Who's Zooming Who?

International library, civil society, philanthropy pro Carol Erickson writes a thoughtful piece on the long-standing, under-acknowledged problem in philanthropy she calls the "donor deception dance."

This same problem happens here, among U.S. funders and U.S. grantees. Just last night, I had dinner with an long-time friend in town for "strategic planning" at a national organization to come up with a plan and evidence of having done "something" in the last year under an enormous grant from a Big Name Foundation. In preparation for a site visit from the program officer. In two days.

I doubt that organization is squandering cash. I'd bet that they are doing important work and that there was some kind of stumbling block that they maybe didn't feel "safe" discussing with the funder. Maybe (I honestly don't know about this particular case and am projecting) other projects moved up as strategic priorities for this year, maybe the staff can't--and shouldn't--deliver the project in the way the leadership (or grantwriter) envisioned, maybe they know that there's a better way to address the problem and they wish they had money for that, maybe this was more the funder's pet project than theirs. Maybe they simply need a little more time to plan.

But we've all been to that party, either on one side or the other:
• Dance Partner A: Harried nonprofit exec side, practically pushing to do so much on such limited margin, tempted to overpromise or restrict information and access to peers (let's be honest).
• Dance Partner B: Deliberate, thoughtful, safely salaried (let's be honest) foundation officer, academically pushing suggestions that no matter the intention, will be understood to be directives and wanting to hear and see only evidence of wild success.

We must be more honest with each other. We must be more open. We must see each other as peers--each side with resources and assets to put toward The Problems. But how? It's really hard. But I think it works, as with other relationships: building trust through real and personal interaction. Breaking bread.

This is where I would like to see (have always wanted to see) much the national organizations (like NCNA, Council on Foundations, Independent Sector, NCRP, the national foundations, the RAGs and affinity groups) facilitate more, deeper "networking" among Nonprofit Leaders (not "Grantees," not "Practitioners"), Foundation Officers, and Donors.

Dance party song for "donor deception," in which both funder and grantee want things to look better than they may actually be (scroll down the playlist until you find the Queen of Soul).

Photo by Yanik Cha.

What We Write About Now

Here's the new www.wordle.com that shows what we write about on this blog.


Here's the link to what we wrote about as of December 2008.

Community Supported Theater

I really love this idea, which producing artistic director Jon Stancato presents as a new business strategy for nonprofit theaters, but I don't see it as a new business model. It's more of a really brilliant frame or metaphor for much better fan-building/engaged donor-generating fundraising than most arts organizations do.

Envious kudos to the NYC-based Stolen Chair folks for getting important funders to see it as a big innovation, and for getting some money to test it. But nonprofit arts organizations, are community-supported organizations. Or should be. Already.

It's innovation, alright, and a seriously fresh and practical tweak of good fundraising. I just don't see it as an entirely new business model for nonprofits. But honestly, who cares. This approach to engaging arts fans is a good one.

Social Innovation Fund

Last Friday, at a few minutes to 5pm, I submitted these comments to the staff responsible for the Social Innovation Fund. Thanks to Sean Stannard-Stockton at Tactical Philanthropy for the e-mail address and the reminder to write.

[Because nonprofit groups often cannot expand ideas that work because the nonprofit marketplace is 180 degrees from how the private-investment marketplace works because they don't have early access to capital for experimentation and expansion, testing innovation is tough.]

Yes, and this gets at the challenge of how problematic it can be for successful and nationally expanding groups to focus on developing donated funding streams. Donated money from individuals, in a range of amounts, provides tangible evidence of relevance and civic engagement. It shows whether the work being done--and the key people involved--can build and excite a genuine fan base.

Evidence of investment in individual fundraising really should be a marker of the potential for a social innovation. For potential of the program concept and delivery. For potential of the innovation's leadership to create a movement. Perhaps better yet would be ensuring that medium-sized groups, with proven program and capacity that are poised for innovation can get the practical, concrete, tailored, __creative and innovative__ assistance they need to grow their fundraising capacity. Leaders need support from __funders__ to spark the innovation in __resource development__ needed for so many organizations.

The problem with big, government agency-size investments early in the process of innovation is that it can eclipse--and, frankly, distract the leadership from attending to this responsibility. It's too natural instead for these (typically young) leaders to focus on developing the program itself and doing whatever it takes to big government funding.

Instead of saying "it's hard" to raise individual money, social entrepreneurs need to say "it's essential and let's figure it out and do it."

One other thing to note is that the social networking fundraising ($10 by mobile phone and Facebook causes, etc.) has been an innovation in reach. Expanding a donor base is really important. However, the important thing nonprofit leaders must __still__ learn to do is to figure out which of these many, many new fleeting donors can be engaged to stick around--which ones can continue to invest and be involvedin the innovative program work into the future.

Very instructive for board members--and, dare I say, social entrepreneurs--are the Nonprofit Finance Fund papers on capital structure and the "strange" world of nonprofit finance, where in addition to a charity's core business it has--and must attend seriously to--"subsidy" businesses, such as fundraising and volunteer labor. Also, the theories and practice of grassroots fundraising--really connecting to and engaging donors and community members.sets the framework.

