The three-term Mayor (1978-1989) of New York City, the late Ed Koch, was famous for, among other things, standing on street corners or in subway stations and asking whomever passed by: "How'm I doing?" This question amounted to requesting a kind of instantaneous, button-holing review of his performance as Mayor. The verdicts were positive enough to get him elected three times in a famously fractious city.
Reviewing an employee's performance is one of a nonprofit manager's or board members' most important, and for some, least favorite, personnel activities. To ease the process over time various consultants have designed templates and charts around which an evaluation can be framed. Those formats help, but they shouldn't take the place of a key outcome of such a meeting - a two way conversation.
I recall trying such a template that used a 1-10 scale to score the employee in various categories - 10 being perfect. The employee was asked to self-evaluate. We exchanged our results. The employee had marked perfect 10s through out. I was less generous but not by any means negative overall. The meeting did not go well. Most of the remaining time was spent bewailing (sometimes literally ) my scoring, the person claiming all perfect scores before. My rejoinder - that I myself have always found perfection elusive - was of no help.
I have used a system that works more satisfactorily, especially for board leadership review of the CEO. It requires more work on the front end but the final result can be mutually beneficial. At the beginning of the fiscal year the employee lists a series of goals and objectives, which, in turn, is reviewed and approved by the evaluating party. The touchstones of the goals and objectives document should be the employee's job description as well as the organization' s strategic plan - so it is imperative that the nonprofit have each - updated.
It is this list against which the employee's performance is judged. The value of such an approach lies in the avoidance of the LIFO effect. LIFO stands for "Last In, First Out," a term used in inventory management, which I learned about at business school in my brief encounter with manufacturing policy. With a LIFO evaluation, an employee is at risk of being reviewed based on the most recent activities, and not the whole year. If , for instance, a problem arose a few weeks before the review, the evaluation could end up unfairly skewed.
It is wise for both employee and reviewer to check in during the year to see if there might be changes to the goals and objectives, based on unforeseen events. I've always liked the phrase sometimes used in government - OBE'd- Overtaken By Events. It happens. Any midcourse correction also encourages conversation between the parties. Evaluations ideally are two-way discussions. Employees should also use the opportunity to "feed back" any concerns on their minds..
The pressures of running a nonprofit can be severe, sometimes leading to a CEO disappearing into a mental bunker, besieged by a myriad of demands from donors, staff, board and the public Likewise, if board members are involved, their private and professional lives can also be complex. A carefully structured evaluation process will require emergence from whatever bunkers where those involved might find themselves.
A performance evaluation should be viewed as a constructive exercise. And the employee shouldn't be afraid to ask, in Mayor Koch's phrase: " How'm I doing?"
Comments on this blog post, and others, always welcome.
Wednesday, April 1, 2015
Saturday, February 28, 2015
Bequests - "You Never Know..."
One of the most important, but most difficult to acquire, sources of funds for nonprofits, are the result of what is called "planned giving." This is a euphemism for what donors plan to do with assets designated for charity after they leave this planet. Such gifts take many different forms, the simplest of which is a bequest in a will, the more complex are instruments like charitable lead trusts, which may also have tax benefits during a lifetime.. All require some form of legal advice to navigate the treacherous waterways of our tax code. A warmer name, gaining more use, is "legacy gift" for a donation that comes through an estate
The difficulty for nonprofits lies in the uncertainty of what any donor might be planning and typically the long lead-time required in identifying and then cultivating potential donors. Also, nonprofit managers are so consumed by the need for dollars NOW that the time required to undertake a planned giving effort can fade away. Some donors will inform the nonprofit of their planned giving intentions. Nonprofit staff may even work with them on the details, including their gift being recognized publicly during their lifetimes.
Of course, donors can change their minds. I had experience with a couple who had set up a sizable charitable trust, but one that was revocable. It was clearly intended as a cudgel to make sure the organization followed their bidding. It was indeed thus wielded, but too often. The board eventually refused a specific demand. The trust was then revoked,. But by that time, other wealthy and less demanding donors had come forward, whose gifts would more than make up the loss.
Nonprofits sometimes make the mistake of assuming that only large annual donors are suitable prospects for legacy giving. They are of course, but other supporters, such as members and volunteers should not be ignored, especially if they have a long history of support at whatever level, that demonstrate their commitment to the organization's mission. Some of these supporters fall under the "you never know" category, where a person of apparently meager means turns out to be just the opposite.
A recent story in February out of Brattleboro Vermont. is illustrative. The headline read "Former Janitor Leaves $6 million to hospital and library in Vermont." Ronald Read, who died at age 92, was described as wearing clothes "held together by safety pins." He had been a janitor at a local J.C.Penney store for 17 years. The only clue to his other life would have been knowing he subscribed to the Wall Street Journal. The lawyer who handled his estate was quoted as saying: " He had two lifetime hobbies - investing and cutting wood."
The above has to be classified as a windfall, where the stunned beneficiaries were unaware of the gift until it was given. But it was likely people at the hospital and library had at one time or another been kind to Mr. Read. There is a lesson there. Another helpful hint is to get to know local lawyers who specialize in trusts and estates. There may be times when a client asks advice on where a bequest might be made.
