The Infrastructure Collaborative was a collaboration of grassroots land trusts, watershed organizations and technical assistance providers in Rhode Island that started in 2004 and is just wrapping up. With support from Third Sector New England, they formed a learning network to consider how they might pilot a model for sharing services that could improve the administrative and fundraising capacity of small conservation nonprofits.

Throughout, all of the members learned a lot about the challenges of building capacity in very small nonprofits. Rather than crafting a typical final report to a foundation, they decided instead to share their experiences in the form of a case study so that others could benefit as well.

Some of the lessons learned:

• In the smallest organizations, capacity is in individuals and their institutional knowledge, not organizational systems. When inevitable transitions occur, built capacity can quickly be lost. Attention must be paid to building sustained people capacity somewhere in the network. Transitions often occur at a rate that prohibits capacity building.

• Small groups need either a large organization with significant built capacity already on their team or they will need a much larger cash investment to buy what they lack.

• Small nonprofits live in the moment, focused on the urgent needs that caused their formation. Rarely planning for financial or operational sustainability, at the extremes they can be alternately overwhelmed by or overlook even key short-term administrative tasks.

• Leadership matters. They never would have moved forward without the steady guiding hand of their two lead organizers.  At the same time, leadership changes among the members shifted organizational commitments.

• Hiring staff and vendors is always risky, even with very diligent screening. A bad selection can thwart the best plans, undermine confidence in a project and create fatal delays in implementation.

• Research and development investments need to be much bigger to allow experimentation, buy better solutions, and include enough cash to fail, learn and recover. The investment needed for small nonprofits to launch back office services was much larger than they anticipated.

I think you’ll find their experience very interesting.

(I’ve been participating in the project on and off since its inception. In the early years, I was a volunteer representing the RI chapter of the Association of Fundraising Professionals, which was interested in improving the way it supported very small organizations. Later, I provided some training and technical assistance in fundraising and helped them reflect on what they learned — including helping them draft this final summary of their work.)

Yes, yes, we’d all agree that your programs are funded by the money you raise and thus are strengthened in that way.

But that’s not what I’m describing. I’m making a case that the fundraising process itself, in particular, donor relationship building, is program building, and not just the means to an ends.

7 Ways Fundraising Can Strengthen Your Programming

1. You get out the door and talk to your constituents — the best way to get feedback on the issues and concerns that matter to them.
2. You see the real life, real people impact of your work.
3. You can educate your constituents — and key influencers –  about the importance of your issues and your solutions.
4. You can build long-term, good faith relationships that help you weather short-term program storms.
5. You create powerful allies and an ready constituency for your public policy reform.
6. Over and over, you are forced to confront the quality, design and impact of your programs.
7. You continuously test your relevance to your community.

Here’s an example:

When I was development director at a regional environmental organization, my Executive Director and I set out to meet as many of our business donors as we could. Among our donors were many small businesses who gave $50-$250 annually.

This wasn’t surprising as the organization had successfully run a classic annual corporate giving campaign for many years (campaign chair, captains, teams, etc). As both of us were new in our positions, we were eager to meet these donors.

Many were manufacturers, including metal platers, as our region had historically been a big producer of costume jewelry. Metal platers had historically been notorious water polluters. Our organization had aggressively pushed for the toughest standards for industrial pretreatment to force these manufacturers to remove these metals and other toxins from their water discharges into our rivers and Bay.

(Aside: For those of you who get discouraged at the impact you are having, this has been one of the great success stories of environmental regulation. From 1981 to 2008, discharge of toxic metals and cyanide into the two main sewer systems had declined by 97%.”)

But at the time that we were visiting these manufacturers, the battles over industrial pretreatment were still fresh.  Cautiously they let us into their plants and shared their stories with us.

The two of us walked many a shop floor and looked at a lot of industrial pretreatment. What we found were business owners who loved the Bay as much as any environmentalist. They were boaters and swimmers and fishing enthusiasts who also loved our state. That’s why they contributed to our organization. While they didn’t always like the positions we took, most of these owners were working very hard to comply with environmental regulations. They were proud to show us their newly installed pretreatment systems and their continuing experiments to “be green” (long before that was a recognized business strategy).

What we also learned was that this wasn’t simple. Too often, as these business owners and their environmental compliance officers reported, the regulations that were supposed to push them along their path were holding them back. Promising innovations weren’t allowed. By complying with one set of regulations they often found themselves wading into a different quagmire with more onerous regulations and hugely costly paperwork.

