement, individual donor fundraising at small nonprofits, the Bright Spots report provides some important and useful insights. But for more broadly understanding what contributes to overall financial sustainability in the nonprofit sector, this report falls short.

But as I have said before, I don’t fault the Haas, Jr. Fund for exploring these issues. Indeed, they are one of very few funders contributing to the knowledge base about what creates a more financially sustainable nonprofit sector. We just need more of them.

Photo Credit: Evelyn and Walter Haas, Jr. Fund

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A Nonprofit “Culture of Philanthropy” Is Not Enough

Beyond FundraisingThe Evelyn and Walter Haas, Jr. Fund, a foundation on the forefront of investing in nonprofit capacity and one of the few foundations funding nonprofit leadership development, released a new report this week Beyond Fundraising: What Does It Mean to Build a Culture of Philanthropy?.

While I applaud the Haas Fund for taking a pioneering interest in, as they put it, “understanding how to break out of the nonprofit sector’s chronic fundraising challenges,” unfortunately I don’t think that this report will move the needle on the sector’s money woes.

Their landmark 2013 report published with CompassPoint, UnderDeveloped: A National Study of Challenges Facing Nonprofit Fundraising (of which the Beyond Fundraising report is a follow up) uncovered a real crisis in fundraising staffing in the nonprofit sector. And last year Haas announced a multi-year effort to “to identify gaps that may need to be filled when it comes to helping nonprofits break out of chronic fundraising challenges.”

A sector-wide conversation about money is so incredibly needed that I really appreciate the Haas Fund’s efforts to start it, especially when philanthropists are loathe to talk about the sector’s money challenges, let alone invest in solving them.

But in the hope that debate spurs greater change, and because of Haas’ expressed desire to open a conversation so that they can “learn out loud,” I offer my concerns about the Beyond Fundraising report.

As Linda Wood, Senior Director of Leadership Initiatives at the Haas Fund (and past interviewee on this blog), describes in the beginning of the Beyond Fundraising report, there must be a fundamental change in how nonprofits approach fundraising. As she writes: “Without a deeper shift in how organizations hold the work of fund development, simply adopting new tools and techniques may not be enough.”

The Beyond Fundraising report, authored by philanthropy consultant Cynthia Gibson (also a past interviewee on this blog), starts from where the 2013 UnderDeveloped report left off: that the lack of a culture of philanthropy is the most important issue holding nonprofits back from fundraising success:

By framing the issue as a talent pool problem alone, we neglect to focus more critically upon entrenched organizational factors that contribute to the inability to establish development as a shared function and nurture an organizational culture to sustain it. The right development director hire alone will never break the cycle, but the right person inside an organization that has a culture of philanthropy, can.

The Beyond Fundraising report is an attempt to understand what a culture of philanthropy is and how to encourage its growth. The report defines a “culture of philanthropy” as a situation in a nonprofit where:

Most people in the organization (across positions) act as ambassadors and engage in relationship-building. Everyone
promotes philanthropy and can articulate a case for giving. Fund development is viewed and valued as a missionaligned program of the organization. Organizational systems are established to support donors. The executive director is committed and personally involved in fundraising.

The report delineates four necessary components to a culture of philanthropy:

  1. Shared responsibility for development
  2. Integration and alignment with mission
  3. A focus on fundraising as engagement
  4. Strong donor relationships

It then provides a list of indicators for nonprofit leaders to use to assess whether or not they possess a culture of philanthropy, a list of “guiding questions” nonprofit leadership can ask in order to build a culture of philanthropy, and a list of roles that development staff and funders can play in bringing a culture of philanthropy to fruition.

While I don’t disagree with any of the indicators, questions, or roles the report describes, I don’t think that any of them, or even their sum total, will solve the lack of financial sustainability at a particular nonprofit, let alone in the nonprofit sector overall.

