Blog - Page 15 of 17 - Jonathan Poisner Strategic Consulting

On the perils of chasing money

October 28, 2011

Filed under: Fundraising — Tags: Fundraising — jonathanpoisner @ 3:43 pm

I recently had a conversation with an organizational Executive Director who was having their group round up its grassroots supporters to generate online votes to have the group selected to win a small grant. (Small means that in the organization’s context, it would at most be 1% of the organization’s budget if they received it).

What was odd to me is that the grant they were seeking was to do work that wasn’t part of their strategic plan. Indeed, it wasn’t even something that fit within the group’s core niche/role, so it’s not that it wasn’t part of the plan because it was low priority — it was off the map entirely.

When I asked the ED why they were nonetheless pursuing it, their response was that the dollars flowing in would be twice what it would actually cost to implement and it would get the group on the radar screen of a foundation.

I pondered this for a few minutes and my reaction was — that’s not right.

Chasing money off-plan fails to account for:

Staff time necessary to first chase the money, then implement the small project, then possibly to report back on it.

The opportunity cost — eg. what the staffers involved in drumming up “votes” for the proposal could have raised from spending that time meeting with individual donors.
The dilution of the organizational brand, as grassroots supporters become confused about what the organization is all about. The same is perhaps doubly true with foundations — being on a foundation’s radar screen, but then perhaps being misidentified as something you’re not strikes me as a negative, not a positive.

Bottom line: chasing money can be hazardous to organizational health.

Look for more on this in a future edition of my article: Why Organizations Go Off Course.

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Talking in values language

October 20, 2011

I recently was speaking to a board of a conservation organization and said that they were working to protect “environmental values.” And that we should lead with our values, not our policies.

One of them asked, what’s that mean?

Here’s my answer:

Values are the first-order rationale for why you want the policies you want. They are too often unstated by advocates.

Clean water is a policy choice.

The value is why you want clean water.

Here there are multiple potential answers:

Safety — Because people deserve to be safe from poisons

Fairness — It’s unfair for current generations to rob future generations of the world’s precious resources

Responsibility — We have a responsibility to protect the natural world for future generations

And you can I’m sure think of other examples.

Safety, fairness, responsibility, legacy, family — these are examples of values that underlie the why behind the work that conservation advocates do.

Organizations focused on other issues have their own constellation of values.

The important thing is that we need to be up-front about our values. When we are, people will pay more attention to us when we drill down into the policy. If we lead with the policy, their eyes will glaze over and they won’t find us worth their time.

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How Organizations Learn

August 8, 2011

Filed under: Strategic Planning — Tags: Evaluation, Strategic Planning — jonathanpoisner @ 11:58 am

Just read a fascinating article in the Stanford Social Innovation Review on how organizations learn.

It definitely has tremendous applicability to any effort to help an organization establish systems or conduct training. Still pondering what it means for my work, but thought it was worth sharing.

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Why I do what I do

August 4, 2011

Filed under: About My Work — jonathanpoisner @ 4:26 pm

I’m about 20 months into my work as a consultant.

As my day-to-day has become busier (thanks to my wonderful, fabulous clients!) I’ve started to think harder about what I’m trying to accomplish.

My mission: To help progressive social impact organizations thrive.

My vision: To work with 15-20 clients per year, with about one-third of those being repeat clients. To help those groups leave the consulting process in a higher orbit, with a permanent increase in their capacity, not just a temporary boost.

Why do I do this: Because I see too many people reinventing the wheel. Because even the most talented advocates have gaps in their expertise and, in many instances, I can help fill in those gaps. Because I love inspiring people. Because I want to create big ripples in this pond we live in.

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How often should your board meet?

Filed under: Board Development — Tags: Board Meetings — jonathanpoisner @ 4:24 pm

I’ve had this question come up in conversation a few times in the last month.

There is, of course, no pat answer.

