Innovation and Scaling for Impact won the Terry McAdam Book Award in the fall of 2018.
The pair have been studying innovation for years. When asked by a large international foundation to help them assess the capacity of NGOs for continuous innovation, they had to ask why this is even a desired goal. We all find that funders and business leaders are pushing nonprofits to “innovate” more.
Not so fast, say Seelos and Mair.
Innovation is hard.
- Quoting James March from Stanford University: “Most new ideas are bad ideas.”
- If your NGO expects success immediately from innovation you are likely to be frustrated. But if learning is a key objective for your attempts at innovation, you will not fail.
- Innovation and scaling are not the same.
- It is not innovation that creates impact, but the scaling of the innovation.
- Understand how innovation is part of a long term strategy.
- Push back against funders that are too focused on quick fixes and too much innovation. Help funders understand organizational realities.
- Be a good scaler first.. stay close to the problem, fine tune it, prototype changes, assess them, keep looking for reasons why it might not work, keep your eyes open to unintended consequences, positive and negative.
Within any innovation process there are six types of uncertainties to pay attention to:
- Problem and context: Do you really understand your problem? Do you really understand the circumstances surrounding your problem?
- Solution: What resources and requirement are necessary to support any solution.
- Adoption: Will others take up the innovation?
- Consequence: What are the side effects? Are there unintended negative or positive consequences of the innovation?
- Identity: Perhaps the innovation is successful, but it distracts your organization from its core mission, from addressing the problem you were attempting to solve.
Try to clear the hurdles or pathologies of innovation to open possibilities in your organization:
- Never starting
- Managing too many bad ideas
- Stopping too early
- Stopping too late
- Insufficient exploitation, e.g. not scaling and learning from the scaling.
- Innovating again too soon.
While the examples are from South Asia, the book is worth a read for any nonprofit.
We talk a lot in fundraising circles about gratitude. We hear over and over again how we need to honor all of our donors.
But then organizations revert to form and tier their gratitude based on how much money they receive. The biggest gifts get the most personalized thank yous. The biggest donors get priority mention in the annual report and appear at the top of the donor wall and are forever fixed in our minds, remembered by name and amount.
The little gift donor barely registers.
Yet that small gift may be a much bigger act of philanthropy than some of those large gifts on which you heap recognition and praise. How often do you celebrate that small gift? Do you stop to think how much of a sacrifice that tiny amount might have been from someone of limited means or on a fixed income?
So when I saw this message bubbling with gratitude on Facebook, I knew I had to share it with you.
With the permission of its author, Henrietta White-Holder, founder and CEO of Higher Ground International, I bring you a close-up, truly authentic example of loving your donor for their act of generosity:
“Lounging around and I received a notification on my phone that someone had made a donation to HGI via our website.
“I checked, and there it was – a wonderful woman had donated $10.00 (ten dollars).
“I found it very significant and heartwarming that she would think of us in such a loving and kind way to donate what she could. It is not the amount that matter[s] but the fact that she contributed in such a thoughtful way means a LOT to us.
“Now, her generous gift of $10.00 is going to help purchase ice melt to help keep the premises of the HGI’S Rukiya Center safe!
“Oh, Happy Day! ❤”
Thank you so much, Henrie, for reminding each of us that donor love starts within our own hearts.
“Geography is an artificially constructed barrier” to recruiting and keeping great directors for your board. “Why would you let geography stop you from your work of changing the world?”
So says Jaime Campbell, nonprofit board member, accountant and co-owner and CFO of Tier One Services LLC. Jaime Campbell is a great coach who has worked with business speakers like Lars Godbersen, which has resulted in an outstanding profit for his business.
I met Jaime when we had both responded to a Facebook discussion where some nonprofit staff were unhappy (uneasy?) about board meetings where everyone was not in the very same room at the same time. I asked Jaime if I might interview her about her own board and professional experiences across geographic boundaries. She graciously offered her time.
