Giving to a charity can seem to a donor as if it’s an episode of Let’s Make A Deal. Will the donor choose to respond to the email, the letter, or the phone call? Sometimes donors feel as though they’ve made a bad deal when they get no response instead of the big deal of the day, a simple thank you.

It’s a marketing issue with the nonprofit. Response and internal structure of how to respond to donors was the topic of an NPT Executive Session held earlier this year at the National Press Club in Washington, D.C.

The participants were Peter J. Carey, vice president, Strategic Marketing, Sage Software, Curtis C. Deane, president, AFP Foundation for Philanthropy, Tom Gaffny, executive vice president, Fundraising, Epsilon, and Kristie Hazard, account director, at BartonCotton. The panel was moderated by Paul Clolery, vice president and editorial director, The NonProfit Times and Rick Christ, president, NPAdvisors.com.

Paul Clolery: There has been a lot of talk lately regarding marketing across all aspects of the charity. It seems to me that’s a no-brainer. Why is this so hard to sell to people.

Tom Gaffny: I think it’s a simple answer. It stems from human nature. And the first question, or one of the first questions, any of us asks when given a job is, okay, what do I need to do to be measured as being successful? It all comes down to measurement most of the time, because what invariably each of us — let’s back up.

How nonprofits tend to measure success is based on how well that person does driving the channel for which they’re responsible. Human nature being what it is, if I am running the direct marketing channel as a for-instance, I’m measured by how much money I raise through the direct marketing channel.  I’m going to be concerned with how much I raise through my channel. And, I’m going to be reluctant to probably share my names. I’m going to be reluctant to share my time slot in the communications plan. I’m going to be reluctant to not contact my people at certain times of the year. It really does come down to measurement and what I feel like I, as an employee of that organization, need to do to be measured as successful.

Clolery: But that’s, of course, a bad concept.

Gaffny: Totally. It’s not only a bad concept because it’s a bad concept, but it’s a bad concept because every test I’ve ever seen indicates that if that name, my constituent, is shared with others within my organization and other channels within my organization, the organization as a whole does much better.

And invariably, my particular channel does much better because of an enhanced relationship.

Kristie Hazard: It is also a matter of resources. I am often surprised by how small their various departments are and they just can’t keep up. They can’t capitalize. They can’t feed each other information.

And so as an agency, we’re always looking for resourceful ways to help the matter. Either you have somebody external to the organization doing research for you to feed information to the marketing team that can feed it to public relations.

Gaffny: That’s a great point. I also think that one of the problems is that the knowledge that sharing names across all channels helps every channel is still something that isn’t widely known yet. We’re trying to get the message out about this concept that one plus one equals three.

Clolery: Curtis, you just went through this process with the Association of Fundraising Professionals, the breaking down of some silos and making sure that the whole organization is marketing.

Curtis Deane: I’m not sure it’s exactly analogous, but we did have a staff structure that was basically bifurcated. And it was brought together at the senior management level to have one person over everything instead of two people each over half of everything. Part of that was just personnel movement. You have that in every organization, somebody leaves or somebody wants to change — whatever — and it gives you an opportunity to restructure in a more kindly way rather than in a forceful way.

And on that point, I think that the concept of personnel issues is really significant. Let’s say you’ve got a marketing person; you’ve got a communications person; you’ve got a development person. Now, the development person is going to want to run it all, because they’re bringing in money and have these other ones to support.

Hazard: They generate the revenue.

Deane: When you have an experienced and senior development professional who is skilled enough and has the ability to manage all of that effectively for your organization, it’s fabulous. You bring in a lot of money. Everything’s reinforcing.

But what happens, and believe me, it happens everywhere, when that kind of senior fundraising professional is getting taken away? You can’t retain them. There’s too much demand and too little supply for that kind of skill, so that person leaves. And when you can’t successfully recruit the equal replacement then it breaks up into silos. And then maybe over time, the communications person leaves. And then the other two see an opportunity to divide that up, so now you’re breaking it into two.