With a large and often unknown universe of potential legacy donors, unless the nonprofit has the resources to have staff dedicated to that task, the best alternative is to have printed or online material prepared with a simple description of planned giving options. Those can be mailed, linked or presented personally to prospects. A hindrance to effective fundraising for this purpose is the reluctance to discuss with donors a matter that necessarily involves their eventual demise. If the prospect is someone already engaged in support, an approach might be that a legacy gift continues on the work begun in their lifetime.
Two statistics need to mentioned regarding this topic. First is that it is estimated only 55% of Americans have prepared wills or other estate plans. The other is that just approximately 5% of giving to nonprofits comes through estate planning. That figure illustrates the difficulties of attracting such generosity. Families, if they have them, will come first in most donors' minds. Working towards some kind of a program to invite legacy gifts can, in the long run - and often it is very long -yield great benefit to the nonprofit, as such gifts are sometimes quite large. They are of a size often used to build endowment.
In 2007, Michael Dunn of Derby VT, in the "Northeast Kingdom," died suddenly, leaving his entire estate of $10 million to New York's Museum of Modern Art. Its director Glenn Lowry, although a summer resident of a nearby town, had never heard of Mr. Dunn, who turned out to be a low level supporter of MOMA. Like Mr. Read of Brattleboro, Dunn had no family, Unlike Mr. Read, he was gregarious and active in the town. Yet no one there had a clue of the size of his wealth or where it was headed after his death.
"You never know..." and what is it about these Vermonters?
The difficulty for nonprofits lies in the uncertainty of what any donor might be planning and typically the long lead-time required in identifying and then cultivating potential donors. Also, nonprofit managers are so consumed by the need for dollars NOW that the time required to undertake a planned giving effort can fade away. Some donors will inform the nonprofit of their planned giving intentions. Nonprofit staff may even work with them on the details, including their gift being recognized publicly during their lifetimes.
Of course, donors can change their minds. I had experience with a couple who had set up a sizable charitable trust, but one that was revocable. It was clearly intended as a cudgel to make sure the organization followed their bidding. It was indeed thus wielded, but too often. The board eventually refused a specific demand. The trust was then revoked,. But by that time, other wealthy and less demanding donors had come forward, whose gifts would more than make up the loss.
Nonprofits sometimes make the mistake of assuming that only large annual donors are suitable prospects for legacy giving. They are of course, but other supporters, such as members and volunteers should not be ignored, especially if they have a long history of support at whatever level, that demonstrate their commitment to the organization's mission. Some of these supporters fall under the "you never know" category, where a person of apparently meager means turns out to be just the opposite.
A recent story in February out of Brattleboro Vermont. is illustrative. The headline read "Former Janitor Leaves $6 million to hospital and library in Vermont." Ronald Read, who died at age 92, was described as wearing clothes "held together by safety pins." He had been a janitor at a local J.C.Penney store for 17 years. The only clue to his other life would have been knowing he subscribed to the Wall Street Journal. The lawyer who handled his estate was quoted as saying: " He had two lifetime hobbies - investing and cutting wood."
The above has to be classified as a windfall, where the stunned beneficiaries were unaware of the gift until it was given. But it was likely people at the hospital and library had at one time or another been kind to Mr. Read. There is a lesson there. Another helpful hint is to get to know local lawyers who specialize in trusts and estates. There may be times when a client asks advice on where a bequest might be made.
With a large and often unknown universe of potential legacy donors, unless the nonprofit has the resources to have staff dedicated to that task, the best alternative is to have printed or online material prepared with a simple description of planned giving options. Those can be mailed, linked or presented personally to prospects. A hindrance to effective fundraising for this purpose is the reluctance to discuss with donors a matter that necessarily involves their eventual demise. If the prospect is someone already engaged in support, an approach might be that a legacy gift continues on the work begun in their lifetime.
Two statistics need to mentioned regarding this topic. First is that it is estimated only 55% of Americans have prepared wills or other estate plans. The other is that just approximately 5% of giving to nonprofits comes through estate planning. That figure illustrates the difficulties of attracting such generosity. Families, if they have them, will come first in most donors' minds. Working towards some kind of a program to invite legacy gifts can, in the long run - and often it is very long -yield great benefit to the nonprofit, as such gifts are sometimes quite large. They are of a size often used to build endowment.
In 2007, Michael Dunn of Derby VT, in the "Northeast Kingdom," died suddenly, leaving his entire estate of $10 million to New York's Museum of Modern Art. Its director Glenn Lowry, although a summer resident of a nearby town, had never heard of Mr. Dunn, who turned out to be a low level supporter of MOMA. Like Mr. Read of Brattleboro, Dunn had no family, Unlike Mr. Read, he was gregarious and active in the town. Yet no one there had a clue of the size of his wealth or where it was headed after his death.
"You never know..." and what is it about these Vermonters?
Thursday, January 29, 2015
Are you my Thought Partner?
Huh? That's what I said to myself when I came across this expression in a letter from a nonprofit CEO referring to the accomplishments of the organization during the past year. The writer declared many in the community viewed the group as a good "thought partner." That got me thinking about the value of clear expression in any work, but especially in nonprofits, where if you grab an audience you should assume the reader/listener doesn't have all day to receive and understand your message.
