No, Why Don't YOU Run Your Business Like a Nonprofit?!

I just read one of those ever-popular articles exhorting nonprofits to operate like businesses. If you Google "nonprofit like a business", you’ll get 78,000 results.  Of course, nonprofits are, in fact, businesses, but that doesn’t seem to slow down the advice from the for-profit sector.  At the risk of offending every pure-hearted but clueless MBA offering this kind of advice, let me turn the question around. Why don't YOU operate your business like a nonprofit?

You would think the MBAs would be a little more humble these days.  Bear Stearns didn’t disappear because of feckless social workers.  Homeless shelters didn’t get bailed out because they were too big to fail.  You didn’t see nonprofit organizations buying and selling bogus mortgage-backed securities.  The Sierra Club didn’t spill oil in the Gulf of Mexico.

But, please, Mr. Businessman, tell us how for-profit businesses are the gold standard we should be striving for. 

Would you like to tell us about how important it is for us to be as efficient as the mighty profit-driven machines? Like much widely accepted "wisdom", the delusion that private industry is somehow more efficient than nonprofits or even governmental agencies wilts under real-world scrutiny. How are those for-profit hospitals comparing to their nonprofit competitors when it comes to efficiency? Studies say there’s no real difference.  Does anybody care to compare the results of for-profit universities to nonprofits or the local state university? It’s not a pretty picture.  The truth is that for-profit superiority in efficiency is often a fallacy.

While we’re talking about running your business like a nonprofit, how about showing me your paycheck? How about the tax return of your business? Of course, I should mind my own business.  Nonprofits, though, publish their highest paid employees and their tax forms are public.  Go poke around Guidestar and snoop to your heart’s content.  It’s transparency, and it’s a way that nonprofits are miles ahead of their for-profit friends.

Another feature of the for-profit world that doesn't come over to the nonprofit world is nepotism.  Family businesses get handed down, and so do massive corporations, but you don’t see Clara Barton’s granddaughter running the Red Cross, or Juliet Gordon Lowe’s running the Girl Scouts.  Nonprofit CEOs get chosen by merit, not genetics.  And that means that the hard-working, brilliant Executive Director of the local Women’s Shelter builds a business that she just gives away when she leaves instead of handing it off to the next generation. 

Now, don’t get me wrong.  For-profit business people offer tremendous wisdom and guidance – along with tremendous donations and volunteer support – when they help nonprofits.  And many have experience that can hugely improve the results of a nonprofit; if any great copywriters or graphics design people want to help me with my year-end mailing, I will jump at the chance to work with them.  Good business skills are good business skills, whether in a for- or non-profit organization, and nonprofit is only a tax status.

I have worked for small businesses, multi-national corporations, and for nonprofits of various sizes.  My personal experience is that nonprofits tend to run more efficiently than the for-profit corporations, but I will happily agree that the multi-national corporation I worked with was not necessarily representative of the best.  But I will point out that the writers of Dilbert and The Office chose to target the for-profit world . . .

Obligatory Tangentially Related Joke: A hot air balloonist realizes that he has gone way off course.  He sees a guy in a field below, and he shouts down,"Excuse me, can you tell me where I am?"
The man below says, "Yes, you're in a hot air balloon, about 30 feet above this field."

"You must be an engineer," says the balloonist.
"Yes, I am. How did you guess?"
"Everything you told me is technically correct, but it's of no use to anyone."
The man below says, "I'm guessing that you're in senior management."
"You're right. But how did you know?"
"You don't know where you are, or where you're going, but you expect me to know everything you ought to know. You're in the same position you were before we met, but now you're criticizing me!"

A Few Moments on Minutes

Minutes are the unsung heroes of board meetings.  Their approval is a ministerial task in the warm-up phase of the board meeting, or they are relegated to the consent agenda. Their creation is a tedious task assigned to the least sought after officer position (well, maybe treasurer is less sought after), or a staff member.

The importance of the minutes is staggering. When duly prepared and approved, they become the historical fact of the organization's history. A controversial motion passes or it doesn't; the relative strength or volume of arguments don't matter.  "Just the facts, Ma'am."

Minutes also provide a pretty handy tool for a deliberative body to test its efficiency. If large amounts of time are being spent on matters that are not the subject of motions, the Board's time is being spent on non-deliberative matters. There is nothing wrong with informational presentations or providing advice and feedback, but the Board should drive drive to spend its time on decision-making and policy setting, and much of the rest can be accomplished outside of a formal board meeting.

FORMAT

What does a good set of minutes look like? While some organizations have a tradition of long, elaborate narrative minutes, the best minutes resemble a box score more than the play-by-play announcer. Motions should be prominently displayed, and action items clearly noted. There's no need to record who said what or why, and if you do, the record should be factual and mockingly terse. That long-winded board member's soliloquy can be recorded as "Mr. Jones spoke in favor of the motion." Wild Apricot has a few good sources of templates here.

