[VIDEO] How Nonprofit Leaders Can Show the Way

Larry C Johnson recently joined us for a webinar in which he explained how three hallmarks of effective leadership work together to put a nonprofit organization on top—and stay there.

In case you missed it, you can watch the replay here:

Full Transcript:

Steven: All right, Larry, is it okay if I go ahead and kick us off officially?

Larry:Please do.

Steven: All right, cool. Well, good afternoon, everyone, if you are on the East Coast, and if you are on the West Coast, I should say good morning. Thanks for being here for today’s Bloomerang webinar “Nonprofit Leadership: How to Show the Way.” And my name is Steven Shattuck, and I am the Chief Engagement Officer over here at Bloomerang, and I’ll be moderating today’s discussion, as always.

And just a couple of housekeeping items before we begin. I want to let you all know that we are recording this presentation, and I’ll be getting that recording in your hands later on today, so if you have to leave early, or perhaps you want to review the content later on or share it with a friend or colleague, you’ll be able to do that. I’ll send out the recording and the slides later on this afternoon, so just be on the lookout for that.

And as you are listening today, please feel free to use that chat box right there on your webinar screen. We always save time for Q&A as much as we can, but today we’re going to save a lot of time for Q&A. If you’ve attended a webinar from our friend Larry here, you know that we like it to be interactive, so do not sit on those hands. Please send any questions or comments our way, and we’re going to have some fun discussions here in the second half.

You can also ask us questions on Twitter. Send us your tweets if you are into that kind of thing. I’ll be keeping an eye on those. Just use the hashtag #Bloomerang or send us a message right @BloomerangTech.

And if you are listening today through your computer speakers, these webinars usually are only as good as your own internet connection or Wi-Fi connection, so if you have any problems, try dialing in by phone. We find that the quality by phone, the audio quality is usually much better than the computer over the internet quality. So if you don’t mind doing that, or if you have any trouble, just check that email from ReadyTalk that went out earlier today, and there’s a phone number in that email just for you to use.

And if this is your first Bloomerang webinar with us, I just want to say an extra special hello to you. We do these webinars just about every Thursday. We bring on a great guest like Larry to give an educational presentation. But what we do the rest of the week is we offer donor management software, so if you are in the market for that, or maybe thinking about switching, or just want to learn more about Bloomerang, check out our website. You can download a quick video demo and see the software in action if you’re truly curious, and we’d love for you to do that. So that is there if you ever need it.

But for now, I am super excited to introduce this handsome gentleman. He is joining us from Vail, Colorado by way of Boise, Idaho. Larry C. Johnson. Hey, Larry. How’s it going?

Larry: It’s going great. I’m here working with a wonderful client in Vail. They’re going to be having a wonderful house party in a home that I just saw the video tour of. Quite the place, quite the place. It’s the home of the creator of Tommy the Train.

Steven: Cool.

Larry: And so we’ll be having . . . yeah, we’re working on a major campaign here.

Steven: Nice.

Larry: And I’m looking forward to that this evening. And then I return home to Boise tomorrow.

Steven: Very cool. And I should say an extra word of appreciation to you, Larry, for fitting this into your schedule. I know you travel a lot, you’ve got a lot of customers and lots of speaking engagements, so it’s really a treat for you to do this. You’re in a hotel room, I think, so . . .

Larry: Yes.

Steven: . . . really appreciate that, and I want to brag on you for just a minute before I turn things over. If you guys don’t know Larry, he’s a great guy. I actually just got to see him a couple months ago in person, which was fun. If you don’t know him, he is the founder of The Eight Principles, which is a really awesome resource. There’s lots of videos and workshops. Check out his website after this presentation. You’ll get a lot out of it.

He is an internationally recognized fundraising and philanthropy coach, like I said, working with lots of clients on interesting projects and campaigns. He is the author of the award-winning book “The Eight Principles of Sustainable Fundraising,” which I got on my shelf behind me right now, one of my favorites. In 2010, he was named Outstanding Development Executive by AFP. That’s the Association of Fundraising Professionals. And Wall Street Business Network considers him to be one of the top 15 fundraising consultants in the United States.

He is a proud resident of Idaho. He’s a Yale graduate. Super awesome guy. And Larry, I am going to turn it over to you, because I’ve already taken way too much time away. So take it away, my friend.

Larry: All right. Okay. Well, I want to thank everyone for the opportunity to be with you today, as I kind of get the technology here. There we go. All right, good, good.

