Venting a bit....

A story in today's New York Times got me going this morning. It reports that Goldman Sachs, the investment bank, is considering increasing the requirements for charitable contributions from it's top paid employees--you know, the ones who helped screw up the economy and are now getting million and multi-million dollar bonuses a year later.

The article noted that Goldman has long had a requirement that top earners give 4% of their income to charity--and then check their tax returns to assure that there is compliance. Thus, there is no real charity at Goldman, just an enforced policy, like a dress code or the expectation of cheery attendance at a hated boss's birthday celebration.

The key part of the article was whether this policy--of wringing donations out of otherwise unwilling employees from their obscene bonuses--would reduce public anger over the bonuses themselves.

Yet again, these people are clueless about how real people think and act. I must have heard two dozen interviews over the last year from Wall Street types who absolutely do not understand why the country is mad at them for taking crazy risks (on all our behalf) to make money (for themselves). While there were many, many people who contributed to the economic mess, the Wall Street bankers stand out above the rest for their endless and self-serving rationales of why they were not the ones that brought the nation (and much of the world) to its economic knees, then needed tax dollars to bail them out, and now can go back to business as usual (with no oversight, PLEASE--we know what we're doing).

All of which is a rant to get to this question. Is forced charity really charity? Don't get me wrong, I'm delighted that some nonprofits will get what, on my quick accounting, is a ton of money (Goldman has set aside $16.7 billion for compensation this year--calculate 5% of that and you see what I mean), but still, is it charity? Goldman has reported that the firm also put aside $200 million for it's Foundation. I wonder how much of that $ will be given to charity, and how much will be kept in the foundation, invested by Goldman--and who at Goldman will earn investment fees. Pardon my cynicism.

There's a related issue here that has been bugging me for a long time--the courts sentencing people to community service. This sets up a conversation I had with a high school student a few months back where he told me he was busy after school: "doing my community service alongside the felons and DUI guys". His school requires volunteering, but limits the places students can volunteer, the time, and the type of volunteering. The kids get it--this isn't charity, it's forced labor.

A few years back, I was in London giving a talk at a conference and the main topic of discussion at the breaks was the new Charity Act, which paid young people to volunteer as a solution for years of reduced volunteering, particularly by people under 30. All of the attendees from the UK thought this was a great idea. The three or four Americans there smugly noted that we don't pay our volunteers--they actually show up on their own.

Well, sort of.

Will businesslike charities become charitable businesses? Part 1

One of the more interesting debates in our sector at the moment is the discussion (panic/hue and cry/gnashing of teeth) about the merging of the nonprofit and for profit models of business. Critics and analysts have noted correctly that many nonprofits are acting in a more businesslike manner than 10 or 15 years ago. Then, these observers marry that "fact" with the growing desire of businesses to have a social outcome and become one definition of a social entrepreneur. These two trends are seen as inevitably ending the distinction between charitable groups, often accompanied by much verbal angst and pulling of hair.

My suggestion? Chill out. We are not approaching the nonprofit apocalypse by any means, so let's dissect this discussion a bit to see why in this post and my next one.

Are nonprofits in general more businesslike than 15 years ago? Absolutely. Are all nonprofits this way? No chance. There are hundreds of thousands of sloppily run nonprofits today, and there always will be, just as there are sloppily run for-profits, poorly managed government agencies, and badly managed personal finances.

What has happened is that the expectations of the quality of nonprofit management have climbed dramatically. Take outcome measurements for example, a term that was just gaining traction 15 years ago (with, I might add, much angst-filled commentary about how such measurement would be the "end of the sector" since it took valuable time away from mission). Or, look at the spread of best practice models, standards of excellence (such as the terrific ones from Maryland Nonprofits) and accreditation. And, of course, the online oversight of watchdogs like Guidestar and Charity Navigator. All of these forces have slowly raised the bar on nonprofit management, outcome and accountability.

To which I say, good, good, and good.

And, certainly we talk more about mission-based businesses (a term I've been pushing for 25 years) and using business skills such as marketing and finance. But have most nonprofits moved from being charities to becoming mission-based businesses to going all the way to being businesses with a mission on the side?

No, and it won't happen any time soon. Why? Because nonprofit staff and board have seen the light regarding the key rationale for managing their mission better: They get to do more and better mission as a result. All the business "stuff" that critics worry about is not based on becoming a business--it's about doing better mission. That's what people on the ground tell me and show me all the time. There are just too many people who are too committed to service and mission to let this morph out of control. Will some organizations go too far? Yep, and they already have. But the vast middle of the bell curve on this issue is just doing more and better mission, not turning into some sort of nonprofit Wal-Mart.