Of course "thought partner" is jargon, defined by one reference as "special words or expressions used by a particular group.... that are difficult for others to understand." Aside from its vaguely Orwellian character (cf. "thought police" in 1984 ), the phrase only serves to show off the author's desire to abandon plain speech in favor of a phrase du jour, perhaps with a view to impress.
There are two major modes of expression - aside from hand gestures and eyebrow lifts: written, and oral / spoken ("verbal" should not be confused with "oral"). Good written expression is supported by diligent teachers and texts, such as the still superior The Elements of Style by William Strunk and E. B. White. As any employer, editor or casual correspondent can tell you, the dam is breaking on careful writing. Emails and tweets are eroding sentence structure and grammar. When I was in management and hiring people, the receipt of a clear and persuasive cover letter got that application to the top of the pile.
As for oral/spoken expression, the predominant formal practitioners- politicians- have been helped by the teleprompter. A good speech written in advance and loaded on the machine can make even the most suspect seem coherent, content aside. But if the technology should fail, beware. Recently, Republican presidential hopefuls spoke to a convocation of conservatives in Iowa. Included was former vice presidential candidate Sarah Palin. Midway through the speech, the teleprompter conked out and Ms. Palin had to resort to speaking ex tempore. The result was like a highway pileup of syntax, grammar, and metaphor. It made no sense. By comparison, the political debate format at least allows the listener an opportunity to see what may be inside a candidate's brain.
As for nonprofit managers, I have noticed that some have a tendency, once in front of a captive audience, to say too much for too long. Eager to tell the whole story, in which they are so invested, they forget that the listener, after a while, may have something else to do. Organization of what you want to impart is helpful. The late Mike Strang, my old friend and former Congressman, said that on the campaign trail he followed a simple rule of thumb speaking to a crowd: "Tell them what you are going to tell them, tell it to them, and then tell them what you have told them." That structure ideally imposes a need for clarity and, if you can keep it short, even better.
I hope I have been clear. If not, let me know and please do not ask me to be your thought partner. I will decline - on principle.
Comments on this and other blog posts are always welcome.
Of course "thought partner" is jargon, defined by one reference as "special words or expressions used by a particular group.... that are difficult for others to understand." Aside from its vaguely Orwellian character (cf. "thought police" in 1984 ), the phrase only serves to show off the author's desire to abandon plain speech in favor of a phrase du jour, perhaps with a view to impress.
There are two major modes of expression - aside from hand gestures and eyebrow lifts: written, and oral / spoken ("verbal" should not be confused with "oral"). Good written expression is supported by diligent teachers and texts, such as the still superior The Elements of Style by William Strunk and E. B. White. As any employer, editor or casual correspondent can tell you, the dam is breaking on careful writing. Emails and tweets are eroding sentence structure and grammar. When I was in management and hiring people, the receipt of a clear and persuasive cover letter got that application to the top of the pile.
As for oral/spoken expression, the predominant formal practitioners- politicians- have been helped by the teleprompter. A good speech written in advance and loaded on the machine can make even the most suspect seem coherent, content aside. But if the technology should fail, beware. Recently, Republican presidential hopefuls spoke to a convocation of conservatives in Iowa. Included was former vice presidential candidate Sarah Palin. Midway through the speech, the teleprompter conked out and Ms. Palin had to resort to speaking ex tempore. The result was like a highway pileup of syntax, grammar, and metaphor. It made no sense. By comparison, the political debate format at least allows the listener an opportunity to see what may be inside a candidate's brain.
As for nonprofit managers, I have noticed that some have a tendency, once in front of a captive audience, to say too much for too long. Eager to tell the whole story, in which they are so invested, they forget that the listener, after a while, may have something else to do. Organization of what you want to impart is helpful. The late Mike Strang, my old friend and former Congressman, said that on the campaign trail he followed a simple rule of thumb speaking to a crowd: "Tell them what you are going to tell them, tell it to them, and then tell them what you have told them." That structure ideally imposes a need for clarity and, if you can keep it short, even better.
I hope I have been clear. If not, let me know and please do not ask me to be your thought partner. I will decline - on principle.
Comments on this and other blog posts are always welcome.
Wednesday, December 3, 2014
Blog Milestone plus "What's In a (Re) Name?"
The milestone: this is my 40th blog post since I began writing them in April 2011. In review, I find I have covered a lot of topics and issues that I hope have been interesting and useful to readers in the nonprofit world . You can judge for yourself by referring to the archive section to the left of this page. Anyway, Happy 40th, Mr.Blog!
Thinking about what subject to discuss for #40 and searching for a title I discovered "What's In a Name" conveniently was the title of my first post in 2011. Hard to resist that coincidence. At that time it was about branding an historic site, This time it's about an unusual transaction that has repercussions for the issue of nonprofits naming buildings, or parts thereof, for donors.
Since 1973 - over 40 years- the home of the New York Philharmonic at Lincoln Center has been known as Avery Fisher Hall, in recognition of the hi-fi pioneer Mr. Fisher's gift then of $10 million, On November 12, The New York Times announced that Lincoln Center had reached agreement with the Fisher family that in exchange for a payment of $15 million to them (there are three children) the Center will be free to drop the Fisher name and seek another, and presumably larger, naming donor to help fund some $500 million in renovations needed for the facility. The Hall, for instance, has been plagued by acoustical problems ever since its opening in 1962.