Our presentation today is about leadership. Leadership is very, very important to being successful in fundraising, and we’re going to be getting into that. But before we do that, I want to tell you a little bit more about myself.

You know, I’m not all work. Being in Idaho gives me the Rockies are on my front door, and so I enjoy diversions, and one of them I do is the Middle Fork Trip. This is a six-day wilderness trip down the Middle Fork of the Salmon River, one of the top five wild rivers in the world. I do this every other year with some of my staff, and we have a great time. We meet people from all over the world, Scotland, England, Australia, Madagascar. I mean, people come from all over the world to make this trip. It is five days, six days in the wilderness, Class IV, Class V rapids every day. We have a great time, and it’s something that I really look forward to, and it’s . . . the shove-off point is just two and a half hours from my house.

Since moving to Idaho in 2006, I’ve taken up riding a Harley Davidson. I really, really enjoy it, getting out on the open road. That picture is taken just south of the Montana Border at Chief Joseph Pass. I just have a buddy in my business, and we ride together, and it’s just a lot of fun.

And then my wife is a horse woman, and we have trail horses. Those aren’t ours. Ours are painted and palomino. But we go up into the mountains to ride horses, and we really enjoy that very much.

You know, if I’m not traveling or doing one of these things, you’re very likely to find me in my tree house at my home reading a good book. I like just to retreat and keep up to date with what’s going on out there.

But right now what I want to ask all of you is your undivided attention, please, all right? A lot of what I say sounds very simple. It sounds very obvious. But there’s an underlying layer of what I’m trying to get you to see here that often is what you have to observe to really get the meat of what I’m trying to tell you.

I’m a big believer in making things as simple as possible. You know, there’s no reason to overcomplicate what we do. There’s some technical aspects of it, to be sure, but a lot of what we do is very simple in its essence. And so if you’re paying attention, you’ll get the simplicity that’s just above the complexity, and that’s what I want you to do.

So anybody out there multitasking, if you are, in the chat box, fess up now. Let’s see it. Come on. I know you are. All right, good. Um-hum. Yeah, yeah, yeah, yeah. Um-hum. Smiles. Oh, yes. “I just quit.” Oh, someone said no. All right. Okay. Well, you know, I really want you to do that. It’s very important, because I want you to get as much out of this as you can. If you’re going to spend an hour of your time, let’s spend it wisely.

You know, don’t be busted. Don’t be looking at your thing. Don’t do that. That’s really not what you want. That’s not doing you any good.

Because if you change your mind, you can change the result. Even something like physical training, a lot of it is mental. It’s not necessarily what you’re doing. It’s the mental perspective that you approach what you’re doing with. Now, I guarantee you that if you can change your life, you’re willing to take that step, you’re going to see dramatically different results, absolutely, no question.

Philanthropy is elastic. It grows every year. There is, I can tell you, I work both sides of the fence. I work with nonprofits. I work with higher end, high net worth people who want to give money away. And I can tell you that there is much more money available than is even being close to being tapped. And the primary reason is that nonprofits are not learning or not engaging — excuse me — donors in the right way.

So what is today talking about? It’s talking about leadership. And Principle 3 of the Eight Principles — and we’ll talk a little bit more about what they are in a moment — is Leadership Leads. All right. That sounds good.

So what are the elements of leadership? Well, the first one, of course, is example. And leadership can be your staff, but I’m addressing my comments primarily to your volunteer leadership, which we know as your governing board. Every one of your board members are volunteers. You know, unlike corporate boards that are compensating, nonprofit boards are volunteers. By law, they can’t be compensated. Expenses can be reimbursed, but that’s it. So they’re giving of themselves. The example they set to everyone else is what’s setting the pace for everything else. And we’ll talk about that in a minute.

Also, the other thing that leaders do is they provide. And they can provide directly, or they can provide indirectly. But provision of resources is key to them being effective. And it’s a total picture. It’s understanding the revenue streams. In a nonprofit, it’s also understanding that fundraising is a part of this process, and that’s participating in it and investing in it, as well.

How many people out there consider their fundraising budget an expense? Let’s hear some yeses or nos. How many people out there consider their fundraising budget an expense? All right, I see all yeses. Okay.

Fundraising budgets are not expenses. Fundraising budgets should be investments. An investment is simply resources that are put into something that net you back more than you put in. Hence the turn return on investment. And there are identifiable standard returns on investments in different kinds of fundraising vehicles. You should be aware of all of that.

