Colleen Dilenschneider

A Theory for Breaking Through Nonprofit Sector Constraints

It seems that, without even knowing it, we’re all working together to limit nonprofit innovation.

In the nonprofit sector, risk (an important element in innovation) is stifled due to nonprofits’ need for multiple stakeholder acceptance in order to survive. This makes large-scale change difficult, if not impossible, and the only way that we will solve this is if we put our minds together to think about it.

Let’s take the hot topic of increasing salaries for nonprofit leaders (though we could pick any topic that challenges perceived sector constraints). A nonprofit might seriously consider higher salaries in order to attract high-quality leaders, establish itself professionally, or ensure that competition for the position allows the organization to choose– or continue to motivate– the best candidate for the job.  This could be a great idea. It could work wonders. But questioning sector constraints at all is often much like trying to give a big hug to a hand grenade. Here’s why:

  1. The board and staff will need to approve this risk. In the case of increasing employee salaries, they will consider that every extra dollar given to a staff member is a dollar that could be spent on programming. These immediate stakeholders must believe in the potential of the idea.
  2. Then the nonprofit will have to face the multiple foundations that may no longer award the nonprofit otherwise-much-deserved grants because their administrative costs exceed (or come close to) a percentage set by the foundation in advance.
  3. You have to face the people who don’t understand why you made this change (regardless of its nobility), and the media may tear you apart. Even worse, other nonprofit leaders at The Chronicle of Philanthropy may even give you bad press for trying to take a risk to aid in sector evolution.
  4. Your amount of in-kind donations over the year may suffer because of the bad press– which defeats your whole attempt at innovation because you can no longer afford to pay a higher-than-before salary to your employees… so you are back where you started– but with fewer funds, a lot of bad press, alienated foundation connections, and unhappy employees.

In the private sector, innovation breeds new business practices and monetary success. The system is quite simple: a firm must gather capital to take a risk, take that risk, and if the company makes a profit, they are onto something. Other companies catch onto the company’s new tactic and next thing we know, every company has to be doing that innovative thing in order to continue to stay in the game. The same is true for nonprofit organizations except, in the nonprofit sector, raising capital may mean raising social capital.

 

Please click on the image to enlarge

So what can be done to alter sector constraints in order to allow nonprofit professionals to be innovative in organizational management?

First, double loop learning must take place. Double loop learning occurs when leaders question their own basic assumptions about the world. Single loop learning, by comparison, is the tried-and-tested routine that we fall into when we do everyday things like write grants and conduct meetings– but we also use single loop learning when we devise wages (continuing with the case of nonprofit salaries as our example). We have an idea of what works and we stick to it. Double loop learning, on the other hand, makes us ask ourselves, “Why do we do X? Maybe I should be doing Y.” When we ask this question, possibilities are born.

Second, the nonprofit must be transparent about their new idea and share it among networks. The nonprofit could ask for input via social media networks, get dialogues going with staff members; make everyone (stakeholders especially) aware of the possible benefit of taking this risk. This includes spreading word about the importance of innovation among stakeholders, the public, and other nonprofit groups. Technology is a great mechanism for information-share, and getting brain juices flowing. Who knows? A few other nonprofits may consider the idea and try it out alongside you.

Through this, social capital is created. Spreading the message creates connections. Asking people for their input (even if it’s negative) creates connections. Connections build social capital. Social capital increases overall support of the new practice because friends and community partners can share your idea with their own networks, and become part of idea formation and collaboration.

Then intellectual capital is built as stakeholders become educated on the issue. The more people hear about the issue, the more educated they will become on the need for innovation, or rather, the more accepting they will be when you actually follow through in challenging sector constraints. Lets go back to the example of a nonprofit taking on higher administration costs to motivate employees. If we learn that there’s a nonprofit leadership deficit on the way, then we may be more likely to outwardly encourage and support (or at least understand) nonprofits that are raising employee salaries.

And finally, the innovation is accepted. This does not mean that people will agree with your new (hopefully) innovative practice– but, because of your transparency, they will fully understand why you have challenged sector constraints, and also that you have the best interests of the community you serve at heart. And whether they agree with the idea or not, folks may be more inclined to respect the idea. Foundations may still award grants to the organization, and donors may stick around for at least another year. Who knows? Maybe your active desire to contribute to the sector and your fresh views of management will earn you a few more donors.

This theory is just that: a theory. I do not know how to encourage nonprofits to take responsible risks and challenge constraints that hold them back in serving their mission. I do know that, if the sector means to evolve, nonprofit leaders must begin to think about blazing new trails— and we should think about ways to allow them to do so.

Posted on by Colleen Dilenschneider in Sector Evolution, Trends 8 Comments

Keep The Ride Alive- A Tradition to Celebrate the Power of the Individual

Daisy Keeps the Ride Alive this year in Bloomfield Hills, MI.

