Changing the Way that Charity Changes the World.

Tag: Jeremy Gregg

The Outsourced Development Office (Guest blog by Andrew Kramer)

This post was written by our friend, Andrew Kramer


Image by Andrew Kramer

Image by Andrew Kramer

For most nonprofits that have $500,000 or more in revenue, funding must come from a variety of sources – government, foundations, individuals, corporations, events, etc. – and has to be managed, almost full time, by a senior person in the organization.

The trouble with a broad, diversified funding base is that each stream can – and often should – be managed by a specialist. Most large organizations have dedicated employees who focus exclusively on a single area, such as grants, major donors, receipts, etc. Smaller organizations with limited staff and funding usually don’t have the ability to excel at fundraising for each of these streams. And the problem is that there is always, always, a new way to raise money that you should be pursuing.

Good nonprofit managers will follow the 80/20 rule closely with their time – 80% of their time from the 20% of their donors who provide the most money. Unfortunately, when Dr. Pareto invented his rule, he was looking at it the way that too many managers spend their time – 80% of their time on the 20% of donors who take the most time and energy.

Unfortunately, time spent does not equate with dollars raised.

So, instead of spending the majority of their time cultivating foundations – where a nonprofit might have seen a very good return in the past – they spend all of their time on an event that only bring a fraction of the revenue. And in the end, most activities that consume a poorly organized manager’s time will not lead to the two fundamental activities that every fundraiser should pursue:

  1. Ask for money (see attached photo — I see this car a lot, and I love it every time); and
  2. Send a handwritten thank you note.

There is a possibility today, however, for a small nonprofit to maximize its efficiency by outsourcing the development function. In fact, a secret that most managers might not know is that the larger organizations outsource a substantial amount of their fundraising rather than try and do it in house.

Here are just a few of the things that can be outsourced to free up a development manager’s time to focus on cultivating their most valuable donors:

  • Grant writing: most grants are fairly straight forward affairs that use some combination of the same text over and over for each foundation. Outsourcing the ROUTINE asks makes a lot of sense so that the manager can focus his or her time on the non-routine grants that can take up a lot of time (but which, when done correctly, can lead to outsized funding for new programs).
  • Direct mail: plenty of nonprofits outsource their direct mail operations – and there are even some organizations that specialize in direct mail for certain kinds of organizations (food banks, museums, etc.)
  • Online marketing: In the end, online marketing is no different than any other kind of sales/ask, but it is just special enough that it makes sense for people who are experts in online programming to do the work.
  • Events: Throw a contract and you can hit an event planner in Dallas.
  • Major Gifts: In the end, the nonprofit manager has to perform in-person asks for money and resources. But, the reality is that a lot of organizations may never even meet their largest donors – or certainly not each year when they ask for money. Which means, things like invitations to special events, handwritten thank you notes, even the (bi)annual proposal can all be handled by outside experts, freeing the manager up for the tasks where she is really needed (such as phone calls, in person meetings, etc.).
  • Receipts: This critical, but sometimes overlooked, function doesn’t need to be handled in-house. In fact, sending it out might be the best way to ensure accurate, timely acknowledgments of gifts. Unfortunately, it’s too easy to put off writing fresh stories, updating the content, and customizing the letters for larger or more frequent donors.

“But what about the cost?!?”
In reality, that depends on what the nonprofit executive wants done – and more importantly, what the manager isn’t getting done effectively because of his lack of time and expertise. Consultants and service providers can, and do carry some costs. But, because they are specialists, you are getting their experience and value immediately. A good consultant will have great references and can provide a clear action plan tailored to your needs from the beginning.

And, while it is unethical for a consultant or provider to take a percentage of any funds raised, they are just as interested in helping your cause to raise the money it needs to fulfill its mission because it’s how they stay in business.

An executive director or development manager considering hiring new development staff might give serious consideration to farming out their specialized work to multiple contractors instead of hiring a single employee who might only have expertise in one or two specific areas. Instead of spending $50,000 or more on salary, benefits, and payroll taxes, you can spend (perhaps even a small portion of) that to productively hire outsourced experts – giving you access to the highest level of talent without the risk and hassle of hiring an employee.