After dozens of these conversations, my Executive Director emerged with a new perspective on the unintended local impact of what appeared to be well-crafted law and regulations. As a result of his knowledge, Carol Browner, the new Director of the Environmental Protection Agency, invited him to serve on the metal-finishing subcommittee of her aptly named “Common Sense Initiative,” a national project designed to cut paperwork and simplify environmental regulations at the same time advancing environmental protection and fostering industry innovation.

All of which started with our simple goal of wanting to get to know our donors a little bit better.

(By the way, many increased their gifts into the $500-$2,500 range. At least two of the manufacturers became major financial supporters of the organization, giving over $10,000 annually).

To quickly summarize:

The international child sponsorshop and development organization I worked for had tried and failed many times to receive a development education grant from the US Agency for International Development.

We learned that one of the reasons for this was that our donor-to-sponsored child and family communications were not taken seriously by the funder and undercut our credibility.

We initiated a process to explain the theory and practice behind our communications program to USAID.  As a result of that, the door opened a crack.

Our first three lessons learned:

1. Get involved with your colleagues
2. Find out what funders think about you
3. You have to have and discuss a theory of change

That’s were I left off. On to the next set of lessons.

So, I now had the task of designing a development education program that would win funding and achieve our desired mission impact.

Lesson Four: Build your new program on your existing assets

Because our experience showed that people-to-people contact helped North Americans care about other parts of the world, we knew our development education program could take advantage of our 50 year history of direct communications. Our office was rich with the stories, photos, drawings and reports from sponsored children, their families, our international staff and town or village leaders.Our staff routinely oooed and awed over  some dazzling art and images on 8 1/2 x 11 inch or A4 paper that serendipitously came through our doors en route to sponsors.

What if we did something with art produced by children in our program countries? Let our kids tell their own stories, through their art and through their descriptions of the scenes they were sending.

Oh yes, one more thing. Our development education program wouldn’t be built around an in your face story of poverty or helpless victims. We wanted to share the real stories of daily life, told by real children living those lives.

Lesson Five: Bring something new to your funder’s portfolio

One of the things that we had noticed about the development education projects that had been previously funded was that the majority were aimed at high school or middle school students. After a while, the projects sounded very similar.

We had also learned that USAID staff weren’t interested in continuing to fund projects that seemed to be duplicates … after all, once a high school lesson plan had been created by one organization, couldn’t it be used by others?

We took that to heart. We had this great art and these first hand stories of individual children, their families and their communities. So how could we use the art to reach a new audience? And who would appreciate it the most.

Duh! How about art teachers? Or elementary school kids? No one had developed a program for them yet.

But would it work?

Lesson Six: Consult the experts to ensure strong program design

Because we didn’t have experts on staff who were elementary school educators, curriculum designers, artists or art teachers, we sought out expertise locally and nationally to help us think about the program design and the use of artwork. What we came up with, with their advice, was a development education program for 4 and 6th graders (because that’s were they were studying international issues in our potential pilot schools), multi-disciplinary to fit the elementary school model, and based on the art and stories of children in our program countries.

We knew that we also had to build this expertise into our proposal design, so we included funding for a curriculum consultant who would also be the project manager and funding for an expert on art and teaching. We also added two advisory councils, one to select the art that included art teachers and an artist from Ghana who had recently relocated to our area, and a second teachers advisory group of those who would be interested in piloting the project and helping us test activities.  And of course, a few individual with international development expertise.

Lesson Seven: Build internal support and ownership

Of course, the program wouldn’t work without the buy in of a number of our field directors who had to secure the art work. We also had a few university professor board members who thought the whole idea was foolish because who could teach a subject so complicated as  international development through pretty pictures? (And they doubted our ‘teaching” ability)

We found at least six or seven field directors from different parts of the world who loved the idea and were willing to work with us to get children in their area producing work about our themes: family, school, work, food, fun, home. We offered to cover the cost of any art materials and shipping that they needed as we knew this wasn’t in their budgets. They sent us what turned out to be very modest expenses which we included in the project budget.

We weren’t able to convince our skeptical board members that this approach would work, but we were able to get them not to oppose our seeking out the grant. Whew.

