32 Theses About Nonprofit Compensation

  1. Nonprofit work is hard work. It is complex, adaptive work where the answers are not known in advance — we have to invent them as we go. Most nonprofits are tackling huge problems with few resources and many face deep-pocketed opposition.
  2. Nonprofit work is long-term work. The problems we’re working on — climate change, inequality and injustice — didn’t emerge overnight, and we’re not going to solve them in a couple of years.
  3. Because nonprofit work is hard, long-term work, the nonprofit sector needs to attract the most talented people we’ve got — and keep them around long enough for them to become wise and masterful practitioners.
  4. The skills and talent nonprofits need to solve big social problems are complex . We need to be able to draw in people with a broad range of experiences, skills and talents. Failure to do this not only hurts us tactically, it limits us strategically.
  5. Right now, access to wealth — inherited wealth, earned wealth from a prior career or spouses/partners who are the primary breadwinners in their households — is often an implicit filtering criterion for long-term nonprofit employment. This perpetuates and deepens the structural racism and inequity in our society, even as we say we are working to eliminate it.
  6. The student debt crisis is a huge, largely unacknowledged talent problem in the making for the nonprofit sector. While many millennials are drawn to mission-based work, their student debt will prevent them from entering the sector, or ensure that their stay here is short.
  7. The skills that it takes to build and sustain a successful and effective nonprofit are becoming more varied.
  8. Because of the explosion of nonprofits — and the immediate accessibility of a global audience afforded by the internet — nonprofits must not only be skillful at more things, they must be relatively more skillful at more things if they want to break away from the pack. The bar for success is, paradoxically, rising, even as the barriers to starting a nonprofit are falling.
  9. The skills that nonprofits must master to succeed in the twenty-first century are rapidly converging with the skills that organizations in other sectors must master to succeed.
  10. We can see this most clearly in the area of technology. But it’s not just technology, it’s also finance, leadership, marketing and more.
  11. The rise of mission-based “social enterprise” businesses and B-Corps further exacerbates the nonprofit’s sector’s intensity of competition for talented, mission-minded people.
  12. Nonprofits are therefore competing beyond the sector for talent more directly than ever before and the intensity of this competition is only going to continue to increase.
  13. Nobody expects (or deserves) to get rich working for a nonprofit.
  14. Many nonprofits are (or can be) amazing places to work. People will sacrifice some amount of money for challenge, meaning, flexibility and autonomy.
  15. Despite this, we should not expect nonprofit workers to forgo home ownership, children and a secure retirement in order to work in the sector.
  16. If nonprofits want to successfully compete for talent — and keep good people around for the long haul, they need to pay enough so that money isn’t an issue, then out-compete other employers on meaning, relationships, autonomy and opportunity.
  17. The amount of money that makes “money not be an issue” for the diverse, talented people we need to attract and retain is often more than the median nonprofit is paying right now.
  18. The amount of money that makes “money not be an issue” for the diverse, talented people we need to attract and retain is not insanely large. People who are drawn to and can succeed at the complex, adaptive challenges of nonprofit work tend to have strong intrinsic motivation and are rarely highly materialistic.
  19. There are many roles in nonprofits for which it is believed to be difficult to objectively and fairly evaluate employee performance and/or contribution to either the organization’s bottom line or its mission impact.
  20. Nonprofits rarely cut low performing staff.
  21. Nonprofits rarely if ever pay their top performers significantly more than their median or low performers.
  22. Most nonprofits would rather spend additional dollars growing their team or launching new programs and accept turnover as a “fact of  life” than invest in retaining their best people for the long haul.
  23. Nonprofits rarely account for the full costs of turnover: lost relationships, lost knowledge, lost productivity, damage to morale, etc.
  24. Many of the nonprofit sector’s most highly skilled people eventually are forced to leave the sector entirely or go into private practice as consultants in order to meet their financial needs.
  25. The “consultant-ization” of the nonprofit sector has some benefits (e.g. rapid, flexible team formation, deep specialization, diffusion of knowledge, etc.) but also considerable costs.
  26. While nonprofit culture and management practices contribute to some of the sector’s dysfunctions around compensation, nonprofit board members, donors and funders play a significant role in shaping the sector’s culture and determining how it allocates resources.
  27. The overhead myth, preferences for new programs over proven effectiveness, underinvestment in leadership development, failure to admit and embrace failure — these phenomena all contribute to unhealthy ideologies about compensation in the nonprofit sector.
  28. Nonprofit boards rarely involve themselves in staff salary structures or policies, restricting themselves to setting CEO compensation and perhaps approving incremental increases to the overall salary pool during the budgeting process.
  29. Foundation program officer salaries often serve as an effective upper bound on nonprofit CEO compensation.
  30. Funders rarely reward their highest-performing grantees with game-changing infusions of general support dollars — and even more rarely do they cut their low-performing grantees to free up resources for their high performers.
  31. Many funders are happy to reward effort rather than results. This is closely tied to risk aversion, because big results require big risks and it is often hard to claim credit for long-term success.
  32. There is no silver bullet solution to these challenges, but the nonprofit and philanthropic sectors must work together to open a more courageous conversation if we are to make progress.