Because this is one of the things that donors — excuse me — that board members are providing, is that they’re providing the insight, they’re providing evaluation into what you’re doing. And most boards, the way they look at fundraising is, well, what kind of cash came in in the last quarter? That’s an accounting statistic. That is completely irrelevant when it regards to fundraising performance. That’s past tense. That’s what’s come in based on work you did, what, weeks, months prior. And the way to evaluate a fundraising program is seeing and calculating and observing different kinds of benchmarks.

So I want you to just expunge the word “expense” from your vocabulary when it comes to fundraising budget. If it is an expense, meaning that it’s not netting as much as you’re spending, well, then you’ve got a problem. Then you’ve got to go back and redo this.

But the three elements of leadership are setting the right example, making sure that there’s enough resources there to deliver on a mission, and then providing insight. And the insight piece is one of the reasons why you want a strategic construction of your board. And what I mean by that is you look at a person’s other skills that they bring to the table. Certainly financial resources are part of that, but also what networks do they allow you to be a part of? What skills? What professional skills do they bring?

This is why you want to make sure you have a balanced board. You don’t want all bankers, attorneys, or accountants, or any of those people, or even marketers. They’re all valuable in and of themselves, but the key is you want them to be a mix, a good strategic mix.

So let’s take each one of these things and let’s remove them from the picture. So let’s say that your leaders are not providing a good example. What happens to your organization? You know, how are they viewed in the constituency? Well, there’s no trust. You know, people aren’t going to trust you if your leaders are saying one thing and doing another.

And this one fact is the reason why all board members must be vested. And when I say vested, I mean financially vested. Personal funds given, invested in the organization. Because they’re simply — I’ll just tell you — they’re simply not believable otherwise. People are very quick to pick up on this, especially at the higher giving levels. That’s very critical. So if you remove that, you don’t have any trust.

But what happens if you don’t have enough provision? Well, it’s obvious. You don’t have sufficient resources to do what you’re supposed to be doing. And as a result, you’re having to cut back, or you’re skimping, or you’re doing things on the fly or on the cheap, and none of that works.

Remember that donors are not really giving to you. They’re giving to see outcomes. That’s what they’re giving to. And I don’t care how worthy your organization may be or how noble its cause may be. To a donor, that’s really a yawn factor. They’re looking at outcomes. And especially with young donors. They don’t give along institutional lines nearly as much as my generation — and I’m a Boomer — or my parents’ generation.

And if you take insight away, you end up with an organization that has no direction. You’re just kind of moving along. You’re not really doing anything. You’re just kind of sitting in the water there. And so you see the obvious results of that.

Are there any examples of directionless that people can offer? Any examples in your own experience of a situation where there’s no direction?

Yeah. Lack of strategic planning.

Yeah. Um-hum, um-hum. Lack of planning. This is probably a big piece of it, yeah. Oh, we’re going to direct some of these things. Mission creep. Oh, board overstepping. I like that. We’re going to talk about that, too.

Only one person on your board gives financially. Well, you are in real trouble. That’s got to change immediately.

Too busy. All right. Let’s talk about some of this stuff. I’ll go back here. I kind of got one or two ahead of me.

There are only three things that boards in charities, nonprofit organizations, need to be focused on. Number one is setting policy. By setting effective, reasoned, balanced policies, it creates an environment in which the staff and other volunteers can do their work and do it productively.

The second responsibility of a board is to advocate. You know, your board members need to be willing to tell anyone and everyone what a great place it is and what great work you do. That’s their second responsibility.

And their third responsibility is ensuring sufficient resources. And this is more than fundraising. Now, in charity, fundraising is almost always a part of that picture, but it also concerns other revenue streams. For instance, you may have a fee for service revenue stream if you’re a museum, you’re some sort of attraction, you’re a health agency that receives fee for service money, that’s part of your revenue. You may own or partially own a business which generates revenue. That’s another revenue stream. And then, of course, there is public money. That’s a revenue stream. And then there is, of course, fundraising, philanthropy, and we’re focused on that today.

Now, if you look at these three things, a lot of times there’s a lot of haphazard, shall we say, enlistment of board members. A friend of a friend of a friend, or we want a warm body, we’ve got to have a certain number of people. None of those are good reasons for being a board member.

Sometimes boards use board membership as a reward for being a good volunteer. Board membership is a responsibility. It’s not a reward. There are lots of wonderful volunteers that do well in certain slots but would not be very good board members. It’s a very special kind of volunteer. And the key is getting the right people on your board, the people who understand these three criteria and who commit to participating in these three.