Lesson Eight: A creative presentation sometimes helps

As we were pulling the project together, we needed to call it something. With some brainstorming by my staff and others in our office, my team finally decided on a name for the project that was both intriguing and captured its purpose. We decided to call it : See me, share my world.

(Yes, there were many in the office who felt the name was too long. But we came to love it anyway).

Because this was an art project, we knew we absolutely had to have some art in the proposal to help the reviewers understand what we were trying to do. So we found a wonderful drawing with a child’s explanation of what it was about and made that the cover of our proposal. We asked for $140,000 over two years, to be matched 100%, (largely through inkind).

And we sent the proposal off. And waited. And waited.

WE GOT THE GRANT.

Postscript:

The project was a great success all around. Our field staff told us that the art projects energized their schools and unleashed creativity they hadn’t seen. Teachers loved the project. Our local art museum featured the work from one of the countries in a small exhibit.

Two years later we were also awarded the next grant that we applied for. This one was designed for public libraries, highlighting literature art and artifacts from the countries we served, to spark a North-South dialogue on environmental issues (that was in 1990) called “Our Piece of Land is Small.”

Then I left to take a position at another organization.

Not too long after our second project completed,  USAID approached the organization directly and asked it to design a development education/research project that tested the impact of targeted education materials on its sponsors. The ultimate grant fantasy — have a funder approach you about a project. You can find a short article on that research published in 1998 by The International Journal of Sociology and Social Policy.

Keeping the advertising, invoicing, fundraising, and donor stewardship running was an expensive investment for an organization that relied primarily on monthly giving from tens of thousands of donors.

While that funding model was clearly our strength, it also lost us donors who determined which organization they chose to support solely on the basis of  overhead ratios. Overhead costs were lower at colleague agencies that had lots of low-fundraising-cost government grants and commodities passing through their books.

(Note: Why overhead ratios tell only a tiny part of the story).

Which is one reason why we were interested in increasing our revenue from grants (in addition to the good work that we could do with more money.)

In particular, we had our eye on “development education” grants awarded by the US Agency for International Development  (USAID). Those funds supported programs that taught US audiences about global issues, especially issues facing the world’s most poor and vulnerable people.

We also knew that those agencies that received USAID development education grants seemed to have a “more favored” status within the development community than those who didn’t. AID funding was like a seal of approval that our development education would be recognized by our peers.

Yes, we wanted to be in the “in crowd.”  Being “in” often led to more media exposure, more opportunity for partnerships with our colleagues, and, ultimately, more donors and more funding to support our programs overseas.

But year after year (before I arrived), our proposals kept getting rejected. And we couldn’t understand why.

And to put the frosting on the cake, we kept hearing funders and our non-sponsorship colleagues advocate for personalizing international development to US citizens by sharing the stories of real people, families and communities overseas.

But but but… each and every day, we were sending very real and personalized stories about those very same communities and families to tens of thousands of donors in the US.

What were we doing wrong?

Lesson One: Get involved with your colleagues

Luckily, my boss was determined to shift the perception of our agency in the eyes of his international colleagues. So he became very active in the US international development community. He joined committees in strategic networks. He lobbied our  international program staff to participate in the US as well. He brought onto our Board of Directors  individuals with international development expertise and got them involved in those networks as well.

Through those activities, he also got to work with and come to know the staff in the development education division at USAID. And that’s how we learned what was wrong with us.

Lesson Two: Find out what funders think about you.

Without getting into too much detail, suffice it to say that child sponsorship organizations like ours — the  ones that invested in active communications between donors here in the US and their sponsored families overseas — were not seen by many of their colleagues as serious international development organizations.Yep. It didn’t matter so much about our programming on the ground.  Our donor communications were seen as purely “marketing” or “fundraising” and thus we not credible.

While this stung us terribly, finally, we had an opportunity for a breakthrough.

Lesson Three: You have to have and discuss a THEORY OF CHANGE

So, we decided we needed our USAID colleagues to understand better the what and why’s of our donor communications program. We were sure if they did, they would have a different opinion of us.

You see, one of the reasons that USAID was funding development education was to build more support for international aid. Leaving government aid aside, individual giving overseas rarely reaches 3% of all philanthropic dollars contributed in the US.

Yet, among the 400 largest US charities, you’ll find many child sponsorship organizations.

Why is that?

Remember that cliche that readers are only interested in local news? (Sadly, you only have to look at the very first news stories coming from the Haitian earthquake to find the truth in this).