Shifting the Collaboration Paradigm Between Funders and Nonprofits (guest blog for The Miles Foundation)

The Miles Foundation

The Miles Foundation

Below is a copy of my interview with the Miles Foundation, “Shifting the Collaboration Paradigm Between Funders and Nonprofits.” My sincere thanks to Sara Redington, the Director of Communications for the foundation, for her assistance with this post.

This interview was conducted in February 2015 shortly after I presented at the Dallas Contributors’ Network.

You can also download a PDF of the article here.


 

Shifting the Collaboration Paradigm Between Funders and Nonprofits

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Jeremy Gregg. Image via TEDxSMU.

Guest blog post from Jeremy Gregg

Jeremy Gregg is a three-time TEDx speaker, an award-winning communicator, and an experienced leader in both the entrepreneurial and nonprofit arenas. We heard him speak at a local funders’ luncheon earlier this year, and were captured by his frank characterization of the current “dysfunction” present in the philanthropic community. As so many funders (including us) work to collaborate more effectively with our nonprofit partners, we asked Jeremy to dig into this issue and give us tips for improving our partnership model. Below are Jeremy’s thoughts on how funders and nonprofits can better work together so that we can affect change and positively impact the communities we serve.

1.   What is wrong with the current foundation/nonprofit dynamic, in your opinion?

The current dynamic is too centered on “otherness” and overlooks the shared mission that should unite foundations and nonprofits. This does not foster much honest communication between the two, let alone a transparent conversation about common challenges and shared goals.

In a way, there is a systemic flaw in the nonprofit financial model: the source of capital (donors) is almost entirely disconnected from the use of capital (clients). Nonprofits become a link between the two, which creates a scenario in which a nonprofit’s financial stability depends far more on fundraising excellence than on programmatic excellence. As a result, a nonprofit’s long-term goals become more focused on financial sustainability than on systemic change… leaving grantmakers frustrated because many of their foundations were created in order to change broken systems.

So, as it turns out, philanthropists interested in systemic change might need to look first at changing the system of philanthropy itself.

2.     What are some real-world examples of this dysfunction?

The clearest example of this dysfunction is the fear with which nonprofits court foundations for grants. All of the power is on one side of the transaction. When nonprofits seek money from foundations, they often act like the freshman kid trying to ask the homecoming queen to the prom. It’s just silly how imbalanced the conversation is perceived to be.

As a result, nonprofits spend hours reviewing long lists of foundations whom they can solicit for money. They debate whether and how to contact them, afraid to merely pick up the phone and call the foundation lest they be added to “the black list.”

From the foundation side, there is also a powerful conflict at play. Foundations are concerned with sustaining their investments while simultaneously wanting to harness the power of those investments to transform society. As I recently shared with the Dallas Contributors’ Network, I see this dysfunction in several ways:

  • Foundations may not provide general operating grants to support overhead, yet they desire longitudinal outcomes. How can a nonprofit make the investment to measure such impact without unrestricted funding?
  • Foundations may not provide grants to expand fundraising programs, yet they desire for nonprofits to achieve scale. What business – nonprofit or for-profit – can achieve scale without money?
  • Foundations do not provide “risk capital” in the form of unrestricted grants, yet they demand innovation from nonprofits. The ability to innovate is intimately tied to the ability to fail; if nonprofits can only receive funding based on their “best practices,” there will be no innovation.
  • Foundations often do not provide ongoing funding year-after-year in order to avoid creating “dependency,” yet they demand a plan for financial sustainability. This creates a scenario in which nonprofits are almost punished for success; if they increase individual giving, for example, they might lose their foundation funding. A foundation’s decision to make a grant should focus more on what the nonprofit will do with their grant rather than worrying about whether someone else might be able to pay for it, instead.
  • Foundations rarely consider multi-year grants, yet they demand long-term planning from nonprofits. Considering that the average nonprofit has less than 60 days of cash on hand, long-term planning is impossible without some visibility into future cash flow.
  • Foundations often shy away from grant requests for advocacy…yet they desire to create systemic change.

3.     What would the ideal or improved collaboration model look like?

Nonprofits have almost no power to adjust this dynamic. Change can only come from the donor side, and it involves several significant adjustments in their approach to grant-making. However, the fundamental shift is from being a “funder” to being a real “partner.”

What does this look like?