It’s really a lot about retaining the key personnel, and the fact that you can’t and the fact that there’s inherent turnover, especially in the fundraising area. The market’s just red-hot for these people. Then what you want to do in theory isn’t able to be implemented because you can’t get the horses to pull that wagon.

Hazard: This breakdown combined with the time it takes to ramp-up with a new team member causes campaigns to suffer.

Gaffny: There’s some historical baggage to all this, too, because it wasn’t until recently that we had technology with more integrated databases. It was impossible for the person running the telemarketing campaign, or the person running the special event campaign, because they were not aware that that constituent’s name might have also been part of the direct marketing program. Databases not too long ago were not integrated.

A lot of times, it was just a case of the left hand didn’t know what the right hand was doing. And I think there are some legacy issues to that.

Rick Christ: By the same token, our consumers or donors who are also better educated and more technologically savvy, have expectations that they didn’t have before.

There are probably a good number of donors who are regular givers to charities whose households are better wired and integrated than the charities. And so I know that if I send an email to my charity that they’re going to get it in five nanoseconds, and so I expect an answer in, say, 12 nanoseconds.

Deane: You’re that kind of donor, huh?

Christ: And so one of the first steps is let’s change the standards. Let’s respond immediately to all of them with a message that says we’ll get back to you in 24 hours or 36 hours. Being able to change those expectations is necessary because donors expect more and that frustrates them when they get less.

Carey: In that setting you also have to acknowledge that the charity has to have time to develop its capabilities to learn to walk before it can run. It’s got to develop a plan, a way to approach both its donor base and its internal constituents to generate the kind of insights that will help one hand know better what the other hand is doing and create the synergy that Tom was talking about.

Clolery: Peter, let me just jump in here. I’m surprised that you didn’t come out of your shoes at something here, which is that technology sometimes is unhelpful where the databases aren’t talking to each other. Ten years ago, the Internet was just really coming into its own and everybody had a new piece of software that was supposed to replace everybody in the fundraising department. How can we be a decade later and still say that the databases don’t talk to each other?

Hazard: It’s a combination of financial resources and the organization’s priorities.

Carey: There are always resource issues. Although technology is an important enabler and a very necessary tool for all charities nowadays, I strongly believe that it doesn’t substitute for insight, knowledge, and expertise that people bring.

And they bring it two ways, I think. One, they bring it in embodying the vision, the mission of the organization. If you’re able to translate that into objectives that are meaningful, relevant, and achievable, and then translating those on down into strategies, it’s those strategies that can help break down silos. So the technology enables that.

Second, I think that you have to do a better job of diving into the information that you own, and develop insights to understand what you can get out of that. Technology alone is not going to solve the problem.

Hazard: I think when you look beyond the standard direct mail, telemarketing, and email marketing, you run into a lot of other issues. An example of that is the Web site.

The Web site of one of our large clients is not controlled by the development department. But, the other three areas are. It’s about marketing yourself. A lot of my clients don’t have the revenue, the extra money, to invest in marketing themselves well. So while you can only do so much with your donor file, you can only squeeze so much out of a rock, if they’re not marketing themselves well outside of those channels, sometimes you’ll limit it.

Clolery: You were just saying that the Web site was not part of the other three fundraising departments. Why should it be? Why shouldn’t it be? And if it should be, how do you get somebody from the fundraising side heavily involved in that?

Hazard: It goes back to your point. You need to find one key person who has a say in all of these different pieces, and some organizations don’t have that. That’s where you run into a real problem.

Deane: I think of the analogy where you have a communications person, a marketing person, and a development person. Many times, the marketing and the communications person might not be from nonprofit backgrounds.

The communications person could be from government. The marketing person probably has a for-profit background, but the development professional understands the nonprofit milieu. That’s why I tend to put the leadership role in with the development professional, because it’s all about a nonprofit reality, which is usually reliant on donor revenue.