The original sin of nonprofit capacity builders

Back in 2011, a few weeks before I left Groundwire (R.I.P.), I was at a nonprofit conference down in southern Oregon. I was delighted to run into Dianne Russell, who runs the Institute from Conservation Leadership. Dianne’s been doing organizational capacity building work in the environmental sector for… well, pretty much forever and has always been one of those people I’ve admired as we worked over the years with many of the same great people and organizations.

So there we were in the lobby, catching up, talking about the weather, our kids, I don’t quite remember. But then out of nowhere, Dianne dropped this idea on me:

“I’ve been thinking lately,” she said (and I paraphrase slightly), “that we capacity builders have really screwed up. We’ve systematically miseducated funders about the true cost of doing the work.”

I swear that the clouds parted and a great beam of light shone down on us. (Never mind that we were indoors.) I heard the clap of thunder, but maybe it was just the sound of my jaw hitting the concrete floor.

I picked it up and said, “Oh, wow. You are… totally… right. I never thought of it that way before. How come I never thought of it that way before?

In an instant, I flashed through all of the ways I’d failed at pricing over 15 years of doing mostly-below-market-rate technology and communications consulting to environmental nonprofits:

  • Giving work away for free: FAIL. very few clients truly value what they’re not paying for, and a price of “free” makes it really easy to fail to invest in making new tools and knowledge sustainable.
  • Charging meaningful but “below-market” rates: FAIL. This is a more subtle way to fail. When you charge a meaningful amount, clients have “skin in the game” and that’s good. You have far fewer failing projects. But think back to Econ 101 — if you price below market, demand is infinite, and every unit of below-cost service you deliver is another unit of charitable subsidy you have to raise. So, while each project is great and your clients love you, you are digging a hole to hell with your good intentions.
  • Charging “the low end of market rate:” NOT A TOTAL FAIL, BUT DANG HARD. Here, your clients are happy and you’re not losing money hand over fist, but you’re trapped in the tyranny of the billable hour and the constant struggle to keep staff from being poached by higher-paying for-profits,  etc.

But, despite having experienced all of this failure modes, I hadn’t really thought about how underpricing affects funders — who, along with the nonprofits themselves, are often “the customer” for capacity building services, even though they are not “the client.”

As we tie on our superhero capes and leap into action, we often fail to calculate our true costs. And even more often, we fail to disclose that full cost either to our clients or to our funder/customers. This happens for many reasons, all of them sincere and well-meaning.

We capacity builders, with our zeal to get the work done — after all, there’s so much good work that desperately needs doing — we’re wizards at cobbling together a few bucks here, a few bucks there. And maybe we feel a little bit guilty about charging all that money to do good work.  We’ve usually got at least a touch of impostor syndrome (“we’re not really that good”) so we hem and haw and there are a thousand reasons why we just sort of don’t get around to really showing everyone who’s paying for a piece of our pie just how much the whole pie really costs.

This is all well and good and well intended. The clients are happy, the funders are happy and the capacity builder might even be pretty happy too. But over the not-so-long term, Bad Things Start to Happen:

Even if you’ve been rigorous about showing all your cross-subsidies, the cumulative effect of underpricing is that it affects what funders (and clients) are willing to pay for future capacity building engagements. This is what my economist friends call “price anchoring.” Over time it means that funders (and clients) start to believe that below cost is what it costs and, worse, that’s all it’s worth. This means that if a future capacity builder should have the temerity to charge enough to cover their full costs (including the cost of paying people competitive salaries, not burning them out with overwork, etc.), they are very likely to be told, “Sorry, that’s too expensive. Last time I only paid $BELOW-COST-PRICE.”

