Funders Who Reward Capacity Development

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Creative and sustainable nonprofits are drawing more and more funding from "investors" while the pool of feel-good "donors" is shrinking.

You can trace much of how nonprofits operate back to the source of their funding.

The majority of nonprofits have a Development Director whose key role is not development of the organization, but development of funds for the organization. They are in charge of writing grants, reporting on grants, courting foundation contacts and major donors, managing fundraising campaigns, and basically asking for money.

In my experience, very few nonprofits see "development" beyond the role of asking for money, over and over and over again.

If we trace this back, it's easy to see the reason for this reliance on repetitive fundraising.

Historically, many foundations and donors demanded that the greatest possible percentage of their funds be invested in direct program services. In other words, donors have demanded that nonprofits spend donated funds right away, with no investment in the future.

This idea was set in stone by organizations like the Better Business Bureau Wise Giving Alliance, Guidestar and Charity Navigator; sites whose profit model was based on giving donors solid information about the nonprofits they were considering donating to, but whose lack of concern or awareness of genuine indicators of mission efficacy resulted in a long era of comparing nonprofits based on one major indicator: their "overhead".

In fact, many states (including Utah) still publish the percentage of donations invested in direct program services on charitable solicitations permits - requiring these permits to be displayed on location and making such information available online, as if it were a genuine indicator of impact that was comparable across mission focuses.

This hyper-focus on a particularly meaningless percentage has resulted in enormous pressure to pay as little as possible for everything, from space to supplies to talent. Nonprofits are expected to get everything donated and to attract bleeding hearts who will work hard in crumbling offices on the bad side of town for less money and terrible health insurance.

I was talking with several talented employees of a local nonprofit that I admire a great deal for their forward-thinking revenue models last week. I was amazed to learn that because of their location, they are approached daily by drug dealers and have to watch their young clients deal with the same interactions as they come and go from classes.

A for-profit arts school would absolutely never subject their clients to this type of environment; it's bad for business. This organization is catering to the same clientele with unique and important STEM education, yet they have not made it a priority to move to a better location. Why? Almost certainly because it would increase their overhead.

While many nonprofits are responding to opportunities for sustainability and internal revenue creation, they continue to sacrifice in ways that ultimately lead to poor performance of those initiatives, or outright failure.

However, the nonprofit culture is shifting, albeit slowly.

Family foundations are now being run by a younger generation, a generation characterized by entrepreneurship and impact. More and more corporations are investing in nonprofit grants and awards that reward sustainability and innovation. And thanks to technology, we are witnessing nonprofit and for-profit startups that are making a splashy impact, while giving 100+ year old nonprofit in the same niche a run for their money.

With this shift, those big three online nonprofit rating services finally backed away from this percentage as an indicator of mission performance with an open letter in 2013 and a follow-up letter to nonprofits in 2014.

The days of doling out $10,000 checks for feel-good programs are petering out and it's a good thing.

While I've witnessed many nonprofits deny this shift and struggle to incorporate better business models into their long-term mission strategy, the process is leading to stronger, more accountable, and increasingly sustainable cause organizations who may very well multiply their impact on homelessness, domestic violence, animal cruelty, addiction, and every other mission focus.

And much of this credit comes back to funders and donors who are willing to invest in the long game, who are looking beyond the percentage of donations invested in one-time services and reinforcing the importance of internal capacity.

Eide Bailly's Resourcefullness Award is just one example of a funder that sees the bigger picture, investing a total of $15,000 in nonprofits with creative and sustainable revenue generation initiatives in Utah, Arizona, Colorado and Minnesota (applications are due August 12th).

Here in Utah, our Community Foundation just held it's third Social Investors Forum, curating a community-wide dialogue around the importance of funding unique, innovative, and sustainable nonprofit initiatives while bringing new funders to the table who are more comfortable with "investing" rather than "donating".

Our state Arts & Museums Division invests up to $2,500 in arts organizations each year specifically to aid them in developing their capacity.

These focus changes are critical to creating long-term impact. In effect, these are genuine investments that multiply the impact of the funders. They trigger and support internal capacity development and revenue generation programs that allow the nonprofit to further its reach and its mission, year after year.

That's a donation check I want to write.

So, whether your making a personal donation, a grant award, or a creating a corporate giving program, consider reaching out to nonprofits within your mission focus area and finding out which ones are making this leap.

Invest in the long game, not low overhead, which is too often an indicator of low growth, unsatisfied employees, high turnover, and ultimately, low impact.

And for you nonprofits, invest in talented, creative minds that can challenge your status quo, and brag about how you are positioning to make a difference for now, and for the future.

The Purpose Economy

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Plenty of for-profit corporations operate with some measure of community benefit, often limited to charitable contributions to offset tax liabilities. However, there is a growing trend toward purpose-driven business. The indirect benefits to corporations who "give back" are hard to measure, but clearly arguable. Employees who work for an engaged company and witness positive impact in their neighborhoods are likely to be happier, more productive and loyal. Potential customers who observe the same actions may be more inclined to purchase the company's products or services.

Socially responsible corporate leadership could argue that an investment in the community beyond the standard 1-2% of pre-tax profits positively impacts the bottom line. But, would their argument hold up in court?

eBay vs. Newmark

Did you know that eBay purchased a decent share of Craigslist in 2004 and owns approximately 25% of the for-profit corporation?

Craig Newmark, the founder and namesake of Craigslist, along with CEO Jim Buckmaster, have been fairly transparent about their desire to simply provide classifieds, rather than maximize shareholder value.

Obviously, this isn't in eBay's best interest as a major shareholder and making a fairly long and complicated story short, eBay sued Craigslist and won on several points.

The bottom line?

For-profit corporations have a law-binding fiduciary duty to maximize profits. Which makes it difficult to divert any significant resources to social impact.

In steps the BCorp

As described in a prior post, benefit corporations are a recent corporate entity breed that maintains the for-profit nature of business, but adds in a mandate to have a “material positive impact” on society and the environment.

As of this post, 27 states have passed benefit corporation laws. In May, local purpose industry organization, P3 Utah, celebrated the addition of Utah to the list of states benefiting from BCorps.

P3 Utah is a nonprofit promoting business for people, planet and profit. Founder and Executive Director, Steve Klass, was interviewed by Utah Business last month and described benefit corporations:

They define success by what is called the ‘triple bottom line,’ or the degree by which they can improve human existence for their employees and communities and the environment, while also making a profit. It’s doing good while doing well.”

Becoming a B-corp doesn’t come with any financial benefits, tax incentives or preferential treatment. However, as a B-corp, the company can expand its fiduciary duty beyond maximizing profits, without fear of investor or shareholder whiplash.

One might also predict that the new breed of consumer will begin looking for the B-Corp designation when making purchase decisions.

A Purpose-Driven Economy? 

Economists and marketing experts have commented on the timing of socially responsible businesses, noting that the millennial generation has much greater expectations of the businesses they patronize, demanding a give back philosophy and tangible results rather than an annual corporate social responsibility report on dollars donated.

Aaron Hurst, author of The Purpose Economy, describes the concept of an economy that caters to our need for something more:

 

Could an increasing consumer demand combined with a highly entrepreneurial generation equate to a major impact to our economy?

Harvard professor and corporate strategist, Michael Porter, thinks so, having launched the Social Progress Index, a global index that measures more than GDP (the US ranks 16th with an overall SPI of 82.77 as of 2014).

There's also been an explosion of mutual funds and investment opportunities for the socially responsible investor, from 50 in 1995 to over 500 "SRI" funds today.

Claim Your Stake

Businesses like TOMS Shoes with it's one for one donation promise and Starbucks with its healthcare coverage for even part-time employees are proof that social impact is highly correlated with profit in light of the changing values of consumers.

Is your business ready for such scrutiny?

