> Funding sources are increasingly more difficult to find. More organizations are seeking funds from a static pool. Giving USA reported that charitable donations in 2008 dropped by 2% (almost 6% if you take inflation into account).
> While we have disputed some data regarding a decline in volunteerism, it is clear that people have less time to give to causes and are finding other ways (e.g. social networking options) to “get involved.”
> A recent article in Philanthropy News Digest indicated that 1/3 of the organizations polled in CT feared they may have to close down.

In light of these facts, we suggest some fairly straight forward and sensible options:

> Social profit organizations must look for ways in which they can collaborate. Years ago, at a strategic planning retreat with the International Dyslexia Association, we coined the word co-opetition to describe the concept.
> Other organizations should consider merging. When our Senior Consultant, Tom Viall was with the Preeclampsia Foundation, they merged with the HELLP Syndrome Society. The similarities between the two organizations were significant and they were competing for the same set of donors.
> People who are passionate about an issue should first seek out existing organizations or agencies and get involved with them to address concerns.
> If there is an issue that is not being addressed sufficiently by existing organizations – get involved and make the case for new programs.

Americans, at their best, are among the most charitably focused people in the world. We applaud that social conscience and we want to see it put to work in the most efficient possible manner. We owe it to our causes.

*Once again, we prefer to use the term “social profit” but since “nonprofit” is a term of art in the legal world, we will relent and use it for purposes of this blog. (see our previous blog at: http://levelheadedinc.wordpress.com/2009/08/26/nonprofit-sector-or-social-profit-sector/)

Still, and regardless of the tenets of our legal system, the harm has been done. Like it or not, the social profit sector operates under a different “social contract” than the for-profit sector and when that trust is broken . . . the fall from grace is deeper and harder. When Enron’s executives were convicted, the public attitude seemed to be a sarcastic, “Oh my, what a surprise!” But, when United Way’s CEO was convicted of fraud, the public pain was palpable. After all, the United Way had grown to be the 4th largest social profit in the country and they were (and are now) by all accounts funding valuable work in communities across the nation. We were hurt deeply because a special trust had been broken.

My leadership mentor, Don Winkler, often spoke about the “Shadow of the Leader” and how critical it was that a commitment to ethical behavior begin at the top. And the fact is that we can find business leaders who have “cast the right shadow,” such as Jim Burke at Johnson & Johnson. When criminals tampered with several bottles of Tylenol and people died . . . his first question was, “How do we protect the public?” His swift and unwavering commitment to ethical behavior saved lives AND the product (within one year it had regained its pre-incident market share). With respect to values and ethical behavior in the marketplace, my mentor was fond of quoting Roy Disney, Walt’s brother and the “brains” behind the business. He used to say, “When the values are clear, the decisions are easy.”

Even though the social profit sector may be perceived as being held to a higher standard than the for-profit sector we believe we can learn from those who have done the right thing, regardless of “sector-ism.” The trust you build with your client base and/or supporters will run only as deep as your commitment to ethical practice. That mantra must become part of every fiber that is the tapestry of your organization. Such leadership won’t solve all your business challenges . . . but we guarantee it will prevent many.

The social profit sector* is a significant employer throughout the country. Johns Hopkins University’s Center for Civil Society Studies (http://www.ccss.jhu.edu/) estimates that in some parts of the US (New England and Middle Atlantic states), social profit employment represent almost 12% of the total working population and the national average is 7.2%. Now consider the fact that government retrenchment has thrust more and more responsibility on the social profit sector for filling an increasing number of holes in our societal “safety net,” and you have a national disaster in the making.

Just ask one of LEVELheaded’s Senior Consultants, Tom Viall. In his former role as an Executive Director, he knows the hoops he had to jump through to try and keep health insurance affordable for his organizations as well as staff that served constituents so passionately. All EDs in the social profit sector know that, in most cases, they cannot compete with the private sector when it comes to salary and many other benefits. Beyond commitment to the “cause,” and good health insurance, we had few other tools in our recruiting arsenal . . . and now even those few options are being depleted.

Not enough attention is being paid to the negative impact our current health care system is having on the social profit sector. We will not comment here on details regarding the merits or demerits of such issues as the “public option.” We will, however, state clearly and most emphatically that something MUST be done or the social profit sector will become increasingly unable to fill even its traditional role, let alone the more expansive role of the last decade.

In short, we agree with President Obama when he says, “Doing nothing is not an option.”

