Profiles in Courage

In Baltimore, the first cool days of the impending fall season bring about a wonderful moment in my house, the first time in a long time where the air conditioner goes off and the windows are open. The turning of a season is a beautiful thing.  And it's a great time for me to take make a small change in this digital depository of inarticulate rumblings.

To date, this space has been filled mostly with issues relating to mission based enterprises, particularly how we can build them, run them and fund them better. That won't change. The improvement of the human condition through innovation and entrepreneurship is my calling in life. It's what gets me up in the morning and keeps me going when the world seems to be all uphill battles. But from time to time I want to take a step back and talk about why we do this work. This is one of those stories.

The other day I rolled up to an intersection and was met by a female panhandler – an increasingly common sight in what used to be a predominantly male undertaking. She looked to be in her late 40’s although life had shaken her up enough that it was hard to tell. She seemed to be just getting ready to take her place. Her hand lettered sign with the ubiquitous “God Bless” at the end of her written plea was still folded under her arm. What caught my eye was that, as she took her place, she stopped to comb her hair. I rolled down the window to hand her a dollar and told her to hang in there. Her response brought tears to my eyes. She looked at me and said “I’m just trying to get up the courage to do this”.

It occurred to me that she had clearly been dealt a bad hand and was truly left with no other alternatives. Now I know that all the theorists and experts can tell you that folks who panhandle are dealing with multiple issues, and that giving them money is often just enabling other bad behaviors. I’ve found myself over the years giving folks information on shelters and missions that might be able to help them. One time, I had a half a pizza in a box and handed it out the window. Lately I’ve taken to the practice of giving them money, telling them to hang in there, and saying a prayer as I drive away. A prayer that they find the help they need and the grace to accept it, and a prayer that I never take my incredibly blessed life for granted.

A good friend of mine had an epiphany moment a while back when he realized that the soup kitchen he was running was not sufficient, and that what he needed to do was work toward helping folks find a way to self-sufficiency so that they could get off the soup line.  If our work as social entrepreneurs is ever going to amount to more than just another social program, we need to be thinking the same way. We need to be working to run ourselves out of business. It’s not enough to meet social needs. We need to be solving social problems. We need to be working not to give another dollar to that woman on the corner, but to find ways to get her off the corner.

I told her she was the bravest person I’d met today. And I found another 10 bucks in my wallet.

The significance that this posting is going up on 9/11/12 is not lost on me, and I cannot go without remarking on the bright blue sky overhead today. Not quite as bright, literally or figuratively, as it was 11 years ago; but bright nonetheless.

Courage takes many forms.  The courage to go running into a burning building when all logic says you should be running out. The courage to hold up a sign in front of unfeeling strangers because you have no other place to go to find the money to feed your family.

May we find the courage to take on the big challenges of solving social problems.  And may we do so not to build an empire, to see our name on a press release or to get an award for innovation.  May we do it so that woman won’t have to find the courage she spoke of that day.

Soli Ego Gloria

(Last of a Series)
The great grand master Johan Sebastian Bach wrote a little note at the bottom of each of his compositions - Soli Deo Gloria – Glory to God alone. Would that more of us took his approach. Far too often, it's Soli Ego Gloria - To me alone be the glory.

Now before you jump off this page thinking a religious treatise is on its way, you should know that I'm headed for a point more about motives and the mind of the social entrepreneur than I am about God. So let's jump back a step and talk about human motivation.

Like good detective work, one of the keys to understanding human behavior is motivation. If you can figure out what makes a person behave a certain way, you can then understand how they might be able to change that behavior.

Lots of work is being done to understand what motivates entrepreneurs. Surprisingly, even in a for profit venture, is not about the money (ok, it's not ALL aboutthe money).  A lot of it is about ego, the need to control your own fate, and the desire to have an impact. But in all of those cases, the individual is held up as a champion, and the recognition is in and of itself a significant reward. Not to mention that they make a good buck or two along the way.

This ego need becomes a challenge when the work has a social benefit. And much of the cause is the compensation structure of the typical nonprofit. Because the usual Executive Director makes far less than the same job would pay in other sectors, they are forced to seek gratification in other ways. Yet the social structure of the industry is such that the "grand conqueror" path is not available to them. And honestly, most of us are just not capable of the level of self-effacement that old JSB was able to claim. So our old faithful E.D. gets put into a bind - a no win scenario where they end up doing all sorts of weird things to obtain the sort of recognition and personal satisfaction that other sectors commonly feed in other ways – “it's not about me- it's about the mission” (reminds me of that old rule in negotiating: when they say it's not about the money, it's about the money). And the root cause of all this is our own inability to claim the real value of what we produce.

I remember giving a speech to a bunch of social entrepreneurs about two days after Steve Jobs passed away. All the headlines where about how Steve Jobs changed the world. My take was that this group of daring souls did far more to change the world than Steve Jobs ever did. Jobs revolutionized markets, changed an industry, and fundamentally shifted the way we communicate. That's a heck of an accomplishment. But it pales when compared to the fundamental change in the human condition that occurs thousands of times every day in social benefit organizations around the world. 

If we start to claim that value, all of our other issues begin to fade into the background. But to claim that a life is changed is (oddly) not enough. We need to show the real value in that change. For example, the reduced dependence on government support and increased tax revenue that comes about when a homeless person gets a job and can pay for a decent place to live. If we start to think about and talk about the work we do in those terms, we'll get all the attention our egos can handle. And if we can make a stronger practical case for the value we actually create, we can probably earn a few more bucks as well.