P3 Utah's 4th annual conference will provide insights, tools and resources, and a network of role models on September 18th and 19th in Salt Lake City. Session topics include social enterprise, local partnerships, employee engagement, sustainability through LEAN, and more.

Register now to ensure you get a seat at the purpose economy table.

P3 Utah Conference

When to Hire a Consultant

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In my experience, most organizations are fairly wary of consultants. We don't have the best reputation. My own personal experiences with consultants as an executive weren't all that impressive either.

Here's how it generally goes: 

1. We have a problem/opportunity, but we lack the expertise and manpower to act on it.

2. We can't stand consultants on the whole, so we either:

(A) do absolutely nothing beyond talking about the problem/opportunity; or

(B) we hire an "affordable" and inexperienced employee to tackle it.

More often than not the situation is a problem, not an opportunity: compliance issues, lack of funding, poor sales, a fried server, etc.

In the nonprofit industry where I focus my attention, executives often recognize the problem, talk about it a great deal, and then succumb to option A: do nothing.

Within the larger organizations I've spent time with, the route starts the same, but leads to authorizing a new part-time or full-time employee as the fix.

Why the fear of consultants? 

Consultants are a dime a dozen. Anyone can flunk out of their career and change their title to consultant.

Many consultants make the mistake of taking any work that comes their way rather than exclusively offering services where they have genuine expertise, which leads to poor results for the client.

Plus, most consultants work in the arena of "soft skills" (ie. leadership development, retreats, communication skills, sales, etc). It's next to impossible to measure the immediate and long-term impact of these types of investments, so executives will often dismiss them outright.

When should you hire a consultant despite all this? 

A great consultant will provide value that is 10x their expense. These are specialists with substantial talent within a specific niche. They have the ability to quickly observe your situation and efficiently implement action based on diverse experiences with a variety of organizations like your own.

Doing nothing is not a viable option. I recently watched a small organization lose nearly everything because they refused to invest in an "expensive" IT professional to set-up a secure internal network or at least a cloud-based back-up. All it took was for one laptop to get stolen.

Conversely, I've also seen a small nonprofit triple their budget by investing in an experienced fundraiser to craft a strategy and develop grant templates to serve as the model for all future proposals. They raised more than $150,000 in the next 6 months and the consultant charged a measly $3,000 (a scary price tag at first).

Hiring an employee to fill the gap can be smart for ongoing needs, but for temporary challenges or opportunities that are outside of your expertise, a new employee will likely cost much more than a consultant while taking much longer to respond to the issue successfully, if they succeed at all.

The bottom line is that the resources that will be consumed by new hire activities, socializing with colleagues, supervision, lunch breaks, research, and failed attempts will rack up to an expensive missed opportunity and increased overhead.

Rather than reinventing the wheel each time you're confronted with a sticky problem or an opportunity, at least consider bringing a consultant into the mix. Their expertise can pay for itself right out of the gate while keeping your organization agile.

Not sure how to find a great consultant?

Get in touch with your industry hub for referrals.

For businesses, this is often your local chamber of commerce or small business development center. For nonprofits, you're local community foundation or United Way probably have a short list of experts they would be happy to share.

Capacity Building and the Overhead Myth

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The concept of capacity building seems to be unique to the nonprofit sector, although it's immediate definition could apply to any organization, or anyone for that matter:

Capacity building or development is the process by which individuals, groups, organizations, institutions and societies increase their abilities to: perform core functions, solve problems, define and achieve objectives; and understand and deal with their development needs in a broad context and in a sustainable manner."

Within the nonprofit sector, capacity building has gained substantial attention over the years, primarily because we all created an environment where nonprofits did the opposite: their activities consumed capacity, every bit that they had.

Why do nonprofits eat away at their capacity rather than use it to build more?

1. Nonprofits are mission-driven, to the core.

There are always more mouths to feed, babies to save, and water to clean. The job is never done and the leaders we attract to serve within nonprofits are motivated by the mission, lacking the long-term perspective of a seasoned executive.

2. Funders and donors demand it.

The unfortunate truth is that private foundations, corporate funders, and many major donors are still part of the problem: they want warm fuzzies in exchange for their cash, so they only award it to nonprofits who promise to use it for direct services.

3. Government and industry organizations made capacity building a black mark of doom.

This is the holy "overhead" percentage myth. Here in Utah, as in many states, it is printed with pride, or shame, directly on your charitable solicitations permit, supposedly as a way to protect the donor.

Industry organizations, like Guidestar, the Better Business Bureau Wise Giving Alliance, and Charity Navigator, touted the overhead percentage as the single biggest determinant of whether a charity was worthy of a donation. Luckily, they have since removed the thorn that demanded service over capacity to serve and are trying to undo the damage.

The overhead percentage, if you're unfamiliar, is simply this: all of your spending on anything besides programs and services as a percentage of your total spending.

Charities have attempted to live up to superhuman standards: to perform their charitable services while spending as little as possible on leadership, marketing, fundraising, talent development, research, and organizational development.

The result is a nonprofit organization you should never want to invest in.

An ill-equipped executive team with zero experience leading an organization or managing its finances. The inability to attract any talent to it's employee pool. Poorly delivered services as employees receive zero development or mentoring. High turnover since employees are asked to perform miracles in a crappy office with no supplies or support.

Even more critical is that a nonprofit where 90%+ of funding is eaten up by services is extremely inefficient.

They cannot deliver their mission effectively because every dollar donated is just a dollar. It does not get multiplied by investing in marketing or fundraising where it could turn into 5, 10, or even 100 dollars. It cannot be invested in the salary to recruit a talented Executive Director with the experience and abilities required to do more and better.

Capacity building is the inverse of this mess. It is a purposeful investment of resources in increasing efficiency, engaging in strategic growth, and refining internal mechanisms for service delivery to become more effective.

Nonprofits have an obligation to seek new and even more effective ways of making tangible progress towards their missions, and this requires building organizational capacity.

All too many nonprofits, however, focus on creating new programs and keeping administrative costs low instead of building the organizational capacity necessary to achieve their aspirations effectively and efficiently…This must change: both nonprofit managers and those that fund them must recognize that excellence in programmatic innovation and implementation are insufficient for nonprofits to achieve lasting results.

Great programs need great organizations behind them.”

Effective Capacity Building in Nonprofit Organizations, Report for Venture Philanthropy Partners by McKinsey & Company (2001)

Which is your organization engaging in? Fear or hope?

Prevent the 5 Pitfalls of Your Emerging Leaders

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I landed in my first leadership role in my early 20s, before I even owned appropriate executive apparel. Unfortunately, gaining the leadership skills to go along with my new pin-striped skirt wasn’t as simple as a trip to The Loft. In fact, it was a painful series of confidently crafted catastrophes. Your succession plan requires that your emerging leaders succeed. By watching out for these five common pitfalls of early leadership, you can prevent the fallout and grow your bench.

1. Fixer Upper Edicts

Do you have a hot shot eyeing leadership? Be wary of the tendency to project their personal expectations and begin making changes to suit their narrow focus right out of the gate. This often begins with executive orders and ends with a lot of frustration on all accounts.

Lacking experience, high achievers fail to appreciate the scope of planning and effort associated with what they see as simple requests. As McKinsey & Company notes, “…managers drive results via budgets and quotas; real change leaders achieve objectives by mobilizing a broad base of people.”

Don’t let your potential leaders learn the hard way. Involve top players in project teams early so they can gain the firsthand experience necessary to lead change effectively when it’s their turn.

2. Monochrome Cloning

Some personalities, especially the bold personalities of top performers, fail to appreciate the benefits of other, less driven personalities. I went through three secretaries before I realized I shouldn’t attempt to hire a clone of myself. In mentoring emerging leaders, it’s important to coach them in balancing the personalities and strengths on any given team, including their direct reports.