Let me be clear: it’s not that clients and funders are naive or that they are trying to abuse us by setting up a race to the bottom. Prices are signals and prices are stories, and our prices are telling lies that have, over time, systematically miseducated our customers (and our clients) about the underlying economic reality of the work.

The bill for this is coming due.

 

What tech skills should mission-driven nonprofits expect all of their employees to master?

What tech skills should mission-driven nonprofits expect all of their employees to master?

The-IT-Crowd-006I’m not talking about what we should expect the “digital” people to know — or the IT staff. These folks are always going to require a deeper set of particular skills that are going to vary greatly depending on their role and the particular organization. I’m asking a bigger and more abstract question: what skills should we expect of everyone who works in an organization trying to make change in the world — from the CEO to the administrative assistants, and everyone in between.

Is it simply enough to expect “proficiency with Word, Excel and Outlook?” Or, in 2014, should we be expecting more?

I think we can and should expect more.

Let’s start by unpacking the notion of “proficiency” with “basic office productivity software.”  There’s more here than meets the eye. Here’s my list of tasks I’d expect someone who has solid “intermediate proficiency” with the basic tools that are essential to modern mission-driven work to be able to perform.

  1. Format a document with style-based formatting, both in a word processor and in a website content management system
  2. Create, share and organize online documents and spreadsheets.
  3. Use “tracked changes” or similar document revision features to collaborate on a document with others
  4. Perform a basic mail merge from a spreadsheet, and be able to translate basic mail merge concepts to online tools such as broadcast email systems
  5. Compose and send a lightly-branded broadcast email message that looks good on a mobile phone
  6. Sort and filter a list in a spreadsheet
  7. Use common spreadsheet formulas to analyze data like SUM, AVERAGE, MEDIAN
  8. Create a simple chart or graph that follows most of Edward Tufte’s rules of good information design
  9. Crop and resize an image for use on the web or in an email
  10. Create a lightly formatted but professional-looking set of presentation slides that are compliant with an organization’s brand guidelines
  11. Set up and use an LCD projector
  12. Host and deliver a presentation online through webinar or online meeting software.
  13. Use text/video chat software like Skype, Google Hangouts, etc. for real-time communication with colleagues
  14. Manage one’s calendar online.
  15. Book appointments with colleagues and partners electronically
  16. Use a password manager to generate and manage secure passwords for online services
  17. Build a simple online survey and interpret the results
  18. Create rules or filters in an email client to organize your inbox
  19. Track tasks with a team using tools like Trello, Asana, Basecamp or Evernote
  20. Export a list of names or other data from one system in CSV format and upload the list into another system
  21. Create and manage an email discussion list
  22. Bonus: design the agenda for and facilitate an effective small group meeting

Bet you weren’t expecting 22 items. (Hey, did I leave anything important out? Leave a comment!)

Seriously: imagine how much more efficient and effective our organizations would be if we could count on all of our colleagues and allies to have mastered these basic skills.

I’m not naive; this is a high bar. Is the solution then to raise our hiring standards? Maybe. When I’m hiring folks, I certainly attempt to gauge how solid their technology skills are. But I realize that there are a lot of smart, bright and capable folks out there who couldn’t tick all of these boxes. That’s OK. College is supposed to teach you to read, write and think — it’s not supposed to be vocational education.

This means that employers need to be ready to train their people in the practical skills they need to excel in the workplace. Part of the job of any social mission organization is to bring in smart, bright and capable people and help them grow. This takes a strong organizational commitment to making those investments — and a strong organizational culture of peer learning. And you can be sure I am looking to hire people who are motivated and ready to learn (and to teach!).

Folks who are already in the social change workforce: you should see mastering as many of these skills as possible as an essential part of your job. These are the building blocks of 21st century social mission work.

Update 7/4/2014: edited slightly to incorporate great feedback from commenters below and on social media. Thanks, keep the feedback coming!

Approaching funders for program-related investments

At work, we helped put on  a great panel session on program-related investments (PRIs) [1] earlier this week. We had a packed house of 80+ folks and they asked a ton of great questions, including one from the CEO of a nonprofit with a revenue-generating social enterprise program: “As a nonprofit, who can I approach to invest in my social enterprise?”

Panelist (and my colleague) Peter Berliner offered the following answer: Foundations make PRIs for the same reasons they make grants: they see alignment between their philanthropic goals and the goals of the social enterprise. Second: they ask, “is it a reasonable business proposition?” So, it makes sense to ask for mission investments from foundations with whom you have existing relationships. Who supports your goals already?