To say this "buy back" arrangement is unusual is an understatement, apparently there being no precedent. There have been instances where names have been dropped. I reported the same in a post of September 7, 2012 citing examples of removal of a name at a facility at American University due to the discovery of the donor's shady dealings in the arms trade, and the change in name of the Baltimore Ravens' football stadium when the company namesake, PsiNet, went bankrupt. Baltimoreans were reportedly not unhappy. Some could never get their mouths around the name and fell back on calling it Piss Net.
The Lincoln Center - Fisher family deal was a private transaction and one of mutual benefit. But it openly moves the naming game into an arena not unlike one that can be found in market trading. I can imagine there are now nonprofits across the country with named facilities researching the terms of the original contract/arrangement with the donor. If their building is in need of refurbishment or replacement and there is a prospect for a larger naming gift, why not go back go to the donor or family and see if a deal can be struck?. Lincoln Center had to have been sure there were one or more new "namers" waiting in the wings, as the $15 million to be paid to the Fishers is to come out of the new naming proceeds.
The New York Times had a follow-up article on November 28 that discussed, for instance, the meaning of "perpetuity" in naming rights agreements. There are some donors who set a time limit -say 50 years- after which they and/or their heirs agree the naming rights can be re-sold. Such a stipulation makes things simpler. But what of the venerable institutions with names that go back many years- like New York's Carnegie Hall (1891)? The answer there is to sub-divide. The main hall at Carnegie is named after Isaac Stern and its stage for the family of financier Ronald O. Perelman.
Then there is the example of the New York Public Library, which in 2008 renamed its Fifth Avenue landmark building after the financier Stephen A Schwarzman in recognition of his $100 million gift. Within the structure there were already the Bill Blass Public Catalog Room and the Rose Main Reading Room, both designations for donations made in the 1990s.
My favorite naming, also reported in the Times, is The Jerome and Ellen Stern Restrooms at the New Museum on Contemporary Art in NYC. At the time of the gift in 2007, Mr. Stern said he wanted to see his name "in a place where I'm going to spend a lot of time."
Without question, we owe great gratitude to those whose names adorn countless cultural and academic buildings and facilities, as well as positions such as professorships and concertmasters. The attraction of naming undoubtedly spurred these gifts. The challenge before Lincoln Center now is to find a donor whose name (s) will stand the test of time and be at the same time appropriate (as Avery Fisher's was). I don't think, as an example, Facebook Hall would cut it.
At the same time, the donor has to be resigned to the reality that patrons won't necessarily refer to the facility by its new name. In 1945 Mayor Fiorello La Guardia re-named New York's Sixth Avenue "The Avenue of the Americas." New street signs were erected as well as large medallions in honor of each country. The signs are still there, but the medallions now lie rusted in a warehouse in Queens. And many New Yorkers still stubbornly refer to the street as Sixth Avenue. Sic transit gloria mundi.
Comments on this post always welcome.
Thinking about what subject to discuss for #40 and searching for a title I discovered "What's In a Name" conveniently was the title of my first post in 2011. Hard to resist that coincidence. At that time it was about branding an historic site, This time it's about an unusual transaction that has repercussions for the issue of nonprofits naming buildings, or parts thereof, for donors.
Since 1973 - over 40 years- the home of the New York Philharmonic at Lincoln Center has been known as Avery Fisher Hall, in recognition of the hi-fi pioneer Mr. Fisher's gift then of $10 million, On November 12, The New York Times announced that Lincoln Center had reached agreement with the Fisher family that in exchange for a payment of $15 million to them (there are three children) the Center will be free to drop the Fisher name and seek another, and presumably larger, naming donor to help fund some $500 million in renovations needed for the facility. The Hall, for instance, has been plagued by acoustical problems ever since its opening in 1962.
To say this "buy back" arrangement is unusual is an understatement, apparently there being no precedent. There have been instances where names have been dropped. I reported the same in a post of September 7, 2012 citing examples of removal of a name at a facility at American University due to the discovery of the donor's shady dealings in the arms trade, and the change in name of the Baltimore Ravens' football stadium when the company namesake, PsiNet, went bankrupt. Baltimoreans were reportedly not unhappy. Some could never get their mouths around the name and fell back on calling it Piss Net.
The Lincoln Center - Fisher family deal was a private transaction and one of mutual benefit. But it openly moves the naming game into an arena not unlike one that can be found in market trading. I can imagine there are now nonprofits across the country with named facilities researching the terms of the original contract/arrangement with the donor. If their building is in need of refurbishment or replacement and there is a prospect for a larger naming gift, why not go back go to the donor or family and see if a deal can be struck?. Lincoln Center had to have been sure there were one or more new "namers" waiting in the wings, as the $15 million to be paid to the Fishers is to come out of the new naming proceeds.
The New York Times had a follow-up article on November 28 that discussed, for instance, the meaning of "perpetuity" in naming rights agreements. There are some donors who set a time limit -say 50 years- after which they and/or their heirs agree the naming rights can be re-sold. Such a stipulation makes things simpler. But what of the venerable institutions with names that go back many years- like New York's Carnegie Hall (1891)? The answer there is to sub-divide. The main hall at Carnegie is named after Isaac Stern and its stage for the family of financier Ronald O. Perelman.