The Color Code by Taylor Hartman is a fun and effective way to increase awareness of different personality styles and how to play well together. The bold red COO learns to appreciate the stabilizing effect of the white CFO during difficult meetings, while the blue, people-oriented CEO takes advantage of the yellow HR executive’s ability to build a bright and exciting culture.

3. Isolated Juggling

For many first-time leaders, the lightbulb doesn’t click on that the how of completing our work has completely changed; we simply acknowledge increased responsibilities. If you frequently find your new leader in front of their computer issuing bits of communication via email, you’ve got a problem.

As Kevin Kruse defines it in his classic Forbes article, What is Leadership, “Leadership is a process of social influence.” This can be frustrating when your known method for winning is buckling down and doing the work better than anyone else.

Take your emerging leader along for casual coffee meetings and visits with frontline staff. Role model that the Ivory Tower doesn’t hold up in your organization, and create opportunities to demonstrate the insight and trust generated from face-to-face engagement.

4. Efficient Decision Fallacy

It can be easy to get caught up in the confidence of eager new leaders. They often have great ideas, albeit naïve at times.

The scenario: Your excited new executive stops you in the hall for a quick chat about how the organization can save thousands by going paperless. “Sounds great,” you say, and continue to the urgent meeting in your office.

The consequences of quick hallway decisions are often immediate. Those down the line who are already wary of the 20-something who advanced above them get a bit rattled when they aren’t consulted about change that impacts their teams. It’s a setup for the aforementioned Ivory Tower trust gap. Avoid it by always responding to good ideas with encouragement to gather input.

5. Expert Alienation

Taking on the mantle of leadership isn’t easy. Confident bravado can garner quicker results than genuine leadership. Observe your emerging leader in meetings and in teams. If he or she always has the right answer and fails to encourage the perspectives of peers and subordinates, they probably won’t get much done at the top.

Coach your rising star to become a better facilitator, rather than the oracle. Judith Ross summed it up in the Harvard Business Review: “…an empowering question does more than convey respect for the person to whom it’s posed. It actually encourages that person’s development as a thinker and problem solver, thereby delivering both short-term and long-term value.”

It all begins with the C-Suite. Are you role modeling leadership that empowers, involves and engages your organization? Or are you sitting in front of your computer carrying out a hallway decision? It’s not too late to invest in a robust and productive organization that grows mature leaders of the future.

Originally posted on the C-Suite Network blog, the most powerful network of C-Suite leaders.

The Nonprofit Management Audit

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The goal of a management audit is to identify your internal blind spots - the risks the organization is incurring due to gaps in day-to-day operations. It's more commonly practiced within the corporate world, but non-profits are especially at risk for unknown weaknesses. Passionate, well-meaning people found beautifully optimistic nonprofits everyday. There is a notion that a running a "charity" will be nothing like running a business; nowhere near as difficult.

While most fail quickly, many nonprofits make it past infancy to the point of acquiring space, allocating a stable salary for the founder-turned-Executive Director, and hiring a few staff members.

This is the next major fail point.

The compliance requirements, reporting, paperwork, payroll taxes, liability insurance, property tax exemption declarations, sales tax reimbursement requests, charitable solicitation permits, business licenses, accounting systems, spreadsheets, meetings, and much more aren't what the founder envisioned.

Without experience, it's nearly impossible to recognize which puzzle pieces are missing and which will cause you the greatest grief. This is where the management audit comes in.

A professional management audit should be conducted by a consulting firm so as to provide objectivity and hopefully some resource-saving expertise. But organizations of all sizes should engage in regular, internal management reviews to continuously build an infrastructure that is sustainable and protect your 501c3 status.

To help you get started, here are the major areas I might review during an audit, depending on the goals of the organization:

Foundation

Charitable Purpose By-Laws Mission Vision Strategic Focus Annual Plan Long-term Strategic Plan Impact (Outcomes)

Regulatory & Compliance

501(c)(3) Status Charitable Solicitations Permit Business License(s) Independent Financial Audits (Voluntary or Required) Annual IRS 990 Submission Workers Comp Unemployment Insurance General Liability Insurance Directors & Officers Liability Insurance Policy & Procedure Document Retention Policy & Management Industry-Specific Regulatory Requirements

Executive Leadership Team

CEO / Executive Director CFO / Financial Director Additional Leadership Roles Team Structure & Decision Making Process Development & Coaching Board Chair Involvement Succession Plans

Financial

Zero-Based Annual Operating Budget with Board Approval Frequency of Financial Reporting to the Board Financial Controls in Writing and in Action Bookkeeping Responsibilities Accounting Software / Firm In-Kind Donation Tracking Restricted Funds Management Diversification of Revenue Earned Income Activities & Unrelated Business Income Compliance Annual Financial Review/Audit 990 & Financial Review/Audit Board Review & Approval Overhead Percentage & Sustainability Cash Reserves Physical Assets Security

Board of Directors

Recruitment & Member Induction Process Director Agreement / Code of Conduct Director Terms Director Compensation Conflicts of Interest Policy & Annual Disclosures Meeting Minutes Number of Quorum Meetings Annually Committees Level of Attendance & Contribution Director Onboarding / Ongoing Training Board Chair Succession Plan

Human Resources

Employees - Open Position Postings - Equal Employment Opportunity (if covered entity) - Employment Applications - IRS W-4 - I-9 - E-Verify (15+ Employees) - Regular Supervision - Documented, Regular Performance Reviews - Timesheets - Any Required Training Documentation - Labor Law Compliance Posters

Independent Contractors - Categorized Correctly - Current Contracts - Business License - Professional License(s) - Invoices

Volunteer Applications Volunteer Hours Reporting Background Checks (Voluntary or Required) Confidentiality Agreements Onboarding Process Ongoing Internal Training Opportunities (Voluntary or Required) Disciplinary Action Policy & Documentation Hard & Electronic HR Files Security

Outreach & Development

Strategic Development Plan Development Calendar Website Social Media Grant Proposals & Follow-Up Special Events Major Donors Individual Donors & Stewardship Promotional Materials Outreach Activities Community Engagement Industry Network PR

IT

IT Equipment Phone System Software & Technology Email System Shared Calendar System Accessibility & Security Internet Access Policy

Space, Equipment & Supplies

Space Ownership / Lease Office & Staff Supplies Staff Break Areas

*Disclaimer: I primarily work with nonprofits located in my own state. Some of the identified requirements or permits are exclusive to Utah.

5 Common Nonprofit Budget Blemishes

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Most nonprofits get their start with a founder who is passionate about the mission...not the numbers. Here are a few of the common budget blemishes that can result in a grant request blunder.

1. Your budget isn't actually a budget.

I may love your mission, but if I'm going to give you $25,000, I want to know you can manage it well, and hopefully multiply its impact through effective fundraising. Unfortunately, when you give me a budget that is simply a list of current revenue and expenses (like below), I lose confidence.

Budget Blunder 2

I kid you not, I've seen several budgets that were essentially set-up like this.  Make sure your budget looks like an actual annual operating budget, not a list of expenses that grows each month. It's a projection of an entire year's worth of revenue and expenses, based on history.

2. You have a big red negative number at the bottom.

No matter how much I love the redwoods, I really don't want to dump my money into a swirling drain of demise.

Often times, the budgets that are "in the red" are simply a misunderstanding. A budget shouldn't include only the revenue commitments you already have, it should include realistic revenue increases that you are pursuing. Young organizations will likely build new revenue into their budgets year after year until they stabilize. Just because you haven't received the $10,000 donation you need to close the gap yet doesn't mean you aren't going to.

If you're projections look like your heading for a major loss or bankruptcy (and, yes, nonprofits go bankrupt all the time), you either need to close your doors or devise a serious action plan for how you are going to course-correct. This should include both serious expense cut-backs and increased revenue strategies. Your budget should reflect realistic projections from those efforts (a lower, less worrisome, red number).