Sometimes it’s non-donor revenue, but contributions are usually the main revenue source. The other professionals can learn about the nonprofit environment and management issues and programmatic thrusts. But they don’t always have it from the get-go, whereas the development professional should and probably does.

Gaffny: I think it’s an organizational issue. And I think more groups need to institutionalize CRM (constituent relationship marketing), and to identify one person who’s in charge of the holistic organization. It’s marketing, communications fundraising all wrapped into one.

I give the American Cancer Society enormous credit. They’ve identified someone who’s incredibly smart in Angie Moore and who thinks of things in a holistic, synergistic way. She’s in charge of the whole thing.

I think they were one of the first groups to say, we need someone who manages CRM within our organization. With all of these other departments — fundraising’s a department, marketing’s a department – they are officially reporting up into the one person who’s then an umpire deciding what’s best for the holistic organization. Unless that’s on the organizational chart, I don’t think it’s going to happen in most groups because there’s always going to be turf wars.

Clolery: This isn’t one-size-fits-all when you’re talking about CRM. It’s not just the largest organizations that should be doing this, right? How does a $5 million organization put something like this into play when they don’t have the gazillion dollars to pay somebody of that ilk?

Gaffny: Well, there’s still someone who’s in charge of CRM. You raise a good point, though, because that person might also be in charge of two other departments that are under CRM.

There’s always going to be this concern that is she or he is “going to play favorites with a couple of groups he or she is in charge of as well as mine.” So that does raise issues. But again, it’s one person in charge.

Clolery: But I’m talking about dollars and cents-wise. Is this just too expensive to do for a small organization that isn’t a top-tier group?

Gaffny: It’s too expensive not to.

Carey: That’s exactly what I was going to say. If you have donors and you haven’t figured out ways to make sure you understand them and manage the relationship, if you’re a $5 million organization, you’re much more at risk than if you’re a $500 million organization.

Hazard: In many ways it’s easier for the smaller organizations to implement this kind of CRM. Large organizations cannot be as nimble as smaller ones. Small groups are also closer and more intimate with their donors.

Gaffny: I’ve got to say, though, that we’re kind of talking about this as if it’s unique to the fundraising world. I work with pharmaceutical companies. I was at one this week and it’s breathtaking how much infighting and how much silo-martyring and how much protectionism of a constituent’s name that goes on in that world. This is a human nature issue. It’s not a fundraising versus the commercial world issue.

Deane: I’d like to build on your point about the measurement being the driver. You know, it’s “I’ve got to bring in $1 million or I’m going to lose my job.” There is another approach, which is you don’t have those kinds of measurements. You still have measurements, but that’s not the measurements you use.

For example, at AFP, what we’re doing now is the individual goals are gone. And there are just three goals and everybody’s measured by the three goals. They are: increasing our member satisfaction rating; increasing our membership rate of growth; and, increasing the bottom line.

Gaffny: So then what’s the accountability factor?

Deane: Basically, everybody gets bonuses communally.

Clolery: But everybody can’t get fired.

Deane: Well, I guess you could. I think the point is that if we do those three things, then whatever your program, it is going to be improving and growing. And so the concept is we’re pulling together versus we’re all pulling separate little carts of goals. Now maybe this won’t work.

There are no guarantees in the world. But it is a way of trying to get everybody focused up here instead of down there on their own little horizon.

This is the hardest part. If you’re only going to have two or three criteria — critical success indicators, if you will — what are they? In a for-profit business, it’s easy. But in a nonprofit, it’s a little more difficult.

Christ: A for-profit has issues like research and development, which clearly chew into a short-term bottom line.

Clolery: Nonprofits have R&D expenses.

Christ: Exactly. So it’s complicated all over. Paul and I, in our other lives, share something in common. We’re both involved in emergency management issues. Paul’s a volunteer EMT instructor and I’m a volunteer fireman. We both get into issues like this. There is a leadership process and a management process from which emergencies are managed. I constantly try to figure out how we can do a good job there. And one of the issues is the communication between top management and the group.