‘We are called a nation of inventors. And we are. We could still claim that title and wear its loftiest honors if we had stopped with the first thing we ever invented, which was human liberty.” – Mark Twain

On the April 18, 1775, Paul Revere and other riders set out to warn American farmers and villagers that the time had come to fight for freedom. As individuals, these riders combined to help launch our country’s quest for independence – an independence that gave each of us the opportunity and freedom to engage our own individual “rides” that can make a difference.

So on April 18th, we salute Paul Revere and the others who fought for our freedom. They demonstrated the power and potential of a single individual.

Since 1997, on April 18th, people all over the country and around the world have celebrated Paul Revere’s ride by wearing the KEEP THE RIDE ALIVE T-shirt. On April 18, 2010 look for people wearing shirts with “KEEP THE RIDE ALIVE ALIVE” in black letters on the front and “235 YEARS” on the back – with a black and white picture of the traditional bald eagle… and remember to keep your own ride alive.

When my family started this symbolic shirt-wearing tradition in 1997, we made and distributed only 9 shirts with iron-on letters. From that day onward, the tradition has been growing. My family now makes and distributes over 300 free shirts to willing participants each year. Shirts run out quickly, and often folks in our high schools and colleges have made their own shirts with fabric markers to celebrate the day when supplies ran low.

During my college years, a majority of the shirts were worn on The University of Chicago campus with large amounts often found at the University of Notre Dame and the University of Wisconsin-Madison campuses (where my brother and sister attend(ed) school). Since our college friends have dispersed, the tradition has made even wider impact– with shirts being worn in nearly every state in the U.S. (including Paul Revere’s House in Boston) and beyond to Canada, Scotland, Japan, Dubai, and other countries.

The tradition is not meant to be political– but rather patriotic and a collective celebration of the important role that each individual plays in the world. I want to share it with my readers here at Know Your Own Bone because I believe that in order for people to be their best and contribute to the evolving world, they must understand and celebrate their individual worth.


Henderson House Keeping the Ride Alive, 2004

Alpha Omicron Pi Keeping the Ride Alive, 2005

Folks caught walking around campus, 2006.

A few ladies keeping the Ride Alive in 2007

Keeping the Ride Alive during Seder dinner in Seattle in 2008

Keep The Ride Alive Shirts from 1998 – 2010 laid out on Jackie Wild's bed in Wichita, KS.

Happy Paul Revere Day, readers! Please take a moment today to think about how you have contributed, not only to moving along the nonprofit and museum worlds, but about the impact you make every day in the lives of loved ones, and the greater context of your community.

Posted on by Colleen Dilenschneider in Miscellaneous, Nonprofit Marketing 1 Comment

Perhaps We’ve Got it Backward: Businesses Are Turning to Nonprofit Practices

Photo credit to agentgenius.com

More and more for-profit companies are beginning to function like nonprofits– and perhaps for good reason. It seems that nonprofits are becoming less like slow-to-pick-up organizations, and a little bit more like the sector that’s onto the trends.

There’s a lot of talk about how nonprofits gain by functioning more like businesses. Among other things, nonprofits must keep up with the innovation taking place in the for-profit sector, or nonprofits will be weeded out by for-profit competition.  But  nonprofits are not the only ones looking to other sectors for inspiration. In fact, nonprofits have a few things going for them right now that for-profit companies seem to really want:

1. Competition

Companies will need social missions to attract the next generation of customers. In fact, according to a USA Today article, 69% of Gen Yers consider a company’s social commitment when deciding where to shop, and 83% will trust a company more if it is socially responsible– and that’s just attracting customers! Companies will need to step it up a notch if they want to hire new MBAs and MPAs (whom are increasingly socially conscious, by the way). The next generation is civic-minded and cautious in regard to where and how they spend their time. And on top of all this, the human race as a whole is evolving into beings that value kindness.

Companies are already publicly rising to the occasion and deep-rooting their identities in crowdsourced cause marketing. The Pepsi Refresh Project, American Express Members Project, Google Project 10^100, Chase Community Giving, and Target’s Bullseye Gives may be just the tip of the big-companies-crowdsourcing-for-social-good iceberg. Not only are these companies recognizing their need to “do good,” but they are making it a part of their social identity by fostering communication and asking communities to participate in choosing where their money goes. Recently, this has helped for-profits build up legitimacy in yet another area where nonprofits (as opposed to for-profits) are known to shine…

2. Communication-

Nonprofits are said to be kicking private sector booty in building relationships through social media. They have quickly taken up this way of telling stories and spreading social missions. Sure, social media has its serious pluses for nonprofit organizations: it’s generally affordable, it can be done by a volunteer, and site visits and bit.ly clicks are measurable (an often-rare quality for activities taken up by nonprofit organizations). But most of all, social media is a hit for nonprofits because the ability to connect, ignite excitement or empathy, and create and maintain strong interpersonal connections has always been an element of survival for nonprofits– both on the administrative end and in the front lines. The community engagement– as well as individual connections– that nonprofits are often able to summon is an object of desire for private companies in the evolving world. The days of putting a product into the world with an overarching one-way message are coming to an end. During this time, companies will need to steal and ingrain the nonprofit practice of building meaningful connections in order to thrive.