3. You have a positive number at the bottom.

Ideally, you should be crafting a zero-based budget. If you have a surplus, give it a name and move it up onto an expense line. If you are purposefully generating a surplus to build reserves (nonprofits should aim for at least 6 months of operating reserves), assign it as such.

If I'm a potential grantor, I want to give me money to the organization that needs it, not one that already has more than they know what to do with. Name every dollar based on how you will spend or save it, protecting yourself from the perception that you're running a money-making machine.

4. Your budget doesn't match reality. 

If you raised $5,000 in individual donations last year, you're probably not going to raise $500,000 this year. And if you have a salary line of $100,000, you better have a corresponding payroll tax/fringe benefits expense line.

A budget is a critical management tool that lets you know if you're winning or losing. It should be used as a constant guideline and substantiate your decisions as an executive. If you're budget is missing expected information - like annual insurance premiums, fringe benefits, professional fees (like the CPA for your 990 prep), or utilities, funders will wonder if you really have a grasp on all of your expenses, or if you're just shooting from the last balance on your bank statement.

5. Gaps from Missing In-Kind Revenue & Expenses

It can be difficult, especially when you're just starting out, to appropriately track and project in-kind revenue/expenses. But if you're mission relies on a hefty influx of in-kind support, your budget should reflect that. Otherwise, your description of your capacity won't match the figures in your budget.

For example, many nonprofits receive donated space. Get a letter from your lessor documenting the market value of the space and include that in your budget. Remember that in-kind revenue, such as donated space, volunteer services, or items used in your programs, generates an equal expense. It's a wash.

If you need a little help in the budget arena, don't go it alone. Either recruit financial expertise onto your Board or hire a consultant to help you get it right. If you just need a functional template, you can get one here. If you'd rather just send in the figures and come back on Monday with it done, I can also help with that.

There's no reason to work in your weaknesses. It doesn't serve you or your mission.

Got a budget question? Post it in the comments. Chances are, someone else is wondering the same thing.

New Tools for the DIY Founder

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I specialize in building the backbone of young organizations, allowing them to scale their impact. Over the years of working within this segment, several consistent pain points have emerged:

  • Preparing a professional annual budget that actually helps guide decisions
  • Setting up compliance activities (business licenses, charitable solicitations permit, labor law compliance, etc)
  • Establishing paperwork and procedures for new hires and independent contractors
  • Implementing financial controls
  • Developing overall policy and procedure documents

Often times, figuring out exactly what is causing the ceiling on your efforts is part of the mystery.

However, I often encounter passionate executives who are know they are missing these pieces, but they just don't have that expertise. This is especially true in the nonprofit sector where founders become CEOs without much formal training on the dark side of organizational leadership: spreadsheets, paperwork, and compliance.

This is why I'm launching affordable toolkits for the Do-It-Yourself founders out there.

Reinventing the wheel is time expensive and often results in subpar outcomes, but hiring the expertise is often cost-prohibitive, even under a temporary consulting agreement.

Instead of paying $300-500 for someone like me to commute, meet you face-to-face, and develop an annual budget, simply throw your figures into a spreadsheet and exchange it for a professional workbook containing your annual budget and variance reports, automatically calculated based on your actual results during the year. All for a flat, affordable fee and in just a couple days.

Already have a decent grip on your budget, but need to convert it to a format that will help you track revenue and expenses easily and present professional reports to your Board? Simply download the DIY Budget template.

Hiring your first employees or bringing on an independent contractor? HR is synonymous with paperwork and payroll demands you do it right. Download the HR quickstart toolkit and get a handy checklist for your new hires plus all the paperwork you need, easily customized for your company:

  • Employment application template
  • Timesheet template
  • Contract template
  • Invoice template
  • IRS Forms

Virtual Budget Prep, the DIY Budget Template, and the DIY HR Toolkit are all available now. More products are on the way, including starter policy and procedure, an earned income for nonprofits workbook, and a financial controls toolkit. Be sure you're on the mailing list to get the latest product updates.

Growing your organization shouldn't mean late nights pouring over IRS publications or scouring an Excel spreadsheet for the broken formula. You have better things to do to advance your mission.

Give a man a fish...and you've got a problem

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The problem? He's coming back for another fish tomorrow, and the next day, and the day after that. Too many organizations fail to empower men (and women) to fish on their own. There exists a powerful opportunity to improve the long-term outlook for every client we reach, whether we operate a nonprofit or a for-profit. And consumers recognize the difference.

What is the long-term impact of your work? For the individual? For the community? 

Case in point: The U.S. Healthcare System

Within the traditional disease-oriented "healthcare" system:

My child has a rash that is concerning. I call the local pediatric clinic after searching online for which one is in my plan. I make the earliest possible appointment for tomorrow afternoon. It's the only appointment available, but I will be at work, so I ask my husband to handle it. They drive 15 minutes to the clinic, fill out four forms, and wait 15 minutes for the physician. The nurse rooms my daughter and they wait for another 10 minutes. The physician looks at the rash for 5 minutes, recommends an over-the-counter cream, and then bills the insurance for $180. After contractual adjustment, we pay $153 a week later. The rash has still not cleared and my daughter came down with a bad cold several days after the visit...my own throat is a little scratchy.

Consumers, within the healthcare sector and beyond, are beginning to demand a different experience.

They recognize when they are authoritatively told what to do and when they are educated, cared for, and empowered. The latter is a much more satisfying experience.

In what ways are you only giving out fish? Your customers may be demanding a fish. They may genuinely appreciate the fish. But, how you could add in the resources, tools, and approach to truly empower them to fish?

This is especially imperative within mission-driven organizations.

I can hand out a box of food at the local pantry to an impoverished single mother of four and feel really good about it. But, what will that mother do when the food in the box runs out in a few days? Will she have a job, transportation, child care, a living wage, a safe home, and the ability to buy or grow her own food?

The next step could be as simple as a job skill training once a month in the pantry warehouse or posting the job ads and relevant wrap-around services on a bulletin board where clients wait in line to pick up their box.

For-profits get caught in the fish giveaway trap as well.

As a consultant, I may undermine demand for my own services by offering do-it-yourself resources and tools, but the truth is: If you serve your customers well and empower them to do more, you will always be in demand. Meanwhile you will empower yourself to do more by removing dependence on a limited asset...you.

I hire a CPA for my taxes to avoid learning all the ins and outs of various IRS schedules, but I demand that my accountant educate me on how to manage my personal finances better. I've referred nearly a dozen friends and family members to my current CPA because he exudes this rare quality.

The organizations who will rise and stay at the top aren't creating dependency. They are creating empowered evangelists who sing their praises, and become donors or referral sources.

Are your teaching your clients to reel in their own tuna?

The Laws of Subtraction

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The Laws of Subtraction by Matthew E. May was selected in a book club I recently joined. It's a compelling concept and I would have picked up the book otherwise, but I might not have finished it. The six laws of subtraction that May proposes are designed to help us remove the superfluous because success in the "age of excess everything" demands the skill of subtraction. That piqued my interest, as we really do have unlimited options and distractions and the key is the ability to prioritize and tune out the rest.

May compiles more than 50 different stories and perspectives on the topic, resulting in a book more than 200 pages long. I am an easy reader - I love nonfiction and I love new ideas that I can put to use. Unfortunately, I fell asleep twice while attempting to read The Laws of Subtraction.

May failed to apply his own methodology to his writing. The stories and metaphors designed to illustrate his laws went well beyond the point. I would have expected a book on the laws of subtraction to be short, concise, and laced with thought-provoking "Aha!" moments. Unfortunately, the gems were buried in lengthy explanations and I truly don't recall any of the specific laws themselves - they weren't catchy and actionable.