* see LEVELheaded’s blog “Nonprofit Sector or Social Profit Sector?” (http://levelheadedinc.wordpress.com/2009/08/26/nonprofit-sector-or-social-profit-sector/)

How many executive directors are Triple Crown winners? There are few, but as in baseball, not many. Some stand out as excellent fundraisers and others excel at public and media relations. Many are terrific financial managers, and still others shine as staff motivators and leaders. But it is the rare executive indeed that can lead the league in all areas of competency.

In the case of a new ED, we believe that the first months of tenure can be critical in setting a tone of confidence, leadership, and competence. However, when the executive is new, s/he may not even know where the pockets of strength lie and where the need for improvement exists. Worse yet, some organizations create an environment in which acknowledgment of the need to build certain skills areas is seen as a sign of weakness.

It is our opinion that Board Chairs must establish a culture of growth and learning at all levels in the organization . . . but it MUST start at the top. Relatively small investments in professional development for the new ED can provide significant returns in the long run. Most importantly, that commitment to personal improvement can make the difference between acceptable results and extraordinary results for an organization.

Great leaders understand how to bring out the best in their colleagues. As my good friend, Don Winkler (www.cyberwink.com), the former CEO of Ford Motor Credit Company says, “A leader takes people to places they could not go by themselves.”

Summary:

Many nonprofit organizations depend on volunteers for a wide range of activities: day-to-day operations, program management, delivery of services, and fund development. In tough as well as strong economic environments, volunteer performance can make the difference between good and great. The session presentation will introduce the concept of Lighting a FIRE©: Building Volunteer Capacity to Attain and Sustain Greatness.” While no single session or presentation can create instantaneous results, it is our objective to enlighten our audience to critical and fundamental necessities of volunteer capacity building that will, over time, increase effectiveness, enhance the bottom line, and further mission fulfillment.

Lighting a FIRE© is LEVELheaded’s mnemonic device to highlight key components of volunteer development:

Focus: clarity of purpose.
Implementation: provide the training and tools to do the job
Responsibility: create a culture of responsibility and excellence
Enjoyment: encourage unabashed joy in mission fulfillment

The session will challenge participants to assess the clarity of their goals, whether long or short term, and determine if their organization has given its volunteers the capacity to effectively contribute to the implementation of those goals. Further, the session will offer practical tools to build a culture of personal responsibility for fundraising within the organization, leading to peak performance and high quality results. Last, and perhaps most overlooked in lighting a FIRE for success, is a commitment to enjoyment, or unabashed joy. The session will discuss why such enthusiasm is critical to the financial growth of an organizational and how leaders at all levels can harness that energy for mission fulfillment.

For more information about the AFP Conference, go to: (https://conference.afpnet.org/)

Mayor Bloomberg’s latest initiative to catch our attention is Cities of Service a coalition of approximately 20 American cities designed to promote volunteerism (http://www.citiesofservice.org). Given our recent commentary on surveys that are reporting a decline in the American public’s civic activity, this initiative is timely indeed. While I am not convinced that we as a people have given up on helping our neighbor, I can still applaud every effort to make certain we retain that which is among the best in the American soul.

So, we want Cities of Service to succeed and in that spirit we offer three simple suggestions:

1. If you want to recruit and retain volunteers, you must provide them with opportunities to make a meaningful contribution to “the cause.” Sometimes mundane activities need to be done, but it is your responsibility to make certain your volunteers see the connection to the greater good.

2. On this front, it would appear that Cities of Service has hit the nail squarely on the head: keep the activity local. Volunteer commitment is often in direct proportion to the gap between the volunteer and the beneficiary. Clearly there are many who take on volunteer tasks for the benefit of people thousands of miles away – but we submit that the bonds that will keep a volunteer coming back are strongly rooted in local soil.

3. Last, keep the volunteer assignment discreet and well defined. Most people like something that has a beginning, a middle, and an end. Give a volunteer an open ended task and you take away a key factor in feeling successful and fulfilled.

It is our perception, supported by others including the Center on Philanthropy at Indiana University (http://www.indiana.edu/~nonprof/results/npsurvey/insmember.pdf.), that this trend has been developing for some time and predates the current recession.

The report does, however, suggest some bright spots: the millennial generation is more active in volunteering than baby boomers and many are doing their “social good” on an individual, rather than group basis.