3. Costs

Amazon’s Jeff Bezos is credited for saying, “I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.” This could have come out of the mouth of any nonprofit CEO out there. Granted, the for-profit sector has an arguably greater ability to take risks than nonprofit organizations, which have several stakeholders and constraints beyond the budget. Bill Gates proved that scrappiness and frugality were the way to go back in 1976 when he created Microsoft. In fact, Guy Kawasaki dedicates an entire chapter in his book, The Art of The Start, to bootstrapping. In the current economic climate, there’s a need for businesses to reevaluate spending. In this case, it is less that businesses want to be more like nonprofit organizations– they have to be.

Nonprofits are not often thought to be business trend-setters. Perhaps that’s why the nonprofit sector– as a whole– don’t seem to take the time to pat themselves on the back. Right now, nonprofits are onto something. Social missions are in. Personal connections are in. Even endearing scrappiness is in.  Instead of looking longing at the for-profit sector’s freedom and financials when it comes time to allocate resources or cut already-decreased spending in nonprofit organizations, we should take a moment to focus on the sector’s incredible strengths. Nonprofits, it turns out, are teaching private companies a thing or two about how to connect to communities and champion a good cause.

I owe a thank you to Dr. Peter Robertson, a professor of organizational behavior within USC’s School of Policy, Planning, and Development, for raising an eyebrow and saying, “I think in the future businesses will function as nonprofits,” when I spoke nonchalantly about nonprofit evolution to private sector practices during a recent meeting.

Posted on by Colleen Dilenschneider in Trends 5 Comments

The Nonprofit Manifesto for Generation Y Leaders

USC Price MPA

Attributes of Generation Y will shape the nonprofit sector as oldest members of the generation turn 30 and take up more powerful positions in organizations. Just for fun, I’ve combined some of my generation’s stereotypical characteristics to create a little manifesto for generation Y nonprofit leaders. I present (trumpets, please):

1. Thou shalt question perceived sector constraints and manage according to what is best for my organization

I will manage my organization with an eye for each unique situation, and I will not back down when perceived sector constraints stand in the way of progress in achieving a social mission. I will channel the entrepreneurial spirit of my generation and nontraditional leadership skills in order to come up with creative solutions. I will consider accepting high administrative costs if it will bring me better leaders and that is what I need. I will produce products and sell them to support a mission. I will employ business best practices suitable for my situation. Above all, I will ask, “Why not?”

 

2. Thou shalt manage with professionalism but understand the importance of soft skills

I will lead with compassion, kindness, professionalism and a strong sense of morality. I will not let my feelings jeopardize what is best for the organization or let things slide for employees just because it is a nonprofit organization. I understand the growing importance of soft skills. I will combine hard and soft skills to cultivate a culture of both compassion and professionalism.

 

3. We shall remain the sector of interpersonal relationships under my watch

I will share my organization’s mission and the captivating stories of the communities I serve. I am civic-minded and social, and will create and develop personal relationships with individuals who share the desire to improve these communities. I will be driven, passionate, imaginative, hopeful, and ambitious within reason.  My demonstration of this sincerity will contribute to the fire of the sector as a whole.

 

4. Thou shalt realize that I do not own social change

My generation understands that what matters is getting the job done in achieving a social mission. My organization and even the nonprofit sector itself does not own social change. When I do contribute to change, I understand that often credit belongs not only to myself, but to employees, donors, volunteers, corporations, and often entire communities. Often, the private and public sector are just as capable of serving social missions as the nonprofit sector, and can effectively evoke positive change. For me and my generation, making a difference is important, regardless of sector.

 

5. I am not better than anyone else because I am motivated by public service.

I derive utility by helping others. I understand that some individuals do not share the same primary motivation, and I respect this. Many individuals working in the private sector do, indeed, want to help others, and they will become some of my organization’s most valuable donors and terrific friends.

 

6. Thou shalt always be brainstorming

I will be constantly thinking of ways to make my organization more efficient and brainstorming innovative ideas. I understand that brainstorming may produce many unwise ideas that I shall not act upon, but great possibilities arise from brainstorming as well. I will read blogs, utilize the internet, and engage my networks in coming up with creative solutions to problems facing my nonprofit organization. I will utilize my spirit of collaboration to work with others to come up with new ideas.