You know, the old adage, “Oh, Sally gives her time, and that’s enough.” No, it’s not enough. This is a both and all proposition. It’s not an if, or, or but. And the key to successful boards is to enlist slowly, to enlist very selectively, and even if you have a small group of people, start off small. The key is to make sure that everyone is equally committed.

And the reason for that, aside from the obvious reason, is that if you have a group of six people, for instance, and you have one or maybe two who are not on board, so to speak, that will actually degrade the entire group. And what you’ll see happening over time is that the people who can make a difference or who are willing to commit will gradually self-select off. They’ll go elsewhere.

And the aphorism I’ve heard used that I think is important today is significant people want to do significant things. You want people who are serious about being there, serious, not because it’s a pet hobby, or they love animals, or whatever it is they’re doing. This is a very specific job. And so if you need to make changes, you need to migrate off, you need to look about developing a job description and getting that enforced from the chair. You’ll probably get some self-selections off. That’s fine. Thank people, move on.

But without this in place, you have a huge anchor around your fundraising, and there’s not anything else that is going to compensate for this. You can sort of help it a little bit, but it’s always going to be there.

So let’s look at what happens when you’re missing either one of these things. Let’s say the board is more interested in the table linens at your gala than setting a policy. So then what happens is you get drift. Someone mentioned mission drift, yeah?

Let’s say that you don’t have people who really feel like stepping up and advocating for you, telling you what a great place you are, building awareness in the community. Well, the community’s going to do a collective yawn. Ho hum, ho hum, ho hum. You see? Any one of these three.

And then lastly, what happens if there aren’t resources? Well, you’re dealing with peanuts. And I see a lot of this, and there’s a saying I like to use with organizations who, about this. Well, they’re still broke, and they’re still complaining, and the complaining falls on deaf ears, and the whining falls on deaf ears.

Donors want to respond to something that’s positive, and I can sit here today and tell you without any equivocation that there is more than enough money available to you in a sustainable, scalable way that can touch the stability and growth of your organization, pure and simple. It’s there. I will emphatically state that, and I will challenge anyone to tell me differently, and I can produce the numbers.

So why isn’t that happening? The number one reason why it’s not happening is that nonprofit organizations, either the staff, volunteers, all the people involved, either are unwilling or do not understand how to engage donors. They’re way too focused on themselves and not the donors. That’s the reason why.

You know, I hear donors tell me this all the time. “You know, Larry, it’s really hard to give money away these days.” And when this man told me this, I thought he was referring to the fact that he was getting too many requests for the amount of resources he had, but that wasn’t what he was telling me. He was telling me about a situation where he called up and wanted to make a significant — and when I say “significant,” I mean six-figure gift — to an organization, and one of these resort communities in Colorado, and he was told, “Oh, you know, we’re going to put you on our gala list. We’ll get back to you.” That isn’t what he asked for.

And then to be, and then on top of it, he never was invited to the gala. He called again and they said, “Oh, well, we’ll get back to you.” He finally gave up. That’s what I’m talking about. Lack of training, lack of focus.

Now, fundraising consists of a lot of things. People usually think it’s asking. And yes, asking is a part of fundraising. That’s important. It’s a very important part of fundraising. Look at the hands there. No one has their hand out. Asking is a partnership. Asking is an investment partnership. That’s what you’re looking for from your donors, and that’s the way it should be approached.

In that regard, it’s a lot less onerous. It’s inviting people to participate. It’s giving them an opportunity to fulfill their own values. That’s really what it is. And for the, for the donors who would be interested, you’re really offering them something far more valuable than their money. You’re getting the short end of the stick. They’re getting self-fulfillment.

And I say this in all seriousness, because this is what people are really looking for. And there are commercial product verticals that have learned this a long time ago, and they’re very effective at promoting the concept of purchase their product and you achieve self-fulfillment, and they make billions of dollars with that very same proposition. Now, with them, they’re giving you a well-crafted invitation. But charities have the opportunity, if they’ve tapped into the sincere values of their donors, to give them the real thing.

So, but asking is actually the minor part of fundraising. A much bigger part of fundraising for boards is making connections, reaching out to people. Here again, it’s not about going out and hitting up your friends for money. It’s not about going out and twisting arms. It’s not about going out and making a nuisance of yourself. It’s about making connections with like-minded people.

Now, here’s an interesting fact. The entire world is connected in six degrees of freedom. That means any person in the world can be networked two in six steps. That’s kind of scary in some ways, but it’s kind of also interesting, because it shows you what a small place the world really is. And so do not underrate the idea of making connections. “Oh, you know, we don’t have any rich people. We don’t know anyone.” Blah blah blah. That’s baloney. Start working on your connections.