TIMING

The minutes of a board meeting should be prepared and shared within 48 hours of the meeting. Many, perhaps even most, organizations do not distribute the minutes until days before the next board meeting, and include them in the meeting packet. This is a terrible practice, since the board members cannot remember what was said or decided, and any notes they may have had have probably been lost.  In today's era of easy electronic communication, those minutes should be available when memories are fresh and accurate.  No excuses - if you don't require yourself to do them right away, they won't gain urgency until the last possible moment.

PRESERVATION
The journey's not complete until the last steps are taken.  The minutes MUST be printed out, and signed by the secretary.  Under most states' laws, that provides the presumptive evidence of what action a board has taken.  Save them in a book and keep them out of harm's way, just like that strategic plan you produced and put on a shelf!

Obligatory Tangentially Related Joke: Moses and the Jews are fleeing Egypt, and they get to the Red Sea.  Like any Nonprofit Leader facing stress, he calls a meeting.  He looks to the chair of the Army committee.  "Normally, I'd recommend that we build a pontoon bridge to carry us across," said the Army committee chair, "but there's not enough time - the Egyptians are too close."  He looks to the Navy Committee Chair. "Normally, I'd recommend that we build barges to carry us across," said the Navy Committee Chair, "but time is too short." "Does anyone have a solution?" asks Moses. The PR Chair raises his hand. "You!" said Moses, "You have a solution?" "No," said the PR Chair, "but I can promise you this: If you can find a way out of this one, I can get you two or three full pages in the Bible..."

Guns, Cheerleaders, and 8 Tips for a Successful Auction

Last night, I attended the Chiefs Ambassadors "pairings party", which is a pretty nifty way of extending the fund-raising impact of a golf tournament. Even though I was unable to play in the tournament today, I got to participate in the raffle, and bid up a few silent auction items. I have voiced my dislike of special events, but this one was well conceived. They did a good job of celebrating their successes, explaining who they are, thanking their volunteers, and raising a bit of money.

Most of my background is in the social service and education areas, so it came as a bit of a surprise to see cheerleaders walking around with guns as live auction items. My hat is off to the organizers, however; they knew their audience of jocks and wannabe jocks, and the bidding was enthusiastic. A few thousand dollars will go towards supporting the charities that the Ambassadors support.

How often, though, do you see botched auctions? Personally, I've sat through too many excruciating auctions where amateur auctioneers struggled to get opening bids for items that are either too expensive for the audience, or are otherwise inappropriate.  Here are a few rules of thumb I've come up with during countless charity auctions.

1. Cars are too much for all but the most well-heeled crowds. 

2. Expensive vacations only work if the specifics are well-publicized well before the auction, so that potential bidders can check calendars and recruit traveling companions. 

3. Unless it conflicts with your mission or values, it's helpful to have an open bar prior to the auction. 

4. If possible, recruit a professional auctioneer to handle the bidding; trust me, it's much harder than it looks. 

5. A chocolate lab puppy will often bring in a lot of money, but there are those who say it is unethical. 

6. No more than a dozen live auction items, please. 

7. Always do a "Fund-A-Need", and line up somebody ahead of time to bid at the highest level. A lot of people at such events are guests of friends, and will repay the invitation by making a donation if given the opportunity.

8. Publish the items with complete descriptions as early as you can, and as often as you can.

Most of all, make it a fun event, so people will come back next year.

Obligatory Tangentially Related Joke: (A different version of this one was told by Mike Bell, a former end for the Chiefs.) Three guys go in for job interviews. The first one goes in and the interviewer says, "What's the first thing you see when you look at me?" The guy says, "That's not too hard, you've got no ears." The interviewer says, "That's it, get out, you'll never be seen around here again." The second man takes his turn and is asked the same question. The applicant replies, "Uh, you've got no ears." The interviewer throws the guy out, cursing and yelling that he'll never get a job with his company. As he is leaving, the second guy warns the third guy, "Listen man, whatever you do, don't point out that he hasn't got any ears. He's so touchy with the ear thing." "Okay," said man #3 on his way into the office. Once inside he is told, "Name the first thing you notice when you look at me." The guy answers, "That's easy, you wear contacts." The interviewer was flabbergasted, "How on earth did you know that, son?" "Easy!  You sure as heck can't wear glasses since you don't have any ears!"

Spiffing up the Blog

Take a look at the right side of the blog!

I have added a bunch of links, and, I hope even more helpfully, added feeds to those links that have them.  This way, you can come here and see whether any of your favorite Nonprofit blogs have new articles.  If there are any blogs you think I should be adding, please email me or leave a comment.  I don't mind posting links to commercial sites, as long as they include helpful content.