 

7. Thou shalt expect employees to take time to rest

The nonprofit sector is strongly associated with burnout, but I will change this because I understand the importance of work-life balance. Giving employees adequate rest, reward, and relaxation will make them happier and clear their minds so that they may produce higher quality ideas. Allocating time for my personal life makes me a better, happier leader and I understand and expect that employees need this time as well. I will be sensitive to burnout.

 

8. Thou shalt bring an understanding of social media to the table

I am part of the first generation raised with computers, and I understand the importance of generally keeping up with technological advances. Social media and online marketing skills are of growing importance in nonprofit organizations in this day and age. Staff and board members can generally look to me for guidance in understanding social media.

 

9. Thou shalt seek mentors in every organization

I believe that older employees have valuable wisdom to share, and I will actively seek their guidance. Especially in nonprofit organizations, I count on older employees to pass along the culture and unspoken ideals upon which the organization was founded. I respect this culture, and I will handle it with care– even if it must be transformed for the good of the organization. I believe that there is much to be learned from older employees and I am appreciative of their mentorship.

 

10. Thou shalt understand that the world is always changing and that sector practices must evolve according to those changes

I understand that working in the nonprofit sector is not easy.  There will be ups and downs in every organization and throughout the sector. Some predict that we will face a severe 2016 leadership deficit. Others predict that increasing CEO salaries will bring better leaders to the sector. Whatever the future brings, I will summon my talents to tackle problems facing not only my organization, but the sector as a whole.

Do you agree, disagree, have points to add, or just want to give your seal of approval? Please share in the comment section!

 

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Posted on by Colleen Dilenschneider in Millennials, Nonprofit Marketing 8 Comments

How to Lead with Empathy: Read Fiction

It’s no surprise that great change-makers and business leaders (like Barack Obama, Bill Gates, and Nelson Mandela), when asked about their favorite book, say something like “The Great Gatsby” rather than “How to Make Friends and Influence People.” Perhaps this is because fiction influences people in its own right; it makes readers better leaders.

Looking to hone your leadership skills? Here are five reasons why you should pick up a work of fiction:

 

Hemingway's 'For Whom the Bell Tolls' is a favorite book of President Barack Obama and Vice President Joe Biden.

1. Fiction helps you understand other people’s emotions.

A study by the Journal of Research in Personality uncovered that readers of narrative fiction score highly on tests of empathy and social acumen. Not only that, but they score more highly on tests involving social reasoning . This kind of skill allows great leaders to connect with others on an emotional level, and it provides them with the emotional basis to tell compelling stories that engage others.

 

2. Fiction increases social ability.

Reading fiction puts you in somebody else’s head, and studies show that this is good practice for us in our ability to relate— not just to people on a one-on-one level– but to groups and in differing social situations. Fiction provides information on how and why people react to combinations of social forces, and by putting ourselves in the mind of the main character, we are challenging our own perspectives. This skill comes in handy for every leader, but you can imagine that a politician without high levels of emotional intelligence and with a less-than-perfect ability to maneuver socially might not retain favorable polls for very long.

 

3. Fiction enriches brain functioning.

Of all of our organs, the brain is the only one that will continue to grow and function if we nourish it properly. Reading fiction provides your brain with new scenarios that buff up our brains. And fiction gets us more involved than you might think: our brains are responsible for constructing the voices, appearances, gestures, and even smells of characters and scenes in novels. When we watch a play or see a film, many of these interpretations are resolved for us– so here’s a brain-enriching tip: read the book before you see the movie.

 

'War and Peace' became Nelson Mandela's favorite book when he read it during his years in prison in South Africa.

Nelson Mandela first read his favorite book, 'War and Peace,' while in prison in South Africa.

4. Fiction makes you more creative.

According to research conducted at Emory University, the brain’s reward pathways respond more strongly to unexpected stimuli rather than expected stimuli. Fiction, more so than other genres of literature, provides the most unexpected stimuli. Readers’ brains light up as they face new scenarios. Being exposed to these kinds of creative forces teaches our minds to think and act creatively in return. Want to perfect your creative problem-solving skills? Studies say that detective fiction will help.

 

5. Fiction makes you smarter. Fiction makes you smarter in two ways. First, reading has been shown to increase vocabulary and vocabulary is arguably the best single predictor of occupational success. Second, fiction exposes you to different time periods and cultures. It’s impossible to read The Great Gatsby without getting a sense of the prosperity of the roaring twenties in America. The Grapes of Wrath takes readers back to the Great Depression. Not only do readers get a professionally beneficial dose of vocabulary by reading fiction, but they also get an engaging history lesson and taste of other cultures.

Posted on by Colleen Dilenschneider in Miscellaneous, Nonprofit Marketing 1 Comment

When Art Museum Directors Talk Trash, Everybody Wins.

Directors at the Indianapolis Museum of Art (Max Anderson) and the New Orleans Museum of Art (John Bullard), after a series of playful trash-talking, have made public bets on who will win the Super Bowl this weekend… and they bet famous works of art.