Once that happens, I’m willing to bet that all the other silly reindeer games we currently play will no longer be necessary.  

So there you have it. The ultimate root cause of the Nonprofit Martyrdom Syndrome is our own inability to translate our work into terms that can be objectively valued.  The tools for making a more objective value assessment are in our hands. To return to the religious analogy for just a second, the cross we are on is of our own making, and we can climb down anytime we want.

In my next series, we’ll talk about why we don’t measure better. But for now, it’s time to rally. It’s time to stand up and claim our value. Soli Outcome Gloria? Could be, my friend, could be.

Simple is not easy

One of the greatest lessons I’ve ever learned is that there is a huge difference between something that is simple and something that is easy. Love thy neighbor is an amazingly simple concept. But when they park in front of my house and I have to walk a block in the rain from my car to my door, it’s not really easy to practice that love.  The need to exercise daily is clear to anyone. Lacing up the sneakers at 6am is one of the hardest things I can think of.

The same goes for some of the simple fixes I’ve recently proposed for some of the structural flaws in social benefit efforts.  If you’re just tuning in, I’ve been treating these problems like a disease – in no small part because that is how they often manifest.  I’ve named this disease (only partly in jest) the Nonprofit Martyrdom Syndrome (NMS for short).  I’ve identified three main strains of this virus (which are hereby also given pseudoscientific names):

1. 1) Offering and accepting substandard pay rates (Magnus Laborus)
2. 2) Accepting and excusing poor performance(Operarius Horibilus)
3. 3)  Making unreasonable demands on the time and devotion of your employees (Missio Super Omnes).

In each of these cases, the cures have been fairly simple, and center around developing and implementing a basic system of performance management where pay is based on performance, where goals and expectations are developed collaboratively, and where pay is based on the market rather than what you think you can afford . Nice, simple, clean solutions. Implementation? Maddening. But since I’m solutions focused, here’s a thought on how to make is a little bit easier.

For over 25 years now, I’ve maintained a pretty regular exercise habit.  3-4 times a week, I get out and run around 3 miles or so (run being a generic name for something that looks more like an old duck waddling). Three miles may sound like a lot to some of you, so you should know that I didn’t just wake up one day and run.  I still remember when I first started to jog. There was a park across the street that was exactly one block square. Once I made up my mind to start exercising, that park became my goal setting device.  The first day, I walked once around the park. Then, I began to increase distance in block lengths. Once around became one and a quarter, which became one and a half and so on. Then, I would jog one length and walk one length, so the routine was jog/walk/jog/walk to complete one lap of the block. Then it was two segments jogging (Jog/Jog/Walk), then, three. One day, I was registered for a 5K run (3.1 miles for those of you who don’t have your metric conversions memorized).  And while I've run a number of distance events since then (including a full marathon, two half-marathons ad a dozen 10Ks); I still have to give myself a little push each time I get ready to go running.  

The moral of the story comes in two parts – first, break your goal down into little chunks. Second, remember that it will get easier (ok, maybe less hard), but it will always be work.

So don’t think you need to just jump in and have that difficult conversation with that troubling employee. Start with an easy conversation with someone who you know is coachable, then work your way up to the problem child.  Set a goal to close your pay gap by 5% rather than trying to move right to a market rate pay scale. Start small, but for God’s sake start.

Now there is still one more aspect of this disease that we’ll get to next time. But for now, know that the cure is in your hands, and that simple can be made easier if you start with achievable goals.

There’s a semi-famous running coach named John Bingham who calls himself The Penguin  (so named for his running style, which is a lot like mine). He’s the champion of the back of the pack runner like me.  The title of his book says it all – “The Courage to Start”. In his words, “waddle on my friends, waddle on”.

SO close, and yet……………………

(We interrupt our series on the Nonprofit Martyrdom Syndrome for a breaking news report on a new social enterprise – well, sort of)

My morning ritual is scrambled eggs, coffee and a quick flip through my local news (that love/hate relationship in newsprint that we know as The Baltimore Sun – and a quick flip it is).  Turning to the business news this morning, my heart jumped with excitement about a prominent feature article.

This particular piece announced the opening of a new nonprofit in Charm City, The Baltimore Community ToolBank.  Kudos to the Sun for an interesting story, a good graphic, run in a prominent place.  Mr. Abell would have been proud – that’s how you sell newspapers.

Kudos too for an interesting take on a unique issue. Turns out that the reason this organization exists is so that “churches, schools and charitable organizations” can have a place to borrow tools when they need them for “service projects like building playgrounds, cleaning streams or rehabbing houses”.  Ok, that’s great. I like a good stream cleaning as much as the next guy. I also know that community service projects are a great way to engage constituents and build community spirit. The article states the need this way – “anyone who has ever volunteered for a community project and has had to stand around waiting for a shovel or rake will appreciate this.”  Sure, keeping volunteers happy is important.  And renting tools from your local rental shop can be expensive, putting a strain on limited resources. So the theory is that a lack of affordable access to tools is an issue in getting community projects done - interesting.  Maybe not as big an issue as some of the other social causes we are fighting, but certainly an honest attempt to get at a root cause (no pun intended). So, I’m intrigued and read on.