That being said, I respect May's obvious expertise and passion for the topic and took away a few pearls that certainly made the read worthwhile:

Pulsing

Pulsing is the concept of working in 90 minute stints with recharging breaks in between, such as a walk, meditation, doodling, or reading. Studies of brain activity show that we move from higher to lower "alertness" every 90 minutes. May points out that the symptoms of pushing the boundaries include restlessness, hunger, drowsiness and loss of focus, which explains why I find myself staring out the window and eating M&Ms.

I would add emphasis on the first 90 minutes of the day. What would happen if you invested the best of yourself each day into your highest priorities, with a targeted deadline less than 90 minutes away followed by an enjoyable activity? Sprints result in quick wins that build momentum.

Design...In Everything

FedEx LogoWe often only think of design when it comes to logos and advertisements, like this FedEx logo. (Do you see the white arrow?) But simplicity and clarity truly are desirable in all our interactions, so why not consider how simple and clear our lives and businesses are designed?

I often explain too much, burying my focus in a muddle of words. I also save way too many documents in a pile on my desk, just in case I might one day want to review one. What areas of your organization are cluttered or absorb an inordinate amount of your energy? Do you have white space where a person can relax, create, and work effectively?

Intentional Limits

In the past two years, I have often found myself paralyzed by the sheer number of directions I could go in. We all have a variety of passions, interests, and strengths...which to pursue? May observes that intelligent limitations provide the necessary frame to contain our efforts. Without those purposeful guideposts, we stare at a blank page.

Derek Sivers, author of Anything You Want, notes, "Give yourself some intentional restrictions in life and you'll finally get inspired to act. Restrictions will set you free." In what ways can you set better boundaries on your work, your time, and your relationships so that the next step is obvious and builds on the steps that came before?

The Principles of Skunk Works

Skunk Works is the top secret Advanced Development Program for Lockheed Martin. Their legendary chief engineer, Clarence "Kelly" Johnson, developed a strict set of principles for leading this shoestring rapid innovation team to repeated success, and they hold true for leading any team:

  1. It's more important to listen than to talk.
  2. Even a timely wrong decision is better than no decision.
  3. Don't halfheartedly wound problems - kill them dead.

The implications of the lessons contained in The Laws of Subtraction are open for application to large organizations, small groups, and individuals. Fewer distractions, clear direction, and clean space benefit everyone involved.

A surprising and genius vacation policy

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Last Thursday, I had the opportunity to speak to my local American Society of Training and Development chapter on building a change-ready culture. During the presentation, I had participants team up to discuss how they could tackle some of their urgent change problems. The teams shared some of their results afterward and a couple gems emerged around corporate vacation policies that I had to share:

The typical company vacation policy: 

Each employee has the opportunity to take up to X vacation days during the organization's fiscal year and must submit their vacation request ahead of time with manager approval contingent on coverage, seniority, yada, yada, yada.

Invisible fine print: We pretty much expect you to still manage everything while you are out on said vacation. While we can't force you to respond to emails and calls, we will reward and promote the type of employees who aren't ever really on vacation.

The genius company vacation policy: 

You MUST take at least X vacation days and management will actively monitor whether you are taking said vacation days and how your team functions while you are gone.

If YOU are required to deal with the situations that arise, then you are FAILING. If you are micro-managing from Tahiti, you will find yourself across from your supervisor when you return. In fact, we are going to monitor the number of emails you send while you are off duty and if it surpasses X, IT will shut off your access on your next vacation.

Why? 

As Wes Stockman of Nicholas & Company and Jay Naumann of RC Willey pointed out (two fantastic minds on organizational development):

Vacations provide natural opportunities to grow your teams and develop new leaders. Micromanagers hold their teams back and communicate to their direct reports that they are not competent or responsible enough to rise to the occasion, which sabotages a culture of ownership and excellence.  Leadership should empower synergy, not bottleneck growth.

Of course, there is also the more obvious benefit: your employees actually return to work recharged and rested and should they fail to return (or need to be escorted out at some future date), you will have plenty of competent replacements ready to jump in without interruption.

So, next time one of your employees requests time off, consider who will be empowered to practice their role while they are out and communicating strict email boundaries - for everyone's sake.

The Purple Cow | Why It Matters & Giveaway!

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Do you have a purple cow? While Seth Godin may not be an author you are familiar with, this concept might change the way you think about fulfilling your mission, especially if your organization has been around for years and years. All too often, the experience within the purpose-driven community, especially among nonprofits, is a territorial one. It is a sense  of scarcity. The myth of a limited pie of donations is still strong. Many opportunities are wasted by focusing on what others are doing and how to guard the island of grants we've carved out.

But what would happen if instead of chasing dollars with dollars, after all it does cost money to ask for money, we invested some of that cash and effort into being remarkable.

Literally...remarkable.

As in, "I cannot believe how neat this project is. I want to be a part of this. I can't want to tell my friends and family about it."

The concept of a "purple cow" is just that...it's remarkable, unlike the hundreds of other white or brown or black-spotted cows. What do you do within your organization that is truly remarkable?

Thousands of organizations feed the hungry, shelter the homeless, and save the children. What if a new organization opened their doors in your hometown with a remarkable way of fulfilling your mission better, or just differently? What kind of impact would that have?

We have entered an age of social innovation rather than "social work". Social entrepreneurs, benefit corporations, social enterprises, and impact investments are driving forward new ideas and testing opportunities to create a bigger impact.

While the recognition of opportunity within the social sector benefits us all on the whole, the climate is charged with tension. There is a divide between the old traditions - boring galas, silent auctions, and holiday appeals for the broken dishwasher - and the exciting pioneers who are pushing the limits and taking major risks.

Regardless of where you fall on the continuum, you're in a crowded field. What sets you apart? What makes your organization remarkable?

Wouldn't it be remarkable if the local homeless shelter installed a large greenhouse on their roof and the homeless and unemployed could work part-time farming food for the soup kitchen, building their resume and earning income?

Would you talk about a women's empowerment group that sent young women to flight school as a precursor to business school scholarships?

Salt Lake City Bicycle Collective "Earn-A-Bike" Program

What if a bicycle collective taught disadvantaged kids how to build a bicycle and then gave it to them, providing confidence, exercise, and transportation? What if they then hired these youth later on to work as bicycle techs in their shops?

The Green Urban Lunchbox

What if a sustainable farm-to-table organization transformed a school bus into a greenhouse so that kids could actually see and take part in where their food comes from at local schools?

These last two purple cows already exist right here in Salt Lake City.

Could you create a purple cow within your mission delivery?

Since we can all agree that passionate, creative organizations who are excited about solving problems in our community are a more attractive location to invest our dollars, share with us what you already do or could do to stand out.

The purplest commentator by the end of the day Sunday, April 13th will receive a free copy of The Purple Cow. Good luck!

6 Steps to Boost Ownership on Your Frontlines

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If the complaints in your organization tend to burn up the ladder until you finally take the initiative to resolve the problem, you’re not alone. In fact, upset customers are communicating directly to the C-Suite these days, bypassing the ladder altogether. Once relegated to the limits of family and friends, a bad experience can now circle the globe in a matter of minutes, thanks to social media. In the Economist Intelligence Unit report, Getting Closer to the Customer, Frank Eliason, senior vice president of social media for Citi, puts it bluntly, “Consumers now own the brand.”  It’s become imperative for leaders to nurture customer loyalty.

The C-Suite is fairly removed from the day-to-day customer interactions. Yet, many of us have a tendency to own the process. The very idea that a busy executive — removed from the customer experience by three to five layers of management — has the time to resolve every hiccup or even has the best idea of what will work is absurd.

How do we change the culture to instill ownership of the customer’s happiness with the ability to make a real impact in real time?

Click here to get the 6 critical steps.