Accordingly, we feel that all in the social profit sector who depend on the “kindness of strangers” must adapt their business models. When devising new program initiatives, organizations may have to include budget lines for staffing that previously had been donated by volunteers. Additionally, use of student interns might be a reasonable alternative to meet program needs while reducing costs and providing invaluable experience to the next generation of social profit advocates. Often times services can be obtained for reduced or no cost if the organization is willing to offer exposure, testimonials, or “advertising” of a sort to the service provider.

In any event, we choose to focus on the positive data in the report and remain optimistic. Even though volunteer-based organizations may well need to adapt, we prefer to think, paraphrasing Mark Twain, that the reports of the death of “American Volunteerism” are greatly exaggerated.

In periods of strong economic growth – his logic is unassailable. However, in this economic climate, everyone — private foundations, corporate foundations, and nonprofits large and small – must be even more mindful of budget constraints, making hard choices regarding what does and does not get funded. At LEVELheaded, we feel there ARE ways to help funders stay true to Peter’s advice and also keep their commitment to such critical social issues as workforce development, education, the well being of our youth, or a greener environment – to name just a few critical areas of social profit activity that are dependent upon the philanthropy of others.

We have found that many non profits have a great passion for their causes, but need support in such areas as leadership development, board governance, strategic planning, financial management, or program design and evaluation. Despite the great need, we recognize that for many non profits there can be a huge financial barrier to obtaining such assistance.

LEVELheaded strongly urges funders to consider building such support into the grants they make. If they do, several good things will happen. Most importantly, new and innovative social profit organizations will be given the chance to impact their communities. Additionally, the funders will be minimizing their risk when making grants to untested recipients. And, in keeping with what we call the “Goldberg Principle,” some initiatives may still fail, but precious gems will also be uncovered.

Do all these things, and even in this cycle of tight or declining budgets, you WILL get your share of funding. Remember, even if a Foundation’s assets have declined by 40%, they still exist for a single reason: to give money away and why shouldn’t you be the organization that grabs one of the golden rings?

You will, if you have solid programs to sell.

We believe that a Development Officer should have one foot in the Development Office, one in Finance, and the other in Programs (never mind the math). Research, understanding the issues, eloquence in telling the story, and a clear business plan to implement the initiative are all fundamental to a successful grant submission. Your Development Officer should be part of Program meetings; he or she should have the opportunity to participate in some program services in order to understand mission on more than an intellectual level . . . good grant writing also has to come from the soul.

There are, of course, a host of other practical considerations to keep in mind when developing your project and seeking funding. Don’t be constrained by personnel limitations – you can always build a program manager line into the budget and hire on an “as funded” basis. Don’t always think you are the only organization that can do the job – collaborations can build stronger programs and leverage foundation dollars to go farther and impact greater numbers. Don’t try to save the entire universe with one project – perhaps a small prototype will be more fundable and lead to a larger, stronger, and better designed project that can be taken to the major national funders.

To us, that’s LEVELheaded thinking; have good products on the shelf, keep a positive attitude, and sell your mission from the heart.

With respect to membership campaigns, we feel there has been a significant shift in public attitude toward joining, and a 2005 study from Indiana University Center on Philanthropy and the School of Public and Environmental Affairs supports our perception (32% of recreational groups and 42% of fraternal groups reported a drop in membership). The concept of membership is not always a good fit with today’s lifestyle. Without going into a litany of detail — and recognizing the pace at which many people live — most feel they have to put 25 hours into a single day.

“Join? Become a member? Sign up? I just don’t have the time!”

One of our mantras is that often it is not what you say, but how you say it, that makes a difference — and we think that’s relevant to membership organizations. New language that gives supporters multiple entry points and ways to be involved without having to make the “membership commitment” should be considered. We hasten to add that we would never recommend dissolution of membership programs and campaigns. However, while many organizations have a devoted and core of members, we also know that many people are committed to a cause, not necessarily the organization.

Consider then a two pronged plan. The first should enrich the real and perceived value of membership with such things as discounts, increased services, and public pride at being part of “the cause.” And, in a parallel campaign, invite “Friends” to support the cause without the possible onus of joining.

The campaigns can complement one another and prove useful on very practical levels. “Friends” will not receive as many member benefits and thus may actually be more profitable on a unit basis than members. Additionally, understanding the PR value of a large membership and the reality that members may be more likely to stick with organization (a long term investment) – organizations can use the “Friends” base as a cultivator of membership. Ultimately, constituents have multiple entry points and can choose — within their comfort zone — how they want to be involved with your cause.