I do a quick Google and see that the Baltimore operation was established in partnership with The Parks and People Foundation, who I love and do great things; and funded by some good local heroes like the Abell Foundation. So now I know that there are some smart and well respected social innovators involved in the project, and my interest level goes up significantly.

So, how about the solution? These fine folks have formed a nonprofit that lends out tools (BTW, this is the third one, following Atlanta and Charlotte, with Cincinnati, Houston and Portland coming soon). Why a non-profit? Well, because the other options (buying or a commercial rental) are costly and can reduce the ability of the local group to get projects done. Again, I get that. But these ToolBanks don’t just let you borrow their wheelbarrows; you rent them.  The rental rate is “3 percent of the value of the tools, multiplied by the number of weeks to be borrowed”.  Oh, OK, now I get it, it’s a Social Enterprise, right? Yea! Earned Income! Fees that go to offset operating costs!  Now my fist is in the air and I’m hootin and hollerin!

Then, is read that “the tool fees won’t be enough to support ToolBank’s operations, so it will need continued support from businesses and foundations to remain viable”.  And with that one fateful line my heart went from glad to sad. If only.  If only the philanthropic support went to the startup costs, and the rental fees covered the ongoing operations. 

 

OK, that would mean that the rental rates would need to be a bit higher, sure. And if they were a bit higher, it’s likely that not as many projects would get done. But I’m willing to bet that it would still be more than are being done currently, and we’d avoid the situation where the ToolBank and the church it is serving might be applying to the same grantmaker or courting the same donor.  We’d have a great idea that is truly self-sustaining and helping others to achieve their vision.

Don’t get me wrong here. This is a good idea and an interesting model, with a lot of promise. So much promise that it really is a shame that they didn’t take that final step.

A really good social enterprise has three core attributes. It has a sound root cause social change theory, it runs its operations efficiently, and it doesn’t depend on grants and gifts for ongoing operations.  They say two out of three ain’t bad. Baltimore ToolBank is probably 2 & ½ out of three. So close……………..

(We now return you to our regularly scheduled program)

But it’s for the kids……

(Number 5 in a series)

A friend of mine teaches at a local private school. He tells me that anytime that a faculty member wants to get their way; the closing argument is that “it’s for the kids”. The obvious conceit is that it may in fact have little to do with the kids; but within the school’s culture and context, that argument is very hard to assail.

When it comes to the motives of both donors and staff, a similar construct exists in the lexicon of most nonprofits.  “It’s for the mission” becomes a catch all that obscures much of the actual behaviors and intent of many folks who seem well meaning on the surface.  Studies of donor theory indicate that while many donors act from altruistic motives, a good portion of them are driven by self-satisfying intentions such as ego, a desire for improved social status, or the ability to influence the agenda of the organization.  Good points all, but probably not a huge new revelation to most of you.

Those of you keeping score at home will recall that our last installment told the true story of a time when my darling bride was taken to task for insufficient personal sacrifice in the name of a nonprofit mission. You will also recall a promise to discuss the reason this happened. So here’s the theory of the day: Nonprofit Executive Directors are subject to the same range of motives as the donors

.

Yes, yet another strain of the dreaded Nonprofit Martyrdom Syndrome is the ego driven staff scenario, where the personal gain of the mission’s leader is what the goals are really about.  In the story I told last time, the absurd behavior exhibited by the local E.D. was driven in part by a need to be seen as “the best” by the national organization, and that somehow this translated into staying up all night in a bizarre hugfest. What this type of behavior shows is that the leadership is not really motivated by concern for the cause.  Sometimes it’s the ego rush of being in the spotlight. Sometimes it’s a need for control, or the desire to build or maintain an empire. Sadly, sometimes it’s the validation that comes from others who tell you “what a good person” you are. Regardless of the reason, the negative impact on mission of this kind of behavior should be obvious. Rather than share best practices and build a better operation, each chapter office is left to its own devices. Any first year MBA will tell you that such behavior is bound to create duplicative efforts and increase costs. In a misguided effort to improve performance, the national leadership creates a competitive culture that pits local operations against each other rather than encouraging collaboration.

The cure?  Create and implement a performance management system that clearly encourages collaboration and discourages competitive behavior.  And then (this is the hard part) hold your team accountable to collaborative goals. For example, the office that raises the most money should not be rewarded either directly or by accolade (no trophies, no “atta boy”, none of that). On the other hand, a poll of peers asking them which of their colleagues shared the most might be the subject of a great item in an internal newsletter.

Sensing a trend here? The astute observer (and I know you’re out there) will note that effective performance management was part of the prescription for the cure for our first strain of NMS, the pittance that passes for a pay scale in nonprofits.  Now here we go again with performance management as part of the answer to abuse in the form of excessive hours and lack of collaboration.  The simple answer to that is that Martyrdom is a human issue, and so Human Resource tools are appropriate in many cases.   

Perhaps the real issue is that we confuse dedication with sacrifice or that we think that a calling implies a complete 24/7 devotion (ask any Pastor, Rabbi or Priest how that’s working).  The truth is that we all need times of rest and renewal, and that the work we do is so important that the need to do it well is even more important.

Bottom Line:  Transparency in motive, and the courage to call out and correct behavior that is not healthy, will actually make us more able to care “for the kids”. 