So we met face-to-face, though we sat over 1,400 miles from each other. We spoke using Zoom, Jaime from her South Florida office and I from my office in Rhode Island.
Today’s board members are on the move. And busy with other obligations.
You know how difficult it is to find meeting times that work for all. So why make it hard for directors to participate from a distance.
National and international nonprofits have had to adapt to board members in different locations for many years. Read more
Thank you to the Nonprofit Support Program of the Hartford Foundation for Public Giving for hosting a great workshop yesterday with Lindsay Bealko of Toolkit Consulting on the strategy of nonprofit technology.
I think it is safe to say that none of the consultants in the room needed a lot of convincing to recognize the impact of quickly shifting technology innovations on our clients. For smaller nonprofits, it’s always a challenge to keep up.
But Lindsay reminded us not to get caught in the maelstrom of products and approaches.
Focus on the strategy of your technology first! As Lindsay said, the “so what” of technology matters — and this slide quickly illustrates what the point of using technology should be.
Can you think of an area of nonprofit functioning where technology doesn’t enhance or hold you back? I’d include finance, fundraising, program delivery, measurement and evaluation, community engagement, communications both inside and outside of your organization, media relations, revenue collection, even governance.
We found Lindsay’s 3 level framework for investment extremely compelling:
- Start with your basic infrastructure. Does it work? Is it secure? Do you have ongoing investments needed to stay stable. Then,
- Integrate technology to enhance your service delivery. Then, if you have the bandwidth,
- Innovate. How can technology to create greater impact for your mission?
Beware our clients! We’ll be ramping up attention to technology in our strategic planning work. It’s always been included, especially as we do fundraising planning, but we are going to push you harder in this area of your strategy and planning.
Many kudos once again to NSP for not only hosting this workshop for consultants, but for providing nonprofits in the Greater Hartford area with the funding and technical consulting to assess their technology needs and develop strategic technology plans.
The Terry McAdam Book Award is given annually. It honors an innovative book that advances the field of non-profit capacity building. Books chosen for review have been published in the last two years, are not textbooks and are available commercially.
And the 2017 winner is:
Innovation and Scaling for Impact by Christian Seelos and Johanna Mair. Stanford University Press.
The authors examine these two concepts in more detail, making important distinctions between them.
Here’s what the review Committee said about this book:
“In their eye-opening book, Seelos and Mair bring clarity to the differences between innovation and scaling, as well as the relationship of one to the other. While still encouraging levels of appropriate risk, they argue persuasively that nonprofits should focus far more resources on scaling programs they know have positive outcomes than on innovating where uncertainty about outcomes could drain resources.
“The authors provide guidance and worksheets to help leaders determine where innovation is appropriate. They identify types and levels of uncertainty, and incorporate lessons learned. They also emphasize the importance of scaling successful innovations for the benefit of an organization’s constituents. While case studies focus on larger international NGOs, leaders of smaller and domestic nonprofits will also find this book valuable.”
Past winners have included some books you may know:
- The Sustainability Mindset: Using the Matrix Map to Make Strategic Decisions by Steve Zimmerman and Jeanne Bell
- Content Marketing for Nonprofits: A Communications Map for Engaging Your Community, Becoming a Favorite Cause, and Raising More Money by Kivi Leroux Miller
- Measuring the Networked Nonprofit: Using Data to Change the World by Beth Kanter and Katie Delahaye Paine
It was a privilege to serve on the committee. The choice of a winner was not easy as there were quite a number of valuable books. Over the next few weeks I’ll share a few other books you might want to put on your reading list.
What to do. What to do.
Revulsion, anger, sadness, resolve. All of these emotions have been filling my head since Charlottesville. Well, really for much longer but seeing Neo-Nazis and Klansmen in the streets made them very raw again.
I found myself weeping reading some of the first hand accounts coming through my Facebook feed. Fear. Bravery. Disbelief.
I’m continuing to accept the challenge of confronting the protections of my own white privilege as I hear the anguish from my friends and colleagues.