Not only did I think this was a fantastic answer, it was almost verbatim the answer I gave for many years to nonprofits who asked me, “What foundations will be interested in funding my technology capacity needs?”

The old world connects with the new.

[1] PRIs, as the jargon goes, are foundation investments that are designed to yield below-market financial returns and accomplish social change goals.

Three dimensions of transformational leadership

I’ve been thinking a lot about what makes truly effective leaders in the social change sector. There are people who’ve devoted their entire careers to the question, and I don’t presume to their erudition. But lately, I’ve been reflecting on three key dimensions of organzational leadership that have really helped me understand organizations I’ve been involved with over the years.

External relations leadership

External relations is the classic, outward-facing dimension of leadership. It’s the one we often mistake for the whole ball of wax. External relations is about charisma, storytelling and selling the organization to the world at large. It’s a vitally important dimension of leadership, especially in the nonprofit sector, where donors and grantmakers often give based on emotion and relationships. Many nonprofits are founded by leaders who are strong on this dimension of leadership.

Management leadership

This is the internal-facing “make the trains run on time” function. Management leadership is what builds systems and processes; it allows organizations to execute consistently, with excellence and at scale. Few organizations can grow or be successful over the long term without developing strong management leadership. Leaders who are strong at management are often very different personalities than those who excel at external relations–they tend to be more introverted and detail-oriented. Many management oriented leaders are found in COO roles.

In many nonprofits, the top two people are a strong external relations leader and a strong management leader. This can be a pretty effective leadership model for some organizations, and is far preferable to a single CEO trying to perform both roles.

But if we stop with just these two leadership functions, we overlook something critical to the long term health and success of an organization: the leadership function that is focused on taking care of its people.

Nurturant leadership

Leadership is not just about strategy, sales and management, leadership is motivating and supporting people so they thrive and excel. It’s great to have a charismatic leader out front, and a management leader who can build and refine the internal processes. But someone has to be focused on taking care of the organization’s people as whole human beings. This is not an “HR” function; it’s a core leadership function.

Nurturant leadership is this dimension of leadership–and, unfortunately, it’s often overlooked–and consequently one of the biggest barriers to long-term organizational excellence.

Lots of organizations have a strong ED/COO combination providing external relations and management leadership. But these organizations sometimes have a tough time retaining talented staff over the long haul, because they are missing third leg of the leadership stool: a strong nurturant leader.

“But isn’t this the CEO’s job?” you ask. Well, it’s certainly the CEO’s responsibility to make sure the organization has sufficient nurturant leadership. But many CEOs struggle with this leadership function–particularly CEOs who are focused on external relations. External relations leaders are charismatic and visionary, but they are often ineffective at nurturant leadership for several reasons:

  1. Being outward-oriented means you’re out of the office lot. There are so many meetings to go to, donors and clients to pitch, speeches to give. External relations leaders are often on the road so much and in so many meetings with stakeholders that they don’t have the focused time it takes to nurture their teams.
  2. The more visionary and charismatic the leader, the more intimidating they often are. It’s hard to nurture people who are a little bit scared of you.
  3. A certain degree of narcissism often goes with the territory, and while it’s not unhealthy per se, it does tend to interfere with the empathetic demands of nurturant leadership.

Similarly, many management leaders struggle with this as well. When you are focused on building systems and processes, it is easy to slip over the line into caring more about “the system” than the people that must operate within it. Overall, though, I’ve seen a lot more people who are successful management/nurturant leaders than people who combine external relations and nurturant leadership.

The biggest lesson for organizations, though, is to explicitly attend to and elevate nurturant leadership as a discipline co-equal to external relations and management leadership. More on this in a future blog post.

Advice for consultants

Whenever I talk with consultants about their challenges, the conversation almost always results in me saying, “It sounds like you need to raise your rates a bit.”

I’m joining Philanthropy Northwest!

I’m pleased to share the news that I’ve signed on as Communications Director at Philanthropy Northwest!

PNW is the regional association of grantmakers, offers capacity building and consulting services to the philanthropic community through The Giving Practice, and also runs a national network of organizations focused on impact investing called Mission Investors Exchange.

I’m tremendously excited about this opportunity to apply my strategy, communications, collaboration and technology skills in a new set of networks. I’ll be starting on Monday by hopping on a plane to Juneau, AK for PNW’s annual conference–not the most traditional onboarding process, but it’ll be a great opportunity to dive into the deep end of the pool!