By the way, this is Principle 5 of the Eight Principles, Work from the Inside Out. You start with those nearest to your organization and you move outward in networks. You don’t just make a random appeal and invite anyone and everyone. That’s a waste of time and it’s a waste of money, and the net on it is quite low.

And the last piece of fundraising that boards should definitely be involved in is how to evaluate your program. And we went back to that cash example again. Board members need to be educated as to what they’re looking at, what’s important. They need to be able to approve an annual fundraising plan. They need to hold the staff accountable for that plan. They need to be looking at the right benchmarks. You know, is our average gift size going up? What about our renewal rate? These are the kinds of things that boards need to understand, and they aren’t rocket science, you see? And the board members you have are intelligent, professional people. They’ll understand this. But keep it in simple terms.

And then lastly, the thing that board members really should be involved in is sharing their passion with other people. This is different than networking. You know, the sharing is simply authenticating why you participate in this board. Why is it important?

You know what, when I talk to a board member, I almost invariably ask them, “So why are you on this board?” Well, if they don’t give me an answer that is authentic and sincere, that’s like a warning light going off. It’s like, why are they on this board? I mean, there are board members that get on there for all sorts of self-serving reasons. Well, my boss told me to do it. It’s a resume filler. I’ve got to be a community person. You know, yada yada yada. I like animals, so I wanted to come pet them at the animal shelter. None of those are valid reasons for being on a board. None of them. Now, maybe they’re side benefits, but they’re not the reason they should be on that board.

And so this is key when you begin to enlist people. And you might have to ask a lot of people before you get the right person you’re looking for. But the key is not to bend on your requirements going in. Because there are three things — excuse me — there are two things that board, that any volunteer wants to know when you want to enlist them. They want to know what success is going to look like. No one wants to be a failure. Everyone wants to succeed. And so the clearer and more specific you can make the list of what success looks like, the better chance you’re going to get of people who are joining you for the right reasons.

The second thing volunteers want to know is they want to know how much time it’s going to take to do a good job. Here again you don’t want to say, “Oh, you know, if you just come to a few meetings and do this, well, we’re fine with that.” You know, that’s not doing them any favors, and it’s certainly not doing you any favors. Because then they get into it, and they realize it’s four times as much effort as they thought. They get dissatisfied. They feel like they’ve done a bait and switch. And they’re not effective. They’re just not good. So do those two things at the front end and you’ll have a much more satisfied board member who is passionate about what they’re doing.

Okay, now, here we go. How many people out there think they’re a little stuck?

Oh, lots of yeses. Okay. All right. Okay.

How many people out there would like to upgrade their program?

You know, upgrade means bigger, better, more, for those of you who asked what an upgrade means. And typically that also means raising more money. Now, I like to qualify that, because it’s one thing to raise more money, and it’s another thing to raise more money today, tomorrow, and next week, and next year, and the year after that. And that’s my shtick. I’m all about sustainable fundraising. You know, there are wonderful fundraiser methods that work for once and done. You know, crowdfunding is a great way to raise money for a once and done event or a disaster or something like that. It doesn’t work too well for sustainable funding. You know, we haven’t seen any ice bucket challenges work lately, have we?

So if you want to upgrade, you want to raise more money, and you want to get out of your rut that you’re stuck in, so how do you do that? All right.

You know, this is what I’ve always told people, and I didn’t know on what good terms, on what good basis I was on till recently when I read a book. You know, people usually start the process. That’s a long trip down that track. Well, we’ve got to do this and this and this and this and this. Busy busy busy.

I’m going to assert to you that is not the place to start. When facing a long journey like this and you’re looking at some sort of goal in the future, the place not to start is by getting busy. Let’s step back one step, and that step would be what I call understanding your paradigm. In this case, your fundraising paradigm. Okay, so what’s that? Well, there’s different kinds of organizations that have different ways that they engage their constituencies. That’s certainly a piece of the paradigm. The size, the location, all these other things influence the paradigm. Because, guess what, that influences the processes that will work. Not every process works in every situation.

So despite what the promotional emails tell you, the latest and greatest little whizzbang tool secret may or may not be appropriate for you. And unless you know what your paradigm is, you’re not going to be able to make a good decision in that regard. And this is where I think a lot of nonprofits really go astray. They’re chasing the latest and greatest, and they think, oh, well, it worked for Sally, maybe it’s going to work for Jan. Well, it doesn’t do that.

