Posts Tagged ‘accountability’

Back to Basics

Tuesday, January 5th, 2010

One could almost hear the collective “sigh” as 2009 came to a close. It was a difficult year to be sure, marked with equal doses of tangible challenges and the fear of the unknown just beyond our view. Our daily struggles were made that much more difficult by the uncertainty of what else may lie ahead.

This nation has been through at least a dozen recessions, a couple of staggering market crashes and a Great Depression. We have seen times like these before, but that is cold comfort to younger generations who may not yet realize that we have always emerged stronger from our trials. However, there is a significant difference in this current crisis that concerns me: it is the simple fact that we did so much to bring this on ourselves. For that reason, I feel there are lessons to be learned and for the future welfare of the children of this nation and the world, I pray we learn them sooner rather than later.

I do see glimpses of a “back to basics” philosophy that is rising from the excesses that helped bring us to this point: in my life, my neighborhood and the broader community.  I hear Dennis Haysbert in comforting tones, extolling the virtues of “a home cooked meal, time with loved ones; appreciating the things we do have.” In a recent Allstate spot, he goes on the say, “It’s back to basics, and the basics are good.” Incidentally, this is not a plug for Allstate, but I proudly quote Dennis because I know what a great man he is and that those lines are something he actually believes. Further  we have worked closely with the Allstate Foundation and I can tell you that Jan Epstein at the Foundation is one of the great souls on earth. But I digress!     

As one who seeks to address need on a daily basis, I consider lessons we have been forced to learn in 2009 to be worth learning and long overdue. But my fears are twofold: first, lessons are all-too-easy to forget: when gas hit $4.00 a gallon, we were all suddenly conservationists and the predictions were bleak for SUVs and other giant forms of transportation. The talk was all about hybrids and smaller cars and transportation rather than vehicles that show our status. However, within weeks of price moderation, it proved to be a short-lived lesson.

Second, there may be some, perhaps many, who do not see any lessons to be learned. There are folks who see much of what has happened as someone else’s fault and therefore nothing they can do will make things any better. But try as we might to shift the blame, we cannot escape the fact that greed, impatience and selfishness has much to do with our dilemma - and it was not all corporate. Sure we were spoon-fed bad mortgages, but we as consumers used them to buy houses we could not afford, temporarily suspending all common sense. Available credit was, well, too available, but we still had the power as to how much we would use. And these complex financial instruments that defy explanation and have nearly wrecked the markets didn’t seem so bad when our individual portfolios were growing by leaps and bounds.

As economic indicators point to clear signs of recovery (albeit a slow one), I wonder if the pain has been meaningful enough to spare us from repeating this desperate scenario down the road. I realize that is a harsh thing to say and will not sit well with someone who recently lost their home or job, but on a more global societal scale, I think this is an important point because it is clear to me that those in need depend upon the generosity of those whose lives are more stable, more in tact. Children here and around the world, rely on the fact that there are those who can and will help them rise above their poverty and need.  This country has always been the stable, willing and generous source, for as long as I have been alive. It would be tragic to relinquish that role because of our own greed and selfishness.

As for us in the non-profit space, are there lessons to learned, specific to philanthropy? The answer here, from our perspective is again, “yes.” Just a few lessons that perhaps an advisory firm would be the first to notice:

Don’t let an ongoing donor turn into a line item on the budget.
Do not fail to appreciate ongoing donors because they have established themselves as reliable. Report, communicate, acknowledge and did I mention, report! Every day we meet with donors who express frustration over the fact that in the beginning, they could see the impact of their support with a given charity. But over time, the communication breaks down and the accountability tends to wane. This may go without saying, but in this current environment, we would all do well to take care of existing support rather than trying to generate new donors. Now more than ever, a charity needs to prove its value.

Do not assume your message is clearly understood.
While this applies to the previous issue, it is also different. One of the real challenges in the non-profit world is communicating a relevant message. In an economy where the “casual donor” is disappearing, we can no longer count on small donation based purely on personal relationships who may or may not understand your mission, but give anyway.

 Now is the time for charities to state their case, clarify exactly what it is they do, as well as how they measure results. Like the proverbial mechanic whose car is always broken down in the yard, we in the non-profit space sometimes becomes too preoccupied with mission and fail to take care of our own marketing and messaging needs.

Consider partnerships and joint efforts.
In the for-profit space, mergers and acquisitions, take-over’s and competition are a way of life. Those terms have rarely been applied to non-profit work because we feel so good about what we are doing and after all, it is charity!