I’m jumping sectors a bit from environment to philanthropy, the essence of the work remains the same–building, connecting and inspiring people around social change. There’s enough that’s familiar for me to feel confident I can do the work, and, even better, a ton I’m looking forward to learning from my new colleagues and peers.

See you out there!

Things I should write

The following article titles have been staring out at my from my “drafts” folder for months (or longer):

  • Can we save the planet with grants averaging $40k?
  • How do we measure the effectiveness of organizing and advocacy?
  • Running Agile non-software projects (like campaigns)

Clearly I’m not getting around to them. Crowdsourcing anyone? ;-)

How to measure the effectiveness of GiveBig and other “day of giving” campaigns?

Today, May 15, is GiveBig, Seattle’s third annual “day of giving” event. Created by the Seattle Foundation in 2011, the idea is to focus attention on charitable giving, raise the public profile of the Seattle Foundation and of course raise some dough. There are similar events in many other cities now, and even a national “GivingTuesday” event right after Thanksgiving.

But how do we know whether GiveBig and similar day of giving type events are really working?

Continue reading

Needed: an open data standard for volunteer opportunities

I was chatting today with my friend Sameer about the challenges and opportunities in volunteer management software and had a bit of a realization: it’s crazy that we don’t have an open data standard for volunteer opportunities, so that organizations can publish a machine-readable list of volunteer opportunities on their websites, and let them get picked up and syndicated by services like VolunteerMatch and Idealist that specialize in aggregating and curating volunteer opportunities.

I’m thinking of something like RSS (or even better, ATOM), which provides a simple, open standard for publishing information about articles on websites so that they could easily be picked up, remixed and syndicated to reach a far larger audience.

Let’s call it “VSS” (Volunteer Syndication Standard). I haven’t thought about this deeply, and I’m no expert on designing protocols like this, but I would start by seriously examining ATOM, the most modern RSS-like standard for publishing articles. I’d also look at hATOM for inspiration about how to embed machine-readable data directly into a standard webpage. EDIT: Probably also .ics (the standard for event syndication, because volunteer opportunities often–but not always–resemble events.)

It would be hard to inspect one’s navel to design this right, so I’m not even going to try. But I’d definitely definitely want to include folks like:

  • Organizations that publish lots of volunteer opportunities
  • Organizations that aggregate and curate volunteer opportunities or recruit volunteers for many organizations
  • Makers of volunteer management software (or other tools that let groups publish volunteer opportunities online–this could include major CMS platforms, for example)

I think that a standard like this, if sufficiently widely adopted, could unlock a huge amount of innovation in how organizations (and intermediaries) recruit volunteers, especially if it was coupled with another set of standards for intermediaries to use to push data about volunteers directly into groups’ volunteer management databases.

 

 

 

 

How to make your organization’s story compelling

I got an email today from one of my all-time favorite organizations, Sightline Institute, that just blew me away. This is one of the best tellings of an organziation’s history that I’ve seen in a long time. It’s succinct, personal, filled with rich, specific imagery (especially for an organization that mainly trades in data and policy!) and best of all, it places the reader into the story. Sightline has a long history of top-notch writing, so it’s no surprise to seem them hit it out of the park. Any organization looking to tell its story better could learn a ton from studying this single email closely.

Dear Jon,

Twenty years ago, I lugged a refurbished library table into my cramped bedroom closet, drilled a phone line through the wall, and let myself begin to heed the mission that had been calling me: to make the Pacific Northwest a global model of sustainability.

Daunted but unswayed by the audacity of this goal, I began to do what I have been doing ever since: describing the challenge to others. And then as now, they—you—joined me. You brought your talent, grit, generosity, and faith, and the result was Sightline Institute, then called Northwest Environment Watch.

Sightline grew through eighteen books, scores of reports, hundreds of speeches, and thousands of articles and blog posts. It grew from hundreds to thousands to tens of thousands of monthly readers, each a force for change in his or her own community. It grew to reach media audiences tallied in the tens of millions and to shape the thoughts of governors, senators, and CEOs.

In time, it grew influential enough to leave fingerprints on Cascadia’s future. In our first decade, we launched Stuff, studied in hundreds of classrooms and in tens of thousands of copies. We planted the seeds for a carbon tax-shift in British Columbia. We coined the term “green-collar jobs,” words that would eventually issue from the lips of presidents.