Now, how about the for-profit world and their social aspirations? That's also a real trend, and we'll look at that in my next post.

Are these really the big trends?

Being behind in a lot of things, I just picked up the December 10 issue of the Chronicle of Philanthropy, which lists their 10 Emerging Forces for the nonprofit sector in 2010. While most of the list, at least in my view, is rehashing of things that have been out there for a while, I was glad to see that they've highlighted the need for and increased use of volunteers (although I don't like their alliteration "Volunteers in vogue"...it sounds like it's just a trendy trend), and the fact that some boards may understandably stall their tech upgrades due to reduced revenues.

All of the trends make good reading and I'm sure at least 6 or 7 pertain to every single nonprofit out there.

In the same issue, the really bad news is the report on the sector from Bridgespan that notes that 97% of charities are feeling the effect of the recession and that more than 40% have laid off staff. These and all the other indicators (demand, funding, etc.) have all worsened since last year.

As we know, the nonprofit sector lags with recessions--and with rebounds. We go down later, go deeper, and come out last. So, what should nonprofits do? We'll talk about that a bit in the next post.

Some wishes and some apologies

Well, Happy 2010 to all.

Apologies for the loooooooonnnnngggggg break in posting, but stuff has been going on here, not the least of which was a bout of breast cancer for my wife, Chris. Thankfully, she's had successful surgery and her prognosis is very, very good. Thanks to all who sent (or thought) good wishes.

One of my 2010 goals is to post much much more, including on some cool stuff I'm involved with regarding nonprofit innovation, the 3rd edition of Mission-Based Management, which came out while I was gone from this spot, and the 3rd edition of Mission-Based Marketing, which is half revised as I write this.

So, you'll see more of me here from now on, and I hope you tune in regularly. I've always got lots to say, and I'm six months behind!

The interesting article from today is about one of my favorite nonprofits, Teach for America, from the New York Times. I'm not quite sure what to make of the headline, except to say it seems misleading. Need to read the entire piece of research.

Books: I just finished SuperFreakonomics and loved it as much as the original. Strongly recommend it.

Back soon....

Online Donations and Payments

I've been telling audiences for a long time that they need to have an online option for donations, and for selling other goods and services. Most ED's recoil, remembering the days when setting up a credit card payment stream was difficult and very, very expensive.

No more, and Wild Apricot, one of my favorite blogs, has broken down the great options, whether from Google, Amazon or other online payment processors. Here's a terrific post on online payment options, and then a second one on Amazon's new program for nonprofits.

Finally, a big shout out to the nonprofits who made the list of the Cone Nonprofit Power Brand 100, particularly Goodwill Industries International, on whose board I sit. Goodwill came in at #5 on Cone's list, but being on the list at all is a big, big deal.

Good work!

Listening to your customers (and line staff) in a recession

Here's a GREAT article that, on the surface, has nothing to do with nonprofits, but in reality has everything to do with how your organization deals with the new economy.

It's from the New York Times and discusses how big retailers are shifting strategy in the recession.

I know, I know, who cares, right? OK, trust me, read the article. You'll see these organizations listening to line staff (something they should have been doing for years) making small changes that appeal to customers (the anecdote about dress demand in Pittsburgh and Salt Lake City), or reducing "seasons" since people are buying what they need now, and not buying ahead. Small changes that make a big difference.

The other issue from this article to remember is that the stores are making long put off changes since they assume that, even when the recession is over, the new normal will not be like the old normal.

Good thinking.

Building better websites

Regular readers know that I continue to push nonprofits on the fact that more and more people (and certainly EVERYONE under 35) will check your organization out (whether for donations, volunteer opportunities, job openings or actual service) online first and, perhaps, only.

Thus a key to nonprofit success is a great website. But where to start?

TechSoup (again) to the rescue. Here's a great article on Designing or Redesigning an Great Nonprofit Website.

Every nonprofit manager should read this, and then look at your own website!

Hidden in the new 990...

I had an interesting week, both professionally and in terms of travel. It started with a fun day in Hartford, sponsored by the Hartford Foundation for Public Giving. We began with a meeting in the morning with a large group of nonprofits, and followed that with an afternoon session for capacity builders. We talked about Mission-Based Management in Difficult Times at both sessions. Great questions and a large number of follow-up emails, which I always enjoy.