A grand time was had by most

[The following story is true. The names have been obscured to avoid embarrassing the guilty, who are carrying a virulent strain of the dreaded NMS – Nonprofit Martyrdom Syndrome.]

It’s 3 am.  My darling bride is in a formal gown, and I’m in my best suit. We’re exhausted, collapsed into each other’s arms. We’ve just spent the evening at a $500 per plate gala fundraiser. It’s been one horrible night. Sounds like there should be every reason that it was a great evening. The problem?  We weren’t guests, we were staff.

At the time, my wife was a program manager for a regional office of a major national nonprofit; an organization with a noble and important cause. I had directly supported the effort myself by completing a few of the now ubiquitous “run for the cause” events that this mission had helped to popularize.

Said gala was the highlight of the year for these folks, and pulling off the event was my wife’s primary responsibility. Now I know you’ve been to many of these, so I can quickly describe the scene in very broad brushes:  Interesting and unique space, fully catered sit-down dinner, DJ, silent and live auction. The kind of thing you see in the “out and about” pages of your local newspaper.

12 hour days have been the norm for about 8 weeks leading up to this night, with the much of the labor focused on collecting, cataloguing and pricing all of the silent auction items, which then had to be brought down to the interesting and unique event space.  Across the dinner table, I learn that the team plans to do this in multiple shuttle trips in their own cars. “Why, that’s silly” say I, sensing an opportunity to earn some husband points. “You should rent a van and haul it all down in one shot”. “Oh, we can’t rent a van” says my dear one, “that’s not in the budget. And besides, who would drive it?” So, good sport that I am, I volunteer to rent the van (paid for out of my own pocket) and be the driver (of course, I’ve already taken the day off from work to be the supportive husband that I am).  

The auction gets set up, the caterer arrives, a grand time is had by all (well, by the guests anyway – paid and volunteer staff have been on their feet since early in the day).  The guests are now gone. Everything is packed up. The team is sitting around enjoying the afterglow of a great success. I suggest that we need to go home, because I have to go to work the next day. Hugs all around, thanks all around, high fives all around.  We climb into the rented van, make it home and pass out, still in our formal attire.

My darling bride sleeps in a bit, and makes it into the office around 10 am the next day. She’s told by the receptionist that the boss wants to see her right away.  She walks in, excepting a brief and upbeat post-mortem, but is greeted by a severe reprimand – not for being late to work (absurd as that is), but for leaving the event early.

This experience left me pondering a question that haunts me to this day. Why do organizations that do such great work caring for others show such little concern for those who do the work of caring?  Why do we expect human suffering as the standard behavior for those who work to relieve human suffering?

Now I know that your shop doesn’t do this. You provide a fair wage for a fair day’s work, and make sure your team gets the rest they need. You provide healthcare, paid vacations and all the other things that any good employer does. But I bet you know a few programs like the one in this story.  Programs where the entire team actively works each day to nail themselves to the cross (and in some cases will even climb back up when someone has just let them down).

And no, this isn’t a way for an aggrieved husband to air an old grudge – in fact; it’s an experience that has inspired much of my current work to redefine how social missions are delivered. Most if all, it’s a clear case of NMS. We’ll get to the cure for this one in our next installment.

   

 [P.S. – the next income for all this effort? Around $80,000. The net result on employee turn-over? Other than the Executive Director, 100% staff turnover within 12 months – and one member of my household who will NEVER work for a nonprofit again (just ask her).]

The high cost of tuition

(Number 3 in a series)

For several years, I had the distinct pleasure of building and growing a unique program that helped grow social enterprises.  We did such a good job that we were recognized by the United States Association for Small Business and Entrepreneurship for our innovative efforts. We helped over 60 organizations search for and find appropriate earned income strategies to help fund their missions.  It was during this time that I discovered one of the cures for NMS (Nonprofit Martyrdom Syndrome).

NMS, as you will recall, is a horrible disease that keeps may social benefit organizations from realizing their potential.  One of the symptoms of NMS is a pay scale that is well below what it should be for folks doing such important work. But the cure is at hand, and came to me in a conversation I had while running this exceptional program.

The basic structure of the experience was that local nonprofit leaders were teamed with university students for a semester long experience to explore the world of social enterprise. We promised that folks would leave the course with a better sense of the feasibility of earned income for their unique mission (and no, it’s not for everyone), as well as some initial thoughts about a model that might work for their organization (match tomission is critical). We hoped that some of them would move far enough along to think about actually launching a venture (about half of them did, and most of them are still in business).  For this we asked the nonprofits to pay three credits of graduate level tuition (about $1,800 at the time).

Each semester, we would hold a series of events to promote the program and recruit participants. At one of these events, the sincere and well-meaning executive director of a local effort took me to task for the “exorbitant”  fees we were requesting, and told me flat out that we would never get nonprofits to participate because they just couldn’t afford that kind of money (interestingly, we had a waiting list every year, but I digress). 

In a moment of inspiration, I requested permission to ask her a few questions about her shop.  First, did she have an office? “Of course”, she said. Next, did that office have a receptionist?  Again,"yes”.  I then proceeded to describe this receptionist. “Let me guess – late twenties, minimal education, low to moderate performance in the job, some attendance issues”. At this point, I’m getting a somewhat annoyed look.  Then, “you probably pay this person somewhere around $10/hour”. Now she’s thinking I’m either a psychic or a stalker, but gulps out a quiet “yes”.  Sensing I’m on to something,  “and you accept the substandard performance because you feel that your pay is substandard and that this is the best you can expect. You’ve never spoken to this employee bout improving performance. You’ve never had a performance review or set concrete expectations for this job.  And, I bet that’s how you run your whole office. “ 

Now some steam is starting to rise from the ears of my earnest colleague. Undaunted, I press on to make my point – “If you implemented a proper performance management system for your employees, you would not only have a more efficient and effective team, you‘d save enough money to be able to pay the tuition for this program.”  And that’s when it hit me.