And this is because I think that only looking at fundraising — the pursuit of philanthropic dollars, which only make up 13% of all the money flowing to the nonprofit sector — is a fundamentally flawed approach to understanding money in the sector. My bias has always been to move the sector from a broken fundraising approach to a more strategic and holistic financing approach.

And while I agree that individual nonprofit leaders are part of the problem, they are just one part. Often their troubled approach to money is simply a reaction to a dysfunctional system. Certainly we need to move away from some ineffective money practices that nonprofit leaders embrace (being reactive rather than strategic about money, not calculating the return on investment of fundraising activities, not aligning money and mission, allowing a board to dismiss their money-raising responsibilities…).

But I worry that by scapegoating the problem to the shortcomings of individual nonprofits we are ignoring the larger financial dysfunctions of the sector. Rather than pull back the curtain on the systemic hurdles causing the nonprofit sector’s money woes, I fear that this report lays much of the blame for financial dysfunction at the feet of individual nonprofit leaders.

Because in my mind, the real problem is not the approach of individual nonprofit leaders, although that is important. I think the financial problems of the nonprofit sector run much deeper. If we truly want to address those problems we must have bigger conversations, and ask harder questions, like:

  • Why is there a lack of financial acumen (how to effectively attract and employ money) throughout the sector (present among both nonprofits and their funders), and how do we solve that?
  • Why is long-term organizational and financial planning not encouraged and supported throughout the sector?
  • Why is there not enough investment in the financial function of nonprofit organizations (the staffing, systems, technology, planning, and marketing necessary to build sustainable financial models)?
  • Why aren’t there many, many more funders like The Haas Fund discussing and investing in solutions to the sector’s money problems?
  • Why are we still focusing on philanthropic dollars alone when we need to understand and integrate money as a whole into social change efforts?

And that’s just a start.

My fear is that if we place the full weight of nonprofit financial dysfunction on the shoulders of an individual nonprofit’s culture, or if we look only at fundraising, we shirk our duty to dig deeper and remedy larger, structural dysfunctions in the sector.

I applaud the Haas Fund for their determination and courage to create a space, through their capacity investments and on-going research, for the incredibly important conversation about money in the nonprofit sector. But I would love to see this effort grow to become a bigger conversation about how we solve the endemic financial challenges nonprofits face.

Photo Credit: The Evelyn & Walter Haas, Jr. Fund

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5 Benefits of a Nonprofit Theory of Change [Slideshare]

nonprofit theory of changeI was speaking to a group of nonprofit leaders last month about creating a nonprofit value proposition — how to articulate the value their nonprofit creates — and it was exciting to see the lightbulb go on around the room.

Nonprofit leaders are so passionate about the work they do — it is so obvious to them why their work is critically important.

But that’s the problem.

Because it is so obvious to them, it is often incredibly difficult for a nonprofit leader to articulate to someone outside the organization (funders, volunteers, advocates, even board members sometimes) why they should become involved.

This is where a value proposition — or what I call a Theory of Change — comes in.

If you can articulate your target audience, what you do, and what you hope to achieve, you have a much greater chance of encouraging others to join your efforts.

A Theory of Change is such a fundamental building block to everything a nonprofit does. So I have created a new Slideshare presentation from the speech I gave on the 5 Benefits of a Theory of Change. In my mind, a Theory of Change:

  1. Builds a Vision, Mission and Strategy
  2. Engages Board and Staff
  3. Helps Prove Impact
  4. Allows Capacity Capital, and
  5. Attracts More Support

So, adding to the growing library of Social Velocity Slideshare presentations, below is the 5 Benefits of a Nonprofit Theory of Change slideshare, which describes these benefits in detail and shows you how to create a Theory of Change for your nonprofit.

Take a look below.

And if you’d like to learn more, download the Design a Theory of Change Guide or the Craft a Case for Investment Guide. Or, if you’d like me to come speak to your group about this or other topics, check out my Speaking page.