Oh, if you are the person who emailed me from the room in Hartford itself--my email crashed at the airport and I lost my inbox (actually two YEARS worth of inbox!). So, it's not that I'm ignoring you, it's that I don't have your email--shoot me another one and I'll get back to you.

Friday I was in Dallas, for a second go round with the American Dietetic Association's annual Leadership Development Conference, talking about Generations. Again, enthusiastic people and fun questions.

Speaking of follow-up questions, I got one yesterday that led me to something we all need to remember-that the new IRS 990 form is not just about the form. It also requires some updating of many nonprofits' management and governance practices. Here's a great article on that topic. If you wait to get at these issues until you are filling in the form at the last minute, you may have some problems.
Check soon.

Enterprise--social benefit-win-win-win

Now, THIS is a good idea for companies in slow times. Check it out and see if you can talk some companies in your town into picking this up. Perhaps feed it to the Chamber of Commerce?

http://www.redlandsdailyfacts.com/sanbernardinocounty/ci_12542852

Good day, good ideas

I had a terrific day Wednesday at Aldelphi University's Long Island Center for Nonprofit Leadership's Nonprofit Summit. Not only did I get to again hear Kim Klein (always a treat), I had fun in two different sessions with participants, and got to visit with some old friends as well as make some new ones.

One theme (starting with Kim's opening address titled, "The Best Of Times") that I completely agree with is that the current economic downturn is an incredible opportunity for nonprofit leadership to reshape our organizations to be stronger when the recession ends. This is so, so true, if we think strategically, and not simply about the day to day problems we have. I know that's easier said than done, but it's still true.

Many thanks to everyone at the Center, but particularly to Ann Marie, Peter, Cathy and Gina. You made my time there very easy and enjoyable.

Nonprofit Innovation

I'm involved with a very cool project on nonprofit innovation through the Kellogg Action Lab. I'll be posting in the coming months on what our work produces so that as many people as possible can share and benefit from it.

Our rules are pretty straightforward. First, we want to build a set of innovation engines that are replicable, scalable and usable in a variety of environments.

Second, none of the ideas (or innovation engines) that come through our project will need attribution--they will be open source and free to everyone.

Third, we're going to use the best in crowdsourcing to generate more innovation. This, to us, means at the local organization, community and national level.

Fourth, we don't care where the ideas come from: from the nonprofit world, the business community, students, private citizens. It doesn't matter.

The problems nonprofits face are hard ones to solve, so we need as many neurons as possible on the job to come up with new ideas and new approaches.

In related information, take a look at this article from on Lessons from Nonprofits on Innovation, then spend some time reading this article on crowdsourcing high end solutions from Wired. The first makes me happy to see someone acknowledge the innovation in our field, and has some good rules for all of us to follow. The second is flat awesome, with LOTS of lessons on the wisdom of crowds.

Expect more on innovation here soon, and often.

Lest we forget

It's a beautiful morning here at Smith Mountain Lake in rural Virginia, quiet, a bit cloudy and I'm watching the lake "wake up" as the fishermen give way to the jet skis and runabouts on a busy holiday weekend.

It's easy to just go on with our lives and forget those who do, and who have, served us so well. And we should never forget. So, two things.

First, today's highlighted nonprofit is the Wounded Warrior Project. A terrific program started a few years back to fill the (inexcusable) holes in care for our vets. Great, great stuff and worth your support.

Second, if you don't already, start doing this, and not just today: when you see someone in uniform, walk up and say thanks. They appreciate it more than you know.

If you only have time to read two books this summer...

Traditionally in May I see lots of lists of summer reading in Newsweek, Business Week, Wired, the New York Times, etc. It seems that many serial authors (as in authors who release one book a year) do it either for the summer or during the holiday shopping period in the fall. So, I'll browse through the lists, see if there's new stuff from authors I know, or highly lauded new authors that I might want to try.

This includes, for me, fiction and non-fiction, since I try to read both in about equal amounts. Regular readers know I ran a book club for CEO's and one for Emerging Leaders for years and recommend such clubs highly as methods of personal growth as well as organizational leadership development and improvement.

We all know that, of all the summers of the past few years, nonprofit staff have less time than ever to read; we've cut back employees and are scrambling to fill funding holes. But even in a financial crisis, we need to be thinking about new ways of doing things, of methods to improve employee morale, of how to grow our next generation of leaders.

So, of the more than 50 management/leadership books I've read in the past three years I want to give you a short summer reading list. One book is for you, and one for your organization. They are both from proven authors who have a long, long reading list if you like the book listed here.