Many nonprofits are locked in a performance management failure cycle. The guilt over low pay prevents them from dealing with employee performance. Carrying subpar employees on the payroll ties up the cash that is needed to build and grow programs.  It is – truly – a vicious circle.

What is takes to break free is a willingness to have uncomfortable conversations with your employees. It takes the courage to set clear goals and hold everyone (including yourself) accountable for achieving those goals. It also takes the strength to be able to let someone go when they are not measuring up.  At the end of the day, all of this is just sound basic human resources management. It’s also the cure for the most common strain of NMS – low grade compensation.  The good news is that fixing this is easy.

 

While a simple raise in pay would be a good start, a better way would be to implement a decent human resources management system. A system where pay rates are benchmarked to similar roles in both commercial and mission oriented firms, where performance expectations are clear, where rewards for exceptional performance and consequences for substandard results are both clear and quickly delivered.

Don’t think for a minute that I’m suggesting that this is easy. It’s hard work. But whether it’s my overworked and underpaid friend Billy, or the underperforming receptionist, the results are the same. I’ve seen it hundreds of times.  It’s like getting a new pair of eyeglasses.  You’d learned to live with you vision a bit blurry, and then one day, you suddenly see much more clearly. And the world is a much better place.

(next time,  symptom #2 - the 24/7 work week) 

A fair day’s pay

You don’t need to study the history of organized labor to understand why it came to be such a force in society. It’s really about a very simple concept – a fair day’s pay for a fair day’s work.

To offer an extremely brief synopsis, the rise of the industrial revolution created large factories.  Workers were often exploited and conditions were not safe (or even humane).  It seemed like the owners of the factory viewed the workers the same way as the machinery – just another cog in the machine. In reality, the existence was not far removed from slavery.  Once labor began to organize and fight back, things changed.  Conditions improved, pay became more equitable.   Living standards rose and work related injuries declined. All in all, life got better.

Hold that picture in your mind while I tell you a story of a recent meeting I had with a young and rapidly growing nonprofit.  This organization has a lot going for it. First off, it has a hugely important mission to stamp out a horrible disease.  Second, a very strong fundraising effort, with all the modern elements – social media, sports based individual donor events, high profile lead donors who actively lend their names.  The executive director proudly took me over to introduce a new member of his team.  We’ll call him Billy.

Billy is very bright and extremely energetic, just a few years out of a very good college. He’s the manager of one of the newer campaigns in the shop, and doing an awesome job. Once we step into his office and close the door, I ask the E.D. to tell me more about Billy’s job.  Billy works about 60 hours a week, with a lot of weekends, late nights and early mornings.  His job does not include any benefits like health care, flexible savings or 401k. He gets two weeks paid vacation a year, 6 holidays and 6 sick days. Billy’s pay ? - $35,000 a year (just to save you the trouble, that’s less than $12 an hour –about equal to a floor worker at Home Depot). 

You may recall my last post, where I identified a major challenge facing the future of social entrepreneurship – The Nonprofit Martyrdom Syndrome (NMS).  First and foremost on the list of symptoms is the abysmal pay rates that are accepted as normal in social services. You may also recall that I used some information about fundraising professionals as the framework for my initial diagnosis. As you can see from Billy’s case, the problem goes far beyond fundraisers. And although I’m sure that your organization does much better than this, you probably know some colleagues who have this situation in their shop. Maybe you know Billy. Maybe you are (or were) Billy.

Leaving the moral arguments of Billy’s situation aside (as hard as that is to do in an industry that is focused on care for others), this practice of low pay and horrible hours is just bad business. And the sin is even more egregious when you apply it to the individuals charged with bringing revenue into the organization.

Remember from our last discussion that the average tenure of a fundraiser in an organization is 16 months – an incredibly short amount of time.  And that low pay and long hours was cited as one of the primary reasons for this high turnover rate.  Contrast that with the typical for profit venture, where the sales organization is usually the highest paid team in the shop. 

Now I’m not advocating for commission based fundraising, and I know that there are ethical challenges in pay for development officers; but it seems pretty clear that higher pay and better hours would reduce turnover. And I know that there are difficulties in just how to execute and structure higher pay in a way that it doesn't violate ethical standards. But it can be done. More importantly, the notion that one must sacrifice oneself on behalf of the cause is truly noble, but may cause unintended consequences that threaten the longevity of the organization. 


And I'm also not suggesting that Nonprofit Labor should start to organize, although there is some interesting movement around the idea of better organizing Nonprofits. If you want more on that,check out my friend Robert Egger's newest project - CForward. Nor am I insinuating that Nonprofit leaders are purposely exploiting their workers. What's happening is not being done intentionally. We all mean well,  yet we have a blind spot when it comes to our own team.

