If We Could Be So Bold

Inherent in our current time of constraint (struggling economy, crumbling institutions, unhealthy planet) is the opportunity of possibility.  As Margaret Drabble said, “When nothing is sure, everything is possible.”

But it is only possible if we seize the opportunity.  Nowhere is this more true than in the nonprofit sector.  Let’s admit it, the nonprofit sector tends to be risk averse.  And you could argue that the many constraints that they endure incent them to  be risk averse.  But what if nonprofit organizations seized the opportunity that this restructuring offers and became bold.  I mean really BOLD.

What if nonprofit organizations adopted massive, crazy, BOLD goals? The BHAGs (Big Hairy Audacious Goals) that Jim Collins in Good to Great describes:

A BHAG is a huge and daunting goal — like a big mountain to climb. It is clear, compelling, and people “get it” right away. A BHAG serves as a unifying focal point of effort, galvanizing people and creating team spirit as people strive toward a finish line. Like the 1960s NASA moon mission, a BHAG captures the imagination and grabs people in the gut.

It is a massive, energizing, crazy goal that can bring people together, give them something to work for, make them part of a team that is doing something inventive, game-changing.

To Nathaniel Whittemore of the Change.org blog we are obligated to move the solutions we seek to a loftier realm.  Those working to solve social problems must be bigger, bolder, crazier, more disruptive in their goals:

Where I think it leaves us is with an obligation to push even harder. At the cusp of that last gasp of crazy, the forces that wish to uphold the status quo kick and fight even harder. The former gatekeepers will not leave without a fight. We need to be even more bold, because at the end of the day, I don’t want 20% better nonprofits with a fundraising strategy better optimized for online giving. I want disruptive change that rights wrongs and realigns incentives for a more sustainable, just future.

And Dan Pallotta agrees.  He challenges nonprofits to take a cue from the moon program as well and create massive goals:

Nonprofit organizations have to join forces and begin committing themselves to impossible goals that address the massive social problems we confront, and they must define those goals in time and space — a cure for MS in 10 years; the end of homelessness in Boston in 10 years, and so on. Think of President Kennedy’s challenge: “I believe this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.” No wiggle room there…

But bold goals are not just for the sake of goals.  Those massive, crazy goals propel an organization forward.  They galvanize staff, board, volunteers, funders to get up from their chairs, to step away from mindless, boring meetings, to enlist their friends, family, colleagues, to invest time and resources until it hurts. Bold goals are the rallying cry that moves us toward solutions, compels us to fix broken systems, to break out of our inertia:

If a courageous group of nonprofits would call for the end of child hunger in D.C. within seven years, we’d have to start talking seriously about…all of the…structural problems like admin:program ratios, inadequate investment in infrastructure…and those discussions would actually be exciting. There would be a reason to reframe the present structure. To try to reframe that structure in the absence of a compelling context…[is] like trying to develop a lunar module in the absence of any goal to get to the moon. You wouldn’t know anything about the booster that would carry it, the rendezvous strategy, weight limits, etc. Everything you did would be ineffective…Daring goals, set in time and space are the only way to get there. Any less courageous path lands us exactly in the chaotic and ineffectual place we stand today. And that’s a long way from the moon.

I’ve seen with my clients how massive goals can transform organizations and galvanize them toward solutions.  When they have decided to take on exponential growth instead of incremental growth.  When they have moved from working to grow their services by 50% each year to working toward addressing 50% of the need.  The former can address the needs of 100 new clients a year, the latter can move towards actually eradicating the problem all together. This change in perspective, in goals, can revolutionize an organization.  No longer are the board, staff and funders content to add a few sites each year with no end goal in sight.  Rather, they understand and rally around their long-term goal, which is to solve a problem.  And they see every effort they make, every meeting they come to, every investment they secure as getting them that much closer to that solution.  It can transform an organization, and ultimately transform a problem.  And isn’t that really what we are all here to do?

Tags: BHAGs, Change.org, Dan Pallotta, Jim Collins, Nathaniel Whittemore, nonprofit

Don’t Go Blindly Into That Social Media World

Seth Godin has gotten everyone talking (some are even yelling) about his latest post that chastises nonprofits for not embracing change and getting on the social media bandwagon. Godin is irritated at nonprofits for not embracing these new tools to “focus attention and galvanize action” around their cause.  And the overwhelming amount of debate about the post  (Beth Kanter, Chronicle of Philanthropy, Tom Watson, to name a few) , has focused on whether or not nonprofits have embraced social media, whether they are “deer in the headlights,” whether they are risk averse, whether they “blow people away,” and so on.