For Your Organization: The Three Signs of a Miserable Job, by Pat Lencioni
This book is a business fable (like all of Lencioni's work) and thus an easy read, even for people on your team who don't like books, or are severely time limited. There is more organizational improvement wisdom here in than in most other books ten times the length. Actually, if you only read one book this summer, make this the one.

For You: If you are a Senior Leader (CEO/COO, VP): Developing the Leaders Around You
If you are an Emerging Leader: Developing the Leader Within You
both by John Maxwell. All of Maxwell's books are excellent, with good writing, well thought out examples and diagrams, and good solid leadership philosophy behind them.

Enjoy your reading, and if you have other books you'd like to share with nonprofit leaders here, post a comment.

Mission-Based Management 3.0

In early March, I sent the text for the third edition of Mission-Based Management to John Wiley & Sons. If all goes well, the new edition will be out in the fall. I'm really pleased about the new content. In addition to updated stories, examples, and bringing the book up to speed for 2009 and beyond, I made two major changes in the theory of the book.

The first change was to add a tenth criterion to my Characteristics of Successful Nonprofits. Readers of either of the first two editions will remember that these characteristics laid the foundation for the rest of the book. The new characteristic, listed second after "A Viable Mission" is "Ethical, Accountable and Transparent". In the chapter on this subject I talk about not only the expectation for transparency and high values, but also how ethics, accountability and transparency begin inside the organization, between staff, between volunteers and between staff and volunteers. Placing this second after Mission, and before characteristics dealing with board, staff, marketing, technology, controls, strategy or finance, is intended to emphasize the importance of these issues in today's nonprofits. As I say in the book,

"The mission is why you do what you do. Your values are how you do it."

The second change is to ramp up the chapter on technology, and not just the content to catch up to changes since the Second Edition. Rather, I try to convey my deeply held belief that the future of philanthropy is in the successful merging of technology and mission. Thus, instead of just getting better at tech, instead of accepting that tech is here to stay, I labeled this characteristic

"Embracing Technology for Mission." And, that's what its going to take.

More on both of these issues in future posts, and I'll be previewing the entire book in posts starting around Labor Day.

Speaking of holidays, if you are here in the US, enjoy yours and remember those who have, and do, serve us so well.

A great idea worth our support

It's been far, far too long since my last post, but I've been on the road, making up for 3 weeks in Australia and New Zealand. Since the end of March, I've been in Texas, Montana, Iowa, Pennsylvania, Georgia, Michigan, Minnesota and Virginia doing presentations on Marketing, Generation change and, predictably, Mission-Based Management in Difficult Financial Times.

I read people's attitude about the recession and their nonprofit as very concerned but not terrified, as they were in January. I can't tell if this is because the talking heads on TV are working so hard to find a light at the end of the tunnel, or simply because the severe downward spiral seems to have slowed.

What nonprofit managers are in constant need of, however, is good people, for their boards, their staff and their volunteers. I'm going to start a series on finding and retaining good people here over the next few weeks, interspersed with other postings, as I get back on a more regular schedule.

Let's start with a biggie. Jobs for Change "seeks to spark a nationwide movement toward careers in the nonprofit, government, and social enterprise sectors." This is a project of Change.org, and no matter what your political affiliation, deserves a look and careful consideration. There are hundreds of job listings in the nonprofit sector, some good advice for people who are interested in working in our sector, and the cost of listing a job is currently free and will eventually be less than Monster.com.

The site is currently in beta, so check it out and post any ideas you might have on how to make it better. Having a place where the best and brightest can find a way to work for the common good is awesome, and I wish them huge success.

Great new information on what makes a good website for donations

Here's some great material from Jakob Nielson's Alertbox on
Donor Usability on your website. A must read for anyone who is seeking to increase online donations...and who isn't?

http://www.useit.com/alertbox/nonprofit-donations.html

Australian Nonprofits

Had two great days with small groups of nonprofit staff in both Melbourne and Sydney, under the auspices of the Not-For-Profit Network. Thanks to both Glen Ramos and Steve Bowman for all their help with the logistics.

The people were predictably great, and their stories fascinating. In general, Australia has not suffered as bad an economic spin as the US and Europe, although today it was announced that the AUS unemployment rate was at a 4 year high....still nothing like our 20 year high in the U.S.

One significant difference here is that nonprofits here hardly ever require their board members to do any significant fund raising (good for them). Other than that, their issues sound surprisingly familiar.

So, Chris and I are off tomorrow to Auckland to see our daughter for 10 days. Our sons will arrive Saturday. It will be good to be together.