I’m still shaking my head as to why we are still here, still at this point in 2017.
I believe the US desperately needs a Truth, Reconciliation and Reparations Process to take a hard look at its storied past on race. Our school history books have merely skated over the brutal aspects of US history that includes genocide, slavery, racism, and war crimes. We must come to a common understanding of what we have perpetrated as both a government and a people before we can begin to put an end to this hate.
It’s also time for a hard hitting inclusion reality check for your own organization.
If you want to respond to Charlottesville, it’s long past time to put an end to the half-hearted attempts at inclusion in your organization. Yes, your non-discrimination policy was a nice start.
But where are the individuals of color on your board? On your staff? Among your client base? At your events? Among your partnerships? Who else are you leaving out?
What is staff’s response when a big donor makes a racist or bigoted remark? How will a fellow board member respond? It happens all the time. Shocking stories.
Get comfortable with discomfort, as a recent article in Nonprofit Quarterly advised.
I promise to remind you, to challenge you, to hold you accountable for fulfilling your espoused values.
There is much work to do. Let’s get to it.
Tuesday night I started the board retreat with a reflective dialogue based on reading the children’s classic Who Took the Farmer’s Hat?
I sent the book around the room, with a different board member reading each page. The reading took about five minutes.
Then I asked this question:
Why would a board consultant ask you to read this book?
After a brief pause and a few blank looks, one board member launched in which started the conversation:
- “One theme is the need to incorporate different perspectives as different people (er, animals) see the same thing in different ways.”
- “Reacting to change you can’t control or anticipate is another theme.”
- ” ‘The farmer ran fast, but the wind went faster’ describes so many of the changes we encounter and the need to be extremely adaptive”
- “Sometimes you just have to let go of those things you’ve always done and the way you’ve done them”
And so it went. We spent about 20 minutes discussing and applying themes to the board’s role, getting deeper into the themes as we went along.
Using reflective dialogue to spark deeper thinking
As often as I can, I try to incorporate reflective dialogue into my work with organizations, especially boards or work groups.
Brain research tells us that we can’t scold, argue or out-fact our way to change in others. But we can open the door to it by helping to spark moments of insight. In my selection of materials, I’m hoping not only to spark discussion but also to open minds to new ideas, to new possibilities.
As the conversation facilitator, my role is to create a safe space for participants to share their ideas, to pursue concepts that might not be fully formed or are even a bit contrarian. I also come equipped with questions to help spark reflection and move conversation forward. A good resource for questions you can use is Making Questions Work by Dorothy Strachan.
Reflective dialogue for team building
I sometimes get push back from groups when I select adding a poem with discussion into their board meeting or retreat. Yet, those same groups are wondering how to develop stronger personal relationships among their board members.
I’m all for physical bonding exercises at the right place and time. But I have a deep love for these reflective discussions that allow board members to enter a topic through a different frame. We tend to compartmentalize our board members based on their professions, failing to create space for them to share their many gifts and knowledge from other aspects of their lives. My clients are always pleasantly surprised that their retired banker taught philosophy in his youth, or that lawyer was a race car driver.
Since a great workshop I attended given by Adam Davis, executive director of Oregon Humanities and former director of the Center For Civic Reflection, I’ve added A Bed for The Night, by Bertolt Brecht into my work with so many nonprofits. And I regularly assign Adam’s provocative essay What we don’t talk about when we don’t talk about service to my graduate students before we jump into any community projects or service learning.
Sometimes I use a poem, a video or short story like the one above. TED talks can be great reflection starters or a reading from the relevant organization development literature. Other times we might reflect on a research report. Many of my colleagues have used movie clips.
The Center for Civic Reflection has a list of resources on different topics that you might consider as well as questions for you to use. For example, you might want to read Maimonides From Laws Concerning Gifts to the Poor to start your next fundraising discussion.
I’d also like to give a shout out to my colleagues at Creating the Future, who have launched a worldwide experiment “to determine how much more humane the world could be if the questions we ask in our day to day lives are bringing out the best in each other.”