In case you're not following the Social Innovation Fund initiative, start here and here.

Make Your Next Meeting Laptop-Free

It seemed almost radical, shocking even. I was facilitating a four-day planning meeting in Warsaw, Poland, and the client had declared the event to be “laptop free.”

This was a rare chance for three different country teams to come together, and they wanted to make the absolute most of that time. It worked.

I had almost forgotten what it was like to have a room full of faces turned toward me while I was speaking, instead of seeing them squinting down at their screens.

Now, there was an official note taker for the meeting who was allowed a laptop. And, yes, I occasionally caught someone taking a furtive glance at their phone. But on the whole, the tenor of the meeting was refreshingly focused and engaged.

I can’t say that it’s appropriate for all events and situations, but “monotasking” may be making a comeback.

Take a Tip from Mr. Belvedere: Thrive Don’t Survive

Do you remember the 80s sitcom “Mr. Belvedere”? In it, the main character is a traditional English butler who goes to work for a suburban Pittsburgh family, offering them frequent bits of wit and wisdom.

What I recall most about the show -- other than that it was based in my then-home Pittsburgh -- was a section of lyrics from its theme song.

According to our new arrival
Life is more than mere survival
And we just might reach the good life yet

Things are so hard on nonprofits right now that we can be in constant survival mode. But if your organization is always in a deprivation mindset, it will impact everything from how donors perceive you to staff moral. People want to belong to and support organizations that are “in it to win it.”

Am I advocating sticking your head in the sand and ignoring your problems? Far from it. But with the arrival of the New Year, try taking even a little time on a regular basis to envision a successful and, yes, thriving organization, be it musing during your coffee break or in a more structured setting like a retreat.

Dedicated time to brainstorming and visualization can shake loose some new ideas and maybe even point to a way out of your current situation. After all, as the saying goes, if you don’t know where you are headed, how will you know when you get there?

Leading Journal on Nonprofits Puts Future of Journalism as Big Topic for New Year

Interview in Nonprofit Quarterly about nonprofits, the future of journalism as a topic to follow in 2010.

Journalism as Nonprofit Business Model

An idea that is being discussed in journalism circles this year is moving the field to a nonprofit business model. Um, maybe. But do the people suggesting this really know what this means?

I find that people unfamiliar with the inner workings of nonprofit organizations have the impression that it's pretty easy to manage--"Hey, how 'bout we just get some grants, have some fundraisers, and do work that helps people."

It's a little more complicated than that.

Consider the rules of the nonprofit business model--the rules that are completely different from a for-profit business model (courtesy of the absolutely brilliant Nonprofit Finance Fund).

Each of the following is true for businesses. FALSE for nonprofits:

Cash is “liquid.”
--> Um, restricted grants. Some of our funding is restricted--some by time period, some by program, some by geography, while some funding is not. A dollar doesn't necessarily equal a dollar.

Price is determined by cost, consumer, competition.
--> Yea, nope. By what your donor or funder will pay. Pretty much nothing to do with cost.

The consumer buys the product.
--> In nonprofit finance, we have to distinguish between the client (user, consume-er) and the donor/funder/purchaser. Often the client pays something, but at a price well under cost. That leaves us to include and manage Subsidy Businesses (a whole 'nother related topic) in the mix of our core businesses.

Growth must eventually generate profits or the business fails.
--> Nonprofits are pushed to grow by community needs and profits? Our goal isn't "profit," but surplus revenues to be reinvested in the organization and work.

Investment in infrastructure is seen as necessary; overhead is a regular cost of business.
--> It's galling, but donors and funders question our typically modest and reasonable expenditures for infrastructure. Such investments are rarely questioned in business.

Profits drop to the bottom line, are used in the business, and/or get distributed to shareholders.
--> Um, obviously not.

The above rules are standard, self-evident, and simply understood as truths in business. They are absolutely the opposite in nonprofit finance.I find that it's pretty hard for anyone who hasn't "lived" the very weird nonprofit rules to truly understand what this sort of solution might mean (board members through the years come to mind).

It's definitely an interesting idea--journalism taking on the nonprofit model. Independent news reporting is definitely in the public interest. But the implications of switching to a nonprofit business model do not mean it will be easier for newspapers (or whatever) to stay afloat. So while this idea is potentially promising, anyone advocating for this should really work through the financial and economic implications.

All this does raise the question of Why. Why do we social entrepreneurs, public interest leaders, environmentalists, arts administrators, social servants, social change advocates--why do we continue to operate under these wacked out rules? That's a longer conversation. Part of it is that nonprofit work is, at its root, creating movements and building support and teams of people demanding change and helping each other. So the money these people contribute represents the strength (or not) of those movements. Power in numbers. Power in voices. Power in resources.

It's just a tricky challenge to pull of meaningful social service and change within business models that work.

A handful of interesting, somewhat whimsically-chosen links to other writing on the future journalism models. Here, here, here, here, here (my favorite), and here.