Over 50 years of experience demonstrated the power of child sponsorship to motivate people to give by connecting them with images and stories of real people that they could learn about and maybe even communicate with.

So we had invested pretty heavily in our communications program. It included:

• an annual photo of the sponsored child and his or her family
• an annual profile of that child and family and their local community
• a description of the country, economy, and culture of the regional and country in which the family lived
• quarterly updates from our field staff describing their programs or interesting challenges in that community
• four to six updates from the child and/or family, written with the help of dedicated field staff, an offering a glimpse of daily life.  (This was the most controversial part, but a story for another forum)
• the ability of donors in the US to send correspondence back to their sponsored family, sharing a glimpse of life in the US.
• Specialty information, particularly about the world’s religions and their practices.

We had also just discovered academic research that outlined a five stage model of how individuals became more culturally aware.  That research supported many of our practices and offered a platform to explain our communications to our potential funders.

Which we did. We took a “dog and pony” show down to the development staff at USAID and walked them through our communications program step by step. We answered all of their questions. We presented our challenges very truthfully.

Did we completely convince them? No. But we could see the cracks in their skepticism.

Which was a significant step forward to winning the grant.

For next time … lessons we learned about program development, target audiences and donor portfolios.

Continued at: How we got the grant, part II

I was named a Partner in Philanthropy during our state National Philanthropy Day celebration. I was invited to the luncheon, had my photo and bio in the program, received a lovely pin, and was invited on stage with the other Partners who were being recognized that day by nonprofits they had served.

As I arrived at the check-in table, I received a name tag, pretty recognition pin, my table assignment and a recognition certificate in a folder.

When I opened the folder to view the certificate, my heart sank.

My name was misspelled.

While I tried to resist it, I couldn’t shake the feeling that the gift I was being given had been selected for someone else. Like the time I opened a present anticipating something very romantic and found a rice cooker instead.

And this organization — I even served as its board president not that long ago.

I admit it. I’ve got a thing about my first name. I’ve never been particularly fond of it. The only thing that has redeemed my name for me is its  spelling. So when I see Gayle mistakenly spelled Gail, I feel particularly rebuked. I can’t help it.

I also use my middle initial L. Routinely. And given the organization that was honoring me, an extra special touch would have been to include the ACFRE credential after my name.

But I’ll shake it off. (I did bring it to the organization’s attention that day. They promised to send me a new certificate. I’ll let you know when it arrives.)

Unfortunately, mine was not the only misspelled name that day. My co-honoree for the organization, who was also a table sponsor, saw her name misspelled as it was projected on the screen with other sponsors. And a dear departed colleague would be rolling his eyes to have seen his name misspelled on screen for the scholarship award given in his memory.

Accidents do happen. I’ve made them myself (it’s a plague to locate all the typos in these columns).

As a fledgling development director, I misspelled the last name of a board member in my first annual report (which had been proofed by others). The misspelling was also a pet peeve of this board member. Like me, he frequently saw his name misspelled. It was tiresome and maddening to him to have to re-educate each new staff member who might have occasion to spell his name.

I’ve worked hard to get names spelled correctly ever since.

So please take the extra time to spell it right. It really does matter to your supporters. We’re not always so forgiving.

The new rule is that you won’t get your trash picked up unless both of your recycling bins are on the curb when the trash trucks come by. (A blue one for glass, cans, and plastics and green for paper)

The city began promoting its new policy in September thinking it would give householders plenty of time to get ready before the November 2 start date.  Public service announcements were sent to the media, the Mayor held a press conference, school kids were notified, and brochures were distributed to our homes.

Trash collectors even pasted an informational  bumpersticker onto every city-issued big green trash barrel, figuring that had to get our attention when we hauled in the barrel at night.

The big day arrived and everyone should have been prepared – right?

Wrong.

Throughout the city, trash was left on the curb wherever there were no recycling bins. Officials reported that trash pickup went down by 63% — which should give you some idea of how many people ignored or weren’t aware of the new policy.

City Hall and City Councilors were flooded with calls from angry residents. A movement was started to reverse the policy (it wasn’t). Over 3,000 bins were sold in two days.

Residents were outraged! Why hadn’t they been told of the new policy?

It takes a lot of repetition to get a message through.