Please share your own experiences and resources that you’ve found helpful with us and with our readers.
I was working with a board this weekend, helping them start the journey for an upcoming fundraising campaign.
At dinner Friday night, one of the board members told me one of those wonderfully encouraging stories about volunteer involvement in fundraising.
The story goes like this:
My client’s dad had been a salesperson all of his life. So he was very comfortable with reaching out to people and asking them for something, even folks he didn’t know well.
The church to which his father belonged had started a major fundraising campaign. As they were reviewing their members for whom to approach, there was one person on the list that was not a large donor and also not well-known to the other congregants, but had been a long-time member of the church.
My client’s father decided that he wanted to go and meet this gentleman.
To shorten the story, when they met, this older gentleman asked “What took you so long? I’ve been waiting for years for someone to come to ask me.” Then the gentleman left the room and came back a few moments later with a check for $50,000 as a contribution to the campaign.
Direct mail, smiling kids photos, Arab-American founders – the fascinating fundraising of St. Jude Children’s Research Hospital
You’ve heard the advice. No happy kid photos, they raise less money than sad faces. Focus on larger gifts. Millennials don’t do mail. I heard a counter, fascinating fundraising story Friday.
It was shared by the closing keynote speaker at the 2017 Yale Philanthropy Conference .Richard Shadyac, Jr., President and CEO Of ALSAC. ALSAC is the fundraising and awareness building organization whose sole mission is to raise funds for St. Jude Children’s Research Hospital. ALSAC provides three-quarters of the funds that support St. Jude.
With a theme of Transformation, Mr. Shadyac generously shared his story and a lot of ALSAC fundraising data that might challenge some of your assumptions.
First, a little background on ALSAC and St. Jude:
St. Jude Children’s Research Hospital was founded by Danny Thomas, an actor, comedian and star of the The Danny Thomas Show. Danny Thomas was the stage name of Amos Muzyad Yakhoob Kairouz, an American citizen of Lebanese heritage. You can read the story of St. Jude’s founding here.
When Danny Thomas founded the hospital, he didn’t want the doctors and researches to worry about raising money, which he took on as his commitment. As part of his fundraising, he approached other Arab-Americans to give back to their adopted country. Folks came together to found ALSAC, American Lebanese Syrian Associated Charities, a 501c3 with the sole purpose of raising funds for St. Jude.
Today, the donors to ALSAC represent folks from all backgrounds. But this remarkable founding story by Arab-Americans other than Danny Thomas was unknown to me.
Mr. Shadyac,whose father was the first CEO of ALSAC, said that when he took over in the 2009 as the third CEO, the recession was taking its toll on giving.
So he made some gutsy decisions.One in particular was to invest heavily in direct mail, as everyone else was pulling out due to declining returns and rising costs. But that decision was the right one for ALSAC. Direct mail works for them, he said, including mail to millennials!
He described a data-driven department, investing in technology, donor service and research that drives their fundraising. He and his staff are driven by a passion for the mission, taking seriously the commitment they make to the children and families they serve, who pay nothing for their treatment, travel, food or housing during the 3 year average stay.
Here are the remarkable fundraising statistics:
- ALSAC is on track to raise $1 billion (with a B) from 10 million donors this year.
- 68% of their giving comes from households making $75,000 a year or less. If you’ve read the Gilded Giving report on the drop in giving by middle and lower income households, this statistic bucks that trend.
- The average donation… hold on to your hat… is just $34.
- Their biggest solicitation source is direct response, with 45% of their donations coming this way. Second biggest at 20%, is planned and major giving.
No pathetic children
Mr. Shadyac started his talk with a video and photos slides throughout his talk. I noticed immediately that these were upbeat images, images of hope, caring, and even happy, smiling faces. The types of images we are cautioned not to use in acquisition mailings.