What I am suggesting is that this acceptance of low pay,long hours and a lack of benefits is a problem. We run organizations that deliver amazing support to those most in need, but  somehow find it acceptable to do that at the significant expense of those we depend on to deliver the service. This is the real issue, and it's the first sign of a larger illness - the dreaded NMS. 

Like any major disease, there are many factors that play into the development of NMS. However, the root cause for Billy’s situation is not as complex as you might think. More importantly, the cure is fairly simple. We’ll get right to that in our next installment.

The Cure for NMS

(part 1 of 6)

The Chronicle of Philanthropy recently reported that a high turnover rate in fundraising professionals is costing Nonprofits a lot of money. The article was based on a study by Penelope Burk, president of Cygnus Applied Research., In a presentation to the Association of Fundraising Professionals at their annual conference in Vancouver, Burk relayed the results of a survey she conducted with over 9,500 nonprofit professionals, where she determined that the average tenure of a fundraiser in a particular organization is 16 months – not even a year and a half – hardly time to even understand the mission, much less develop any real relationships with donors.

Burk give several causes for this problem; including low pay rates, lack of internal promotional opportunities, and overly taxing professional schedules. From where I sit, each of these issues are symptoms of a larger disease, one that infects not just fundraisers but the entire operation. I call it the Nonprofit Martyrdom Syndrome (Henceforth to be known as NMS). It’s a horrible and virulent disease that has plagued mission driven organizations for a long time.

We all know the signs of stress in our efforts to make the word a better place – donations are down, the economy is struggling and government is in gridlock. All of the usual paths for funding are worn thin. Ms. Burk offers basic prescriptions for her identified concern – higher pay, more flexible schedules, a more direct path to senior management. To me, each of those remedies is like cough syrup. They’ll moderate the symptom, but they won’t cure the disease. But there is good news.  Recent successful trials show that there may be a cure on the horizon for this debilitating ailment. And it comes from the gathering storm that is Social Entrepreneurship.

A few weeks ago in Oxford, over 1,000 leaders in this growing movement gathered for the 9^th annual Skoll World Forum on Social Entrepreneurship. Jason Saul recently reported on this year’s gathering, observing that in his opinion,a new brand of social entrepreneurship is emerging – he calls it version 2.0. In this second wave, there is an open understanding that it’s ok to expect an economic return for a social good, that metrics and measurement are no longer optional, and a program that meets a social need is not enough. While attending this amazing event, I even one voice in this field loudly calling for every social benefit organization to aim to be out of business within 30 years of its founding. His point was that if you can’t fix a social problem after 30 years in a community, you should be ashamed of yourself. A huge challenge, and one of the many signs of a creeping case of NMS.

Just like any other disease, NMS comes in many forms. In the same way, specific treatments need to be adjusted to the specific symptoms of the disease. So there is no single cure-all for NMS. Nonetheless, these new ideas may present a course of for the struggling nonprofit.

As an aside, you may have noticed that I use two different terms – nonprofit and social benefit organization. That’s on purpose. Nonprofits are major industry, representing upwards of 10% of the economy and under significant pressure. Social benefit organizations are a new breed that is smaller, less fully formed but perhaps more resistant to the debilitating effects of NMS. It’s also important to note that not every nonprofit suffers from NMS. And even if the disease is present, much good work can still be done. But imagine how much more good we could do if we were healthy and free of NMS.

Over the next few weeks I’ll take each of these symptoms in turn. I’ll show you specific signs of the various strains of NMS, and then provide concrete steps you can take to cure each of them without sacrificing your mission focus.

Modern medicine has made great strides in our lifetime. Cancer, to name one of thousands of examples,  is no longer an automatic death sentence. The means by which we care for each other in society are poised to make a similar leap forward. It can be done. We can cure NMS in our lifetime. Help is on the way.

Piercing the silos

Ok, I'll admit to a little bit of bandwagon jumping, but it really is time to tear down the walls and get on with the work at hand. The new economy is in our grasp. God grant us the strength and courage to take hold.

In the past month I've had the pleasure to attend 3 different gatherings all focused on social change. One was coming at the issue from a faith based perspective, one was using arts and cultural districts as the platform, and one was a "global forum" on Social entrepreneurship. All good stuff. Inspiring speakers, great workshops, and a whole fistful of new contacts. Personally and professionally a very invigorating time. But as someone who is also interested in larger themes and the movement of society, the experience left me less than fulfilled. The problem? Despite a compete alignment on goals and desires, there was very little cross population between these gatherings.

Shortly before the first conference, i was able to gather a meeting of a few thought leaders from various innovation efforts here in Baltimore. Great minds, great leaders, and a truly shared focus. My intent was to ask them to combine their focus on an issue that I saw developing on the horizon. We spent 90 minutes talking and never got to my ask. Why? Because they had never met.

They spent the entire time on introductions and descriptions of their programs. And at the end, they were amazed to find that there was much synergy and many opportunities for collaboration. And while that's great and good, it's also a bit concerning, particularly when you understand just how small a town Baltimore really is.

Now I'm no sociologist, so I won't try to explain all the human psychology issues about why we as people don't want to share our toys and play well together. And I'm certainly not going to go into the whole mess that is the debate on trust and faith that is at the core of many turf wars. Most certainly, I'm not going to step on the third rail of entrenched bureaucracies. But the folks I'm talking about at these conferences and meetings are brilliant and motivated and pure in intent, so they should be past all that anyway.