Obligatory Tangentially Related Joke: Jesus and the devil have an argument as to who is better at maintaining his blog. They finally decide to have a contest to settle it - they both have to update their blog templates and make major changes to their layouts.  They get to work, typing furiously for hours.  All of a sudden, though, the power goes out, and their screens go blank.

The devil starts cursing, and says, "Damn it all to home, we both just lost all our work, and we're going to have to start over!"

Jesus calmly smiles and says, "Nope.  I win.  I didn't lose my work.  Haven't you heard, Jesus saves?"

Way Overdressed at the Hillbilly Bowl

French cuffs and a tie at the Hillbilly Bowl in Kimberling City, Missouri?

 There are those who say that you learn everything you need to know in kindergarten, and that might be where my struggles with fashion first arose. I wore a uniform to my Catholic kindergarten, and, ever since, I have lacked the ability to dress myself with a shred of fashion sense.

And that's how it came to be that I found myself wearing a quality silk tie, a white shirt with cufflinks and a good pair of gray pants, sitting in the bar area of a bowling alley in Kimberling City, Missouri, chatting with a comfortable alum wearing a "Redneck Yacht Club" T-shirt. Which reminds me of the time I showed up at a donor's office in Oklahoma City wearing a polo shirt amongst starched collars and expensive ties.

Usually, I aim to be just a tiny bit more formal than I need to be. If the prospect is wearing a T-shirt, I want to be in a nice polo. If the donor is wearing a polo, I want to be in a nice sports shirt. If the prospect is wearing a sports shirt, I want to wear a tie.

Once the sartorial arms race reaches the suit level, though, I content myself with getting by. Whether the donor is wearing $119 Sears special or a $2000 Italian suit, I'm going with my regular Jos. A. Bank sales suit.  And if I need to wear a tux, I start updating my resume.

Obligatory Tangentially Related Joke: Three businessmen on a plane. First guy says, "That suit looks great on you. You must be a Harvard man." Second guy says, "Yes, thank you. I did go to Harvard. And with that classy briefcase, I would guess that you went to Yale." First guy says, "Yes, I am a Yale man." They both look at the third guy, and they say, "You must have gone to KU." Third guy says, "Why yes, I did. How could you tell?"  "We saw your class ring when you picked your nose." 

Stress is Constant - Might as Well Make it Work for You!

Stress is a killer. Stress is a motivator. Stress can keep you up at night. Stress can give you a reason to get up in the morning. Stress gets imposed on us. Stress comes from within us.

People sometimes accuse me unfairly of being in easy-going person. I tend not to walk around with a frantic or worried expression, and I am unlikely to dump a bucket of anxiety on anyone who casually asks how I am. But make no mistake about it - I am responsible for raising more money than ever for a nonprofit that needs resources to achieve its laudable mission.  If I fail, I let down good people doing important things.  Worse, the path to success goes through other people making favorable decisions they don't need to make.  

I recently watched this video in which psychologist Dr. Kelly McGonigal explains that stress is only bad for you if you allow it to be. You are 43% more likely to die of stress if you think it is bad for you, but if you use the symptoms of stress to your own advantage, you can be smarter and more social - generally good things in the nonprofit sphere. Take 14:29 out of your life to watch this video.

Obligatory Tangentially Related Joke: A guy went to Dr. McGonigal.  "Doctor, I saw your TED Talk, and I need your help.  Whenever I get under a lot of stress, I lose my temper with people, and I insult them.  It's costing me friendships and problems with my marriage.  I need your help, please . . ."

Dr. McGonigal feels compassion for the poor guy and replies, "All right. I'm here to help you.  Why don't you start by telling me about your stress and how it is impacting your life?"

The guy replies, "I just did, you incompetent knucklehead!"

3 Ways to Annoy a Fundraiser

Fundraisers get paid to get along with people, so you probably won’t get smacked when you say these things. You probably won’t even see a wince. But you can be sure that you are provoking an internal eye-roll.

1. “I couldn’t do your job. I hate asking people for money.” What, exactly, do you think we do for a living? We’re not out on street corners with cardboard signs. It’s not like asking your father-in-law for help making your car payment. We help people get that great feeling of accomplishment and pride when they participate in something above their daily life. We encourage people to participate in a cause, and help them do it effectively. It’s a great job, working with good people for important causes.

2. “How can you raise money for your cause when there are . . . (people starving/people dying of cancer/homeless people, etc.)?” The fact is, there is no clear prioritization of need, and most people who raise this issue aren’t doing anything to address the people starving or dying or living on the streets, either. Cynically, I might say that they are just using an excuse to avoid parting with money. More generously, perhaps they really do feel powerless to start fixing problems until they can fix the worst problem in the world. Either way, the fact is that most donors give to multiple causes, so they are addressing multiple needs, not just one. Good people understand the need to get involved with issues they care about. Personally, I would not have chosen a Performing Arts Center as the highest need in KC, but Ms. Kauffman chose to build one, and as a result, we have a wonderful civic asset. Who am I to argue with that?

