The report got me thinking, along the following lines: the researchers conducted fifty interviews, but did not include private consultants in the pool. Why not? Don’t we have an important perspective on capacity building? Yes, we do! In fact, I have for some time felt that private consultants have some important things to say about capacity building, but are rarely asked to weigh in. Here are some of the reasons I think consultants should be included in future conversations:

• Like funders, we work with many different organizations, and can see patterns, highlight best practices and spot trends across the sector.
• Unlike funders, our clients confide in us.
• We are mission-based businesses—many of us care deeply about strengthening the social sector and have thought deeply about how to deliver capacity building in an effective manner.
• As one colleague put it, “We do the work.”

So then, after huffing about briefly, it came to me. The real question: if they asked us what we think, what would we say? This is a really interesting question, and it has taken me some time to think about it (and doubtless I will continue to reflect). I am also grateful that my professional development group was willing to engage in a conversation with me on this great question. Together, we confirmed my hunch that consultants have a valuable perspective to share. Here are a few highlights from our conversation and from my own thinking:

• We would love to engage with the question of how best to serve rural communities. The Nonprofit Ecosystem report alludes to the differing needs of rural and urban-based nonprofit organizations, but doesn’t really detail the differences. We know as consultants that our rural clients are different, and we have learned to adapt and provide culturally competent services. For example, Susan Howlett has crisscrossed the state and region, drawing crowds in rural areas because she understands the challenges rural nonprofits face. Rural areas are truly resource-poor, so development of a scarcity mentality is understandable. Coming in and telling them to just “try harder” to raise funds isn’t helpful.
• We value and appreciate cultural competency. In fact, we suggest elevating this principle as an essential element of a resilient nonprofit ecosystem. We think it is equally if not more important than technology, and should be called out.
• Not only would we appreciate being a part of the conversation, we see a great need for funders and nonprofit leaders to dialogue together. In past years, Philanthropy Northwest and Puget Sound Grantwriters Association have partnered to allow some dialogue. Recently, this partnership has languished. Gains made in the past by nonprofit folks, such as the PNGF (now Philanthropy Northwest) common grant application, have fallen by the wayside.
• We see the pain caused by inadequate investment in capacity building, professional development and infrastructure/general operations. For this reason, it is encouraging to see funders engaging in this issue and trying to educate their peers about the importance of capacity building to a healthy nonprofit sector. Another good example of an educational piece for funders along these lines is The Nonprofit Starvation Cycle. Hopefully, this trend will continue and focus on the “overhead ratio” will be reduced.

I’m excited to continue this conversation—with colleagues, clients and philanthropists. I hope the Nonprofit Ecosystem Report is just the beginning!

Advanced Board Leadership

(co-presented with ArtsFund, Social Venture Partners and UW Nancy Bell Evans Center)

October 21 and 28, 8:30 am-12:30 pm, Cost: $125
Presented with LPC Associate Amanda Madorno

This course goes beyond the standard orientation to board roles and responsibilities. In two half-day course sessions, participants will explore a variety of leadership challenges. The sessions will cover the context of leadership; adaptive leadership; elements of effective board leadership; leading change; generative governance; effective partnerships between board members and with the organization’s CEO; and the application of concepts to participants’ specific leadership work in the community. The course is designed for experienced board members.

Board Recruitment

December 9, 2010,  8:30 am-11:30 am,  The 2100 Building, Seattle, Cost: $40

One of the most important responsibilities of nonprofit boards is board development: renewing and strengthening the board through skills development and recruitment of talented new members. In this workshop, participants will focus on the recruitment side, learning:

• The three life stages of nonprofit boards and what type of board members are needed at each stage of development
• A six step process for board recruitment
• How to identify board members with the skills and experience your organization needs

Register or learn more about either workshop through United Way of King County

A: This is tough. The amount of revenue you receive from individuals will depend on many factors. Usually, individual gifts from many donors are considered among the most stable revenue sources: even if you lose a few donors, you will probably also gain a few new ones, so each individual is easier to replace than a major foundation or corporate funder.

To get a general sense of your donor base and what to expect in the future, you can look at your donor pyramid (distribution of gifts at different levels). Typically, you will have many gifts at the lower levels, and fewer major donors at the high end of the pyramid. Your goal is always to bring in new donors and upgrade existing donors to give more as their relationship with you is strengthened. If you have good strategies for donor acquisition and donor cultivation, your return from donors is likely to grow over the years as the number of donors increased as well as their commitment. Along with donor levels, monitor donor loyalty (repeat giving). Set a goal to increase donor retention each year.

So, knowing your donor base at a statistical level will help you predict revenues. However, getting to know your donors as individual people will help even more. Once you have a good relationship with a donor, you can ask them about their plans and get a sense of their level of commitment to your organization. You will also know what motivates them and what special projects might be of special interest, so you can tailor your asks. If you have very large donors, it is especially important to talk with them to get a sense of whether you can count on their support next year. If you can’t ask them directly, look at their giving history to your organization. Don’t budget expecting one-time large gifts to automatically repeat!

This year, all bets seem to be off: the recession is affecting some people’s giving levels, and many more are giving the same overall amount, but giving larger gifts to their top causes rather than spreading the money around so much. Given this trend, nonprofits who have failed to build strong relationships will be most negatively impacted.

One additional thing to be thinking about as you set revenue goals: gifts from individuals definitely do not come in evenly through the year. May-June and November-December are traditionally the top months for individual giving. It is not atypical for nonprofits to receive 40% of their donations during the last six weeks of the calendar year. The timing of your revenue will also be affected by the timing of your campaigns: when do you approach major donors, plan your big event or send direct mail? Forecast accordingly.

