A Sane New Year

There’s an old saw that says that Sigmund Freud defined insanity as “doing the same thing over again and expecting it to come out differently”. Now with a little spin around the interwebs, it turns out that maybe it was Benjamin Franklin, or Mark Twain, or nobody at all. And maybe it doesn’t really define insanity after all. Maybe it defines the way we as Humans learn to change behaviors over time. Like the way that you learn as a child that holding your hand over a candle will burn your hand, so you don’t do it again. Regardless of the source, or the condition it describes, it seems pretty easy to see that the rational adult would seek a new mode or method when the old one no longer works. Too bad that most of us are not nearly that mature.

All of this came to my mind the other day while meeting with an organization that wanted me to volunteer to help with fundraising. It’s a local mission that I care about and have personally benefited from, so I was happy to have the conversation (actually two separate conversations of about 90 minutes each as it turned out). There was a lot of social value being produced by these folks, and a lot of potential interested parties. There were significant opportunities for commercial partners, any number of ways to monetize the social benefits they were producing.

Our discussions were very interesting. We talked about the incredibly low return on investment that most programs accrue from the typical fund raising gala. We spent a lot of time talking about how the traditional grant-seeking process is not working particularly well these days. We even talked about how little time many folks spend in working with a grant maker before they submit the proposal, and that the real source of philanthropic support is the private donor (a source they have not even begin to tap – even though the membership roles were filled with people of means). They asked a lot of good questions. We wrapped up the conversations with a commitment to follow up in a few weeks.

About 10 days later I got an email from the primary contact thanking me for my time and telling me that the board had decided to pursue a strategy of grant writing and “maybe a few fundraising events”. So here’s a group of folks that are openly admitting that the exact methods that haven’t worked for them before are the ones that they are going to use going forward. Why? Well, as they said to me, it was because all of this earned income and social benefit stuff was kind of new and hadn’t really been proven to work. So rather than take a shot with something that might work, they chose to stick with something familiar, even if it didn’t work.

So maybe that quote from Freud (or Franklin or Twain or whoever) isn’t really the right fit for this problem. Maybe the better notion is that “Change happens when the pain of holding on becomes greater than the fear of letting go” (attributed to Spencer Johnson but with an equally checkered pedigree). And while I certainly understand how an organization can come to the conclusion made by my friends (who – by the way, received my membership renewal and a small donation), my hope for all of us in the coming year is that we will have the courage to step out into this new world of funding freedom, where social benefit organizations are recognized and rewarded for our ability to create value far beyond that recognized in the commercial world.

That we won’t wait until the pain of the old model becomes so bad that we are forced to try something new. That we, as social innovators, can model mature and sane behavior, learn from the past, and make great change happen. That we make a resolution – to try.

The Donor you should marry

Do you remember that girl in high school who said she thought you were kinda cute but she wouldn't go out with you because you couldn't quote Shakespeare (or couldn't stop quoting Shakespeare)? Well sometimes, the old school method of funding social benefit, the world of grants and gifts, is kind of like that girl.

If we're honest with each other, we can all tell stories about that donor with the huge potential who made us go through twenty seven revisions to the proposal and ended up with a much smaller gift than you'd started out with that funded something that wasn't really key to your mission. And you did the gift letter, and put the donor's name on the side of whatever it was he funded. Why? Because you knew that your payroll account was a month from running dry and you needed the money. Or because you had some fundraising goal that the Board had set and you knew that this one would put you over the top. But did it really move the mission forward?

The other day, I found myself in another one of those discussions about what does and want doesn't qualify as a social enterprise. Now, I can get down into the weeds as easily as the next guy, but c'mon now - this is not what we're here for. To me, social entrepreneurship is not about percentage or definitions. It’s about changing the conversation and leveling the playing field. Having earned income gives you the freedom to say no thanks to that big donor that's not the right fit and would love to fund you if you just change the program a little bit. I can hear him now - "what you should REALLY do is....... (whatever crazy idea it is that I want to see my name on)".

Didn't we learn that lesson in high school? That cute guy who wants you to grow or shrink some portion of your anatomy? That really hot girl that's out of your league but would date you if you could only quote Shakespeare or stop quoting Shakespeare (actually it was my obsession with the philosophical insights of Warren Zevon, but that's another post).

The thing that earned income does is allow you to be free of the one sided conversation that is at the heart of donor based funding. When all we can do is beg and say thank you, we have absolutely no bargaining power, so we must (and do) take whatever we can get. And it's also not about what type of earned income it is. We get the same freedom from a direct business/service model that generates income and also matches the mission as we do if we're a subcontractor providing services as a proxy for another entity. Even a service delivery contract under a government grant does the trick (although with the state of government funding these days, I'm not sure that the long term cash flow is all that stable). Anytime we can create some financial space between us and that donor with the 27 revisions, it's a good thing (and don't think for a second that the donor doesn't sense that you're desperate - they can smell the sweat even if they don't know it consciously).

You see, the reality is that not every social benefit organization is a good fit for an earned income strategy. There are times when a direct business/service model can serve to generate earned income for a social program. There are far more times when an existing social program can produce outcomes that are valuable and can be monetized

Now I do recognize that there is a need for distinctions in order to be able to do analysis and make observations about any situation - hey, I can geek out with the best of them. But if we spend our energy on those definitions, then it's that much less energy that we can spend on actually moving the dial.

To go back the high school dating metaphor, the real issues is that desperation is unattractive and confidence is sexy. And earned income gives you that confidence. The confidence to believe in what you're doing. The confidence to know that the social change model you've worked so hard to perfect is the right one, and it's making a difference in people's lives. And when you can walk with your head held that high, that's when you meet the girl who really gets you. The one who can quote Shakespeare even better than you. And her, you marry.