Well, how do we make sure one group is going on? Well, there is one clear mission, and then there are assignments that are handed out. And those assignments, although they’re fairly common from one emergency to another, one can be a much bigger job in some emergencies. They’re given titles. It didn’t matter what you were when you showed up, you’re now in charge of water resources or logistics. We don’t even call you “Pete,” we call you “logistics” or “water resources.”

There’s a constant. The feedback loop is much tighter. It’s much more critical. We get situation reports half hourly at a big fire, every six hours at a major incident. How are we doing? What are the objectives for these six hours? Have we contained the flood or the fire? Have we done this, this, and this? If we haven’t, let’s get on it.

I think the organizational feedback loop has to be accelerated the way we now accelerate communications or data integration. Management is still on an annual basis, wishing they were on a biannual basis. And in reality, we need to be on a nanosecond basis.

Carey: One of the things that you see in the for-profit world that I think translates well into the nonprofit world, even if you set just several discrete goals, is you should be able to develop a pathway to get there. You should know whether or not you’re still on that pathway along the year.

You don’t wait around until the end of the year to ask, “Well, did we accomplish our goals this year?” You have to have feedback mechanisms in the marketplace, and you also have to have the ability for the different components of the organization to be able to report back up.

The reporting should be in a way that is relevant to how they’re doing their business. It also gives them the opportunity to get course correction because sometimes your commander in the field is going to say “Great, you’ve made progress on that, now move over here.”

Clolery: Right. The situation changed. You’re doing a good job. But doing that job well no longer contributes to the mission. What did you do over here? People have to be flexible. That takes a level of confidence at the top to push down and make that happen.

Hazard: To your point coming from the top, the measurement’s good, but also setting the expectations of getting everyone around the table and talking and sharing. I don’t think that happens a lot. You get so involved in the day-to-day that you don’t sit down.

I worked for a nonprofit for a while, and on a quarterly basis, there was a meeting where you had program staff, development staff and communications sitting around a table to talk. If you don’t have that message coming from the top that you have to sit down and talk, it’s probably not going to happen.

Deane: What I hear you saying, and I completely agree, is communication is essential. But then, that’s always been true in any organization.

And the concept of how you get a discrete number of critical success indicators is the concept of simplicity. These are just a few, but they’re easy to understand. It’s not complex. It’s exactly what you’re talking about — going down into the organization. You have to continue to, if you will, have it be very clear, very simple, easy to understand, easy to interpret into your own work reality. Otherwise, it isn’t going to work.

So finding out the way to measure yourself along the path is as important as figuring out the critical success indicators. If you can’t, you don’t know if you’re moving forward. A once-a-year assessment is not good. In fact, once a year is way too late. Monthly is almost too late. Your nanosecond reality, unfortunately, requires that kind of management.

Carey: Which also requires another principle to be mastered, and that’s span of control. Are you managing your people and departments effectively to deliver your critical indicators?

Deane: Let’s take where we started. We talked about a communications, a marketing, and a development person, and how the development person could have this fabulous skill set and manage all three functions very well. But then that person leaves. And then you come back and you want to replace it, but here again, you don’t.

So what happens is the remaining two divide it up or something. But they don’t necessarily have the skill sets for greater span of control. But we do it because they’re in-house, they understand our culture. We don’t have a learning curve as great. And so people tend to get their empires built without necessarily the training to have the greater span of control and be able to do it well. Isn’t this the Peter Principle?

Clolery: Being as we’re in Washington, we can use a Washington phrase. The joke is there are two things you never want people to see: How you make sausages and how you make laws. What does the donor see in all of this? How much of this do you really want the donor to see, or is this supposed to be just an interaction between a faceless organization or a faceless communication tool or this apparatus you’ve now put into place?

Gaffny: Are you asking does the donor have a say in it?

Clolery: Does he have a say and what does the donor say?

Gaffny: I think the 10-word kind of mission for everyone in the organization is to optimize the value of every decision. And the way we do that is …

Clolery: It could be Nike.