In our second decade, we inspired bold commitments to compact urban growth in key Cascadian cities. We prompted new rules on toxic flame retardants by studying chemicals in breast milk. We played midwife to pay-by-the-mile car insurance and peer-to-peer car-sharing. We designed regional carbon-pricing policies and brought them close to adoption. We unmasked the dangers of Big Coal’s export plans, revealed the folly of urban highway expansion, and championed a new, green approach to managing the rainwater that falls on our communities. Sightline’s fingerprints, your fingerprints, are on all these things and more—much more.

Now, today, pausing for a quiet moment in Sightline’s Seattle offices—brimming as usual with passionate and intelligent people—I stand in awe of these accomplishments. They have been improbable, considering that Sightline’s annual budget makes us account for just two one-millionths of the regional economy. In the animal kingdom, we would be like a gnat trying to steer an elephant.

Yet I am filled with hope for the years ahead. The challenge is no less daunting than ever, but we have grown, in concert with you—our friends, supporters, and allies—into a force to reckon with. Sightline’s influence has never been a function of our mass. It is a function of the light you help us spread. Comets such as Halley’s are less than one ten-billionth the mass of the Earth, yet they’ve been known to change the course of history. Sightline’s strategy is comet-like: a small nucleus of staff and board plus a long tail of supporters and allies. Shining outward from this body, our ideas, presented well, can attract the attention of millions and even define a new direction.

A Cascadia worthy of our grandchildren and theirs is more attainable than ever before. But it is certainly not inevitable. It’s a possibility only—a possibility whose realization depends entirely on what we in this generation choose to do. In the span of 240 months, Sightline, now giant compared with my bedroom closet but still minuscule compared with the region we aim to influence, has begun to shift the public agenda in a region of 17 million people. It’s only a beginning, but, I hope you agree, it’s a promising one. Just think what we can do together in another 20 years!

In the next two decades, together, we will shine even brighter. We can put a price on carbon. Indeed, we can move the region along the path that leads beyond carbon and dirty fuels entirely, to clean energy. We can make prices tell the ecological truth in other ways, too: from pollution to traffic congestion to habitat destruction, we can better align the power of markets with the conservation of our natural inheritance—of Creation. We can measure what matters, replacing GDP with better indicators of progress. Through better reproductive health technologies and policies, we can help create a Cascadia in which every child is born wanted; we can help men and women have the families they want, when they want them, even as we temper population growth. We can build complete, compact, walkable communities—places where motorized travel is less common because less necessary. All these things and more we can do.

Twenty years ago, I was the one at the library table in the closet signing the papers to incorporate Sightline, but the resulting improbable cavalcade of hope has never been about me. It’s been about you: Your love for this place on Earth. Your confidence that we can do better, that we can build an economy and way of life that can last. Your faith that we, here, can set an example for the world.

For your love, confidence, and faith, I thank you. Here’s to the next 20!

Alan Durning Executive Director

On boards

As a public administration grad student, I’ve been thinking a fair amount about nonprofit boards of directors lately. I’m not the first person to think that nonprofit boards can be super-dysfunctional; there’s a whole industry of “self-help” books for boards. (The one I’ve most enjoyed lately is Governance as Leadership: Reframing the Work of Nonprofit Boards, if you’re looking for some bedtime reading.)  But the roots of board dysfunction are not to be found in some sort of failure to implement “best practices,” though. There are deeper problems with the institution of the board itself, and I’ve rarely seen these talked about.

Most of the time nonprofit boards work just fine, because there is nothing difficult they need to do. Sometimes, though, boards have to do urgent, important, difficult work–like an executive director transition–and that’s when they can get into big trouble.

The hard truth is that nonprofit boards have almost zero accountability for performance beyond meeting the bare minimum legal standards of “don’t steal the money or let it be stolen.”

  • Board members have no financial assets at stake, unless they also happen to be major donors–and that is all sunk cost anyway. And of course, nonprofit board members are typically unpaid. So there’s no economic incentive.
  • Board members have no real professional reputation at stake, and will typically experience no or few negative consequences even if they destroy the organization through mismanagement.
  • Most boards aren’t elected by a membership, and when they are, the elections are rarely competitive. So, pseudo-democratic accountability is rarely a factor, and weak at best.
  • Much of the time, board members don’t have strong enough relationships with each other to effective hold each other accountable for high performance. How many boards do you know of where the members are close collaborators or, god forbid, friends, outside the boardroom?