5 Benefits of a Nonprofit Theory of Change from Nell Edgington

 

Photo Credit: Bost

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5 Fundraising Mistakes Nonprofits Make

nonprofit mistakesFundraising is such a misunderstood enterprise. And it’s not just misunderstood by nonprofit leaders in the trenches.

I was talking to a normally very savvy foundation program officer the other day who wondered if one of his struggling grantees should think about launching a new gala event to raise some additional money. I swallowed my first inclination to scream “NOOOOOO!” in the middle of a crowded restaurant and instead calmly explained why events are a bad money fix, and why any short-term money generating strategy is probably a really bad idea.

But this well-meaning program officer is far from alone in his understanding of financial sustainability in the nonprofit sector. If I had my way, nonprofit leaders would stop making these 5 big fundraising mistakes:

  1. Taking a Short-Term Approach
    If you don’t have enough money today, a single fundraising activity isn’t going to solve the problem in the long-term. If you want to solve your ongoing money woes, you have to create a long-term plan. The single best way to bring more and larger dollars in the door is to create a smart, long-term strategy for your nonprofit. And that long-term strategy must include a corresponding long-term financial strategy. With a compelling Theory of Change (an articulation of the value your nonprofit creates), what you are hoping to accomplish, and how you will get there, you will be better able to convince funders (no matter what your financial model) to come aboard. People invest in a compelling and believable vision for the future. If you are just raising money for the day-to-day, you will always struggle.

  2. Looking Under the Same Rocks
    Often when there is a money shortfall, nonprofit leaders think they simply need to ask the same people to give again or more. If only it were that easy. To attract more people and organizations you have to have a wider net. But not just on your Facebook page or in your mailing list. A wider net means that your board’s networks need to grow, your distribution channels need to grow, your friend-raising activities, your strategic alliances need to grow — the overall network of your nonprofit needs to grow. You need to think holistically about how to grow the reach of your organization and get everyone involved in making that happen.

  3. Chasing A Magic Bullet
    Seriously, listen when I say this: There Is No Magic Bullet to Fundraising. Fundraising, like so many things, often falls victim to shiny object syndrome. From the Ice Bucket Challenge, to crowdfunding, to social media, it seems there is always something new that nonprofit leaders, philanthropists, or board members think will finally solve a nonprofit’s money woes. But the reality is that finding enough and the right kind of money for the results you want to achieve as an organization is hard work. There is no easy fix. Instead you have to get strategic and create, and then systematically execute on, a financial plan for your nonprofit. It may sound boring, but believe me, once you attach strategy to money, the transformation — to your staff and board, to your funders, to your financial model, to your overall results, to your effectiveness and sustainability as an organization — can be incredible.

  4. Giving People a Free Pass 
    When you tell certain board members or certain staff members that they don’t have to worry about money, you are essentially giving them a free pass and placing a larger burden on the rest of the organization. While money must be led by your Chief Money Officer (whatever their title — Executive Director, Development Director, CDO), it must be a team effort. Your money person’s job is to develop an overall money strategy and then mobilize all her resources (staff, board, other volunteers, technology, systems) to bring that money strategy to fruition. She CANNOT do it alone or with only half a board. Money has to be part of the conversation for everyone in the organization.

  5. Not Fundraising for The Fundraising Function 
    If you want to get better at raising money, you must invest in the right strategy, staff, and systems — your fundraising function –to raise that money. You need to pay market rate for a fundraising person who is a smart, strategic leader. You need to put time and effort into an overall financial strategy, and you need to create the infrastructure (technology, systems) to make that financial strategy a reality. To make these investments, you might have to raise capacity capital from your donors, a one-time infusion of significant money that helps strengthen your organization. A capacity capital investment in your fundraising function can more than pay for itself in a few years when your transformed financial engine is running at a much more profitable rate. But failing to invest in your fundraising function means you will continue to struggle financially.

Oh nonprofit leaders, please stop hitting your heads against the fundraising wall. I promise you, a more sustainable financial engine awaits if you simply invest the time and energy into a smart strategy, a broader network, effective staff and systems and a real team effort.