Then there is the example of the New York Public Library, which in 2008 renamed its Fifth Avenue landmark building after the financier Stephen A Schwarzman in recognition of his $100 million gift. Within the structure there were already the Bill Blass Public Catalog Room and the Rose Main Reading Room, both designations for donations made in the 1990s.
My favorite naming, also reported in the Times, is The Jerome and Ellen Stern Restrooms at the New Museum on Contemporary Art in NYC. At the time of the gift in 2007, Mr. Stern said he wanted to see his name "in a place where I'm going to spend a lot of time."
Without question, we owe great gratitude to those whose names adorn countless cultural and academic buildings and facilities, as well as positions such as professorships and concertmasters. The attraction of naming undoubtedly spurred these gifts. The challenge before Lincoln Center now is to find a donor whose name (s) will stand the test of time and be at the same time appropriate (as Avery Fisher's was). I don't think, as an example, Facebook Hall would cut it.
At the same time, the donor has to be resigned to the reality that patrons won't necessarily refer to the facility by its new name. In 1945 Mayor Fiorello La Guardia re-named New York's Sixth Avenue "The Avenue of the Americas." New street signs were erected as well as large medallions in honor of each country. The signs are still there, but the medallions now lie rusted in a warehouse in Queens. And many New Yorkers still stubbornly refer to the street as Sixth Avenue. Sic transit gloria mundi.
Comments on this post always welcome.
Sunday, November 2, 2014
Board Members as Fundraisers
The responsibilities of nonprofit board members is an ongoing topic both here at Geoffrey Platt Consulting and wherever else there is discussion about the charitable sector. A recent survey conducted by Board Source, the worthy organization devoted to nonprofits' governance, contains some interesting findings, especially about board members and fundraising.
The same survey has been conducted approximately every two years since 1994. This year 850 CEOs and 246 board chairs responded. The good news is that, whereas in 1994 only 60% of board members contributed to their organizations, that percentage grew to 80% in 2013. Yet, the all-important standard of every board member contributing funds to the organization fell short at a reported 60%. Another interesting finding comes from the trustees surveyed: 43% said they were not comfortable asking others - such as friends, family and colleagues - for money.
Why the discomfort? One reason may be the age-old fear of rejection. Another, and perhaps more subtle anxiety, is that the solicitee may in turn, ask them for a donation. This self-reinforcing cycle is familiar to those in the fundraising field. It is sometimes called "mutual backscratching," where favors are exchanged. This activity is usually undertaken by peers. A major capital campaign in which I was involved some years ago had many thousands of dollars raised in this fashion. One board member would say: " I'll ask X - I was very generous to his hospital's campaign last year."
But what if you have no favor to return and there is the possibility of just being told "no"? This is where the degree of personal passion the board member has for the organization comes into play. This enthusiasm can de-personalize the "ask." If the person is just not interested in the purpose of the organization. it is the organization and not the asker that is being rejected. There may also be personal economic factors that have a bearing on a "turn-down."
Let's not discount who is doing the asking. If it's a friend or even a family member, there should be some built-in good will towards the person seeking a donation. The personal approach is always the best. I respond better when there is a note included from someone I know in, say, an invitation to an event. Hand-written notes, which are fast becoming a rarity, are much appreciated.
Another barrier to asking friends and family is the apprehension that you are taking advantage of a relationship. But - what are friends for? As a board member you are fulfilling a duty. You are not forcing anyone to do anything. If your request is declined, at least you have brought to that person's attention your interest and belief in the organization. And who knows, next year they may say "yes."
Successful fundraisers will tell you that relationships really do matter.
Finally, it has to be acknowledged that some board members, especially if they are new to the board and/or nonprofits, simply don't know where to start. This is where training and education makes a difference. One of the more effective forms of fundraising education I have seen came at a mini retreat of a board on which I serve. It was a 30 minute presentation by a fellow board member who had good experience to share. The active Q &A was an additional bonus. A peer presentation like this provides a comfort zone for the neophytes along with the possibility of on-going mentoring.
Board members must be regularly reminded that fundraising is, in one form or another, a part of their responsibility along with strategic planning and fiduciary oversight. Finding resources to sustain the organization should not be solely left to professional staff. If, in seeking new board members, a prospect says: "OK, as long as I don't have to ask for money," look around some more, or modify the definition of fundraising to include "softer" approaches. In any case, the potential board member should understand he or she will have an obligation to work to secure financial resources for the nonprofit.
It would be great to see the 43% discomfort about asking for support drop at the next survey, and a greater percentage reporting 100% participation in giving by a board.
A nonprofit board is too powerful an engine to be left at idle speed.
The same survey has been conducted approximately every two years since 1994. This year 850 CEOs and 246 board chairs responded. The good news is that, whereas in 1994 only 60% of board members contributed to their organizations, that percentage grew to 80% in 2013. Yet, the all-important standard of every board member contributing funds to the organization fell short at a reported 60%. Another interesting finding comes from the trustees surveyed: 43% said they were not comfortable asking others - such as friends, family and colleagues - for money.
Why the discomfort? One reason may be the age-old fear of rejection. Another, and perhaps more subtle anxiety, is that the solicitee may in turn, ask them for a donation. This self-reinforcing cycle is familiar to those in the fundraising field. It is sometimes called "mutual backscratching," where favors are exchanged. This activity is usually undertaken by peers. A major capital campaign in which I was involved some years ago had many thousands of dollars raised in this fashion. One board member would say: " I'll ask X - I was very generous to his hospital's campaign last year."