To be sure, board members have their own consciences to guide them, and for many boards, that is enough to carry them through the good times and even the slightly rocky times. But when the going gets really tough–as it sometimes does–it is far easier for board members to avert their eyes, pull away and even just resign rather than to “lean into the messy” and grapple with the really tough questions of organizational identity, executive performance, and leadership. There are few rewards for high performance, and fewer disincentives for low performance.

If that’s not bad enough, consider that the number of nonprofits in the US continues to grow rapidly–from 2001 to 2011, the number of nonprofits increased by 25% to over 1.5 million. More nonprofits means more board seats to fill, and last I checked, good board members were hard to find. (Proof? Name an E.D. you know who is turning away highly qualified board candidates.) At what point have we created more board seats than we can fill with talented, motivated people? Is this contributing to the phenomenon of low-performing boards that I describe above? How would we know?

I’m joining ActionSprout!

ActionSprout LogoI’m thrilled to announce that I’ve joined the team at ActionSprout, where I’ll be serving as Director of Strategy.  ActionSprout is a startup that was founded last year by my dear friends and fellow Groundwire alums Drew Bernard and Shawn Kemp, and we make tools that help nonprofits organize action and raise money on Facebook.  (For a quick example, check out this ActionSprout campaign from the Sierra Club, going live today, where they’re organizing folks in support of an environmental high school program in Los Angeles that’s threatened with closure.)

To say I’m excited would be an understatement.

First, I’m excited about the opportunity to have a huge impact on how progressive activists (and political candidates! and companies!) communicate and organize online.  Facebook has become a huge communications channel, but until now, the tools for organizing people in meaningful ways there have been pretty limited: you can “Like,” “Share,” and “Comment.”  That’s about it.  But with ActionSprout, organizations can take advantage of Facebook’s Open Graph to create all kinds of new action posts (e.g. “Stand with…” “Support…” “Stop…” “Donate…”) that are far more meaningful and engaging.  And did I mention that we can let groups take online donations directly inside of Facebook? So far as I know, we’re the only tool that makes that possible right now!  I think we’re going to upend the conventional wisdom that “you can’t raise money on Facebook.”

We’ve already thought of a thousand ways to use ActionSprout, and I can’t wait to see the creative things that all our smart friends and allies are going to come up with!

Second, I’m exciting to be working with Drew and Shawn.  They’re fearsomely fast and creative visionaries.  I’m stoked to be able to help them paint boldly on a wide-open canvas.

Third, I’m excited to be working for a startup.  I’ve long been nursing an entrepreneurial itch, and ActionSprout feels like the perfect way to scratch it: innovative, social-mission driven and with nonprofits as the primary customers.  What’s more, Drew and Shawn are both successful startup veterans, and so I have two amazing mentors as my colleagues.

I’ve still got two quarters of grad school remaining, so I’ll be part-time from now until June, then ramping up from there.  I’m going to initially focus on helping our early customers get up and running, building out a partner program for strategy, campaign and social media consultants and getting done what needs doing.

If you’re interested in finding out more about ActionSprout, drop me a line and I’ll give you a tour, or even better, just head on over there and check it out yourself. There’s a short video, some case studies, and best of all, you can test drive it for free.

A neat trick Engagement Organizations can do

Here’s a neat trick that Engagement Organizations can do: because they have solid, integrated website and database systems, they can quickly identify contact records that have missing information, then send out an email blast like this one I just got from Dogwood Initiative:

Contact update email from Dogwood Initiative

As you can see, the email includes a personalized URL that takes me directly to a page on the Dogwood website that displays my current contact info from Dogwood’s database, and lets me update it with a single click.  The information feeds back directly into the database–no data entry or cumbersome import processes are required, so it’s fast and easy both for me and for the Dogwood team.

Dogwood contact update web page

Dogwood sends an email like this a couple of times per year.  In just a few seconds, their members are able to easily update their contact information.  Dogwood reaps the benefits of an up-to-date supporter list and its supporters get the most relevant, personalized information possible.  That sounds like a great deal to me!

“Engagement Organizing” is live!

I’m pleased to announce the release of “Engagement Organizing,” a short whitepaper about the culture and technology of building power for social change in a networked era.  I had the great pleasure of collaborating with my dear friend Matt Price, and I’m really pleased with the final results.  If you are working to make progressive change in the world, please give it a read and share your thoughts with us at http://engagement-organizing.org.

In an era of climate risk, is cost-benefit analysis enough?