 

5 Ways to Unleash Your Inner Intrapreneur

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I always imagined that once I reached the executive level, I would be free to focus on the bigger picture. Sadly, the C-suite is not a rooftop loft with inspiring views and glass walls where we hatch innovative ideas and brilliant plans with scented dry-erase markers. The reality, for many executives, is a never-ending load of administrative oversight with a fairly constant interruption of “not my job” problems that land on your desk as the last stop. After all the daily organizational maintenance, how do you ensure you stay ahead of the curve — or, better yet, pave the way in your industry with new and better solutions? Whether you’re naturally entrepreneurial — and your inner innovator has simply been stunted by the mundane — or you’re a traditional administrator needing to solve entrenched problems, you can quickly incorporate inventive thinking into your daily repertoire with a few interventions.

Click here to read my full article on the C-Suite Network

How to Score During a Give-A-Thon

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Utah is in the midst of our annual day of giving, Love Utah, Give Utah. Founded and hosted by the Community Foundation of Utah, 400+ nonprofit organizations are working to score new donors, exposure, and prizes. What factors set apart the winners from the less lucrative campaigns?

1. Cultivate Community

The nonprofits who really stand out during give-a-thons have an established community of fans, both live and online. They don't wait until a week before or the day of the event to blast their mailing list with an appeal. Instead, they curate ongoing communication and opportunities for interaction. Just like on social media, you want to communicate for the purpose of engagement at least five times for every appeal.

Lacking this foundational component and its already the day of? You can still improve your results.

2. Invite Interaction

Spy Hop Productions, a youth media nonprofit

Some donors have reported having received more than 15 email appeals from different organizations just today. That's a crowded field, especially when you consider the dozens of work-related emails that demand attention.

Beyond the obligatory email appeals (which you should ensure include a photo or two of your purpose in action), the frontrunners have created opportunities for hands-on interaction with the mission. Some organizations are running open houses, some are having parties, and others are running telethons. Some great examples:

If you can interact in person with community members who are interested in your cause, even strangers who weren't aware that their hobbies or activities aligned with your mission, you'll generate more buzz and potential new donors.

Not sure if you can command enough participation to come off as a success? Team up with other organizations who share your donor base.

3. Seed Momentum 

The real trick during a give-a-thon is to convert strangers into fans during the event. This is an incredible feat as people are generally wary of donating to organizations or causes they aren't familiar with. However, if you can generate a lot of momentum and excitement, you are much more likely to attract unfamiliar visitors to your campaign.

Consider Noble Horse Sanctuary, a nonprofit that operates on a total budget of $58,000 and has already attracted $9,000+ from 158 donors.  This small organization has outraised 197 other small nonprofits (as of 5 PM, there are still 7 hours to go). Their results are so compelling that many of us at the headquarters for the event have talked about their mission, visited their campaign page, and checked out their website.

How do you build momentum?

  • Find vocal corporate partners to make matching grants, especially those with a large employee base and an eager marketing team ready to take advantage of the sponsorship.
  • Cultivate scheduled donations early so that you start off at midnight with a bang.
  • Task your evangelists with spreading the message on your behalf throughout the day, multiplying your network reach, online and offline.
  • Don't just communicate at your community. Spur an online Instagram and video campaign to stand out from the crowd and create online interaction.

Utah Film Center

4. Fearlessness

Finally, there is a fearless quality among many of the nonprofits who have capitalized on the day. They volunteered to stand in front of the cameras for the stream-a-thon, they joined in the honk and waves, they asked local celebrities to hold up their sign for a photo opp, and they reached out to real celebrities on social media for a retweet.

When it comes to standing out during a free-for-all fundraising campaign, a little bit of an edge helps.

Good luck to all the Utah nonprofits and those of you with your own community give-a-thons coming up. If your community or state lacks an annual day of collective philanthropy, team up with your local community foundation and make it happen!

Community First, Then Marketing

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I think it's safe to say that the vast majority of mission founders or directors are lacking marketing experience. It's just not a typical precursor to starting an organization to feed the hungry or distribute clean water. But we can all agree that sharing our message is paramount to fulfilling our mission. The more people who care about our cause, and associate us with the solution, the more donors, volunteers, and talented team members available to scale our impact. Marketing is a bit of an intimidating word. It's often associated with advertising, events, radio and television interviews, published articles, and slimy people who launch a lot at bad jokes and drive black BMWs.

It's also easy to pigeon-hole ourselves in comparison to bigger, well-funded players. When you're relying on word-of-mouth or a few hundred printed brochures from Vistaprint, those tear-jerking American Cancer Society ads can make anyone feel inadequate.

How do you stay grounded in what you do best, while effectively spreading your message, so that you can grow your impact?

You may be surprised to learn that many small nonprofits are making waves on social media. A Nonprofit Technology Network article by Susan Gordon highlighted a interesting comparison:

Following the major earthquake in Japan in 2011, quite a large number of diverse nonprofits put out fundraising campaigns. In looking at those on the crowdfunding platform, Causes, the Japanese Cultural and Community Center of Northern California, a relatively small organization with just over a million in annual revenue, had raised more than $400,000. Comparatively, the American Red Cross, an organization with more than $3 Billion in annual revenue, pulled in $322,540.

The most successful mission-driven organizations have built loyal and motivated communities.

Social media and online platforms simply provide an efficient (and inexpensive) method to mobilize your community (and their community) around your cause, even if your cause doesn't have cute pictures of babies to post on Facebook.

Social media can seem intimidating and ineffective at first. Most companies have tasked low-level interns to post inspirational italicized quotes on backdrops of flowers every few days.

Unlike this giant waste of time, organizations who engage in activities that build their direct community and then connect regularly with that community online through stories and relevant information take advantage of social media as an amplifier. An example:

A 45-year old banker who regularly gives $20 to various charities loses his 19-year-old son to an accidental overdose. Having previously distanced himself from substance abuse, "those are bad kids whose parents weren't around", suddenly finds himself personally connected to how insidious even a little experimentation can be. He becomes heavily involved over the next year with a local organization that offers prevention, treatment, and support services to his community.

The banker and his wife are now donors and volunteers for the cause and the organization is doing a great job engaging them in their mission. The wife connects with the organization via social media and invites her local church group and a dozen of her friends to donate with a few clicks. They do because they know the family well and are equally horrified at the loss of their son, a young man the same age as many of their children.

A social media ask is a lot easier to swallow for many of us. There is social approval involved in being associated with a good cause and the visibility of our association online can attract others in our network without even an invite. Many stories are so compelling that they go viral, enlisting thousands of unknown supporters in spreading the message and contributing to the need.

You can't duplicate this effect with a direct mail appeal or an event. We don't share the postcard with the hungry kids on the front with our neighbors, coworkers, and family. We also don't often talk about our charitable contributions or affiliations.

While a case can certainly be made that the older members of our communities may prefer a traditional appeal, on a human level we are all more interested in being part of a community, rather than an address on a list. It's not about the ask, it's about whether you provide a compelling space to interact and connect. Even if you engage on social media with stories, if you lack a genuine community on the ground, the few strangers who retweet you or like your page are likely never going to get more involved than that.

If you're struggling with concept of social media:

Instead of looking for strangers in the dark recesses of the internet, step back and evaluate your genuine followers. You may have a list size in the thousands, but do those people have a real connection to your cause and are you providing opportunities to interact? A few small changes in this realm may make all the difference, with the bonus of social media evangelists praising your work to all of their friends online.

Get More Donors That Give More

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Do you remember baby Jessica? It was 1987 in Midland, Texas. An 18-month-old Jessica Morales fell 22 feet down a well just 8 inches wide. Lodged in the pipe for 59 hours, the story drew near-continuous coverage on every major network until the toddler was pulled to safety. The sheer impact of the highly visible and horrifying story of this little girl's ordeal on the American public is quite remarkable. The White House held a reception, ABC made a tv movie, and thousands of donors generated an estimated $700,000 in support.

baby-jessica

Pew Research ranks her story 8th in media interest over the past 20 years, USA Today identified her as the 22nd most impactful person on our lives, and CNN coverage totaled more than that of the 1994 genocide in Rwanda, where 800,000 people, including many babies, were brutally murdered in just 100 days. That's an average of 8,000 people per DAY.