But what if you have no favor to return and there is the possibility of just being told "no"? This is where the degree of personal passion the board member has for the organization comes into play. This enthusiasm can de-personalize the "ask." If the person is just not interested in the purpose of the organization. it is the organization and not the asker that is being rejected. There may also be personal economic factors that have a bearing on a "turn-down."
Let's not discount who is doing the asking. If it's a friend or even a family member, there should be some built-in good will towards the person seeking a donation. The personal approach is always the best. I respond better when there is a note included from someone I know in, say, an invitation to an event. Hand-written notes, which are fast becoming a rarity, are much appreciated.
Another barrier to asking friends and family is the apprehension that you are taking advantage of a relationship. But - what are friends for? As a board member you are fulfilling a duty. You are not forcing anyone to do anything. If your request is declined, at least you have brought to that person's attention your interest and belief in the organization. And who knows, next year they may say "yes."
Successful fundraisers will tell you that relationships really do matter.
Finally, it has to be acknowledged that some board members, especially if they are new to the board and/or nonprofits, simply don't know where to start. This is where training and education makes a difference. One of the more effective forms of fundraising education I have seen came at a mini retreat of a board on which I serve. It was a 30 minute presentation by a fellow board member who had good experience to share. The active Q &A was an additional bonus. A peer presentation like this provides a comfort zone for the neophytes along with the possibility of on-going mentoring.
Board members must be regularly reminded that fundraising is, in one form or another, a part of their responsibility along with strategic planning and fiduciary oversight. Finding resources to sustain the organization should not be solely left to professional staff. If, in seeking new board members, a prospect says: "OK, as long as I don't have to ask for money," look around some more, or modify the definition of fundraising to include "softer" approaches. In any case, the potential board member should understand he or she will have an obligation to work to secure financial resources for the nonprofit.
It would be great to see the 43% discomfort about asking for support drop at the next survey, and a greater percentage reporting 100% participation in giving by a board.
A nonprofit board is too powerful an engine to be left at idle speed.
Tuesday, September 30, 2014
Elect a janitor to your board?
The other day, an entry in The Chronicle of Philanthropy caught my eye. Entitled "The Janitor Who became a Major Donor," it told the story of Randy Vanness, who works as a janitor for a elementary school in Wisconsin. Several years ago, Randy lost his 27 year old son to myocarditis, a disease that attacks the heart suddenly and can cause death unless detected quickly. Diagnosis is difficult. Coincidentally a nephew of mine succumbed to the disease without warning in 2012 at age 44.
Shortly after the loss of his son, Mr. Vanness began to raise money through events to benefit the Myrocarditis Foundation, which is based in Colorado. He organized two fundraisers. The first netted $15,000 and the second almost $17,000, all sent to the Myocarditis Foundation as unrestricted gifts. Carol Weisman, who wrote the article in The Chronicle on Vanness had been hired to recruit board members for the Foundation. She decided to contact Mr. Vanness to discuss if he would be willing to join the board.
That idea, in itself, would seem to be outside the norm of the profile of "usual" board members. Mr. Vanness was not a wealthy professional and had no special skills (I do not like the overworked phrase "skillset") to bring to the table, such as accounting or marketing. What he did have of course was the ability to raise money derived from a passion for, and an understanding of, the mission of the Foundation - to educate the public about the nature of this terrible disease.
Ms. Weisman and Randy had a long discussion about the responsibilities of a board member and what role he might play. He was at first reluctant and worried that he might not fit in. She went back to the board and asked if they had any objection to their being addressed by first names. She thought this necessary given the formal culture of the board. A number of members were doctors. All issues were sorted out, and Mr.Vanness attended his first board meeting. He brought with him two checks, one of which represented the proceeds from his school's fourth, fifth and sixth grade spring dance. At the meeting he reportedly not only offered brilliant insights, he was the only one in attendance who knew how to assemble the easel!
The point of this story is not just to warm the heart but to challenge the preconceptions we have of people (book by the cover) and to encourage us to think about the qualities we want in board members. Given the financial pressures on nonprofits, the first thought is: who has the money? A person of wealth is always a prospect. In the recruitment process it is wise to determine that person's commitment to the organization's mission and where on his or her chart of charitable commitments the organization might fit.
Just because the pockets are deep doesn't mean the hand will reach in and pull out a fistful of dollars for your nonprofit. There may be other priorities.
Here's an example from my own experience. A person who I knew had considerable means called me one day and said he wanted to make a donation. He needed to be sure it went to a certain program's endowment. I assured him it would- in fact I had to repeat that assurance several times. So I waited expectantly for the check, which arrived, in the amount of $25. To be fair the donor later gave a generous five figure donation to a capital campaign.
You may have heard of the "give or get" theory- that a board member should either give $ or get others to give them. Or ideally, both. Randy Vanness is an example of the "get" side of that equation. On the surface his "station in life" did not suggest that ability. However, not only did he believe deeply in the organization's purpose but he had gone out and acted on his passion with excellent and tangible results..