David Roberts at Grist thinks not.  Great article, with deep links to hardcore World Bank wonkery.  Food for thoughts for Evans students (and profs):

As time horizons and uncertainty increase, cost-benefit analysis becomes less and less useful, more and more “a knob-twiddling exercise in optimizing outcomes,” as economist Martin Weitzman put it. Differences in social/political/ethical assumptions, like discount rates, start determining model outcomes. “Results from the cost-benefit analysis,” says the World Bank, are “extremely dependent on parameters on which there is no scientific agreement (e.g., the impact of climate change on hurricanes) or no consensus (e.g., the discount rate).” It’s still possible to construct models and get answers, but the danger becomes higher and higher of getting the wrong answer, i.e., optimizing for the wrong thing.

Authenticity and social change

This didn’t make it into the paper on Engagement Organizing that we’re about to release, but I thought it was an important point on its own.  Curious to hear your thoughts.

One thing is common to all of the engagement organizations we interviewed: authenticity. These are organizations that are so comfortable with their identity and able to explicitly connect their work of the moment to deeply-held core values that their supporters feel it and respond to it with higher levels of engagement than in other organizations. In a world where people are less trusting all the time, authenticity is a critical foundation of social change.

Should grantmakers be more like VCs?

At Web of Change 2012 last week, I had an interesting conversation with Drew Bernard about nonprofit boards vs. the boards of internet startups, and the very different roles that nonprofit and VC funders play.   Drew’s a great person to chat with about these topics, because he’s worn all the hats: startup entrepreneur, angel investor, startup board member, nonprofit tech consultant and nonprofit board member.

We think that advocacy nonprofits and startups have one huge thing in common: they are both highly entrepreneurial organizations, in that, as Eric Reis puts it, they both need to operate under conditions of extreme uncertainty.   Nonprofits are funded by grantmakers, startups by venture captial (VC) firms.  A typical VC firm has partners, each of whom has a portfolio of investees.  Grantmakers have program officers.

In a VC firm, each of the partners will carry a portfolio of roughly 7-12 firms, and in exchange for the firm’s investment, the partner will sit on the board of each of the firms in his or her portfolio.  VC board members not only look out for the interests of the investors, but they also serve as mentors, advisers, connection-makers and often-vigorous advocates for the startups they advise.  Even in situations where the VCs have relatively small amounts of money on the line (e.g. in angel-funded startups, which are what Drew works on), the VC board member<>startup relationship is often intense, hands-on and collaborative.  “I’m on the board of one startup right now,” Drew told me, “and I’m probably in their office at least once a week.”

Compare and contrast to the nonprofit sector.  All of the foundation program officers I know carry portfolios of roughly 20-50 grantees.  Serving on the board of an grantee is rare, and in most cases it’s done out of personal interest rather than as a part of the job.  There’s some coaching and mentoring and network-making that’s part of the relationship, but with 20-50 grantees, that’s just not a lot of program officer time per grantee.

Anyone who knows me knows that I’m about the last person in the world to put VCs on a pedestal, but I can’t help but wonder what it would be like if a grantmaking foundation tried to use the VC model for its grantee relationships: big investments, small portfolios, intensive, supportive, hands-on involvement.

“The Lean Startup” — for nonprofits too!

I’m most of the way through Eric Reis’ 2011 book, “The Lean Startup.”  As the title suggests, it’s attempt to apply “lean” management thinking (as developed at Toyota and popularized by a thousand books and consultants) to entrepreneurial startups.  But what really grapped me by the proverbial lapels was how directly most of his ideas apply to nonprofits.  After all, Reis’ core definition of an entrepreneur is someone who has to manage under conditions of extreme uncertainty–or, as Ronald Heifetz might put it, people who face adaptive challenges.

Reis’ solution is that leaders have to design their organizations so they can hypothesize, build, measure and learn in iterative cycles, as fast as possible.  Central to this is the idea of “validated learning” — using data to confirm or falsify specific hypotheses about each element of the experiment.  There’s some great discussion of how to approach experiment design and how to avoid “vanity metrics” (list size, anyone?) in favor of measurements that actually correspond to success.

I love, love, love the idea that social change organizations need to think of themselves as learning machines, where the objective is to do learning experiments as fast as possible, backed by rigorous data.  (Bonus: imagine if philanthropy worked this way!)

This perfectly corresponds with much of what I’ve been thinking and writing about lately.  I can’t wait to have the opportunity to chat about it with 100 of my smartest colleagues at Web of Change.

Engagement organizing, movement building, politics. And stuff.