I was prepared for November 2nd. I knew about the city’s “no bin, no barrel” program. But then again, I read the local daily newspaper.

I also listen to my local public radio station, read most of my mail (or at least open the envelopes), and even take in the garbage can once in a while.

(Yes, some gender roles do die hard ).

But what probably made the biggest difference in my awareness?

I ALREADY RECYCLE!

You selectively pay attention to what you care about

As I’ve written earlier, we’ve been recycling for many years. We’ve faithfully sorted our household  recyclables since we had access to curbside recycling.

As a colleague reminded me in a conversation a few weeks ago, I’m more likely to pay attention to news about the things that I’m interested in.

As I was already interested in curbside recycling, it wasn’t hard for my personal antenna to pick up the communications about the proposed policy change.

But as my fellow residents confirmed, householders who weren’t interested in recycling didn’t pay any attention to the City’s attempts to warn them, even when the notice was placed right under their noses where they couldn’t miss it.

So, what makes you think that you’ve done enough to communicate with your own constituents?

Whether you are trying to educate me about a community issue, hope to turn me out for a special event, or are trying to get me to renew my annual membership, don’t underestimate what it will take to get my attention.

If you think that you have sent too many communications, like the recycling program demonstrated, you might want to think your strategy through one more time.

At the end of the day, nonprofit collaborations, joint ventures, mergers, or whatever should produce a better result for their community than what any individual organization might achieve working alone.

A few benefits:

• Fiscal sponsorship enables a group to focus on the challenges or needs in its community — the reason it was started –  without having to staff finance or payroll departments. In turn, the fiscal sponsor enables valuable mission-related programs to flourish while it puts its excess administrative capacity to better use and gains the additional revenue from the small fee it charges to provide these services.

• Each member of an advocacy coalition realizes the political power of a larger group, or benefits from working with more knowledgeable partners, or  doesn’t need to repeat the mistakes their colleagues have made. And often the coalition itself becomes attractive to funders who might have been out of reach, leveraging new resources for its members to advance their missions.

• In the Chattanooga museums collaboration I wrote about in an earlier blog  post, the smaller museums gained from the administrative support and the staff expertise of the largest among them. The staff of the largest museum which was providing shared services found their jobs more interesting. And all the museums and the community gained by creating a lively waterfront populated with thriving, well-managed cultural resources.

When collaboration achieves its goal, the whole adds up to much more than just a simple sum of the parts.

A typical conversation might sound like this:

Volunteer 1: What about Mr. Potential Donor? I think he might be capable of a larger gift than he’s been giving.

Volunteer 2: Oh no. He’s got a son in college (or substitute another reason such as “just remodeled their house,” or “bought a new boat”) and couldn’t possibly do more right now.

I was reminded of the lost opportunity when we make assumptions of what our donors will or won’t do when browsing through my Sunday newspaper a few weeks ago.

A photo caption caught my eye:

“Home Sweet Home Gala raises $400,000”

Whoa! I had to look again. Yes. It said $400,000. I figured the newspaper must have added an extra zero.

If you live in New York City, raising $400,000 probably sounds like no big deal for a charitable event. But the paper I was reading was the Providence Sunday Journal. The organization was Crossroads Rhode Island, formerly Travelers Aid of Rhode Island, the largest nonprofit provider of homeless services organization in our state.

To put this fundraising total into perspective for you, you’ll need a bit more data about Rhode Island.

• The total state population is just over 1 million, making up just over 400,000 households.
• The largest city, Providence, has a population of just 174,000.
• There are only two Fortune 500 companies in the whole state. And one community foundation.
• The unemployment rate, at 13% in September 2009, is one of the highest in the nation.

Even in a booming economy, $400,000 is a huge fundraising gross for an event in Rhode Island. If I had to guess, it’s probably in the 10 top events in total funds raised.

Very impressed, I had to learn more. So I went straight to the top and called Karen Santilli, the Vice President for Marketing and Development at Crossroads.

“Yes, our September gala raised just over $400,000.” Karen informed me.

No, they didn’t have a Hollywood celebrity or famous speaker, which the other events that raise the biggest money often have.

Seven Years and a Winning Formula

This event started seven years ago when Travelers Aid of Rhode Island changed its name to Crossroads Rhode Island. “The event chair at the time felt strongly we had to do something unique to celebrate the name change and help people remember who we were,” said Karen.