This is a good debate, to be sure, but what interests me in all of this is a bigger question about the role of social media in a nonprofit’s overall resource engine. Social media is just marketing, right?  Some organizations have figured out how to tap into social media to spread the word, build a following and so on.  Some businesses have even seen a spike in sales.  That’s great.   But marketing through social media, just like any kind of marketing, has to have a bigger goal in mind.  You don’t market for marketing sake, and you don’t Tweet just because it’s cool and “everyone” is doing it.  Rather, you have to understand how that marketing activity (whether it is “free” or not, it still takes resources) is going to contribute to, or perhaps detract from, your bigger goal, which for nonprofits is to raise resources to execute on their mission.  So, in essence, nonprofits should be using social media to build donors, volunteers, advocates, supporters, right?  And as such, their use of social media has to be part of a larger resource plan.  Social media is another channel for the distribution of your message. You should not just go blindly into the social media world.  But don’t sit on your hands either, I get it.

I would argue that social media must be one component of a larger overall resource plan for a nonprofit, that brings dollars, volunteers, advocates, etc. in the door.  But first we need to take a step back to understand that resource plan.  Which brings me to a misunderstanding of fundraising in the nonprofit world and to my usual hero Dan Pallotta.  Pallotta’s blog posts are wonderful, and usually I read them while silent “Right Ons” and “Amens” stream through my head.  But his recent post on fundraising left me frustrated that Pallotta wasn’t stepping far enough out on the limb that he usually does.

Pallotta argues that fundraising is a dirty word in the nonprofit sector and organizations work as hard as possible to spend as little as possible on it:

Fundraising is the black sheep of the nonprofit sector. Charities spend as little as they possibly can on it. They talk as much as they possibly can about how little they spend on it. The watchdogs, the IRS, and donors deduct goody-two-shoes points from nonprofits in direct correlation to every dollar they spend on it. Institutional funders penalize charities for spending on it… By extension, fundraisers are the black sheep of the sector’s workforce; second-class citizens to the program staff who are in the trenches every day doing the real work of social change.

He laments this reality and suggests that we better integrate fundraising into the costs of the programs that nonprofits operate:

This is ass-backwards. Without fundraising there are no programs. The less we spend on it the less money there is for programs…We should make fundraising a program domain in and of itself — every bit as important as the medical research, social services, advocacy, and everything else it makes possible. We should consider all spending on it to be a critical “program” expense. Instead of disdaining it, we should invest in understanding and developing it, because unless we do, we’ll never have anywhere near the money we need to address the massive social problems we confront.

These are all valid points, but then I lose him at the end when he claims:

Institutional funders should take the lead…Fundraising should be every bit as prevalent on the lists of their program interests as health, human rights, and global poverty. And when they are, they won’t need to be giving program grants to health, human rights, or global poverty anymore, because the fundraising arms of the organizations they support will be able to fund them on their own.

Huh?  I agree with Pallotta that there needs to be more risk and experimentation with fundraising.  But I would take this much further.  Fundraising isn’t just a “necessary expense,” rather a nonprofit’s resource engine must be fully integrated with and equal to its programs and operations.  We have to move away from the term “fundraising,” which has come to mean galas, direct mail campaigns (which Godin abhors), and foundation grants that are conducted in a vaccuum completely separate from and organization’s programs and operations.  Fundraising has become akin to a gerbil on a treadmill where nonprofits go from grant to grant, direct mail response to direct mail response, email campaign to email campaign, working their fundraisers to the bone trying to make the dollars coming in the door equal the dollars going out the door to run their programs.

That is “ass-backwards.”  The only effective way for a nonprofit to achieve its mission, and ultimately social impact, is to fully integrate their programs (the social impact they are trying to achieve) with their core competencies (what they do better than anyone else) and their overall resource engine.  This overall resource engine must be a diverse combination of activities that generate support for and work with, not detract from, the mission of the organization and the organization’s core competencies, like this:

I’ve written about this critical alignment before, and it seems to me that this integration of the three core activities of a nonprofit are rarely integrated effectively, or even recognized by those commenting on the sector, like Pallotta and Godin.  Any marketing or revenue-generating activities that a nonprofit embarks on must be chosen and invested in–with resources like money, staff, board and volunteer time–in accordance with the organization’s mission and core competencies.  And the marketing and revenue-generating activities from which a nonprofit can choose include things such as: individual donor cultivation, solicitation and stewardship; direct mail acquisition; online fundraising; foundation grants; earned income businesses; and yes, even social media.  Just as nonprofits should not shy away from social media because they are afraid of risk and change, they also shouldn’t run towards it if it doesn’t make sense in the overall picture of how they can effectively integrate their mission and core competencies to create a sustainable resource engine.