Here are some factors that would lead me to meet quite frequently (eg. monthly):

If the board has real fears about fiscal health and needs to either take charge of it or hold an Executive Director accountable.
If the organization lacks staff and the board is therefore responsible for fundraising and program
If the organizational lay of the land is in a very rapid state of change

Here are some factors that would lead me to meet either 4 or 6 times per year instead:

If there are functioning committees and you want to give committees more time between meetings to do their work.
If monthly meetings take up so much time that the board doesn’t feel it has time to meet its fundraising obligations.
If less frequent (but longer) board meetings will allow the Executive Director to spend less time doing basic board meeting prep that comes at the expense of fundraising/program.

Of course, if you go to longer board meetings, it does place a higher burden on the Executive Director to come up with other means between board meetings to maintain communications with the board. I’ve written about the subject of ED-Board communications previously.

In my experience, as organizations mature they should move from more frequent shorter meetings to less frequent longer meetings. For most organizations, somewhere between 10-16 hours of meetings per year should be sufficient, if there are functioning committees capable of doing the work between meetings. This is on top of any board retreat that’s about long-range planning, which is worthy of its own blog post.

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Read this. Now.

July 27, 2011

Filed under: Fundraising — jonathanpoisner @ 10:19 am

Came across the attached and thought it was so good that I’m encouraging anyone I know who cares about social change, particularly fundraising for social change, to read it. Now.

Lisa Simpson for Nonprofits: What Science Can Teach You About Fundraising, Marketing, and Making Social Change, a 24 page ebook by Network for Good and Sea Change Strategies.

Would love to hear your thoughts on it.

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When do you hire a Development Director?

July 26, 2011

Filed under: Fundraising,Human Resources — Tags: Development Director — jonathanpoisner @ 10:43 am

I’ve been thinking a lot lately about the transition of organization from all-volunteer, to their first Executive Director, to the build out of additional staff.

One of the recurring questions that comes up — when do you add a Development Director to the staff?

I know of several organizations that hired a Development Director as the first or second hire after the Executive Director, and the results have been mixed.

So here are some of the questions I’d ask myself before hiring a first Development Director:

Do I have a clear fundraising plan so they can hit the ground running? If not, they could wind up spinning their wheels at the beginning or worse, going off in pursuit of the wrong strategies.

Do I already have more true organizational prospects to solicit than I have time to solicit? If the biggest barrier you have to major donor fundraising is lack of prospects, how does adding a Development Director help?

If I expect the development director to manage low dollar fundraising, have I made a realistic assessment of the time that will take and the net revenue it will generate, taking their staff costs into account in determining net revenue. Low dollar programs are very valuable over the long-run, but often cost money in the short run to develop them, particularly when staff time is included in the evaluation.

If they will be taking over management of a major fundraising event or series of events that I have previously managed, how much time will that free up for me to raise money through other methods? What will those methods be? And am I taking into account the time I will need to supervise the Development Director?

Can I find somebody who’s a true self-starter and who starts out with relationships they can tap into for fundraising, so that they’re bringing new donors to the table with less time necessary for my management of them?

If they do start bringing in more donations, do I have the administrative systems and staffing in place to handle a larger flow of donations (eg. banking, databasing, thank you’s, cultivation, etc.). Or will the development director have to manage all of that? Have I taken that into account when guesstimating how much money they will be able to raise?

Have I set aside in savings up to 3 months of their salary so that they can ramp up their work methodically for the long-run, rather than forcing them to cut corners up-front trying to raise money at all costs. I’ve seen Development Directors start who’ve come in with a burst of frantic energy tapping a small number of their own relationships with some success, but having done nothing to lay the groundwork for future fundraising, so it sputters to a halt.

From the above, one would think I’m negative on hiring Development Directors. To the contrary, for a thriving organization, you will at some point reach the stage where the Executive Director must have somebody else whose full-time job is thinking about and executing development plans.

But adding that staff prematurely is as likely to set you back organizationally as move you forward. So think it through!