So they put their heads together to create a truly WOW event that would keep people talking and eager to see what they’d do the next year.

They found a winning formula. The event is always held in a distinctive place, like the top deck of a parking garage, or an airplane hanger, and on the unfinished 3rd floor of a factory under renovation.

The theme – while based on the concept of “home” to remind everyone of Crossroads mission – inspires or is inspired by the event location.

The production formula

“Our event is quite a production,” Karen explained. “Costumed actors from the community theatre RISE on Broadway donate their time to help create the theme. Our incredible designer, Richard Pascarelli, creates the most extraordinary setting.

“For example, this year’s theme ‘Home Sweet Home’ was designed around the book, Willy Wonka and the Chocolate Factory. Guests signed in at a candy shop and truly felt like they were in the book. It’s hard to describe just how creative everything is but you can see a slideshow of this year’s event at Home Sweet Home.

“We have about 60 volunteers who help Richard and Crossroads’ special event manager, Pat Campellone, create the decorations, arrange the tables, set up the space and keep things flowing throughout the evening. That includes many of our staff that get a paid day off in exchange for their service. Staff like the event so much they recruit friends and family members to volunteer that night.”

The event has great food, a sit down dinner, and a live band and dancing. The speaking program, limited to the CEO and the Board Chair, is “very, very brief,” Karen explained.

The fundraising formula

The event has always been targeted to RI businesses and corporations. “This year we had two top corporate sponsors at $30,000 and four at $25,000, all the way down to $2,500 for sponsors,” said Karen.

She told me the event tickets in demand because companies use them to reward their top employees. Earlier this year, when she asked a friend who had been at the 2008 event if he’d be there again this year, he lamented how hard it is to get invited to the company table.

Because you can’t count on having your boss invite you, Karen said, Crossroads has sold more and more individual tickets at $150 each. Individual sales totaled about $35,000 in 2009.

“We had 625 people at the event this year … so many that we had to stop selling tickets because there wasn’t enough room for everyone,” Karen said.

Karen explained that there is also a raffle – they start selling raffle tickets in advance and continue through the night of the event. There are only three raffle prizes, all pretty big, and all donated. This year, the top prize was The Ultimate Chocolate Lovers Dream: A Trip to Switzerland. “We raised $23,000 between the raffle and the 300 wonka bars in which were hidden 5 golden tickets for smaller prizes. We sold all 300 of those during the cocktail hour.”

The solicitation plan

I asked Karen how they solicited for tickets.

“This year, because the economy was bad, we sent our sponsorship pledge letters in January, which was earlier than usual. In late May, we hand-delivered a sponsorship confirmation package to secure our sponsors’ pledges for the event. Those packages are a tease to get everyone excited … their design hints at the theme without ever disclosing it. This year, the packages were based around top hats filled with candy.

“After that package is delivered, a team made up of our CEO, Anne Nolan, our board chair Howard Sutton and his wife Kim, our special events manager, and myself call or personally connect with each of the sponsors on our list.”

Karen told me that the event invitation is mailed in July. This past year it was a really sparkly package with top hat and candy wrapper designs. Last year’s invitation looked like a travel packet.

I wondered if they used any electronic media to support the event. Because Crossroads sends out an eNewsletter every week or every other week or so, they are able to include “save the date” notices promoting the event.

About a third of the individual tickets were sold online this year.

Thoughts of canceling

Some of you might wonder about the decision to hold such an event in this economic climate.

Karen told me that they, too, had reservations about running the event this year, given its joyful themes and the bad economy. All around them, other organizations were canceling their events.

At one point, Crossroads even considered switching this year’s event to one of those non-event events where people just send money but don’t come to anything. “You can only do that kind of thing once,” Karen said.

“In the end, canceling or changing the event simply was a bigger risk. Our work depends on the money we raise.”

Proceeds of this event make up about 20 percent of Crossroads’ total annual fund of $2 million.

So, they forged ahead, expecting corporate sponsorships to be down this year, which they were. But what they didn’t expect, and it was a wonderful surprise, was the strength of the individual ticket sales. The growth in individual tickets made up for the drop in corporate sponsorship, and then some.

A friend raiser too

Karen told me that this event introduces a lot of new potential supporters to Crossroads. Everyone who comes is always wowed by the event and can’t stop talking about it. First timers are interested to learn more about Crossroads’ mission and programs. They spread the message to their friends and family.