"Ideal View of Tivoli", 1644, by Claude Lorrain, Which NOMA will loan to the IMA if the Colts win the Super Bowl.

JMW Turner's The Fifth Plague of Egypt, 1800, which the IMA will lend to NOMA if the Saints win the Super Bowl.

The wager: If the Colts win the Super Bowl, the New Orleans Museum of Art will lend Claude Lorrain’s, Ideal View of Tivoli, 1644, to the Indianapolis Museum of Art for three months. If the Saints win, on the other hand, the Indianapolis Museum of Art will lend out Turner’s The Fifth Plague of Egypt, 1800.

 

But it doesn’t matter who wins the Super Bowl this Sunday. Anderson and Bullard are winners in spreading their missions either way– just because they made the wager. Here’s why this bet is a step forward for museums in terms of mission and community engagement (and the reasons are cooler than you think):

 

1) The bet will build community and mix popular cultures.

Makes sense, right? Being a sports fan builds a sense of community; it’s something that a group of fans come together to care about. The art directors’ bet piggy-backs the art museum culture with the sport-watching culture, which is one of passion and identity. And why shouldn’t communities feel the same sense of ownership and connection with their city’s art museum as they feel with their city’s sport teams? Anderson and Bullard are demonstrating pride in their cities by making the wager, and aligning themselves directly with the members of the community- all of whom are also hoping for a win on Sunday. Anderson and Bullard are saying that the museum cares about a win just as much as the rest of Indianapolis and New Orleans do- and they’ll put their money where their mouth is. In turn, the community knows that folks representing the IMA and NOMA will be gasping, cheering, and shouting their lungs out along side them as they are watching the game; it’s a powerful thing. On the first day that the Lorrian is on display at NOMA (or Turner at IMA), a local will stand in front of it and say, “We won the bet!”

 

2) Scientifically speaking, the bet lights up the brains of art-lovers.

… but not in the way that you’re probably thinking. Many museums have missions to educate- and this public wager does just that. Of course, you learn a thing or two about art while looking over the give-and-take that led to the final wager (I certainly didn’t know that the Indianapolis Museum of Art owns a farm). Interestingly, a 2008 study from The University of Chicago finds that spectators’ brains light up when talking about sports, and their language skills are improved. According to the article, “the region of the brain usually associated with planning and controlling actions is activated when players and fans listen to conversations about their sport.” Most obviously, the bet encourages museum-fans to watch their city’s team (if only for hope of gaining a Turner or a Lorrain in their town) and art-lovers are exposed to this benefit. Or at least I will be, as I was neutral about the outcome of the Super Bowl until I realized that I will be in Indiana in the Summertime…

 

3) The bet makes art aficionados biologically happier.

To non-sports fans, the bet may seem silly– but sports fans are less prone to depression than those disinterested in sports. Gambling also increases dopamine levels in the brain, making fans– of the museum and the teams–happier. It’s a welcome change of pace, especially since human beings are hardwired to avoid conflict and we usually think of museums as on the same team. This is not to say that art museums should go betting works of art left and right, but it is to say that the friendly competition is an exciting and healthy change for museum lovers. After all, scientists credit social competition for human beings’ increasing brain-size. So thanks for keeping us happy, Anderson and Bullard– and for expanding our brains.

 

4) The bet has sass- and so do museums.

This wager makes Robert Smithson look silly for saying, “Museums are tombs, and it looks like everything is turning into a museum.” Well, at least the first part looks dumb. Case in point: check out these trash-talking (friendly) tweets. Anderson and Bullard challenge the notion that museums are cold, static, outdated, and lifeless places. These museums have attitude, and they are acting in regard  to current real-life situations. As for the last half of Smithson’s quote, it seems that everything is turning into a museum– or more accurately, museums are turning into places for everything… like friendly community-building wagers.

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Trends 5 Comments

Lessons from Haiti: Mobile Giving in 2010

This post is a prompt by the Nonprofit Millennial Bloggers Alliance to further increase awareness of the Haiti earthquake and its victims, and highlight take-aways for nonprofit organizations and their supporters.

A (made-up) business card with a call to action.

Since the 7.0 magnitude earthquake in Haiti last week, American’s have been publicizing ways to give to those affected by the crisis– and we’ve raised well over 150 million dollars for the cause. 11 million dollars have come from a single donation method: texting. (and this is already outdated! Mashable was encouraging readers to donate in order to raise 20 million dollars by midnight last night through the Red Cross Text Message Campaign alone.)