Gaffny: That’s fine, perfect. And the way you do that is you ask. I think it’s got to be more donor-directed as opposed to organization-directed.

We’ve all done it. We kind of push our ideas and our thoughts and our time and our place on the donor base as opposed to letting them direct the dialogue a little more. I can give you a perfect example. I’m giving a presentation in a couple of hours. I gave an online gift to 145 charities, $15 to each of them. And 73 of them also sent me a postal letter. The rest of them never did.

Clolery: Wait, they sent you an e-mail response plus a postal letter?

Gaffny: Right, exactly. But half of them never even tried to reach out along a different channel to see what that was all about. Almost none of them asked me how would you prefer to be talked to.

Clolery: Are they just assuming the fact that you talked to them one way, so that’s the way you wanted it to be returned without giving you a different option?

Gaffny: Right. That’s the message I got.

Carey: You’re presuming that was a conscious decision on their part.

Gaffny: Right.

Carey: Well, I think there’s a bias in any organization, both for-profit and nonprofit organizations, that if they have established a channel don’t try anything else. We work very hard in our organization to make sure all channels are open to customers, regardless of how they may interact with us at one time. That’s very important to continue to think about in the nonprofit space.

Clolery: Let’s bring that back to your communication comments. They assumed that you wanted to be spoken to, and so in many cases, they assumed you wanted to be spoken to via email, while some responded through email and postal mail.

Gaffny: And over the phone.

Clolery: What happens if Donor X sends them $15 online and then decides to pop a check in the mail for $25 the next time? The third time, the gift is by phone. How do you talk to that guy without going crazy with all the different channels?

Gaffny: Let’s start with the premise that you’ve just described, a wonderful problem. You’ve had someone raise their hand and proactively on their own indicate that they love you so much that they’ve reached out along three channels. That’s a good problem.

Carey: At that point, it’s not a contact strategy issue really. It’s a segmentation issue. Regardless of the amount, they’re engaged. The person is an engaged donor. You should have a strategy already on how to deal with people who you think are above the median in terms of donations versus your regular base.

Gaffny: And the simple answer is, maybe you just call them and say “How do you want us to do this?”

Clolery: Gee, I don’t know, Mr. Fundraiser, just send me everything you’ve got. Meanwhile, the donors sends three gifts a year and you get a total of $75. Meanwhile, you’ve sent 20 pieces of mail, 15 emails, called them a couple of times. And at some point …

Carey: That’s why I think the measurement that you were talking about, Curtis, is an important component that is entering a lot of conversations now. It’s some form of donor satisfaction measurement. You integrate how much are they contributing and how are they participating in your organization, with their perception of the organization.

You’re trying to evaluate what their opinion is because that opinion likely can influence others. So they are not only valuable in and of themselves, but in how they influence others in the community.

Deane: Just so I understand. It was 142 emails. You gave them 15 bucks. You sent it electronically. Some of them called you because you sent them 15 bucks?

Gaffny: Yeah, it was very interesting. I give National Trust for Historic Preservation a lot of credit. I gave them a gift last December, and my wife got the call Sunday night at home. And she said my husband’s not in, because I usually am ducking telemarketing calls. And she said the woman had asked, well, this is the time of year he usually gives his annual gift, and I’m wondering when would be a convenient time. Is this Mrs. Gaffny? I’m wondering, do you know when would be a convenient time to call him again?  I was surprised that at the $15 threshold I did get a phone call.

Deane: But I thought the call was purely an acknowledgement, a thank-you call.

Gaffny: No, this was a solicitation. This was a perfect example of the left hand knew exactly what the right hand was doing. It was not only the fact I had given but the time of year I had given. It gave them a rationale to call and say that’s why we’re calling. It was very impressive. I didn’t give them any money.

Christ: That’s what we preach, how to get a second gift when the first gift came online. And although there’s no one overriding answer, the big answer is call them.

And many people take that one step further and say call them and ask them to become a monthly donor. Maybe you get a second gift out of it, but bring them on. Using all those channels is important.