This year, Crossroads acquired 400 new names and emails as a result of door prizes and other sign ups at the event.

And in a small state that seems to have at least two charity events on any given night, this is an event that people actually look forward to from year to year.

And next year?

“Of course, it’s a surprise” Karen reminded me. “But it will be fabulous and we hope that you’ll come.”

******************************************************************************************************

A version of this article Thinking Big with your Special Event recently appeared in Gayle’s column in Contributions Magazine

Congratulations! You’ve just joined the board of directors of a charitable nonprofit.

If this is a new experience for you, you are in good company. Many businesses today encourage their staff to serve on nonprofit boards. You’ll share the experience of board service with individuals from all walks of life.

A few of your fellow board members may already be old hands at nonprofit governance. A rarer few have attended workshops or studied some of the literature on nonprofit board governance.

Many, however, are learning on-the-job…just like you.

… Perhaps your organization provided you with a comprehensive orientation to help you start your work on the board

… Maybe you were teamed with a more experienced director who is serving as your mentor?

With luck, you joined a superb board that’s filled with great role models.

It’s not unusual to feel a little unsure of yourself at first.

You should find the reception welcoming, as most nonprofit staff and directors relish the opportunity to benefit from the business savvy, strategic mindset, professional connections, and access to resources that directors from corporate backgrounds can contribute.

Yet, I frequently hear complaints that all of those desired qualities seem to evaporate as soon as a business person is elected to a board. And I often hear business people describe their frustration with their board service.

So here are a few insights about nonprofits that I’ve realized over the last 30 years — and a few tips to help make your board service more rewarding.

Let me start with the insights.

Nonprofits have a different bottom line.
In business, the bottom line is easy to understand – it’s all about profit. Even if your business advocates a dual bottom line (social responsibility and profit), profit doesn’t take second place.

In a nonprofit, there is no private inurement. The bottom line is the delivery of a public benefit – for example, an artistic contribution, environmental protection, or health promotion.

Determining what that public benefit is, how to deliver it and how to evaluate performance isn’t always easy. Imagine you are on the board of an organization dedicated to the promotion of practices for good mental health. Can you concretely define what success looks like? What evidence would you point to? What changes would your small agency claim responsibility for? These are the challenges that will face you as a director of a nonprofit board.

Nonprofits are valued for their prudence, commitment to service and fiscal restraint, yet are expected to produce significant community benefits.
In the for-profit world, business owners are rewarded for taking risks – usually with other people’s money (venture capital). Under-capitalization is warned against. And a personality like Donald Trump is lionized for his opulent lifestyle and forgiven for past business failures.

Not so in the nonprofit world. Here, individuals are expected to make sacrifices for the common good in the name of service. Making do with less is a familiar mantra. Pick up a business publication, and the virtuous charities are the ones with the lowest overhead.

Meanwhile, nonprofits are being admonished to “act more like businesses.” In reality, most nonprofits are extraordinarily small, much more comparable to “micro-enterprises.” According to data available through the National Center for Charitable Statistics, over 80% of registered US public charities had annual revenues below $250,000 in 2004.

At these smallest of nonprofits, nominally-paid staff or their volunteer leadership often have limited experience in nonprofit management and resource development — yet they are expected to operate as efficiently and effectively as multimillion dollar, professionally staffed organizations.

It’s surprising that these tiny organizations get anything accomplished at all. But they do! From the neighborhood soup kitchen feeding the hungry to the volunteer land trust preserving hundreds of acres of open space to the volunteer ethnic organization staging an annual cultural festival for 20,000 participants, many tiny nonprofits are making significant and valuable contributions to their communities.

Nonprofits are expected to consult with their stakeholders and to collaborate with their colleagues.
It’s not unusual for business people to comment on the pace of decision-making that occurs at many nonprofits. Change may happen more slowly than they are used to.

Because nonprofits are accountable to their community for doing good, stakeholders (like consumers, funders, politicians) expect to have some say in their functioning. If your nonprofit depends on public generosity for a sizeable portion of its revenue base, you need to ensure that your constituents understand and support the actions you take, or you put at risk their goodwill and continued financial support.

Decisions and actions both big and small often rely on volunteers.
If a nonprofit has no or limited staff, volunteers are performing much of the work. The biggest decisions of all – where to dedicate resources, what community needs to focus on, and what strategies to deploy – are made by volunteers, you, the board.