But we’re still not where you need to start. You need to start at something called principles. And this is what I learned. I read it, I guess, about two weeks ago reading this book. And Ralph Waldo Emerson, most of you know that name from your schooling, the 19th century philosopher, American philosopher living in New England. And I read a quote from him, and it said something like this. There are lots of processes, lots of methods, as he said, in the world. But unless you know the principles that are behind what you’re doing, the chances of choosing the right methods are pretty slim. And I can tell you from experience he’s right.

So, believe it or not, there are unchanging truths which govern all philanthropy. You know, I just kind of get a little smile on my face sometimes. I don’t hear it as much as I used to, but I still hear that, “But we’re different here.” That’s simply a dodge, you know? We’re still dealing with human beings who have very predictable methods of behavior.

And there are unchanging truths. And I put these together in one list, and I call them The Eight Principles of Sustainable Fundraising. Now, I didn’t dream these up, I didn’t invent them. I just took them and put simple names on them and brought them together in one place. And if you start from this vantage point, this is what I call The Eight Principles Way, which is the mindset that will give you success.

And I can guarantee you that whether an organization knows they’re using The Eight Principles per se or not, if they’re being very successful in their fundraising year in and year out, I can identify every single one of these principles operating in their organization. It’s very easy. It’s very easy.

So I want to shift gears slightly. You know, how many out there are curious to know how you bring these into your organization?

Okay. Great. Well, a year and a half ago, we introduced a digital training platform called The Oracle League, and we’ve been really, really excited about it. And it’s unlike anything you’ve ever seen, I’ll guarantee you, because it’s the only thing like it in the nonprofit market. It is fully mobile, fully digital, includes live access to me, all video, downloadable PDFs. It’s really a marvel. Even I’m impressed with it.

And what we’ve been able to do now is we’ve created a limited edition of The Oracle League which I can give to you free today. You can see what the platform actually looks like. And what it does, it teaches you The Eight Principles. It is good for volunteers or professionals. It makes it simple yet profound. It’s a month to month program. It includes a podcast of a practitioner, a live access to me, videos, and you get CFRE credits, four credits every month.

And so now we have The Oracle Basic to show you what this looks like. And so if you would like to do this, it’s very easy. You simply go to oraclebasic.com, put in your name and email, and you’re off and running, and you can see it for yourself. I really encourage you to do that. And it’s free to you. There’s no pay wall to go through, nothing like that, and I can guarantee you, based on what else is out there, it’s going to be easier to understand, both for professionals and volunteers. It’s going to be more useful, more direct. And, you know, I think fundraising ought to be fun, really. And we try to make it fun. So I really encourage you to do that and just try it out, and maybe tell me what you think. I love it.

So, okay, chairperson, Mr. Shattuck, we’re ready for some . . . here we go.

Steven: All right. Great. Well, like I said, we’ve left plenty of time for Q&A. We always like to give Larry a little bit of extra time, because it’s always more fun to have it be interactive.

Larry: Oh yeah.

Steven: So if you’ve got a particular maybe leadership issue, or maybe you came up with a question as you were listening over the last half hour or so, please send it our way, because we’re going to keep Larry on for just as long as you want. He’s obviously a wealth of knowledge and works with a lot of organizations, so . . . you know, Larry, as I was looking at some of the comments from your sort of rhetorical questions, it seems like a lack of strategic plans was pretty pervasive among the people listening.

Larry: Yeah.

Steven: Any advice for them on maybe how to put that in place for the first time?

Larry: Well, I think the plan is the document that’s prepared by staff, and it receives buy-in from the board. It doesn’t come from the board down to staff. And there needs to be the willingness to invest the time that it takes to do this. Every weakness — excuse me — every strength taken to its natural conclusion becomes a weakness. You know, nonprofit people, for the most part, are very well-motivated to do what they do. They really want to make a difference in the community. They want to be able to see and meet people’s needs in the community and leave the world a better place, and that’s certainly a noble act.

Taken to its natural conclusion, though, it’s like it is when you’re on a commercial airplane, and you’re sitting in that seat, and the flight attendant — and I’m an old guy, I say stewardess — but the flight attendant, she says . . . and if the cabin should decompress, there’ll be an oxygen mask that drops down in front of you.

And then there’s one other thing they say. They say, “Be sure and put your own mask on first before helping others.” Well, why do you think they say that? Well, the reason why is if you don’t, you’ll pass out and you’ll both die.