If you want to find out more about the Financial Model Assessment I conduct for nonprofits, download the one sheet.

Photo Credit: hobvias sudoneighm

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10 Great Social Innovation Reads: Jan 2016

Korean_War_Veterans_Memorial_as_seen_during_the_January_2016_BlizzardFrom an historic blizzard that blanketed the country, to tackling poverty, to the leadership of Black Lives Matter, to technology in the new year, to using social media to stop ISIS, to advice for Charity Navigator, January was an interesting month in the world of social change.

Here is my pick of the 10 best reads in January. If you want a longer list, follow me on Twitter @nedgington. And to see past month’s 10 Great Reads lists go here.

  1. Winter storm Jonas dumped several feet of snow across the country, but also offered a couple of interesting lessons in social change. First, the sheer amount of snow piled up on east coast urban streets provided a glimpse into better urban design. And after the blizzard hit Washington, DC it seems only female senators were brave enough to come to work. Among them, Senator Lisa Murkowski wondered: “Perhaps it speaks to the hardiness of women…that put on your boots and put your hat on and get out and slog through the mess that’s out there.”

  2. Writing in the Nonprofit Quarterly, Tom Klaus took issue with those who criticize the Ferguson and Black Lives Matters movements as being “leaderless.” Instead, he argued that they demonstrate a more effective “shared leadership” model: “Shared leadership…means that multiple members of a team or group step up to the responsibility and task of leadership, often as an adaptive response to changing circumstances. Multiple members may emerge to lead at the same time, or it may be serial as multiple leaders emerge over the life of a team or group.” And The Chronicle of Philanthropy profiled three of the leaders of the Black Lives Matter movement.

  3. One of my favorite bloggers, David Henderson, has made a new year’s resolution to write more often. Let’s hope he keeps it up because he offered us two great ones this month. First, he wrote a scathing critique of the nonprofit and philanthropy sectors for not standing up against presidential candidate Donald Trump’s hate-filled ideology. And then he took it further in a later post arguing that the philanthropic sector must get more political: “It seems a strange consensus that philanthropy and politics do not mix. Yet it is our politics, and more specifically our collective values, that creates the maladies we aim to address. Martin Luther King was a civil rights pioneer not for creating a nonprofit that provided social services to help African Americans live a little better, but by challenging the laws and social values that subjugated a significant portion of our community. Social interventions like homeless shelters, food pantries, and tutoring programs are fundamentally responses to injustice. While these programs are wrapped in apolitical blankets, they are plainly and intuitively critiques of the system we live in.”

  4. And speaking of critiques, columnist Tom Watson wrote a sharp commentary on American philanthropy arguing that it is going the way of American politics — moving from democracy towards plutocracy: “The disparity between democratic philanthropy and its plutocratic cousin is nowhere more apparent than in the importance placed on the Facebook co-founder’s commitment to giving away much of his vast personal fortune compared with the potential of the largest digital social network in the nation. Mr. Zuckerberg’s billions may create major causes and eventually steer public policy, but many nonprofits will struggle to find in their budgets the money required to purchase desperately needed social-media eyeballs from his advertising department. If there’s a better example of the power gulf in American philanthropy, I’m not sure what it is.”

  5. And other critiques of philanthropy in January went even further, with some arguing that modern American philanthropy attempting to address growing wealth inequality (illustrated by a new Oxfam infographic “An Economy for the 1%“) is a paradox because philanthropy itself emerged from the wealth excesses of capitalism.  A new book by Erica Kohl-Arenas argued that philanthropic interventions to solve poverty have been flawed because they don’t address the structural issues causing the poverty in the first place. And her argument was extended when she wrote about her view of a January 7th public event at the Ford Foundation where Darren Walker (who recently announced a new foundation focus on overcoming poverty) and Rob Reich discussed these issues.