  • Realize that funding is only one tool in your arsenal. You also have knowledge, relationships, influence…invest all of them in your nonprofit partners.
  • Make multi-year financial commitments of unrestricted capital. Or, better, commit to an amount of monthly funding that will not change. This provides the visibility into long-term cash flow that is critical for nonprofits to scale.
  • As a result of these two items above, you should limit your grant portfolio from dozens of grants to a handful of serious partners. Don’t be afraid to go deep instead of broad.
  • Encourage nonprofits to do all of the things that you want your for-profit investments to do: invest in technology, in staff training, in systems that create long-term ROI.
  • Remain focused on the broader goal of systemic change. Challenge and encourage your nonprofit partners to share their best practices with others, to develop meaningful collaborations with others, to advocate for the broader adoption of their solutions at the public level, etc.

Essentially, change the dynamic from one in which nonprofits are the fortunate recipients of your largesse to a system in which you are rolling up your sleeves alongside the nonprofits in order to drive systemic change in the areas that matter to both of you.

4.     What change does that require from both sides?

Both sides need to realize that neither can exist without the other: they are merely different sides of the philanthropic system.

In addition to the changes I mentioned earlier, foundation staff need to focus on becoming experts in the areas in which they want to deliver change. They are not in the weeds every day in their issue areas, which offers them a higher view of what is going on in the field. For example, if the foundation is focused on education, they can see many different approaches, learn what is working and what is not working. And they then need to share that knowledge with their grantees, including helping them to establish the partnerships and to develop the tools that they need to deliver the best results.

For nonprofits, they need to be bold and confident, not timid and apologetic. They don’t need to be rude, but they need to stop acting like the leper who was invited to the ball. They need to realize the tremendous value that they bring to the equation: without them, philanthropists cannot do their job. Nonprofits need to realize that they are worthy of the grants that they seek; indeed, they are doing philanthropists a favor by giving them opportunities to achieve their purpose. What a gift to be able to give someone!

On both sides, there needs to be much more boldness and much less fear. Philanthropists do not need to fear becoming too close to a nonprofit – that should be their ambition, to become so close that they seem like a part of the staff. And nonprofits do not need to fear sharing their honest struggles with their foundation partners.

5.     Where have you seen this model work (i.e., can you provide some examples)?

The best example that I ever saw was at CitySquare (formerly Central Dallas Ministries). The organization has a handful of foundations that make serious, long-term financial commitments to the growth of the organization. These commitments provide the base funding that allow the organization to not only focus on doing its work, but on developing bold plans that can drive systemic change.

But here is why it worked so well: as the model succeeded, the original donors did not step back…they leaned in. Their investments increased because they saw the exponential improvements in the organization’s impact that have come from their unrestricted support.

The organization has a very high-profile leader who serves as its face to the community. This is the case with almost all successful nonprofit organizations: they need that dynamic champion to represent the organization. Yet, behind the scenes, the sincere commitment of the agency’s board members and closest donors are driving much of its success. CitySquare is a very effective model for how philanthropists can partner with nonprofits to maximize long-term impact on the people whom they aim to support.

6.   How can funders and nonprofits take the first step towards building “mission-critical partnerships” together?

In a way, all they need is the ability to speak honestly with each other without the “elephant in the room” of funding.

Think of a human courtship. You begin dating, and you only reveal the best parts of yourself because you want the person to like you. And as you approach marriage, some of those guards begin to fall so that you can sense whether the connection is legitimate. And once the couple is married, hopefully, all of those guards are down…and they can really begin to focus on what they want to achieve together because they can take for granted that they will stay with each other.

That is what we need in the philanthropic world. We need a model for meaningful commitment that focuses on maximizing each side’s impact so that both are fulfilled.

In other words, the model needs to shift from “transactional” (i.e. grants in exchange for reports) to “relational.” Foundation directors need to get to know the heart of the nonprofit’s mission: not just show up for site visits, but really join in the daily effort of changing lives.


Written by Jeremy Gregg, managing director of Gregg Partners. Gregg Partners is a Texas-based fundraising consultancy that specializes in grantwriting for nonprofits.

Nonprofit Dysfunction and the Beloved Community

“Our goal is to create a beloved community and this will require a qualitative change in our souls as well as a quantitative change in our lives.”