Nonprofits shouldn’t fear social media, nor any other technological, social, or financial shift in our world.  Nonprofits, just like any other entity, need to be aware of their environment and adapt their business to survive and thrive in that changing environment.  But it all has to be based on an integrated strategy.  Yes, be open to new things like social media and experiment to see how this new development might enhance or contribute to your mission, and your resource engine, while working with your core competencies.  But don’t blindly go there without understanding how it fits.

The bottomline is that the pace of change is speeding up for all of us.  Nonprofits have to be more open to change, yes, but any change still has to be digested and made part of an overall strategy that integrates mission, competency and resources.  I think Godin would be the first to agree that we are nothing without an integrated strategy.  So don’t jump on that bandwagon without one, just because Godin tells you that you are “paralyzed in fear.”

Tags: Beth Kanter, Chronicle of Philanthropy, Dan Pallotta, Fundraising, Marketing, nonprofit, Seth Godin, social media, Tom Watson

A Voice for Convergence

There is a great new voice in the growing movement towards the convergence of the public, private and nonprofit sectors.  Dan Pallotta, author of Uncharitable: How Restraints on Nonprofits Undermine Their Potential, has launched a blog on the Harvard Business site.  His first two posts expose the irrational dichotomy under which the American business and nonprofit sectors operate.  The private sector enjoys various financial tools, incentives and behaviors that are forbidden to the nonprofit sector.  Why do we offer those trying to make a profit every advantage, but make those trying to create a social good suffer hurdle after hurdle?

His first post takes on what he calls the “two rulebooks — one for charity, one for the rest of the economic world.” And he gives various examples of a double standard for charities:

• We let the for-profit sector pay competitive wages based on value, but have a visceral reaction to anyone making a great deal of money in charity.
• We let Coca-Cola pummel us with advertising, but donors don’t want important causes “wasting” money on paid advertising. So the voices of our great causes are muted.
• We let for-profit companies invest in the long-term to identify new sources of revenue, but we want charitable donations spent immediately to help the needy. All results must be measured against expenditures in twelve-month windows, and a 65% return is required.
• We aren’t upset when Paramount makes a $200 million movie that flops, but if a charity experiments with a $5 million fundraising event that fails, we call in the attorneys.

Yes!  Nonprofits exist within a system that in effect penalizes them for trying to do good.  The result is a sorely undercapitalized sector held together by bandaids, desperate for more talent and resources, bracing themselves against the increasing number of problems they are being called on to solve.  It is a horribly broken system, which requires a complete resetting.

In his second post, Pallotta takes on the nonprofit executive salaries debate, again with a view towards the double standard nonprofits face: “We give young people horrible mutually exclusive choices. We tell them that they can pursue their dreams of helping the world’s neediest citizens or they can pursue their dreams for their own economic futures, but they cannot pursue both.”  The end result is a nonprofit sector that struggles to attract enough of the top talent our country has to offer.

The problems we are facing are too complex and too deep to allow this continued lack of resources for a sector that is trying to find solutions while the for-profit sector pays enormous salaries to those  just trying to make a profit:

We must reject the dysfunction that calls a billionaire who spends all his time building his wealth a “philanthropist” but the three-hundred thousandaire who spends 100% of her time trying to end hunger a parasite for her six-figure salary. The notion that people should be compensated on the basis of the value they produce can no longer be denied to those who save lives while it is given freely to those who sell sodas and bounce basketballs.

Some might argue that despite lower salaries Generation Y is entering the nonprofit sector in higher numbers than previous generations, which is great, but that’s not sustainable.  If the system doesn’t change, as they get older, buy houses, raise families, many of the best and the brightest of that generation, too, will be lured away by big paychecks and greater resources with which to do their work.

Dan Pallotta provocatively demonstrates the tremendous inconsistencies that exist in a system that unnecessarily drives a wedge between the nonprofit and private sectors.  I look forward to more of his posts.

Tags: Convergence, Dan Pallotta, nonprofit, resetting, Uncharitable