  6. Caroline Fiennes argued that nonprofits should not try to “prove their impact,” since proof of impact is impossible, but rather use evaluation to gain knowledge that can help “maximize our chances of making a significant impact.” Patrick Lester, writing in the Stanford Social Innovation Review, offered a similar caution about outcomes, but this time to the Obama administration: “A dose of…realism, combined with a greater reliance on evidence and a willingness to learn from the past, could transform the administration’s focus on outcomes into an important step forward. By openly acknowledging the challenges and dangers, recognizing the difference between mere outcomes and true impact, and demonstrating how this time we will do better, the administration could show that what it’s really calling for is not just an outcomes mindset, but an Outcomes Mindset 2.0.”

  7. Speaking of proving results, Charity Navigator’s new leader, former Microsoft exec Michael Thatcher, and the board that hired him came under attack in January for not moving quickly enough away from rating nonprofits on financials and towards rating them based on results.   But Doug White, writing an opinion piece in The Chronicle of Philanthropy and who created the beginning data behind Charity Navigator many years ago, took it even further took it even further: “Charity Navigator is far worse than nothing. The best that could happen is for the group to sink into oblivion, with no charities, no news outlets, and no donors giving it any thought. Or the group could take serious steps to grow up, humbly taking the time and effort to truly try to understand the charitable world.”

  8. Wanting to get further into the social change game, Facebook COO Sheryl Sandberg announced a new effort to use Facebook “Likes” to stop ISIS recruitment efforts on social media. It will be interesting to see how effective this slacktivism effort becomes at creating real change.

  9. Kivi Leroux Miller released her annual Nonprofit Communication Trends Report, including lots of data about how and where nonprofits are marketing. And while she found that YouTube is currently the #3 social network for nonprofits, that may change since YouTube just announced new “donation cards” that allow donors to give while watching a video.

  10. And finally, in January we lost David Bowie. But Callie Oettinger urged us not to be sad, but rather, inspired: “I [am] comforted in thinking of Bowie…on Mars, mixing it up with other artists…a place where the greats go to keep an eye on the rest of us and send down jolts of inspiration from above.” Yes.

Photo Credit: Northside777

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The Debate: Should Boards Raise 10% of a Nonprofit’s Budget?

nonprofit debateIt seems I raised controversy with my recent post, “Is Your Nonprofit Board Avoiding Their Money Role?”. The hot button issue, not surprisingly, was my assertion that boards should be charged with raising 10% of a nonprofit’s budget.

As I put it:

I know it’s heresy, but I believe that a board should be charged with raising at least 10% of a nonprofit’s annual budget. But that doesn’t mean they all have to write personal checks (or get their friends to write them). Rather, there is an endless list…of ways board members, who are fundraising shy, can bring money in the door. Because why should the entire financial burden be left on the shoulders of the staff? That’s just not sustainable. And if you can’t get your board to step up to the financial plate, how will you have any hope of getting others to do so?

Several people disagreed, and consultant Gayle Gifford (who very respectfully argued with me in the past about my take on nonprofit events) took real issue, commenting (in part):

In my 30 years of experience, the most sustainable organizations financially are those that rely little on their board of directors for their financial success. I just wonder why it is that these governing volunteers, who are charged with so many more weighty responsibilities for sustainability, are held to such a double standard when it comes to revenue development. Imagine the absurdity of you pronouncing: The Board of Directors must be responsible for managing at least 10% of the organization’s programs.

I argued back that we must define board contribution to the financial model of a nonprofit much more broadly:

The point is that board members should not be allowed to ignore the financial realities of the organization, and it is impossible to ignore something when you have a responsibility for a piece of it. In the examples you give, I would wager that if you calculated board involvement in a much broader way, you would find that at least 10% of that money could be attributed to board involvement. And if not, yikes! Because that means it is all resting on the shoulders of the staff, and that simply is not sustainable. The board must be much more supportive of the nonprofits they serve, and in my mind that means they need to show up, and show up in a significant way, to the financial engine of their organization.