~~ Dr. Martin Luther King, Jr. ~~

Yesterday was Martin Luther King, Jr. Day. As the nation reflected on the legacy of MLK, I was reminded of Dr. King’s belief in “the beloved community.”

That concept — which the King Center articulately differentiates from the idea of the Peaceable Kingdom — should be the ultimate Vision Statement for the nonprofit sector. Whether we are in the business of feeding the hungry, healing the sick, educating children, or creating art … the goal of the nonprofit sector is to build The Beloved Community.

And yet, I believe that we face a systemic dysfunction — a structural challenge in the very financial model of philanthropy — that prevents us from doing so. This morning, I am speaking to The Dallas Contributors Network on this very topic of nonprofit dysfunction.

My theory:
The nonprofit sector struggles from a disconnect between the source of capital (donors) and the use of capital (clients); this creates a scenario in which financial stability depends more on fundraising excellence than on programmatic excellence (i.e. the development of the beloved community). As a result, a nonprofit’s long-term goals become more focused on financial sustainability than on systemic change.

To solve this, I believe that nonprofits need to return to their original purpose: to build The Beloved Community. To do this, we need far more than funding for our missions; we need to build movements that shape culture.

More (much more) to come in the future.

UPDATE: After posting this, I found this TED talk from TEDxAtlanta in which Doug Shipman shares “The Secret to Creating the Beloved Community.”

Land of Non — More than Charity

harper in the stream

Things aren’t always what they seem…

Tomorrow, I am giving a presentation at the Nonprofit Summit hosted by the Nonprofit Center of North Central Florida. I am giving a wide-ranging talk that I am calling “The Land of Non: More than Charity.”

(Thanks to my friend Stacy Caldwell for introducing me to this very appropriate term for the ol’ nonprofit sector. See my first blog about it here.)

My talk will cover three basic topics:

  1. YOUR ORG (“your organization”): How and why nonprofits should stop using the language of “begging” when it comes to fundraising, and focus instead on giving a solid investment pitch (i.e. more like what you see on Shark Tank than on the street corner). I’ll also talk about the difference between thinking of donors simply as sources of money rather than ambassadors in your mission.
    1. To illustrate this, I am going to use a version of the Prison Entrepreneurship Program’s “ambassador enrollment presentation” as a case study.
  2. DOT ORG (“the nonprofit sector”): How to reframe our understanding of the nonprofit sector’s role in society by discussing the size, breadth and impact of the nation’s 1.4 million charitable organizations.
  3. OUR ORG (“our sector-wide organizing efforts”): How we can all get involved in changing the dialogue used when discussing the nonprofit sector.
    1. To illustrate this, I am going to highlight the work of Robert Egger and his new lobbying organization, CForward

I have about 45 minutes to cover 45 slides. Some will take 5 seconds, some will take 5 minutes. We’ll see how this works out!

For those who attended the conference and are now finding this blog, you can download the presentation here:
Land of Non – More than Charity – by Jeremy Gregg

Finally, here are the links included in this presentation for “Suggested Reading”:

The Future of Marketing: Predictions For 2012 on Social Media Marketing

The Future of MarketingBusiness 2 Community is an “independent online community focused on sharing the latest news surrounding Social Media, Marketing, Branding, Public Relations & Much More.”

The site recently included me as one of its “46 experts on marketing” in the article, The Future of Marketing: 46 Experts Share Their Predictions For 2012. Here was my contribution:

The future of marketing will be turning your customers into your salesforce. The initial foray into this area has begun with retailers offering discounts to customers who can prove that they “checked in” to their store on Facebook, Foursquare, etc. We are also seeing more and more campaigns that provide incentives for connecting to a company’s social media presence.

This trend will continue, and possibly extend into the “rewards card” programs; customers could be rewarded over a long-term basis by attracting
other customers who use these cards; many grocers have been doing this for years with their nonprofit partners (i.e. donating 1% of purchases to a charity whose donors register their rewards cards with that charity’s number).

Webinars as an educational and marketing platform saw a huge rise in popularity in 2011, and will continue to grow in popularity in 2012.

Read the whole article here:
http://www.business2community.com/marketing/the-future-of-marketing-46-experts-share-their-predictions-for-2012-088529

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