What do you think? Are there additional considerations that I haven’t mentioned?

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The Executive Director v. the Board

July 6, 2011

Filed under: Board Development — Tags: Executive Director — jonathanpoisner @ 3:55 pm

I’m often asked by Executive Directors to give advice as to the division of responsibilities between the staff and board.

Here’s my two cents.

The traditional view is the following:

The board:

Financial Due Diligence

Help with Fundraising

Strategic Direction

Hire/Fire/Evaluate the Executive Director

Board Recruitment

Facilitate its own meetings

The Executive Director:

Manage day to day finances

Lead Fundraising

Create a vision for the board’s use in setting strategic direction

Hire/Fire/Evaluate other staff and contractors

Develop programs and implement them (either directly or via other staff/contractors)

In the real world, I’ve rarely found the traditional scenario played out. Almost always, the Executive Director must set the conditions necessary for the board to fulfill its role.

This includes:

Setting up systems that allow the board to exercise its financial due diligence, providing them financial statements on a monthly basis in an understandable format with appropriate analysis of how things are going.
Providing a clear structure for the board’s fundraising, through a combination of training, materials, ideas, and systems to ensure board members are operating efficiently and not duplicating each others’ efforts.
Providing ongoing information about the lay of the land and strategic options so that board decisions regarding the strategic direction of the organization aren’t set in a vacuum. Almost always in my experience, boards can best provide strategic guidance when provided reasonable alternatives from which to choose rather than having open-ended dialogues.
Initiating their own evaluation, including a self-evaluations, and including establishment of personal goals that the board can use for its evaluation of the Executive Director.
Staffing the board recruitment process and participating in it or even leading it if necessary to ensure the board is at full strength over time.
Providing draft agendas for board chairs and leading the board meetings, even as the chair plays the official facilitator role. This includes putting together good board packets and getting them out on a timely basis.

It sounds exhausting. And it is.

But when it clicks — when the ED does one role and then the board plays its role — an organization can truly thrive. When thinking about my long tenure as an ED, those moments when everything clicked were priceless.

Of course, the above begs the question of how things are different when an organization is small, just getting started, and not yet thriving. Almost always, this means the board must take on more responsibility in some areas and less in others. I’ll write more about that in a separate blog post soon.

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Mercenary vs. Missionary Donors

June 21, 2011

Filed under: Fundraising — Tags: Fundraising — jonathanpoisner @ 12:28 pm

A mercenary donor is one who gives to you for some reason that isn’t primarily about agreement with your mission. They may give out of loyalty to a friend, out of a desire for good PR/marketing, or because you happen to be doing something at the tactical level that will have incidental impacts they want.

Organizations often seek mercenary donations and I’d be the last to tell you to avoid them at all costs. But if I have a choice between a mercenary donor – whatever the type — giving me $1,000 and a mission-driven donor giving me $750, I’d take the $750 every time.

Why? Because I’m evaluating the long-term expected value of the donor relationship and not the short-term monetary impact of the donation.

The long-term value of a mission-driven donor is higher for at least two key reasons.

For starters, getting a subsequent gift from them is more likely. And getting a larger gift from them in the future is more likely. You are looking for donors, not donations. The $750 donor may very well turn into $5,000 over the next 4 years if the relationship is handled well. Whether the $1,000 mercenary donation ever turns into a repeat donation depends on factors out of your control.

Aside from this, mission-driven donors are also critical in growing the organization in another way. They are far more likely to turn around and help your organization by reaching out to their friends and colleagues to help you grow your organization. Indeed, part of any well-designed major donor program and/or annual event is precisely the process of turning donors over time into fundraisers and friend-raisers.

So if mercenary donors are less valuable, should you ever seek them? Heck yes. But with a huge yellow caution sign – your programs, events, and strategies should focus on mission-driven donors. And once you’ve created them, it’s okay to sweep in some mercenary donors as cream on the top.

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