Folks can donate $10 from their cell phone bill to Red Cross relief efforts by SMS texting “HAITI” to 90999, or donate $5 to Yele Haiti’s Earthquake relief efforts by SMS texting “YELE” to 501501. It’s the cool, new way to give. It’s easy and it adds up. Though this method of giving is not ideal for the Haiti crisis (as funds need to be delivered immediately and may be held up), the widespread popularity of this method of giving offers a new strategy for nonprofits’ to incorporate in their fundraising plans. There’s reason to believe that nonprofits who can work with organizations like the Mobile Giving Foundation to incorporate mobile giving will see, as evidenced through text-based giving to the Haiti crisis, an increase in donations and a new kind of donor. Here’s why:

 

It’s easy to give through text. The average American sends 14 text messages every day, and as a country, we send 4.1 billion text messages each day. Mobile phone use has continued to increase for years. In order to give, the donor doesn’t even need to get his or her credit card ready. He or she simply sends a text message and the donation is taken from the donor’s cell phone bill. The easier it is to do something, the more likely people are to do it. We all know how to text, so we all know how to give.

 

Mobile makes it cool to give. Cell phones are providing us with the newest and easiest ways to do everything. You can manage your bank account with your iphone or use it as a GPS. The ability to give via text message is another cool, new way for Americans to use a convenient tool that they already love. It combines technology and giving. There’s instant appeal.

 

Small donations add up. Donating $10 to Haiti via text message does not sound like a big donation– but American’s have collectively donated over 11 million via text (at the very least); that’s more than 1,100,000 people using their cell phones to donate to Haiti. Nonprofits could, over time, raise a lot of money for their cause. What if nonprofits add the call to action in their e-mail signature or on business cards? It’s an open door to easy giving that can lead to major funding.

 

Small donations build relationships. A downside to text-based donations is that it is one-way giving. Though it is up to the donor to follow-up and continue to build a relationship with the organization/make themselves known, the first step of the fundraising pyramid has taken place because the donor felt connected to the cause and contributed. Nonprofits should utilize text-based giving to strengthen their fundraising efforts– especially if they are active on Twitter, Facebook, or other types of social media where they have many fans, but are having troubles transforming them into donors.

Posted on by Colleen Dilenschneider in Trends 6 Comments

The Nonprofit Leadership Deficit Won’t be as Bad as We Think

The Bridgespan Group released a study in 2006 revealing that we’ll need a staggering 640,000 new nonprofit senior managers by 2016 (that’s 2.4 times the number currently employed) to fill the leadership gap left when baby-boomers retire. We talk about this all the time. Thomas Tierney has famously driven the subject home: we’ll have to recruit the equivalent of “more than 50% of every MBA graduating class, at every university across the country, every year for the next 10 years.” And, according to the study, we’ll need 78,000 new senior managers in 2016 alone. That’s a lot of people!

Though we rightfully take this study very seriously in the nonprofit world, the deficit will not be this bad. The study is only three years old, but it is already outdated because it assumes that the nonprofit sector will function in the exact same way in 2016 as it did in 2006. Though there will most likely be a gap when baby-boomers retire and it is in our best interest to mentor and train emerging leaders, here’s what we need to remember about the deficit prediction:

 

1. Nonprofits will always evolve to maximize their allocation of resources (or, the world keeps moving):

  • Public, private, and nonprofit sectors will need to defy the most basic rules of economics in order to hit the high numbers on this leadership deficit. For instance, according to the study, we’ll need an extra 2,000 more leaders than we do right now just because there will be more nonprofits- and nonprofit organizations have larger senior leadership teams than for-profit companies. Organizations will evolve based on their needs; that’s economics. They will learn how to appropriately allocate their resources. If there’s a leadership deficit, nonprofits will think long and hard about their existing capabilities before spending excessive hard-earned resources trying to attract an unnecessary and endangered nonprofit leader.
  • The study predicts a relatively steady increase in numbers of nonprofit organizations throughout the decade following the publication (2006-2016), but the recession took a toll on nonprofits in 2009 and 30% resorted to layoffs- which means that there are fewer nonprofit employees now than there were at the start of 2009. Tierney admitted in his 2006 article that things could happen to lessen the number of nonprofit organizations, but the fact remains that something has already changed the projected numbers.
  • 9,000 nonprofit leaders are predicted to transition out of the sector in the next decade, but the study does not take into account senior managers that might be transitioning into the sector. It’s not a no-entry zone; people will want to be coming in. At some points the nonprofit sector may be more or less popular, but let’s assume that over the decade 9,000 leaders (the same amount that transitioned out) will transition into the sector. Though those transitioning out should certainly be added to the number of leaders we’ll need in general, there’s no certain deficit here. It’s the way the world turns.