There are people I know will call me to discuss something and want to speak to me. There are others who will email me, only email. Back in the day in another business, I had somebody who would never answer my phone calls. But if I faxed him something, I’d get a response right away. And one learns from that process. And I know that if I want to have an important conversation with my 17-year-old daughter, I text her. And I mean the heart-to-heart stuff via text. I would never get that kind of depth out of her face-to-face, or even on the phone.

Gaffny: It’s funny, too, you mentioned the problem with three gifts and three channels. I would much rather deal with an issue of contacting someone too often than not enough.

We all know the single biggest mistake, and we’ve seen every organization do it, as soon as someone becomes a “big donor,” then oftentimes what someone says is let’s take this person out of the direct marketing program. Let’s take them out of the telemarketing program. Let’s take them out of whatever, and we’ll instead handle that on a one-to-one basis. And invariably, it never happens, and that person never gets any contact at all. So if someone’s going to err, I’d rather they’d err on the side of it’s too much.

Hazard: Who’s to say what too much is?

Christ: The donor. They will decide. I thought you were asking a different question a while back when we were talking about the complexity of layers of management. What does the donor say about that?

And I’d answer what I answered to our local school board member. We were talking about campus deans and deans of middle school education. And I said, “Whoa, what do these people get paid?” Even in my rural area, it’s a decent amount.

And I said, “You’ve got 30 or more kids in every classroom, which blows every standard of span of control. If you’re not teaching the kid, then you’d better be helping the teacher, sweeping the floor, making lunch, or driving a bus. If you’re not bringing the kid to and from the school, feeding them, cleaning the bathroom, you got no use to me as a taxpayer in the school system.”

Donors are the same way. I think donors would be aghast if they thought that there were communication and marketing and development operations in one nonprofit, much less ones that didn’t talk to each other. 

They want messages. Why? Because they want to belong. Because they want to know that that organization is doing wonderful things. They want to hear what that wonderful thing is. They want to hear it the same way, when they see it on a billboard, when they get it in an email, when they get it in the mail or on the phone. They want to be part of that and they want that to be unified.

And they want a minimal overhead involved in that process. The best is such a transparent process that they all know that there’s that kind of organization involved. 

Carey: In fact, I think that’s where the Web has really changed the game. Personally, I expect my charities to have a Web presence to have an ability to interact with me via email, via newsletters, etc. Yet at the same time, as a marketer, I understand that there’s a lot of infrastructure that is underneath that. It’s a real investment.

Nonprofits have to learn how to walk before they can run, because they can get in over their heads and just not be able to deliver to the expectations of this new Webcentric world. And yet, they need to be there. There needs to be a presence. It’s a challenge.

Christ: The Web exposes a lot of structural issues that nonprofits sort of got away with in the past. Because, as you mentioned, Kristie, it includes communications, and programming, and marketing an advocacy group all in the same. They never used the same channel to talk before at the same time.

So we get into issues, like which one goes first at the top of the Web page? And who moved it, how much? And then you end up with Web pages that my partner refers to as NASCAR syndrome, you know, with stickers all over the place. With no semblance of order. But everybody’s happy, or at least equally unhappy. And that’s not the point of either a Web site or of management.

Clolery: Speaking without, of course, revealing the client’s name, have there been some disasters of late that have been fixed, some examples of something that was going horribly wrong that was brought back through this process?

Gaffny: It’s a tough question because it’s such a tough issue. It’s just been the last five to eight years that people have even really wrapped themselves around the idea of CRM. Not too many years ago, email didn’t exist as a channel. The special events category was a significant element, but not nearly as significant as it is now.

There really weren’t as many vibrant channels as there are now. That has brought a lot of these issues to light. So my backpedaling answer first of all would be this is an issue people are really just the last five years starting to wrap their hands around in a big way. I’m not sure there are a lot of instances of organizations where the left hand and the right hand are talking to each other that much.

I think people are moving in that direction, but I don’t see it as much as I hope to see it.