The Identifiable Victim Effect

Dan Ariely is a behavioral economist with MIT and the author of The Upside of Irrationality, a wonderful and intriguing book that I just finished and highly recommend. Ariely sheds light on why we give to some causes, and not to others, illustrated by a simple study:

First, random participants were given $5 and offered the opportunity to donate some or all of their newfound money to a charity in response to a food shortage in Africa. Half of the participants received disturbing statistics. The other half received a personal story about a little girl, Rokia: "Your gift will change her life..."

The result? Participants gave twice as much to help Rokia - 48%, as compared to 20%. Why? Ariely pegs our empathy-or-apathy response to three psychological factors:

Closeness

The physical proximity and feeling of kinship you share with the victim. We feel much more for a family member whose home burnt down across the street from ours, as compared to a fire that takes out a village in Angola.

Vividness

How visible and tangible the need is. A picture of a bald, 4-year-old leukemia patient is vivid. A billboard that informs drivers that heart disease is the number one killer of women is not.

The Drop in the Bucket Effect

The faith in your ability to have an impact. We tend to shut down emotionally when we perceive the need to be so large that we cannot do anything of any real value.

How Can Causes Learn from the Baby Jessica effect?

Stalin historically said, "One man's death is a tragedy, but a million deaths is a statistic." Mother Teresa echoed the sentiment, "If I look at the mass, I will never act. If I look at the one, I will."

Some causes, like St. Jude's Hospital, have a very obvious face, but many do not. These missions aren't any less important and deserve strategic messaging to connect with a broader base of donors who give more:

  1. Find your baby Jessica. If you're lobbying for cleaner air, highlight Jane, who has asthma and missed 24 days of school last year. Connect your medical supply nonprofit to Joe, who received a knee replacement and was able to go back to work. It doesn't have to be a tear-jerker, but your donor needs to relate.
  2. Focus on a picture and a story. Seeing the face of your mission immediately makes it more personal. Pair that with a compelling and tangible story about their life, stirring an emotional connection. This isn't about being scammy. Your cause is IMPORTANT. Your work has meaning for people. Communicate that.
  3. Drop the statistics. It can be hard to completely delete the fact that there are a million Jessicas out there everyday, but the bigger the problem, the less likely your potential donor will try to help. You have a very limited window to capture their attention; don't turn them off with an impossible task.
  4. Empower the donor. Instead of making your donor feel helpless with depressing statistics, show the breadth of the problem by highlighting how many people were helped last year "by donors like you". Take a note from the Save the Children classic where donor could "sponsor" a child and even get updates on them. There's a reason they garner $600M in contributions a year. Make the smallest donation meaningful.

Review your website, brochure, social media pages, direct mail appeal letters, fundraising speeches, and any other vehicle for connecting with donors. You'll probably find a lot of statistics and very few pictures of real, genuine people and a clear message of how my $20 can make a lasting difference.

Step 1. Invest a day in crafting better messaging and images for your mission and then launch that messaging cohesively across all of your platforms.

Step 2: Put methods into place to identify and collect new images and stories from your work to consistently refresh your messaging and empower more donors to have an impact through your organization.

If you supply direct service partners, provide an easy process for them to funnel stories and pictures back to you. Even if you are layers away from the impact, find a contact on the frontlines and partner with them to tell the stories of those you help.

Don't wait, this is one of those important but not urgent tasks that will forever undermine your fundraising if you don't do it now.

10 Steps to Nail the 10 Minute Pitch

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Last Friday, the Community Foundation of Utah held their first annual Social Investors Forum, Shark Tank-style. They solicited both for-profits and nonprofits through a call for investments, narrowed the 150 applicants down to six, and then invited them to pitch in front of the judges, investors, and an audience...on Valentine's Day. Startup founders are well-versed in the pitch and many begin honing and refining their public speaking skills and story long before they are served up to the sharks. But, nonprofits haven't frequently been put through a publicized pitch event. Most fundraising goes on behind closed doors with grant applications or donation request letters.

Pitch-style events probably aren't going away. More and more large donors are starting to see themselves as investors and some are even looking for actual returns by investing in debt opportunities or for-profit social ventures. The opportunity to have a dialogue with the organizations you're considering is invaluable.

While it might be terrifying for introverted mission warriors to share their message from a stage, the platform has its benefits and, if harnessed, can stir up new donors, patrons, and supporters. It's time to embrace the pitch.

10 Easy Steps to Nail the 10 Minute Pitch:

1. Know your audience. Find out exactly who you will be pitching to. If they're traditional foundation directors, then stories about community impact will probably be critical. If the judges are potential investors or from the business community (as with most boards), they will want hard numbers and evidence that you know how to run your organization like a well-oiled machine.

2. Tell a story. It's critical that your audience connects with the application of what you do. We all too often rely on statistics, which are not only boring, they depersonalize the very real experience of the people who make up those stats. A story can be delivered in about a minute and can start your presentation off with a clear understanding of the why and the what, before you launch into the details.

Example:

One of the groups on Friday was looking for seed funding for a youth game development program, expanding on existing media training they do with kids. The program would only initially benefit 10 teens, a sticking point that the judges hit on. Had they started out with the vivid story of "David" who comes from a low-income family and got involved in a video production team in elementary school, advanced to additional media training in junior high, and then received a full-ride scholarship to the award-winning game design program at the University of Utah...and he also happens to volunteer as a mentor for the students in the program now...well that might have answered some of the skepticism around the impact the funding would have.

3. Start with why. We often get stuck in the what too often. Start off in the why. Why does your organization exist and why are you uniquely qualified to deliver the solution you are presenting. The why can often be delivered succinctly in your story, just make sure you make a clear and compelling case for why your organization or project is needed.

4. Demonstrate optimistic confidence. Ever get irked when your kids whine about having nothing to do rather than coming up with an idea? The same reaction holds true for nonprofits, yet many of us still go to funders with a big whiny, statement about how hard things are. Would you invest in someone who comes to you for all the answers, or would you invest in their competitor who is coming up with the solutions?

If you're particularly resilient - brag about it. "Yes, we had a $20K funding cut from our government contract, but we immediately came up with several alternative funding solutions and then launched a social enterprise to bring in sustainable, ongoing funding while training our clients in marketable skills!"

5. Answer their biggest questions. By knowing your audience, you should be able to anticipate what questions they will be asking and what doubts they will have about you, your organization, and your project. If you can fill in the blanks before the Q&A, you'll invoke more confidence. Try out your pitch on someone who knows nothing about your project and have them grill you afterward to help you refine your content.

6. Demonstrate competence. While this shouldn't be a show about how great you are, you should quickly shore up any doubts about your ability to perform by documenting your team's credentials and a few examples of prior successes. Funders recognize that they are investing in people, not just a good idea.

7. Plan for sustainability. If you don't have some form of earned income or a sustainability plan, you are limiting your funding opportunities and losing ground. Highlight how you will leverage funding to create long-term impact, as well as how you plan to maintain funding for the project. A bicycle collective that pitched on Friday rightly bragged about the fact that 90% of their revenue is self-generated through tune-ups, repairs, and sales.

8. Storyboard it. When  you have identified the main components, draw out your presentation from start to finish, ensuring that you have a powerful opening and an equally compelling closing, with a logical sequence in between. Remember that even presentations need white space - if your script has you rushing to keep it to 10-minutes - make some strategic edits to deliver the information more succinctly. Tip: Your slides can help deliver content that you can't fit into the script.