And so my point is this, is that you must step back from all the good things that you’re doing and invest the time that it takes to get a plan in place. Because if you take the time to do the planning upfront, you’ll be so much more productive. Because you’re looking to build capacity. There’s production and there’s capacity, and you’ll never, unless you’re taking the time away from production to build capacity, you’ll always be producing with the capacity that you have.

So you must take that time. There has to be the time invested. And that starts with staff. That starts with executives. It starts with development staff. And then it comes with working with board members to get the buy-in for them. Part of that may be board education.

You know, there have been a number of studies given where about 20% of board members actually receive some sort of orientation or education, and over 70% of them want it. But here’s the proviso: they really only want it at the front end. If you’ve got a board that’s been sitting there for five years, they’re into their habits, and it’s going to be tough to break. But you can begin, but it’ll take a while to make that change. But it starts with staff, and then you get board buy-in.

Steven: Assuming you buy into all that and agree with it, and I do, for sure. What if you have a board that sort of insists or inserts themselves into that process early on, and how do you kind of get them out of it so that you can have the staff do it first and then bring it to the board at a certain point?

Larry: Well, there’s always, you can always get ahead of them.

Steven: Yeah.

Larry: I mean, just flat out go into it and get ahead of them. Another way, I think, this is a group of people, and I think you need a powerful member or influential member of the board that is your, shall we say, your protector, your standard bearer. And by doing that, it’s not just you versus the board. You have an advocate on that board in the process.

Steven: Okay. I like that. Well, speaking of the board, all of the questions that have come in have been around the board. You’ve really gotten people thinking about it, apparently. Here’s one from Gary. It looks like he works at a historical association. He’s got a great board of 13, but only two give financially. And you touched on this earlier, Larry, but how do you get more of that financial commitment from the board? I mean, it seems like 100% of board giving is essential for a lot of reasons, but how do you start when only two out of 13, maybe zero out of 13, are giving?

Larry: Well, yeah, well, that’s a pretty poor ratio, to be honest with you. You know, I don’t know under what terms this board was enlisted. You know, it’s in some ways unfair to a person if it isn’t clear to them when they come on that they would be expected to give, and a year later they’re, quote, “hit up,” unquote. That’s the way it comes across to people.

Steven: Right. Right.

Larry: They feel like it’s a bait and switch. And that’s why I said, when I said you must be very clear and very — what’s the word — inflexible about the expectation. And if they’re not able to do that at a level that’s comfortable for them, whatever that might be, then it’s just not for them.

There’s a flip side to this, too. Let me give you a story that I think will illustrate this. I was working for a poverty relief agency, and I was talking to one of the staff members one day. And this lady is Hispanic, and she’s in a relatively small town, and she was asked to be on this other nonprofit board, and she wanted to talk to me about boards and giving and what have you. And here was her experience. This was her, what, second or third year on the board, and she’s never been asked for a gift.

And, what, nature pours her back in, so she was interpreting her own sort of interpretation of this. And she looked around the room, and she saw bankers, accountants, the country club set, and so she, rightly or wrongly, just assumed that she was there as some sort of token, not there to really contribute, which she could have. And I suspect that what was going on was they thought they were doing her a favor by not asking her for money. So there you go.

You know, if you’re inviting people to invest, they should never be offended. If they feign offense — and that’s what it is, quite frankly — then there’s something else going on.

Steven: Yeah.

Larry: That’s different from collecting bills. And then another reason some donors don’t give is that they’re simply not solicited in a formal, rigorous way. You know, one day somebody gets up in front of the group and they say essentially, “Yeah, I’ll give.” That’s a very passive solicitation.

The boards that perform well all do something called peer solicitation, where it’s a small group of the board soliciting other members of the board face to face with predetermined asking amounts. And if you’ve never done that before, that’s really scary. But once you’ve done it, you’re going to find that your board comes together as a very powerful, unified group ready to conquer the world. And the few people that might self-select off, that’s great. Wonderful.

Steven: Yeah.

Larry: So that would be my response.

Steven: Speaking of setting board expectations. So we talked about board giving, but what about the expectation that the board would fundraise for you? So this question comes from another Gary. This is my buddy Gary in Erie, PA. They’ve got a board, the expectation was not set that they would want them to fundraise, but now they’re realizing that they should fundraise. Is it sort of a similar thing or approach to the board giving?