And yet, we're not. And I'll be darned if I can figure out why. What I can say is that the reasons that collaboration makes sense are so strong that whatever it is that's holding us back must be pretty big.

Collaboration is certainly energizing. The extensive energy around coworking, collaborative software development, scientific communities and artist colonies all speak to the the human desire to share and interact.

Even more compelling, it's also a lot cheaper. This notion is no more complex than what your parents always told you - two can live as cheaply as one. When each project has its own budget, it's own project manager, and it's own fundraising efforts, there is a lot of money going to overhead that is simply duplicative and does nothing to move an effort forward. When we link arms, we can do a a whole lot e more with a whole lot less, without having to skimp on all the vitally important back office functions that any successful enterprise must have to be able to meet its mission.

Last, but far from least, it produces a better output. Any student of the process of innovation will tell you that a well focused team will always outperform a single visionary. The entire body of knowledge in product development supports notions like rapid prototyping and crowd sourcing as proven ways to test an idea and get solid feedback.

A friend of mine theorizes that the real issue is bandwidth. That we're all just so damned busy that we just don't have time to build the bridges that we should. And I know that there are days that feel that way.

But if we really care about building communities, about economic development, about social empowerment, about reducing poverty and improving the human condition; we need to do better. We just do.

A Well Oiled Machine

“Begin with the end in mind” is the second of Stephen Covey’s 7 Habits of Highly Effective People. Too bad that more folks – particularly those leading mission oriented enterprises – don’t follow Covey’s advice.

People who run really good programs get a lot of complements. One you hear quite often is that "the place runs like a well-oiled machine".  What we mean when we say that is that each of the components of the operation fit together well, that each member of the team knows their role (and knows what is NOT their role), and that everybody has a clear sense of the overall objective of the enterprise.

Several times a year I have the distinct pleasure of stepping to the front of a classroom and working with folks who are speaking to build new ventures. One of the first things we cover is the basic business model. Any easy way to see this is to think of a pizza oven. The basic ingredients are dough, tomato sauce and cheese ( add pepperoni and mushroom if you're making it for me, please).  The process is: roll out the dough, put the sauce and cheese on top, and bake. The output is pizza. Simple, easy.  From there, it's not a big jump to an automotive assembly line. After you get that in your head, you start to understand more about how a successful venture is built mostly on how you execute.

The next big leap is to move from outputs (what you make), to outcomes (what difference you make because of what you produce).  The outcomes of pizza are a full belly and a happy kid. Depending on the kind of car, outputs can range from not being late to work, to impressing your beau or neighbor, to being on the cover of QG.

Now we move to my calling, the social benefit organization. And all of the sudden this becomes rather murky. The good news is that much of the haze is unnecessary and can be cleared with some good, basic logic (why that logic is not applied more often is a subject for another day).

The interesting thing is that just about every social entrepreneur can clearly articulate the problem that intends to be solved - far more readily and with much greater passion than the typical commercial venture.  Hunger, homelessness, literacy and thousands more basic human needs are easy to see. And the short term fixes are just as easy – Food, blankets, tutors – you get the idea. But most folks involved in these missions don’t spend a lot of time working through the mechanics of how the process flows. The social benefit organization that looks at how to deliver the service more efficiently is a rare bird indeed. Even rarer is the one that can talk about how the work makes a difference over time. But if we are to truly achieve the promise of social entrepreneurship, we need to be able to point to outcomes, just like the commercial entrepreneur.

The academics call this a program logic model (a concept adapted in part from the IT industry, which goes to show that there really is nothing new under the sun). At its most basic, it’s really just the notion that there is a distinct difference between giving a person a fish and teaching them how to fish (or if you’re really bold – how you revolutionize the fishing industry). At its most valuable and complete state, it’s a clear pathway from inputs to process to outputs to outcomes – outcomes, by the way,  that can be used to attract investors in ways that help you actually grow the mission. And while I certainly recognize the value of a warm blanket and a hot meal, I’d like to suggest that thinking more about how we can get folks to long term self-sufficiency may be a nobler endeavor.

The best news of all is that developing such a model is actually lot easier than you think. The tool is called “backwards mapping” (a curriculum development technique commonly used in education, brought forward to the social benefit space).  If you’re getting the feeling that what I’m advocating is a much more systematic approach to social benefit organizations, you’re correct.  In the end, it’s nothing more complex than Covey’s 2^nd habit.  And the time to begin is right now. 

Funeral for a Friend?

The current political and social climate has called the world of investing into serious question, with issues from moral to economic to pragmatic being actively examined and debated. One of the main dialogues centers around an examination of the creative destruction that occurs when firms merge or are acquired. While generally viewed as a good thing from a business perspective, the current social debate is asking if the jobs lost and lives disrupted may be too high a cost to pay for the increased efficiency that mergers and acquisitions typically create. But hidden in this issue is another key distinction that social entrepreneurs can leverage to bring about the change they seek.


The reasons that business merge are really pretty simple, and the benefits are quite clear. Two organizations can operate more efficiently if they can share the back office costs that are an essential part of any venture. The aggregated talents of the two leadership teams can bring even more expertise to the markets the firm serves, allowing for increased value to be delivered to the customer. Often, the two firms serve complimentary markets or products that can be combined to make a broader or deeper offering, which then attracts a wider range of customers. It can also be a great way for an owner who has put his or life into the business to get the cash they need to retire comfortably. From just about every business angle, it’s a good thing. So good, in fact, that it often is the cause for significant celebration. And some of the folks involved in the transaction make a pretty good paycheck advising in these matters (In fact, one of my best friends, and one of the most honorable people I know, is an attorney working in this space – so I know first-hand that not everyone in M&A is abhorrent). In a commercial context, mergers and acquisitions are a good thing.