Better Late Than Never

Seth Godin asks, "Is it too late to catch up?" He's reflecting a concern too uncomfortable, too humiliating, too scary to admit--but one that is probably way too true for many small (and perhaps some not so small nonprofits) and small businesses. What if your nonprofit has done virtually (yes, virtually) nothing in the last decade and a half—no social media, no really functioning website, etc. Can you do anything now? Or just pack up and go home.

He treats the question seriously and offers a list of my top ten things -- at pretty much zero cost -- to consider doing.Reading this, I felt relief that I understood (almost) every item. And that most ChangeMatters clients are doing at least half of them...and that we ourselves at ChangeMatters are doing at least half of them (or their functional equivalents). But ok, Mr. Seth Godin, I've still got some catching up to do.

Building Charismatic Organizations

Last night, I finished reading Shirley Sagawa's book on building magnetic nonprofits. Lots of underlining and sticky notes! Here is one paragraph that sung out to me as particularly perfect in two projects ChangeMatters is working on now (a major gifts, including storytelling, workshop and an arts organization turnaround). How compelling, how inviting, how engaging are we?

“If you have done your job right, the gravitational pull of your organization—its people, purpose, plan, and proof—has convinced your audience that they want to help. It’s at this point that you much challenge yourself to think of involvement opportunities other than check writing—even if what you want and need most is money. If you ask for a donation you might get it. But if you offer a variety of interesting ways to become involved, chances are that over time, you will get larger donations or more of them if a cash transaction is not the only dimension of your relationship. Ultimately that relationship, not just that donation, is what you seek.

“Charismatic organizations often offer a wide range of involvement opportunities, from volunteer positions to education. And they thank those who get engaged in meaningful ways that keep them coming back.”

I did get this message pretty powerfully from Dance Place, where I attended a performance Saturday night. It was all there in the homegrown "playbill." Class list; performance calendar; mission; letter; photos; friendly and positive language; ways to follow and friend; invitations to come to a show, bring your children, become a member, take a class, buy dancewear, make a contribution, come to a party, volunteer; asking and thanking. And stories, stories everywhere.

Grammar Girl to the Rescue!

Are you trying to persuade or convince a funder to give you a grant? In her latest podcast, Grammar Girl has the answer. (Note: I'm late to the iPod era and have been searching for fun and educational podcasts to follow, although you can simply listen to her episodes on your computer.)

Sometimes in the rush to meet proposal deadlines, grammar and style checks can go out the window. However, it is this very polish that can help set your submission apart from the others. At stake is clarity. Make it easy for the funder to understand your concepts and program design. You also never know if someone on the selection committee is a stickler for good grammar!

Most of the episodes are between five and seven minutes, just long enough for a quick learning break. But maybe you'd rather just check Facebook instead.

The Department of Education's Investing in Innovation Fund

Hey, all you schools and education nonprofits, The New York Times reported yesterday about the DOE's upcoming grants for innovation. See excerpts below:

The federal Department of Education sketched out a new nationwide competition on Tuesday under which some 2,700 school districts and nonprofit groups are expected to compete for pieces of a $650 million innovation fund.

Federal officials said the Investing in Innovation Fund would be distributed in three categories. Small development grants of up to $5 million will support new, unproven ideas that seem worth exploring, they said. Validation grants of up to $30 million will support existing programs that have shown evidence that they can work. Scale-up grants of up to $50 million will go to programs that have developed a strong track record for improving student achievement, the officials said.

The public will have 30 days to comment on the proposed rules after they are published this week. Applications by districts and nonprofits are due in the spring.

The fact sheet on the fund is here.

Explaining Social Media

Thanks to the folks at Digital Wagon Train for highlighting this presentation on social media. Let me know if you present it at your next board meeting.

What the F**K is Social Media: One Year Later

View more documents from Marta Kagan.

Principles for Nonprofit Boards

Over the last few weeks, I've been working with the board of a nonprofit arts center to develop a fresh committee structure. Best texts for this have been David LaPiana's article for Board Cafe, "Why Boards Should Only Have Three Committees;" Jonathan D. Schick's book, "The Nonprofit Secret," (particularly the six principles of successful board/CEO partnerships).

Key principles and guidelines for nonprofit boards:

1. The board creates committees to help accomplish our own job, not the Executive Director’s job.

2. We focus on governance, not management. In general, this means that the board monitors and provides counsel to management and should not get involved in the day-to-day affairs of the organization. In practice, sometimes this distinction is not precise.

3. The board has one employee (the Executive Director) and the Executive Director has one employer (the board as a whole). Board members do not have power or authority individually.

4. We have a role with responsibilities as a full board, as well as roles and responsibilities as individual board members.

5. Each board member serves on one committee (and two, if a member of the Executive Committee).

6. The purpose of an Executive Committee is to represent the full board and, in rare instances, make urgent interim decisions, and to assess and support the performance of the executive director. The purpose is not to reduce the power of the full board.

Major Donor Fundraising

Working on a couple of training events, and rediscovered a bunch of old posts on cultivation and fundraising with major donors:

Seven Fundraising Principles

Asking for Gifts

Turning Contacts into Donors

Checking in with Grassroots Donors

Fundraising Dream

Personalized Donor Cultivation

Everyone is a Fundraiser