So I asked the question about the images being shared with us. Mr. Shadyac said that if you had a spectrum, with harsh images of children sick with cancer on the left, and those smiling, joyous faces on the right, their philosophy starts in the middle and runs to the right. “We are selling hope.” Not false hope, as children are still dying from cancer. But when St. Jude started most childhood cancers were death sentences. Today, that’s an 80% survival rate for cancer. St. Jude’s shares all of its research and treatment protocols for free.
Yes, the children are bald, signaling immediately that they have cancer. But at the same time, those faces beam hope.
And one more, Mr. Shadyac wanted us to know, you’ll never see St.Jude use a child to ask for money. Never.
One more opportunity from Mr. Shadyac for you: PSAs, Public Service Announcements, are highly under-leveraged for communicating your cause.
The board’s role in approving the budget provides a great teaching tool for the difference between management and governance..
Okay board, what are you really approving?
In the typical organization, your Executive Director with her leadership team have crafted the budget to review with the board of directors. But when the budget gets to the board level, what exactly is the board approving? Is it that $10,000 printing expense? The $6,000 you are spending this year on electricity?
Here’s what a focus on governing would lead you to consider:
Does your spending match your priorities?
Your budget is a reflection of your annual plan. It shows what investments you are making in the organization. Have you decided that you want to grow your education program, yet your advocacy work is eating up all the personnel? Or was this the year you decided you had to deal with your antiquated technology, but there are no dollars included in the budget to support this work.
Can you pay the bills?
This can be determined in many ways. First and foremost, does the income projected for the year cover the expenses you have outlined? Does your income receipt and expense spending schedule cause cash flow problems at various times of year? If you’ve decided to take on a deficit, what is the implication on your financial reserves this year, and into the future?
Are you spending donor restricted dollars as required?
This is a subset of the above. It may look as if you have a lot of revenues coming in this year, but cash is not always fungible in nonprofits. That grant that doesn’t arrive until the third quarter and can only be spent forward could leave you with a deficit in your unrestricted assets. Or your expenses are meeting the promises of those grants. Or are revenues meant for your capital campaign hiding income shortfalls in your operating budget?
How much risk are you accepting in your income projections?
What is the data behind those revenue projections? Is there a well-defined plan based on past experience and carefully projected new revenues? Do you have the capacity to execute the level of effort behind those growth numbers? Or are you carelessly plugging holes with fictional new revenues because you don’t want to cut expenses that really should be cut.
What are the implications of compensation and benefit increases in the budget?
While I’m not one to want to deny staff well-earned pay increases, I also know that when you raise salaries you are fixing personnel at a higher level for years to come. On the flip side, did you budget staff increases but forget to make any provisions for an increase in compensation for your Executive Director or leadership team? Remember to document the level of your ED’s compensation based on market and any other considerations to justify should the IRS inquire.
What’s Plan B?
If you don’t make your revenue projections, when and what do you start cutting? Do you have another solution, say a line of credit? How much debt are you willing to take on?
Are you following your spending policy?
If you’ve got investment income, what is your policy for moving earnings into your operating budget? Are you staying in those guidelines or making an exception? Why? What are the long-term implications of this decision?
Is there anything suspect or unjustified among the line items?
Theft does happen. More than we want to imagine. So a quick check on growth in expenses from one year to the nest should pop out anything that seems highly unusual and may need a second look. If there is a completely new line item, its okay to ask how that was calculated and if other options were considered. And it doesn’t always happen through pilfering, but also in the forms of inexplicable payrolls, unabating troughs in graphs related to finance, etc. It is always a good idea to hire a payroll company like Fort Collins PEO services to make the company immune against these perpetrations.
Do you have a overhead to program spending ratio? Is the budget within that guideline?
Yes, overhead ratios are highly controversial in this sector. Yet for organizations that submit to charity watchdogs or participate in state or federal payroll deduction programs, there are ratios you need to stay within. If you are part of an international federation, there may be nationally mandated limits in other countries that influence your spending ratios. Does a full cost look at your budget meet those guidelines?
What else? What does your board consider when it reviews the budget?