But Gayle was not having it. She responded that just as the board should not be expected to deliver on programs, they should also not be expected to contribute to the financial model:

In very brief, the role of the board as governors is to ensure that the organization is delivering on its mission, that it has a business model that supports its ability to deliver its social impact and that the organization has a human resource and operation plan to make that happen. That it is trustworthy and worthy of support. This is the absolutely best fundraising work that they can do. Boards are totally within their governing role to decide that the way to meet the organization’s revenue needs is hire professional staff and have them do what they are in fact trained to do. I would hypothesize that organizations that do that are more likely to successfully achieve their revenue goals (actually, there is research data to back this us -see “Nonprofit Fundraising Study” of Nonprofit Research Collaborative 2012 ) than the wishful and largely unmeasurable objective of 10% standards pulled out of a hat. BTW, I don’t understand why it is unimaginable to say that the board is responsible for delivering 10% of programs, or 10% of operations, if you set up a standard of attributing 10% of revenues? What makes one different from the other in terms of sustainability or professional expertise?

But in my mind, there is a critical role for the board in both mission and money, and you cannot have one without the other, as I replied to Gayle:

I completely agree with how you characterize the role of the board (“to ensure that the organization is delivering on its mission, that it has a business model that supports its ability to deliver its social impact and that the organization has a human resource and operation plan to make that happen. That it is trustworthy and worthy of support”). However, the missing link (so very, very often) in nonprofit organizations is that the board thinks that showing up to meetings and hearing the development report is enough. Raising money requires that the board take an active role. And that active role means opening doors, making connections, providing intelligence, offering insight. This can actually also be true in delivering programs — the board should not only help provide the overall program strategy and theory of change for the organization, but also help to open doors and make connections to key decisionmakers, advocates, or others outside the organization walls who are critical to effective delivery of the organization’s mission. In all of this, I am simply asking that the board step up and take an ACTIVE role, as opposed to a passive role of “hiring professional staff and have them do what they are in fact trained to do.” There must be an effective partnership between the board and staff in developing and executing on a robust financial model, just as this partnership between board and staff must exist in delivery on mission, because at the end of the day there is no mission without money. Maybe 10% isn’t the right number, but I believe you have to set a significant goal if you truly want the board to take notice and actually step up.

You can read the full debate here.

To me, this is such an important topic because it helps uncover our underlying assumptions about the role of the board versus the role of staff. In my mind, we must elevate the expectations we have for the nonprofit board of directors, and one way to do this is to set clear, specific, and lofty goals for them.

What are your thoughts?

Photo Credit: Ron Cogswell

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10 Most Popular Posts of 2015

10 most popular postsIt’s that time of year again — to put work away, enjoy friends and family, and give yourself a chance to take a breath. I will be taking the next two weeks off from writing the blog. But before I go, as is my tradition, I wanted to leave you with a list of the 10 most popular blog posts from this past year, in case you missed any of them.

And if you are feeling ambitious, you can also see the 10 most popular posts from 2011, 2012, 2013, and 2014.

I hope that you all will find some space over the next couple of weeks to relax, to get away, to regroup, and to ready yourselves for the next chapter. We need you social changemakers now more than ever, so please find some time to take care of yourself before you get back to taking care of the rest of the world.

Thank you for being part of the Social Velocity community and for all of your hard work making the world a better place. I wish you all a very happy New Year. I’ll see you in 2016!

  1. The Problem with Nonprofit Events
  2. How Scarcity Thinking Holds Nonprofits Back
  3. 7 Questions to Guide Your Nonprofit Strategy
  4. 5 Myths the Nonprofit Sector Must Overcome
  5. How to Build a Stellar Nonprofit Staff
  6. How to Create a Compelling Fundraising Ask
  7. 3 Signs of a Bad Nonprofit Strategic Plan
  8. 5 Fundraising Delusions Nonprofits Suffer
  9. What Do Your Programs Really Cost?
  10. The Network Approach to Social Change

Photo Credit: Ethan R

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5 Nonprofits Trends to Watch in 2016

Poster_of_Alexander_Crystal_SeerThis is my favorite time of year. Despite the darkness of the last few months, December is often about reflecting on the year that is drawing to a close and hopes for the new one coming.