Clolery: There are numerous examples of organizations where the databases should be coordinated but are not. Some have multiple systems. None of these geniuses in IT are writing software programs to make them talk to each other.

Carey: Well, that’s not exactly the case. This is not going to be a commercial, but I do think it’s important to ask the whole organization what their real needs are and to find solution providers with the expertise to be able to figure out ways to integrate those needs from a software, systems and implementation point of view.

But that alone is not enough. You’ve got to look at your organization and make sure you understand the functions and the communication structure we’ve been talking about.

Christ: And if you’re not doing a good job with 5,000 donors, all the technology in the world ain’t going to help you. If you do a good job with the 5,000, you say we could never handle 50,000. But 5,000 would give you enough money to fuel the infrastructure to go up to 16,000 and eventually 50,000. But technology isn’t going to solve the problem. You could give me a Stradivarius violin and it wouldn’t sound that good. You let me have any violin and three hours a day of practice, in six months, I could make it sound like something.

And I think there are a lot of organizations that either do nothing, waiting for a Stradivarius to show up, or get a Stradivarius and expect it to play itself well. And that’s not fair to Mr. Stradivarius.

Gaffny: There’s another phenomenon in the last five or six years that I think has made CRM more difficult, and that is the push to hire multiple agencies within organizations. It used to be that the typical large charity would have one single agency in charge of messaging and the constituents. And nowadays, it’s not uncommon to have multiple agencies. And that, again, makes it harder for the charities to make sure they’re talking to each other, that they’re creating the same lip, toe, and heel.

Clolery: Yes, but a lot of these long-time agencies spend a lot of time spinning off new types of business. They have to have nine different agencies now.

I’m not saying it’s a bad thing. It’s made agencies hungrier, leaner, and do better work. But it does, to someone’s point about simplifying things, make it harder to pull the whole thing together.

Christ: When that happens, those people have to be integrated into operations, indoctrinated into the mission. Give them the same standards in terms of communication. And reporting and monitor, and give them the free reign then to innovate within that. That’s a tall order.

Hazard: One thing that we forget is that they’re nonprofits and we’re talking about the ideal world. And the way that donors judge nonprofits these days is a lot based on efficiency. A lot of the things we’re talking about are added cost and you’re out of resources. I think that it’s a hard thing these days. There’s so much focus on how efficient nonprofits are and where’s my money going and how much money is in the programs.

And, okay, my percentage looks good now but now I need to focus more on CRM. I need to hire this great new person who’s going to be highly paid. And they’re going to want to bring in more staff or hire an agency. It’s all added cost and is it making you better? It’ll probably take a while. It’s not something you can turn to overnight.

Gaffny: That’s a great point. But I think I’m talking more about the philosophical ship as opposed to a resource ship. But, you’re right.

Christ: I’d like to ask a question on behalf of Paul’s readers. If I’m an executive director or a board member of a $5 million nonprofit, what’s the first step? How do I say, “Okay, I believe what we’ve said here today? How do I start to change, to have my organization more clearly defined, more in touch with the customer? What do I start to do? I don’t want to wait until somebody leaves. I don’t really want to fire people.”

Deane: You might have to, on both points. But my response to you is that it really is a function of leadership. If your board chair’s not going to back you up as a board member, you’re not probably going to have a lot of success. And if your senior staff person, if that’s a president or an executive director, that person has to be on board with this. That is the person who has put in the existing system.

Getting that person to say I want to take a whole new approach is possible. And the person might be able to effectively do it. But it’s not something that happens routinely. That’s an unusual exec who’s able to say, “You know, the way we’ve been doing it for the eight years, it might’ve been good for the last seven, but now it’s not the right way. We have to do a 180-degree shift.” But without that, you’re never going to get there. It’s got to start with your top volunteer and top staff leadership.

Part of the problem with transforming an organization is that it’s usually a multi-year process. That means you’ve got to have an executive director who is committed to, say, a three- or five-year process of really making the whole transformation. And in that time, will there be three or five different volunteer chairs.