2. We are entering an era of social responsibility and a desire to make a difference (or, enter: Generation Y)

  • Will there be a smaller supply of people to fill the roles left vacant by several thousand baby-boomer retirees?  Yes. A shorter supply of leaders, though? Probably not. Generation Y is itching to make a difference, and they have the (nontraditional) skills to do it. With the onset of a new generation and a different kind of leader, it seems natural that trends assumed by the article will change– and even if they don’t, we’re looking at a generation who prefers to work for the social good. Tierney dedicates a portion of his article to the projected difficulties of recruitment during the deficit, saying that organizations will need to spend more to compete with for-profit businesses to recruit the best and brightest. In today’s world, though, many of the best and brightest are already dedicating themselves to social change.


3. If the need won’t go away, then neither will the support (or, as long as there is cancer, we will be fighting it.)

  • Entrepreneur magazine says “find a need and fill it” is the first basic step in building a successful company. It’s not a new idea. As long there’s a need– such as a need to fight cancer (1.4 million people die every year in North America) or a need to strengthen our education system (70% of eighth graders cannot read at grade level)– then there’s an opportunity to raise or make money to fill that need. Tierney describes the ultimate consequence of the deficit, “While the sector stumbles, the deepest suffering will be visited upon the millions of people who rely, directly and indirectly, on the services that nonprofits provide and the social value they create.” This is only true if our society is wholly unable to respond to the deficit in every sector. And even if this is so, some nonprofit missions simply will not be ignored in society. Nobody wants to stop fighting cancer.

Though there may be fewer leaders, they will evoke change if they are good ones. Weak nonprofits that are unable to find effective leaders will consolidate to strengthen heartier nonprofit organizations. Nonprofits will increasingly team up with businesses to get their word out– and if everyone knows that nonprofits are failing, then intersectoral partnerships will benefit both collaborators: there’s money for the nonprofit’s cause, and even greater corporate social responsibility attributed to businesses that strengthen them.

This is not to say that there won’t be a deficit at all. 18,000 leaders will be retiring out of leadership roles before 2016– but we must approach the problem with more than an eye to what nonprofits must do to cultivate new leaders. We must consider that this deficit will affect the way that the civic sector operates as a whole. If even the conservative findings of the Bridgespan Group’s study are true, then nonprofits will suffer. They will find ways, however, to evolve to operate most efficiently and they will shut their doors if they cannot survive due to mediocre leadership, which may decrease mission competition and ultimately strengthen society’s ability for social change.

Posted on by Colleen Dilenschneider in Trends 1 Comment

Survival of the Kindest

Photo by lmnop88a

According to a recent article, there’s scientific reason to believe that human beings may have evolved from the inherently selfish beings of the past (think philosophies of Darwin and Hobbes), into inherently caring and compassionate beings.  In fact, UC Berkeley psychologist, Dacher Keltner, pinpoints altruism as the precise reason why we are a successful species. The article even goes so far as to say:

This new science of altruism and the physiological underpinnings of compassion is finally catching up with Darwin’s observations nearly 130 years ago, that sympathy is our strongest instinct”

Some of our great-grandparents could have actually said, “back when competition was the most basic human instinct…”

Here are a few of the many basic points from the article from Science Daily.  Again, be sure to check it out for more in-depth information:

  • Our brain secretes oxytocin (“the cuddle hormone”) which promotes social interaction and compassion. “The tendency to be more empathetic may be influenced by a single gene,” the article reads.
  • In psychological games, studies have found that the more players gave to the “public good,” the more respect they received– and those who acted in their own self-interest during these studies were shunned.
  • Parents raising socially conscious kids (by teaching gratitude and generosity), find their children become more resilient (there’s an echo of the survival of the fittest).

This is more than just good news for nice guys who are sick of finishing last (and probably haven’t been finishing last for a long while). If we are physically evolving into more caring beings, then our way of life is and has been  evolving with us. I believe it’s hard to say how culturally different we would be if we were still producing low levels of oxytocin.

But these studies and the possibility that we are evolving to the benefit of the public good make me excited (if only for this moment) about our growth. Though perhaps a stretch, I like to believe that the inclination for social change will continue to thrive and mature with my children and grandchildren.

Posted on by Colleen Dilenschneider in Miscellaneous 4 Comments

A Good Nonprofit Leader is Worth a Million Bucks

(or 5 reasons why you should care that Jeffrey Raikes doesn’t make 7 figures)

The debate over nonprofit CEO compensation seems a never-ending issue that has professionals weighing in on both sides of the argument. Some say that higher salaries promote and attract better leadership, while others argue that lower wages are appropriate as they allow more money to go back into the organization.

The unwavering example of a CEO with excessive compensation seems to be Jeffrey S. Raikes of the Bill and Melinda Gates Foundation who makes an annual salary of $990,000. Perhaps Raikes is the excessive-pay go-to example because he’s already sitting on a fortune from his past position as the president of the Business Software Division at Microsoft.  Or perhaps it’s because the former CEO of the Bill and Melinda Gates Foundation, Patricia Q. Stonesifer,  didn’t have a paycheck at all (and now serves  as the Chairwoman of the  Smithsonian Institution for no pay).  Whatever the reason, I’d like to present– for argument’s sake– five reasons why nonprofit leaders should care that Jeffery Raikes is not making seven figures.