And as is my tradition on this blog, I like to look ahead at the trends that may affect the nonprofit sector in the coming year. I have never claimed to be a clairvoyant, but I am an admitted optimist, so my predictions are less about telling the future and more about wishful thinking. This year, more than ever, I want to see opportunity amid the uncertainty and the challenges we face.

So here are 5 things I’m really hopeful about for the nonprofit sector as we head into 2016.

You can also read past Nonprofit Trends to Watch lists for 2011, 2012, 2013, 2014 and 2015.

  1. New Opportunities for the Nonprofit Sector to Lead
    A growing recognition of the value of the nonprofit sector paired with a rising confidence among nonprofit leaders will create opportunities for nonprofits to step up and create opportunity out of the seemingly mounting pile of challenges (like terrorism, natural disasters, political gridlock). The nonprofit sector’s natural place — its core competency — is in righting imbalances and it often coalesces in times of trouble. We are already seeing really exciting collaborations and innovations aimed at increasing civic engagement and winning equal rights, to name a few. Call me an optimist, but I think the challenges we face are merely a precursor to the emergence of a stronger social sector ready to find new solutions.

  2. Increased Use of Protests 
    And as evidence of social movements emerging from challenges, we are seeing an uptick in social protests. This year we’ve seen some impressive organized demands for social change. From Black Lives Matter, to student protests on college campuses, to Chicago protests demanding the mayor’s resignation, people are rising up to demand change. While their methods somewhat mirror the protests of the 1960s and 1970s, their access to and use of technology is quite new. It will be interesting to see how these movements evolve and how much change they will be able to accomplish.

  3. Greater Emphasis on Networks 
    And these protests, like any social change effort, will be more successful if they embrace the use of networks. I think there will be a growing recognition that nonprofits must build networks in their social change efforts. They must understand the points of leverage for attacking a problem on a much larger scale than a single organization can and then figure out who the influencers are in their space and how to connect their work with those others. Because the network approach requires that nonprofit leaders move away from the resource-constrained, scarcity approach that keeps them from forging alliances with other entities that might be competing for the same limited pool of funding, I think (hope) we’ll see more nonprofit leaders move to an abundance mentality that leaves fears behind in favor of a bigger, bolder, more networked path.

  4. More State-by-State Strategies 
    The stunning victory this year legalizing same-sex marriage demonstrated the tremendous success that a state-by-state (as opposed to a national) approach to social and political change can have. Indeed, because of political gridlock at the federal level, other social change efforts (like Represent.us and the legalization of marijuana) have found success at the state level where changing minds and changing policy is sometimes easier and more efficient. But this isn’t a new idea. In fact according to research compiled by Bloomberg Business, social and political change in America follows a pattern: “A few pioneer states get out front before the others, and then a key event—often a court decision or a grassroots campaign reaching maturity—triggers a rush of state activity that ultimately leads to a change in federal law.” Though the idea isn’t a new one, I think it may gain traction as more social movements find a state-by-state approach increasingly attractive.

  5. Smarter Funding
    But to pursue more successful models, like the use of networks and state-by-state strategies, nonprofits must have the necessary funding runway to get there.  So I’m hopeful that funders will increasingly recognize that nonprofits need more flexible and effective funding (like unrestricted dollars and capacity capital). There are already encouraging signs. The Ford Foundation has moved to provide more unrestricted support (and encouraged other funders to build the capacity of nonprofits) and the federal government released new guidelines this year providing more indirect funding to nonprofits. So let’s hope we see more foundation, individual and government funders providing nonprofits more of the kind of money they really need to create solutions.

Photo Credit: Library of Congress

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