Heading out....

My wife and I are off today to New Zealand to see our daughter who is doing a semester abroad in Auckland. I'll be mixing work and fun, doing two gigs in Australia and one in Auckland during our time in Oceania. My sessions are being sponsored by the Not-For-Profit Network, based in Australia.

I'm really looking forward (professionally) to meet nonprofit staff and board members from both countries and to hear their stories and challenges.

Personally, I'm looking forward to seeing Caitlin, and to having her brothers down with us as well. It will be a fun time, just being together. And, I've never known anyone who traveled to NZ or AUS who didn't both love the people in both countries and have amazing stories to tell.

At least some of mine I'll share here.

What to do now, Part V

This is the final post in a five part series on What to do now? as our economic crisis deepens. You can see Part I, Part II, Part III, Part IV if you need to catch up.

In this final post, we'll look at a list of leadership questions. As the leader of your organization in a crisis, you have to make sure you're doing the best possible job of leading, not just being there. Here's my leadership checklist.

1. Am I asking the hard questions?
You need to be asking questions such as these: "Am I looking at all possibilities, even those I don't want to contemplate, such as merger, closing a program, laying off staff? Am I questioning things that have been assumed for years, like our business model, or if there's another nonprofit that can do what we do better in this situation?" These are hard, hard questions, but in a crisis, everything is on the table to keep producing mission.

2. Do I have the information I need?
Probably not enough of it, or as much as you would like.....and here's the rub: you need to share information, ask everyone their opinion (see below) but then it's your job to decide--remember in the last posting I said you needed "drop dead dates" after which you act? Well, waiting for "just a little more information" is often the death of organizations in crisis. Get as much information and input as you can, but on deadline day--decide.

3. Am I sharing information widely?
John Chambers, the CEO of Cisco has this great line---"No one of us is as smart as all of us." While I cautioned you earlier to only share what you KNOW, not what you THINK, getting as much input into your key decisions as possible will only help. Don't take all the responsibility on yourself. Ask for others' ideas.

4. If staff take a pay cut, am I taking a bigger one?
In some cases, you may go to staff and ask for everyone to take a 5 or 10 or 15% pay cut to save jobs. If that happens (and it's really tricky) and you possibly can, take a bigger cut yourself. I know everyone is in a different place financially, but the leadership value of this is unbelievable. And here's the best part: Don't tell anyone. Why? In most organizations, they'll figure it out. And if they don't you'll know what you did, and it will help assuage the guilt most ED's feel when they ask people who are already probably underpaid to take even less. Think about this.

5. Am I putting mission first?
As I said when we started this series, surviving a financial crisis is not about having the least change, the lowest job loss, the smallest disruption...it's about providing the most high quality mission possible AND coming out of the other end of the crisis in the best shape possible to continue doing that. I often hear boards or ED's say---"No matter what, we don't want layoffs". Well, neither do I, but if 80% of your expenses are related to your staff......

Mission first. Use it as your beacon, your rallying cry, your ultimate metric.

6. Am I listening to everyone?
Remember John Chambers, and then remember this: There's a big difference between listening and waiting your turn to talk. Get out among your staff, let them have opportunities to talk, share, ask questions, and focus on them. Don't be checking your crackberry, or gazing off into space. Listen. They need that now, and guess what? You might hear a great idea!

7. Am I taking care of the leader?
It's really easy to stop exercising, or eating right, or sleeping at night. Although it may seem egotistical and self-centered in a crisis--you have to take care of you. That's a decision that can save your mission--so schedule you time, however it works the best. For me, in the two horrible financial upheavals I've gone through, what helped me was always one of two things-going for a run and being able to clear my head, or spending time with my kids, and having to focus on them. What works for you?

Use this checklist as you work your organization through the coming months. It will help you make sure you're doing the best you can in a tough, tough time.

Are you Visible and Transparent?

In tough times, more and more nonprofits are trying to raise funds from new sources, from old sources, from any sources. And, since so many people are in "wait and see" mode, your organization has to remain visible to them day in and day out. That way, when the do decide to get back into donation mode, you'll be top of mind.

Of course, when any donor looks at you, you want to have nothing to hide. You need to be as transparent as possible....letting people see you fully, and in the best possible light. It's kind of like having company--you want people over to your house, but you also want to straighten up a bit before they arrive.

This month's Mission-Based Management Newsletter is about Visibility and Transparency. Take a look for some ideas.

Tomorrow, we'll talk about the Leadership Checklist in the fifth installment of our series on What to do Now?"