It’s a much harder thing to achieve five significant volunteer leaders in a row, all of whom are visionary, and all are going to take the hits along the road to ultimate success.

Clolery: Yes those volunteer leaders might change almost every year, but the contracts these days for the CEOs are on a rolling three or five years. So in year three or in year two-and-a-half, the CEO might be rolled out of there.

Deane: And indeed, that might very well be the case if the CEO is trying to do this transformational shift, which causes some disruptions, makes some performance indicator flutter in the wrong direction. They don’t need it.

And so guess what? I’m not going to do it. I’m not going to take the risk. But see, that’s the system that’s there. And so that’s what’s got to be overcome to get on to this path. And those are a lot of challenges.

The retention potential of the executive, and the fact that you’ve got a volunteer leadership that you need to have years in a row all be visionaries, is very hard. If you’re looking at any volunteer organization with a volunteer board, and if they have an annual chairman, can you get three good ones in a row?

Clolery: But maybe that’s how boards should start thinking about the contracts of their executive, and maybe the number-two person in the organization. “Look, we’re going on this radical transformational change, we need you to stick around for five years.”

The contract is going to be a five-years. Yes, we’ll evaluate you every year, just like anything else. In general, where’s the support in contract, in writing, for that executive who’s shattering those eggs?

Deane: The way this most commonly happens is when there is a vacancy in the exec, you bring in the change agent. The board, through facilitated discussions or whatever, comes to the conclusion this is the time when they want to take a really comprehensive look and they conclude they need to transform. Let’s go find the person with that skill set. And so they bring the person in with that expectation.

Carey: And generally with a shared vision, as well, at that point. But that doesn’t mean there’s not a lot of work to be done to really turn that vision into an effective strategy, and to build across the organization that same shared vision for whatever change you’re trying to implement. It’s hard.

Hazard: If some of these organizations have been around for 50, 100 years, how do you just all of a sudden shift a culture overnight?

Clolery: Look at what March of Dimes just did. They changed the name of their signature event. The WalkAmerica was around for decades. Now it’s the March for Babies.

Carey: So it is possible. You have to make sure when you’re doing it that you have your donor base in line all the way through, that you are not somehow diverting with this new strategy, not changing the fundamental mission. You might have to explain to your donor base that they’ll see the percentage of infrastructure go up and the percentage of programs go down for the next two or three years, it’s for this reason. Come along with us. Try to actually turn that into a fundraising opportunity as well.

Christ: We talked about leadership at the beginning of the conversation, and it was in the last paragraph before you pointed to me. I teach leadership in the emergency management field, and one of the things I start off by saying is leadership is hard. It’s hard for two reasons. One is it’s just plain hard. I mean, you’ve got people and a mission and you are the grease of the wheels. You’re the one whose job it is to make things work.

Your ego, your own needs, have to be completely removed from the mission. Do not attach them to the power that comes from leadership or the compensation or anything else that comes from it. Your job is to get these people safely through this mission and back again. And so that’s hard.

The second reason it’s hard is because how do we learn anything? We learn it from example. And unfortunately, most of our examples in the leadership field aren’t all that good. And we’ve got a lot of bad ones and not a lot of brilliant ones. We don’t spend enough time studying those brilliant ones. I think that everybody needs to get a taste of inspired leadership, make a commitment to take a step. And leadership, it’s key to have top leadership support of an organization.

Where does leadership begin? With you. With me. The next decision, the next phone call with a client, the next decision you make, are we going to help lead them? Are we going to remember that it’s all about the whales, the babies, peace, whatever the mission? And if we’re not contributing to that mission, then we’ve got to question what we’re doing. That’s where it’s tough work.

And yet it’s the most satisfying work in the world. Many a day, I’ve gone off on an ambulance call or a fire in the morning and said, “I don’t care what happens the rest of the day, I’ve done something, challenged myself, done something good for somebody else.” There is no better feeling in the world. And we’ve just got to get into that mold more often in the work that we do.