As I made the transition from commercial to social entrepreneurship, I was amazed to find that in the social benefit space, the exact opposite is true. Most of the time, when two nonprofits merge, or one is acquired by another, we don’t hold a party – we hold a funeral. There a lot of anxiety and wringing of hands and the general sense is that “we’ve lost another great program”. The same facts that are almost reflexive in business – greater efficiency, broader service base, deeper reach – are rarely mentioned or even though of. And yet, isn’t that exactly what we want for all these mission based ventures that we love so much? How many fundraisers, charity balls, silent auctions or phone –a-thons have you been involved in where the goal of the funding is to enhance the mission’s ability to serve by buying equipment that will make is more efficient? Why are we not considering the possibility that this very same equipment might already be owned and sitting underused in a brother or sister organization with a similar mission? And that this same organization might be struggling to meet budget in part because they’re struggling to pay off the blankety-blank equipment?

So here’s the part that is really frustrating. When a commercial M&A transaction is completed, the economic benefit goes to a few - mostly the owners and investors in the entities involved (which is why folks like the occupiers are so stirred up). When a similar transaction occurs in a social benefit context, the value can be plowed back into the mission – effectively doubling or tripling the increase created by improved operations.

Maybe instead of blaming the tools, we should start to talk about the motives of the carpenters. Just like a hammer can be used to build a house or break a kneecap, the tools and techniques that are common in commercial enterprise can be used to even greater good in a social benefit context. By combining forces, leveraging key resources, forming joint ventures, building strategic alliances and yes – even merging and acquiring synergistic firms, we can redeem the process and restore capitalism to its original honest intent. Who knows, we might even convert some of the great minds working in the commercial sector to our cause. At the very least, we’ll have a much stronger social sector, more celebrations - and a lot less funerals.

Let the angels be angels

"The fault, dear Brutus, is not in our stars, but in ourselves"

Whenever the holidays roll around, I always have to pull out the VHS player and pop in my ancient copy of "It's a Wonderful Life" (I've seen it so many times now, I cry at the opening credits). No matter how cold and cynical you are, you gotta love the end, when little Zuzu tells her father that "teacher says every time a bell rings, an angel gets its wings".  Now, in venture capital, the term "angel investor" refers to those early stage folks who see passion and vision and are willing to put money into an unproven idea to see if the wild eyed dreamer can pull the idea together (And this kind of angel doesn't get wings, he gives them). It's a key role at a critical time in the growth of a new venture.

So what has all this got to do with social benefit organizations? Well, quite simply, there is a hole in the funding cycle for social innovation, and we need to let the angels be angels. Allow me to explain.

Most old school non-profits are primarily funded by grants. And they depend on that critical relationship with a local foundation to feed them, year after year. But then one year, the foundation comes to them and starts to talk about sustainability - which the nonprofit correctly interprets as a signal that the gravy train is about to come to a halt. So there is much wringing of hands, and pleading, and maybe the grant is cut but they get another year - mostly because they are good and decent folks who hate like h**l to kick a good program to the curb. But nobody's really happy, because we're not letting the angels be angels.

What foundations really want is to spark new ideas, help build new models and drive change. It's also something they're very good at. But the need to fund the ongoing operations of projects they already support becomes a significant limitation, hampering their ability to seed new projects - and (sorry but it's true) it’s the nonprofits that are to blame for this.

When a social benefit organization clings to old funding models instead of embracing new ways of capturing value created by awesome programs, they tie the hands of the very folks who could help set them free. And the answer is right in front of us.

"I freed a thousand slaves - I could have freed a thousand more if only they knew they were slaves"

Any commercial entrepreneur can tell you what each stage of funding is for, what it can do and how it works. A vision that needs to be fleshed out? That's either bootstrapping (you use your own money) or the three Fs (friends, family and fools). Once the idea has some solid thinking behind it, then it's time for proof of concept (can we make this thing work?), and  that's when you need an angel.   Once the concept it proven, then more sophisticated investors will be involved - debt instruments to fund acquisition of capital for assets, for example (and by the way - if you consider yourself a social entrepreneur and you're not hip to what's happening in impact investing, you're just not hip).

In the social benefit space, that same continuum doesn't yet exist. It takes a much more sophisticated and determined effort to piece such a process together - it's still a ladder with several rungs missing. But despite the protestations of our peers and colleagues, it's not the philanthropic community that's holding us back. Even though this is entrepreneurial finance 101, the vast majority of socials entrepreneurs (doing an amazing job of driving social innovation btw) still think of foundations as the best source for ongoing operating income. And as long as we keep behaving this way, we'll keep having the results. On the other hand, if a few brave folks break free, it makes it much easier for others to follow suit.  Program related investments, social impact bonds, pay for performance are all efforts that are moving us in the right direction. But we need more - much more.

Casuis was right - it is a problem of our own making. The good news is that means it is also a problem that we have the power to solve. We just need the courage.

"But I could show my prowess, be a lion not a mou-ess; if I only had the nerve"