3. “You should put on a . . . (dinner dance/gala/golf tournament, etc.).” Uggh. As a fundraiser, I recognize that some special events are good things, but the vast majority are lousy for the fundraising effort (as opposed to awareness-building and other purposes). There are three main reasons I feel that way. First, they make more money for hotel catering, golf courses and other vendors than they do the charity. I might feel like a hero when I write a $150 check to play a round of golf or attend a dinner, but I’m really only giving 1/3 to 1/2 of it to the cause. Second, they distract from mission-based fundraising. People wind up giving because they are needled by their friends to buy a table, rather than because they care about the cause. Finally, the successes are often false. People report income as profit. People count corporate gifts they would have gotten anyhow as donations to the special event. People round up to the nearest $100,000 when they report the results. And people like me get stuck trying to talk volunteers out of planning the next gala.

Of course, there are many other ways to annoy a fundraiser. “If we can just get everyone in Kansas City to give us $10 . . .” is another one that makes me grit my teeth. “You should get Warren Buffett to support your charity” is a classic. But, for today, the three outlined above ought to suffice if you want to get on a fundraiser’s nerves.

Obligatory Tangentially Related Joke: A fundraiser managed to get an appointment with the richest businessman in town.  The businessman is not known for his generosity, so the fundraiser decides to try using a guilt trip. 
"Mr. Jones," he says, "you own the biggest business here in our town, and yet I've never seen your name connected to any charitable giving.  My records don't show that you've ever donated any money to my cause." 
Mr. Jones looks across his desk. "Do your records show anything about my grandmother, who's suffering from Alzheimer's so badly that she needs expert medical help with her 24 hours a day, 7 days a week, and that she has no insurance to help with that expense?"
The fundraiser stares blankly.  "I'm sorry, I had no idea."
Mr. Jones continues, "I thought not.  What about my sister?  Do your records have anything in there about my sister, whose husband disappeared last year, leaving her with 5 kids, no income, and a mountain of debt?  Do your records mention anything about Christmas last year at her house?"
The fundraiser just hung his head. 
"So, Mr. Fundraiser, let me ask you a simple question," Mr. Jones continued.  "Why would I give you any money when I don't give any to them?

6 Rules on What Kind of Car a Fundraiser Should Drive

Like it or not, everyone forms opinions based on the cars people drive. You do, too. If your sister calls you and tells you that she just started dating a guy who drives a Humvee, you will form a different mental image than if she says he drives a Prius. Or a '73 Vega. Or a Porsche. Or a minivan. 

Similarly, if you are a fundraiser who drives to face-to-face meetings with donors, you should be aware of the message your transportation sends. Here are five easy rules that, all things being equal, should probably keep you out of trouble.

1. Your car should ideally reflect but at least not oppose your organization's mission. No gas guzzlers for the Sierra Club and no convertibles for skin cancer prevention.

2. Your car should not be significantly more expensive than what your typical donor drives.

3. Your car should not be so junky that it looks wildly out of place in your average donor's driveway. And no oil leaks either.

4. Your car should be easy to enter and exit. If you are driving an elderly couple to lunch, don't take a Miata.

5. No pets allowed. Even for animal charities, nobody wants dog hair.

6. Keep your politics, religion and college mascot off your bumper sticker.

Of course, these are just common sense guidelines, to be ignored when they chafe too much.  One of the best fundraisers I know used to drive a sweet Jaguar, violating 1/3 of the guidelines, but putting her in a good mood every time she drove it.  

Obligatory Tangentially Related Joke: A woman walks into a bar and walks up to one of the regulars.

"How many beers do you drink a day?"

"Usually around 3," the man responds.

"How much is each beer?

"Around $5."

"So you spend around $15 dollars a day on beer?"

"Well, if you count the tip, it's closer to $20 . . ."

"$20 per day?!," she shrieks.  "You spend $20 per day here?  Every day?"

"Almost every day.  They're closed on Christmas day . . ."

"How many years have you been coming in here and blowing $20 per day?"

"Probably 20 years now, give or take."

"Well, let's do the math on that.  $20 per day times 30 days a month times 12 months in a year, let's see, that's . . $7,200 per year.  Times 20 years, that's over $140,000 you've wasted.  You could be driving around in a shiny new Ferrari convertible for what you've wasted on beer in this place!"

He takes a drink and looks at her.

"I'm going to guess that you don't drink, right?"

"Most certainly not!", she harrumphs.

"So, where's your Ferrari?"