The Three Legs of a Nonprofit Stool
I could tell he was very frustrated. And he felt misunderstood. To put it plainly, he could not get management to understand that without program information he would not be successful.
The person I was talking to was a very talented major gifts officer (MGO) who had a long track record of success previous to his current assignment. And that success is what had attracted the attention of the CEO who had hired him. But now that it was time to produce, the CEO was blocking the MGO. Not blocking on purpose or with mal intent. No, blocked because of the CEO's ignorance.
Jeff and I see this kind of thing all the time—where there is a lack of understanding about how a nonprofit actually works. Not a week goes by where I don’t hear a story about good, well-educated, smart and professional managers actually blocking the success of fundraising through their behavior. They allow:
- Finance to call the shots without regard for fundraising. In this situation, the bean counters are the ones who decide what the donors want and need, and what the price (ask) will be. There is one situation I am dealing with right now where finance actually comes up with the projects for the MGOs and sets guidelines as to what they can or can’t say to the donor. This is unbelievable and, surprise, it’s not working!
- A situation where no one leads or decides. This is the classic management-by-consensus approach, which never works. I have been in meetings where the leader, although physically present, is nowhere to be seen in the conversation. The troops must duke it out to arrive at mostly bad conclusions. MGOs caught in this situation are encouraged to do the best they can and they try.
- Program folks to rule. This is not too bad of an idea if the program people are donor-centered. Some are. But many aren’t. And the ones that aren’t make it their life goals to protect programs from fundraising! This is so interesting to me. They want to control the very hand that feeds them!
- A self appointed “editor” to make decisions about what works and what doesn’t in major gifts, what can be said and what shouldn’t be said, etc. Usually, this person is attached somehow to an authority figure and, essentially, edits the life out of all communication, written and visual. I dealt with a situation like this just a few weeks ago where the “person calling the shots” was a fourth-tier manager with more opinions than Rush Limbaugh. It was amazing to sit on the sidelines and watch this circus. I don’t know if I was more fascinated by all the opinions emanating from this man’s mouth or the passive behavior of his manager and his manager’s manager sitting in the room. It was all a joke. And suffering through all of it were three MGOs who had to put up with it.
I could go on with other examples, but my main purpose for writing about this today is to make the following point. A well-run nonprofit has a leader who clearly understands that the nonprofit stool has three critical legs—functions that must carefully be balanced for the organization to be effective:
- Product or program. This is the nonprofit’s reason for being—it is what they do. It is what the MGO presents to donors for support. Without program, the nonprofit does not exist.
- Marketing/sales or fundraising. Every successful commercial company has a successful and effective sales and marketing function. Every successful nonprofit has an effective fundraising function. It is this function that marries the donor to the cause. Without fundraising, the nonprofit does not exist, and the MGO falls into ruin.
- Administration. I am shocked at how many people in and outside of a nonprofit believe that the administration's function in a nonprofit should be considered the less valuable and the lowest priority in the nonprofit. Jeff and I see so many situations where folks in HR, IT, operations, finance and general administration are considered second-class citizens in the enterprise. And as a result, are not properly resourced. It is no wonder the thing does not work. It is so sad.
Each of these “legs” of the stool must be high-functioning in order for the organization to be efficient and effective. One cannot dominate the other.
At the top of this post, I told you about the MGO who lacked CEO support. In this situation, the CEO allowed program to rule, and program decided it didn’t want to deliver program information to the MGO. The MGO is now on a path toward failure.
Jeff and I have seen situations where fundraising dominates, and program information in their hands is mishandled. Or, fundraising expenses are so high that the organization can’t meet even its own standards for overhead. Or, administration is calling the shots, and nothing of value comes from either program or fundraising.
If you are a leader or manager reading this and you currently live in an unbalanced organization where one of these functions dominates the other, take steps to do something about it. Do it for the cause. Do it for the donors. Do it for the MGOs so they can be successful.
If you are an MGO working in an unbalanced organization like I have described here, try to influence change. And if you fail at doing that, run like your life depended on it.
If you’re hanging with Richard it won’t be long before you’ll be laughing.
He always finds something funny in everything. But when the conversation is about people, their money and giving, you’ll find a deeply caring counselor who helps donors fulfill their passions and interests. Richard believes that successful major-gift fundraising is not fundamentally about securing revenue for good causes. Instead it is about helping donors express who they are through their giving. The Connections blog will provide practical information on how to do this successfully. Richard has more than 30 years of nonprofit leadership and fundraising experience, and is founding partner of the Veritus Group.