Assumption is often at the root of bad decisions. You assume electing a person to your board based on his bank account will unlock his safe deposit box for you. You may also assume a person living a simple life with little disposable income can offer little to your organization. Check again - and accept that pun for what it's worth. You may be surprised. Remember Randy Vanness.
Shortly after the loss of his son, Mr. Vanness began to raise money through events to benefit the Myrocarditis Foundation, which is based in Colorado. He organized two fundraisers. The first netted $15,000 and the second almost $17,000, all sent to the Myocarditis Foundation as unrestricted gifts. Carol Weisman, who wrote the article in The Chronicle on Vanness had been hired to recruit board members for the Foundation. She decided to contact Mr. Vanness to discuss if he would be willing to join the board.
That idea, in itself, would seem to be outside the norm of the profile of "usual" board members. Mr. Vanness was not a wealthy professional and had no special skills (I do not like the overworked phrase "skillset") to bring to the table, such as accounting or marketing. What he did have of course was the ability to raise money derived from a passion for, and an understanding of, the mission of the Foundation - to educate the public about the nature of this terrible disease.
Ms. Weisman and Randy had a long discussion about the responsibilities of a board member and what role he might play. He was at first reluctant and worried that he might not fit in. She went back to the board and asked if they had any objection to their being addressed by first names. She thought this necessary given the formal culture of the board. A number of members were doctors. All issues were sorted out, and Mr.Vanness attended his first board meeting. He brought with him two checks, one of which represented the proceeds from his school's fourth, fifth and sixth grade spring dance. At the meeting he reportedly not only offered brilliant insights, he was the only one in attendance who knew how to assemble the easel!
The point of this story is not just to warm the heart but to challenge the preconceptions we have of people (book by the cover) and to encourage us to think about the qualities we want in board members. Given the financial pressures on nonprofits, the first thought is: who has the money? A person of wealth is always a prospect. In the recruitment process it is wise to determine that person's commitment to the organization's mission and where on his or her chart of charitable commitments the organization might fit.
Just because the pockets are deep doesn't mean the hand will reach in and pull out a fistful of dollars for your nonprofit. There may be other priorities.
Here's an example from my own experience. A person who I knew had considerable means called me one day and said he wanted to make a donation. He needed to be sure it went to a certain program's endowment. I assured him it would- in fact I had to repeat that assurance several times. So I waited expectantly for the check, which arrived, in the amount of $25. To be fair the donor later gave a generous five figure donation to a capital campaign.
You may have heard of the "give or get" theory- that a board member should either give $ or get others to give them. Or ideally, both. Randy Vanness is an example of the "get" side of that equation. On the surface his "station in life" did not suggest that ability. However, not only did he believe deeply in the organization's purpose but he had gone out and acted on his passion with excellent and tangible results..
Assumption is often at the root of bad decisions. You assume electing a person to your board based on his bank account will unlock his safe deposit box for you. You may also assume a person living a simple life with little disposable income can offer little to your organization. Check again - and accept that pun for what it's worth. You may be surprised. Remember Randy Vanness.
Thursday, August 28, 2014
Ice-Bucketry, Marinara Sauce and other late summer Nonprofit News
With Labor Day September 1, the days of summer, as in vacation time, have slipped, slipped, slipped away. It's time to sum up some news gathered here in between errant golf shots and eating peaches.
The biggest item is the phenomenal success of the "Ice-Bucket Challenge" benefitting the ALS Association. ALS (Amyotrophic Sclerosis), also known as Lou Gehrig's disease, is the devastating condition that attacks nerve cells in the brain. The challenge is directed at social media and here's how it works. Someone dumps a bucket of ice water on you and you challenge friends to follow suit or donate $100 to the ALS Association or both, all of which is captured on video and posted online.
Well, the idea created a firestorm ( bad image I admit for ice water) and thousands, from celebrities to neighbors, have taken the challenge and been videoed, some shrieking, all soaked. A stunt? Yes, but one that has succeeded amazingly for its beneficiary. From July 29 through August 28, the ALS Association received $88.5 million in donations compared to $2.6 million for the same period last year - and it's still growing. Wow.
Why the success? First the idea is ideally suited to social media and going "viral. " Secondly it does have a social benefit for the charity. But most of all it is fun, reminiscent of the school fair where you bought a chance to dunk the principal in a tub. We can all use some fun these days - with news of earthquakes, wildfires, beheadings and Ebola outbreaks.
Not surprisingly many nonprofits are scrambling to come up with similar and productive gimmicks to emulate the ice-bucket idea. One has suggested a pie-in-the-face, but that may be too messy and expensive. One imaginative scheme comes from a Palestinian journalist who wants to bring to greater attention the plight of citizens in Gaza. According to the Chronicle of Philanthropy. he states water is too precious to Gazans. Instead he urges dumping on heads a bucket of rubble, such as can be seen in images of bombed-out buildings there. Sand or dirt will do, if rubble is not available.
Meanwhile the ALS Association has contacted the various charity rating organizations, such as GuideStar, to say the windfall might affect the program/administrative expenses ratio those outfits use to rate charities. The Association may not be able to spend program funds fast enough. I say take your time. Don't spend just to satisfy that index, which increasingly is coming under scrutiny (see my post of October 2012).