All this is to say that it is difficult to forecast revenues for individual giving. I wish you the best as you work to make an educated guess!

This is a huge step up from the last philanthropy-focused show I checked out, Oprah’s Big Give. If you missed that, it was sort of an amazing race to give away money. Contestants competed to creatively and effectively give away larger and larger amounts of money in short amounts of time. In an early episode, a woman who used her $1000 to buy out the inventory of a flower stand and hand out the flowers to passing motorists left me speechless (as did the judges’ favorable remarks about this act of random generosity).

The protagonist is apparently loosely based on the life of businessman-turned-philanthropist Bobby Sager, founder of the Sager Family Travelling Foundation and Road Show.

One interesting question about the show is whether it will actually raise awareness and money for global causes. On the website, the show’s stated intention is that “This is not just a television show…but a philanthropic force.” Co-creator Charlie Corwin dubs it the first “Obama drama” alluding to the new zeitgeist around service. Indeed, there are links to health and relief organizations working in Nigeria. Presumably, next week the links will be to organizations working in Myanmar, where the episode is shot. I hope to see some coverage of the results, and also some shows featuring domestic issues.

So if you are free next Wednesday night at 10pm, and you like James Bond-esque adventure, you might check it out.

If only we were more organized…we might see more funding coming from the economic stimulus package.  From what I hear, states with strong nonprofit sector advocacy organizations are starting to see stimulus dollars flowing to their social sector.  This is a lesson for the future on identifying and working toward our common interests as a sector, and a reminder to value our intermediary organizations (and to demand good leadership from them!).

Some good things are happening societally. Some of the same behavior changes our social sector organizations have been trying to foster for many years are suddenly coming to pass, not as a direct result of our efforts, but because the downturn has forced behavior change.  Driving is down, public transit is up.  Seed sales are at an all-time high, and everyone I know is talking about whether to get chickens for their backyard.  Library usage is up.  Predatory lending is down.  People are showing care and concern for their neighbors.  They are buying locally in the hopes that their local shops can stay afloat. Let’s remember that there is a silver lining to this time, and celebrate it.

People are open to new ideas. There is a strong feeling that the usual ways of doing business are not working any longer.  Naturally, this is very destabilizing and scary for many.  It also presents an opening for creativity and innovation, within our organizations and outside of them.  If you have a different approach, this may be the time to test it out—you are likely to get more support for it in the current environment.

It’s time to value volunteers again. I’ve commented before on the paradox of the growing professionalization of the voluntary sector.  Well, this may be a time when the balance of power will shift back toward volunteers somewhat.  While I acknowledge that it does take time to manage and plug in volunteers, volunteer labor is still cheaper and more sustainable than professional staff in many instances.  Volunteer programs ground an organization in the community, spread expertise, build community ownership and awareness of your issues, and leverage more hours of service.  Consider how you can respond to the following trends:

• Volunteers may be hesitant to drive across town for volunteer service—how can you engage neighbors in your organization?
• Lots of impressive folks are out of work but are seeking meaningful engagements until their next job materializes—how can you tap these folks?
• Recent college graduates are facing a very difficult job market—they may be willing to work for less or consider a year of service. I know my cousin would rather work for you than at his current minimum wage job at a convenience store.  His major?  Neuroscience.

What are your thoughts about managing through this era?  Whatever we do, we need to keep talking to each other and recognize that we are not alone.

•  501 Studios produces “Movie Mondays“–short videocasts featuring advice on fundraising from experience development directors.   This week, listen to the fabulous Susan Howlett on the importance of gratitude.  Update:the Movie Mondays link above will always show you the current movie.  To see Susan’s video, you can now access it via her website, www.susanhowlett.com.
•  Peter Senge is the keynote for the upcoming 2009 Northwest Leadership Summit: Economic Success in Times of Change on May 5 at Town Hall.  The Summit is a program of Seattle University Center for Leadership Formation.

LPC is thusfar surviving the economic downturn just fine.  I’ve been busy reading David Allen‘s Getting Things Done, and preparing to move the LPC office to my new home in Seward Park.  Here’s to a lighter carbon footprint and spending my breaks out in the garden!

Funders offered remarks to open the session, and they were fairly grim in their outlook:  the downturn is likely to be long and impact grantmaking significantly.  They emphasized fiscal prudence, prioritization (discontinuing some activities that are not core to mission fulfillment), efficiency (outsourcing, sharing costs, consolidation), and transparency as keys to surviving in a more competitive funding environment.  There was also considerable talk about measurable impact.  They also gave a nod to creative, out-of-the-box thinking, and noted that this may be a time when people are more open to doing things differently.

Unfortunately, there was no clarion call to change and reinvention.  Despite the fact that business as usual is not going to cut it for most nonprofits over the next few years, a vision for a new social sector has not yet emerged.  But there are some promising, creative approaches bubbling up around the country.  While I can’t offer a clear vision myself, I intuit that the new path(s) will incorporate some or all of the following:

• An inspirational call to service (a la Obama) that appeals to a new generation of activists
• Flexible structure that welcomes and accommodates “individual contributors” (more like a movement, less like a hierarchical organization)
• Ability to tap social networks and communicate effectively through Web 2.0 channels
• Success for folks who have a large network of relevant relationships and a positive, trustworthy “personal brand”
• Declining emphasis on expertise/holding proprietary knowledge and increasing recognition of the power of sharing information/”open sourcing” strategies, curriculum, etc.

What do you think?