I would reexamine that attitude. If there are other organizations that you would be better to partner with, join with or otherwise combine with, do so. So much overhead and administration in the charity space is needlessly replicated. Good intentions are not enough of a qualifier to start a charity and deserve the public trust. When you accept precious donated funds, you have a fiduciary responsibility and if you find your passion has turned into an unwieldy administrative and compliance nightmare, perhaps there is another way you can be part of the solution. Again, a possibly harsh concept but we need to be honest and admit that sometimes passion and even ego can get in the way of better judgment when it comes to charitable efforts.

As we emerge from this difficult period, it is worth asking ourselves, are we more compassionate? Do we care more or less…about those in need? Has the struggle made us tougher, or gentler? Have we become smarter through it all?

Would we actually consider spending less on a car, feeling that perhaps the money could be better used elsewhere? Do we look at the size of a house differently than we did before? Does the family inside matter more than the square footage? Could our recreational budgets be pared down just a bit, in favor of helping someone in need? Could we consider taking our name off the CEO line and providing our passion and talent to an organization that is delivering better results?

These are deep and potentially annoying questions that no one has the right to suggest. They are questions better asked of ourselves, and I am confident that there are those who are asking them. I hope these will be the next generation of leaders that will keep us from a past we do not want to re-visit.

-Rick B. Larsen

Excellence in Giving

Thursday, December 3rd, 2009

Not too long ago I had the opportunity to listen to a wonderful speech that was given by Thomas Tierney, chairman and cofounder of Bridgespan, at the 2009 Philanthropy Roundtable Annual Meeting.  For those who have not had the opportunity to listen to it, the speech can now be found on the Philanthropy Roundtable’s website. It was a refreshing oration which I believe every donor (and nonprofit leader) would benefit from listening to. One of the focuses of the speech was to identify several brutal facts facing donors who are seeking to achieve greater impact through their contributions. Since this year, more than any other in recent memory, donors are interested in seeing their seeing their contributions stretched a little further to help more people, recognizing these facts is essential if you want to optimize the impact your philanthropy is having.  

The first brutal fact that Tierney identifies is that donors are only as good as the organizations they give to. This becomes particularly tricky when a donor considers the sheer number of nonprofits that are out there – more than a million at the latest count.

The second fact is that excellence in giving is self-imposed. It is very easy for a donor interested in average returns to stroke a check to the organization of his choice and continue on his or her merry way.  However, donors who want to see more children helped with their donation must raise the bar in their giving.  It was easy to appreciate his view that, unlike the for-profit sector, there are no predators in the nonprofit world.  In other words, if a charity underperforms, there is no larger charity that will come and absorb it. Underperformers, although often quite well-intentioned, abound in this sector.  It is left up to the donor to determine what nonprofits meet their high expectations.

The third fact that donors must face is that there are obstacles and handicaps that appear in the nonprofit sector, which are not present in the for-profit world that most donors are familiar with.  There are no capital markets for nonprofits, nor any sort of pipeline for identifying and promoting talent. Effective nonprofits must be repeatedly asking themselves the difficult questions about how they define success and how they are going to achieve that vision if they want to have the kind of impact that discerning donors are looking for.

Compound those brutal facts by this week’s press release issued by a collaborative of nonprofit watchdogs, including GuideStar and Charity Navigator, which essentially encouraged donors not to rely on overhead and fundraising ratios as a measurement of effectiveness in their favorite nonprofits: tools that have been historically used to determine a nonprofit’s efficiency.

I completely agree with what the press release had to say.  Overhead ratios do not relate to the impact that a nonprofit is having on its target population.  Not to mention these ratios encourage nonprofits to sacrifice investing in resources and talent that would increase their effectiveness but would negatively affect their ratio. On top of it all, I have never seen two nonprofits interpret the rules for determining overhead costs in the same way.

So what does that leave donors? Since excellence is self-imposed, how can donors interested in achieving more than average returns on their donation navigate the obstacles presented by the nonprofit world and find the partners that deliver the results the donor is looking for? It can be terribly overwhelming. The good news is…there is help. 

Our role at Operation Kids is to provide the research and resources necessary so that our clients can make informed giving decisions and achieve the impact they are hoping for – without taking any fees. We do this because we firmly believe that more donors giving to more effective charities results in more lives changed. If you are interested in raising the bar in your charitable giving this holiday season (or any time), contact us and see if we can help you.

 -Christopher Lindsay