Imagine your business self managing a motley crew of unpaid staff with varied levels of expertise, skills and experience. Family and work demands always take priority over their volunteer commitments. Managing volunteers requires all of the skills and tools you would use with your paid staff, absent one obvious and highly motivating reward – money. Get the idea of the challenges you face?

Despite these differences, there are many experiences that nonprofits and businesses have in common.

• Whether for- or nonprofit, all enterprises need to be responsive to their marketplace.
• All enterprises need business acumen and effective operations to be successful.
• Quality research and information are essential for good decision-making.
• Ethical behavior and accountability ensure the goodwill of the public.
• Every enterprise needs the structures, systems, people, skills, strategy and self-reflection that are essential elements of success.

So, as a nonprofit board member, how can you best put your business experience to work?

Here are a few tips to get you started.

Focus on the bottom line – the mission.
As I said earlier, in a nonprofit, the mission is the bottom line. If you think of your community as your shareholders, achievement of your mission is the shareholder value that you’ve promised to deliver. However your nonprofit has committed to making the world a better place – by filling an unmet need, solving an important problem, creating new knowledge, or by increasing the level of joy or beauty for the people who live here – everything your nonprofit does should be measured against how well it is fulfilling that mission.

Don’t undercapitalize.
Successful nonprofits also need the financial and other resources to get the job done. So while you focus on the mission, don’t forget to ensure that your organization has a well-developed capacity to obtain the resources it needs to keep moving forward. The fewer staff you have, the more likely that you, a leadership volunteer, will play a critical role in obtaining those vital resources.

Do your homework.
You wouldn’t think of starting a new company or making a major business decision without quality research to inform your decision. Yet, many nonprofit board members are tempted to make decisions based on their personal feelings or individual experiences. Do your research. Don’t conjecture. Seek out best practices and benchmarks. Keep up-to-date on issues affecting both nonprofits and your charitable mission. Ask for time at board meetings for education as well as action.

Share what you know.
Just like your business, your nonprofit needs your skills as an entrepreneur, a resource-getter, a strategic thinker, a people-motivator, or an organization builder. That’s why they recruited you. Apply those talents to your work on the Board.

Ask board leadership for your job plan and annual performance measures.
Just as you provide your employees with job descriptions and clear expectations for performance, you should expect the same of your board. What is it that you have committed to? What will you achieve during your term of office? What are your personal priorities? What resources do you have to work with? What relationships are critical? What are the limits of your position? How will you be evaluated?

Be serious about legal matters.
It’s tempting for volunteers, especially in all of those tiny organizations, to think – “those rules don’t apply to our little local agency.” Whether you are a $100,000 or $100 million nonprofit, you are similarly bound by federal or state statutes. Do you know your legal responsibilities as a director? Do you understand the federal, state and local regulations governing your nonprofit? Be vigilant about these matters. You may expose yourself to personal liability if you are negligent or willfully violate the rules.

Hold core values of stewardship and ethical behavior.
The nonprofit sector depends on the trust and confidence of the public for its existence. When a nonprofit violates that trust, it places the whole sector in danger of losing the unique privileges afforded to tax-exempt organizations. Nonprofits survive because they have promised the public that they will use their resources wisely for the community good and not for personal gain – the essence of stewardship. It’s easier to be ethical when you’re committed to wise stewardship.

Combine an entrepreneurial attitude with patience.
In their study of high performing boards, the international consulting firm of McKinsey & Company report that nonprofit leaders tell us that “when boards… devote time to providing expertise, helping managers get access to people and resources, and building managerial capacity, their organizations benefit the most.” At the same time, McKinsey and Company stated in a report on nonprofit capacity building that “almost everything about building capacity in nonprofits (and in for-profit companies) takes longer and is more complicated that one would expect.” Entrepreneurship and patience are important virtues.

Last, but definitely not least, be courageous.

It is not easy to be a good board member. It’s hard to rock the boat or risk offending business colleagues by asking questions that everyone else seems to be dodging, or by insisting on right but difficult courses of action. Even setting goals takes tremendous courage. But nonprofits need, no, they require the courage of board members.

As Dr. Martin Luther King Jr. said, “the time is always right to do what is right.” It’s just not always easy. Good luck. Enjoy your board service.

This article first appeared in Nonprofit Boards and Governance Review at www.CharityChannel.com.