9. Be creative and engaging. You aren't the only team pitching and if folks wanted to simply read your slides, they would have had you send them in rather than having you pitch. Make eye contact, use your hands, stand up straight, and don't read your slides. Take the time to get creative about how you deliver your most important message so that it leaves a distinct impression.

Example: 

One of the presenters was pitching for funding for a fruitshare program. Instead of delivering statistics about how much fruit is wasted and how many people are going hungry, he started his pitch by handing out an apple to each judge. He then shared a powerful statement about how those delicious-looking apples traveled more than 1500 miles and had likely lost half of their nutritional value. It was a simple, but smart attention-grabber that not only left an impression, it literally left an apple in front of the judges for the rest of the pitches.

10. Rehearse. Rehearse. Rehearse. Don't fly by the seat of your pants. You may know your organization inside and out, but a well-crafted and well-timed presentation will give a clear, aligned message from start to finish and demonstrate how motivated you are to secure funding for your cause.

On a side note, if you're an introvert (like me), the more prepared you are, the more likely no one else will recognize that you are WAY out of your comfort zone. During the mingling on Friday, I heard too many presenters complain about how terrible they were or highlight the problems in their presentation.

Nobody likes a self-deprecating complainer and it doesn't make any logical sense to draw attention to our mistakes, but for some reason we seek comfort in gouging ourselves before others can. Be cognizant of this and instead smile, accept the compliments graciously, and roll with the punches - even if you seriously fall on your face or your technology backfires.

Good luck!

Maximizing Impact through Mission Driven Strategy

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Following the latest post on mission drift, how can nonprofits effectively grow, adapt, and innovate for superior performance, while remaining aligned with their ultimate mission? Mission Driven Strategy is a set of guidelines for designing and evaluating strategy toward maximum, mission-based value creation. In many instances, mission-oriented models and guidelines are created within the bubble of the nonprofit culture. Mission Driven Strategy, however, was adapted from the for-profit model, Return Driven Strategy, authored by Mark L. Frigo and Joel Litman.

Stepping back for a moment, if you are involved in a nonprofit, what does strategic planning look like in your organization?

For many, if not most, nonprofits, strategic planning takes the form of an annual retreat where the executive or management team comes together to set a few (or a dozen) goals for the coming year. Very few organizations have a 5-year plan or tangible vision for the future and many are flying by the seat of their pants as they squeeze in the all-day retreat to check-off the annual planning task before they get back to putting out fires while fulfilling five other roles in order to keep overhead low.

While our nonprofits are constantly focused on today, or even yesterday, successful for-profit organizations are positioning for tomorrow. Their products can become irrelevant overnight if innovative competitors get a few steps ahead of them. They therefore invest heavily in strategic planning.

Mission Driven Strategy is simply one of many models which can help us gain a bigger perspective around strategy and effectively position our organizations for sustainability and increased social impact.

As always, we must be cautious in applying overt profit-rooted models and methods to our nonprofit organizations, ensuring that we don't fall into the trap of maximizing revenue around our social causes while disregarding sustainable, positive impact. After all, the latter is why nonprofits exist.

An Adapted Overview of Mission Driven Strategy

Foundational Concepts:

In order to effectively discuss and design a strategic plan, there are a few concepts that we must understand about our organizations. Similar to conducting a SWOT analysis, reviewing the organization through these lenses lays the foundation for the strategic design:

Genuine Assets

What unique or high value assets do we own? Examples could be our unique mission in our geographic area, an ideal location that is embedded within our constituents' community, or a staff comprised heavily of former constituents.

Significant Forces of Change

What external forces are driving change for our mission now or in the near future? Consider scientific or technological breakthroughs; statutory, regulatory, and political change; and cultural and demographic shifts.

The Strategic Plan

Our resulting strategic plan should fulfill the following three goals:

#1: Ethically Maximize Mission-Based Value

Are we doing the right things for the right reasons? How can we adapt or innovate our models, delivery mechanisms, or infrastructure to maximize the value we provide?

#2: Address Constituents' Unmet Needs

Do we have a clear understanding of our causes' needs? How have the needs changed and how will they likely change based on the trends and coming events? How can we best fulfill unmet needs in line with our mission or through partnerships?

#3: Target the Greatest Needs for the Greatest Impact

Where are needs increasing or acting as substantial barriers to mission-delivery? How are we uniquely positioned to impact the greatest needs our constituents face?

Measuring and Monitoring Impact

Example adaptation of the Balanced Scorecard model

The model authors recommend using the Balanced Scorecard model (Kaplan and Norton) for establishing metrics and tracking performance around your Mission Driven Strategy.

The Balanced Scorecard tool was developed to help organizations integrate strategic objectives into daily operations, essentially connecting goals to tasks to measurements. A coming post will review best practices in applying the Balanced Scorecard to our Mission Driven Strategies.

The Bottom Line: Considering how forces of change will drive unmet needs within our mission focus, how can we leverage our genuine assets to develop, deliver, and measure maximized impact?

Bleeding Hearts, Cash, and Mission Drift

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"Mission drift" is typically associated with organizations who inadvertently or inappropriately lose focus of their mission and begin dabbling in other areas, although organizations can and at times need to consciously shift directions. Avoiding unproductive mission drift can be difficult, especially for small nonprofits run by bleeding hearts (no offense intended, we all bleed for certain causes).

A nearly harmless drift:

A startup nonprofit that I have worked with provides a very specific service to a very low-income, disenfranchised, and predominantly immigrant population. They exist to serve X need, but in the process they get to witness all of the other needs in the alphabet, from homelessness to sexual abuse to malnutrition.

During the holidays, their devoted team members were particularly vulnerable to mission drift and there were several instances of giving away cash from personal wallets and brainstorming about a giving tree or free food cabinet.

Why is this a problem? It isn't...if your nonprofit exists in a vacuum where no other community services are available and you have endless resources. In this case, you're simply becoming more comprehensive. Drift away!

However, in most cases this type of band-aid reaction causes more harm than good. Not only do we lose focus on what we need to do to serve X need to the best of our ability, we also distract our target clients from accessing the organizations that are experts at providing the ancillary services they need. The homeless client is better served by a referral appointment with the local housing provider than with the twenty that was slipped to her out of sympathy.

A more detrimental drift: 

On the other end of the spectrum, when you have bleeding wallets or business-oriented executives, drift is prevalent for different reasons, most often the draw to cash.

Unfortunately for many human services organizations, the glow of government super grants is often too tempting to turn away from. Instead of focusing their efforts on serving X need, I witnessed as an organization loaded up their existing team members with the task of launching new services in an arena they had zero expertise in.

Why? Because said services were in vogue and $100M+ government contracts were out to bid.

The organization didn't even get an award, but the program had to be in existence to apply and it would be too much of a black eye to turn back now. Needless to say, they aren't serving their new side mission well and the mirage of increased credibility will fade with the poor outcomes and the soon-to-end service fad.

Maintaining mission perspective

The above examples are highly prevalent in the nonprofit sector. Our causes naturally come with other symptoms, whether we start off working toward clean air or ending cruelty to animals. Funding is deliberately used as a mechanism for change, our causes attract passionate leaches who hope we can add their cause to our momentum, and nonprofit work attracts employees who can't help but see how we could do more.

In fact, nonprofit executives are constantly accused of neglecting their duties. As COO of a behavioral health nonprofit, I had the unsavory duty of working with the endless stream of government auditors. One particular auditor was of the bleeding heart variety and should have become a prosecutor with her ability to latch onto a small mistake and make it into murder. However, they all lacked perspective.

We were constantly told we needed to address the barriers to successful treatment outcomes. From creating veteran-specific PTSD programs to posting outreach workers at the homeless shelters to providing referral specialists to the emergency rooms, there was no shortage of ideas (which of course came across as demands without funding).

When you fragment your organization to try to solve every problem associated with your cause, you cannot be effective.

The perspective that nonprofit organizations function to solve all of the problems that come along with their cause needs to end.