Other news. A ruling by a D.C. Superior Court judge on August 17 cleared the way for the dissolution of the Corcoran Gallery of Art as an independent institution, allowing the merger with the National Gallery of Art and George Washington University. Judge Robert Okun turned aside the suit by Corcoran supporters that suggested the current board, with better fundraising, could save the Gallery. Not likely, the judge - and others - said. I have covered this sad story a number of times here (first post of October 2012).
The Metropolitan Opera reached agreement with the last of its 16 unions on August 17 after successful negotiations with its orchestra, chorus and stagehands. It was a close call, but with the help of a Federal mediator and ultimately a spirit of conciliation on the part of all parties, the season is expected to open on schedule in late September. Unusual in the agreements is the concept of "equality of sacrifice." The monetary value of cuts to labor will be matched by cuts on management's side. This was, if you will allow me, an ensemble success.
Finally, almost every week I read of some embezzlement horror at a non-profit. For instance, in mid August a pastor in Oklahoma was accused of stealing $933,000 from his own church. Here's another twist. Ralph "Buddy" Cianci is a famous- or infamous - politician in Rhode Island. Since 1975, he has been Mayor of Providence twice. Both terms ended in felony convictions and he spent five years in Federal prison. At age 73, he is running for the office again. Recently the Associated Press reported on the product he markets - the "Mayor's Own Marinara Sauce." Its label prominently states proceeds would benefit Providence school children. The AP report revealed there have never been any contributions to the scholarship fund, as from 2009 to 2012 the sauce had made a total of $3 in income. Three dollars - not much help for the school children, but we can welcome Hizzoner to the ranks of nonprofits,
I hope your summer was pleasant and restful. Comments on this post and others always welcome.
The biggest item is the phenomenal success of the "Ice-Bucket Challenge" benefitting the ALS Association. ALS (Amyotrophic Sclerosis), also known as Lou Gehrig's disease, is the devastating condition that attacks nerve cells in the brain. The challenge is directed at social media and here's how it works. Someone dumps a bucket of ice water on you and you challenge friends to follow suit or donate $100 to the ALS Association or both, all of which is captured on video and posted online.
Well, the idea created a firestorm ( bad image I admit for ice water) and thousands, from celebrities to neighbors, have taken the challenge and been videoed, some shrieking, all soaked. A stunt? Yes, but one that has succeeded amazingly for its beneficiary. From July 29 through August 28, the ALS Association received $88.5 million in donations compared to $2.6 million for the same period last year - and it's still growing. Wow.
Why the success? First the idea is ideally suited to social media and going "viral. " Secondly it does have a social benefit for the charity. But most of all it is fun, reminiscent of the school fair where you bought a chance to dunk the principal in a tub. We can all use some fun these days - with news of earthquakes, wildfires, beheadings and Ebola outbreaks.
Not surprisingly many nonprofits are scrambling to come up with similar and productive gimmicks to emulate the ice-bucket idea. One has suggested a pie-in-the-face, but that may be too messy and expensive. One imaginative scheme comes from a Palestinian journalist who wants to bring to greater attention the plight of citizens in Gaza. According to the Chronicle of Philanthropy. he states water is too precious to Gazans. Instead he urges dumping on heads a bucket of rubble, such as can be seen in images of bombed-out buildings there. Sand or dirt will do, if rubble is not available.
Meanwhile the ALS Association has contacted the various charity rating organizations, such as GuideStar, to say the windfall might affect the program/administrative expenses ratio those outfits use to rate charities. The Association may not be able to spend program funds fast enough. I say take your time. Don't spend just to satisfy that index, which increasingly is coming under scrutiny (see my post of October 2012).
Other news. A ruling by a D.C. Superior Court judge on August 17 cleared the way for the dissolution of the Corcoran Gallery of Art as an independent institution, allowing the merger with the National Gallery of Art and George Washington University. Judge Robert Okun turned aside the suit by Corcoran supporters that suggested the current board, with better fundraising, could save the Gallery. Not likely, the judge - and others - said. I have covered this sad story a number of times here (first post of October 2012).
The Metropolitan Opera reached agreement with the last of its 16 unions on August 17 after successful negotiations with its orchestra, chorus and stagehands. It was a close call, but with the help of a Federal mediator and ultimately a spirit of conciliation on the part of all parties, the season is expected to open on schedule in late September. Unusual in the agreements is the concept of "equality of sacrifice." The monetary value of cuts to labor will be matched by cuts on management's side. This was, if you will allow me, an ensemble success.
Finally, almost every week I read of some embezzlement horror at a non-profit. For instance, in mid August a pastor in Oklahoma was accused of stealing $933,000 from his own church. Here's another twist. Ralph "Buddy" Cianci is a famous- or infamous - politician in Rhode Island. Since 1975, he has been Mayor of Providence twice. Both terms ended in felony convictions and he spent five years in Federal prison. At age 73, he is running for the office again. Recently the Associated Press reported on the product he markets - the "Mayor's Own Marinara Sauce." Its label prominently states proceeds would benefit Providence school children. The AP report revealed there have never been any contributions to the scholarship fund, as from 2009 to 2012 the sauce had made a total of $3 in income. Three dollars - not much help for the school children, but we can welcome Hizzoner to the ranks of nonprofits,
I hope your summer was pleasant and restful. Comments on this post and others always welcome.
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