 

1. The Gates Foundation has given away more money than the annual GDP of the entire country of Jordan– and their CEO makes less than Heidi Montag from The Hills.

The Gates Foundation gives out 3 billion dollars a year, and has made 21.08 billion dollars in grant commitments since its inception in 1994. Just one of their programs– The Global Alliance for Vaccinations and Immunizations— has saved over three million lives since 2000. The foundation has an undeniable impact and it’s called the largest transparently operated private foundation in the world. But it has to give large sums of money; charitable foundations are required to give away at least 5% of their assets each year in order to maintain tax exemption. This amounts to an annual giving of 1.5 billion US dollars each year from the Bill and Melinda Gates Foundation, which sits on 34.17 billion dollars in asset trust endowment. In other words, the foundation gives away the entire annual GDP of Belize each year in an effort to improve global health. And just think, the gentleman in charge of all of this (after Bill and Melinda Gates, of course) makes $10,000 less each year than the average joe can win on a game show.

 

2. Jeffrey Raikes is a personal philanthropist.

Though Jeffrey Raikes is making $990,000 each year, he’s giving a good portion of it back to the community. He has started his own foundation (with over 113 million dollars in assets) that provides support to teens and adolescents. He is a trustee at the University of Nebraska Foundation, and he is the designer of the University of Nebraska- Lincoln Jeffery S. Raikes School of Computer Science and Management. And when I looked up Heidi Montag and philanthropy, I discovered that she once served food at a Rescue Mission. This is honorable and certainly a contribution to society, but much different in scope and scale than Raikes efforts. In short, not all folks making more an a million dollars each year give back in the same way, and Raikes uses his six-figure salary to give back in a meaningful way even though he doesn’t have to because his job is already about making a difference. It seems that, to Jeffrey Raikes, philanthropy is more than a job; it’s a way of life.

 

3. Raikes isn’t the highest paid nonprofit CEO (In fact, some are paid double his salary)

According to Charity Navigator’s 2009 Compensation Study, that title belongs to the President of the University of Delaware who earns 2.37 million dollars per year, followed by the president of the Salk Institute for Biological Studies who makes 2.03 million dollars per year. In fact, CEOs in education, health, human services, and arts & culture make more money than CEOs in public benefit nonprofits such as foundations, according to Charity Navigator. This information is important because it means that Raikes does not represent a symbolic ceiling on nonprofit CEO salary. Folks in the private sector can make billions of dollars and the sky is the limit, but the most that a professional in the nonprofit sector can make is 2.37 million. Don’t get me wrong, that’s a massive chunk of change– and most nonprofit professionals don’t enter the sector because they think that is where they’ll make the most income– but the fact that there is a ceiling is hardly a good reason to keep an effective leader earning under seven figures.

 

4. Culture says: orchestrating a touchdown pass > saving millions from disease (x 4).

I don’t mean to pick on my new Trojan family, but Pete Carroll, the head football coach at the University of Southern California (a private nonprofit) makes 4.4 million dollars each year (which means I’d have to be enrolled in my grad program for 110 years in order for my tuition to pay for one year of Coach Carroll’s salary). He is also making two million dollars more per year than any nonprofit CEO in the nation.  In fact, his salary is four times larger than that of Jeffrey S. Raikes. There’s a cultural argument to be made here: football has its own set of rules in terms of what is considered competitive payment (need I remind readers of the recent buyout of Notre Dame’s Charlie Weis? Check out a bit of this letter from Notre Dame Professor, John O’Callaghan, for a peek at what this nonprofit-minded educator thinks of the buyout). Though this perspective has some cultural arguments against it, I think we should look at Raiker’s salary with this kind of information in mind.

 

5. Talent costs money (but if it doesn’t, then let’s not make CEO positions exclusive to those with private means).

“Talent costs money” is a popular warrant in business articles all over the internet, in all different sectors it seems. But Felix Salmon, in his article on the CEO’s salary, doubts that there’s a correlation between payment and talent, and thinks this is a silly excuse in the argument to pay Raikes seven figures.  To pay nonprofit CEOs little money because of their sector (and the effort to preserve funding for programs) is one thing, but I think the folks at Philanthrocapitalism make a good point when they argue that being a CEO for a nonprofit should not be exclusive to those with private means. As lines between public, nonprofit, and private sectors become blurry, CEO payment may start to change. In the meantime, let’s look at the broader picture before we get too upset about the salary of the CEO of the Gates Foundation. There are greater battles to be fought, and the $990,000 salary that many folks see as a travesty could also be seen as rightful, hard-earned, and important in the evolution of nonprofits as a whole.

Posted on by Colleen Dilenschneider in Trends 1 Comment