Larry: Well, I think it goes back to what I said earlier. A lot of people equate the word “fundraising” with asking. Get up there and make it happen. And to be true, to be sure, that’s part of it. But I think boards need to understand that fundraising, the fundraising endeavor is a much bigger piece than just asking for the money. We talked about it. It’s networking. It’s promoting. It’s evaluating. It’s all these other things. And not every person on the board is going to be a top-notch solicitor.

Steven: Yeah.

Larry: A board member may be a door opener. A board member may be an authenticator. Maybe it’s the executive that’s going to be the person that puts the ask before the person, the prospective donor. So not everyone needs to ask, but every board member needs to participate in the program somehow. That’s the difference.

Steven: Makes sense.

Larry: So that takes some of the angst away. Yeah.

Steven: Makes sense. Instead of just at the asking.

Here’s one from Heidi. So . . .

Larry: And . . .

Steven: Oh, go ahead.

Larry: Well, I was just going to say, and that’s why good development staff are program managers. They’re not bounty hunters, all right? They’re not going out to clean up Dodge and bring back the scalps. They’re managing a lot of different people toward common goals that they’re going to reach. And there’s some asking involved, too, but they’re program managers. The best ones are program managers.

Steven: Well, let’s say that you follow through on all this good advice, but you’re still not getting the board members doing what you want them to do. Heidi here is wondering what kind of time frame should you use for removing those board members. How much time should you give them to maybe shape up or change? It looks like her board is pretty small, and most of them are involved and engaged, but she’s got maybe a couple here that she kind of considers to be excess board members who are just kind of dead weight. What advice would you have for Heidi on time frame, approach, all that good stuff?

Larry: Well, I think you need to get a movement with the board members who are doing well to put that question to the ones that aren’t performing. You know, the proverbial come to Jesus moment where it is the board members who are enforcing the board requirements. It goes down much better like that.

Steven: Nice.

Larry: And they know it. And the other thing is, it’s going to be pretty clear to everyone who the non-performers are, and I think if you approach a powerful member of the board and say, we understand this isn’t you. You know, this needs to change, and we need to be able to give people the opportunity to self-select off and at the same time preserve their dignity. So you don’t want them to skewer them in an open meeting or make them feel awful in an open meeting, but I think a private visit that says, “These are our expectations now. Is there something we’re missing here? Is there something going on in your life that we can help you with?”

People have other things outside of this. Who knows what’s going on? I mean, I had that experience just yesterday. Guess it was the day before yesterday, I was in an outdoor restaurant right there in Vail, and we were walking down, and this lady was walking down the street, and she wanted to know how to get to the pedestrian bridge across the river. And we said, “Oh, it’s over there.” And then we just were sitting out there. And then she came back about 10 minutes later walking on air. She was so frenetic to get across the river because she had to make a job interview. And this gal got a job in one of the nice resorts, and she was just ecstatic and thanking us for giving her the directions.

You never really know what’s going on in people’s lives, you know? And that’s why they need that quiet face-to-face meeting that says, this is what we expect. If this is something that you can’t do, that’s okay. You know, we love you, and we’ll find something else for you to do, but this is what we expect. Or is there something we can do to help you?

And, see, most people don’t want to do that because it’s uncomfortable, but it’s what has to happen. I recommend a book called “Crucial Conversations” if you want to learn how to do this well. This is written by a number of authors. One of them is Robert [sic] McMillan, who is the co-founder of Covey Leadership Institute with Stephen Covey. But it’s a great book for dealing with difficult situations and how to do it well.

Steven: Very cool. We’ve got lots of good questions remaining. We’ve probably got maybe five or six minutes left, so if you haven’t asked one, or asked a question, now is the time. We’ve got a couple comments I just wanted to read for the good of everyone listening, and for you, Larry. Elizabeth here says that she uses board member job descriptions, non-participation grounds for expulsions, she’s got bylaws, and she also has extensive conversations with potential board members before ever presenting them for nomination. Sounds pretty good. Would you recommend, Larry, any other documentation, policies? Term limits is one thing that maybe comes to mind that I didn’t see in that comment specifically, but maybe it’s in some other things. What else?

Larry: Well, I think term limits are useful. But it sounds like Liz is doing a pretty good job of vetting potential board members.

Steven: Yes.

Larry: And that’s the key, is she’s taking the time and the effort upfront, and I’m sure she gets nos from people that it just isn’t going to work out for whatever reason, and that’s okay. And, see, that’s when you want to resolve all those things, is before the nomination, before people bringing on.

You know, I spent a number of years in my work working in higher education, and I served, I think, what, four institutions as Chief Advancement Officer. And in all four of those settings, one of my jobs was to be the president’s front man. I would go and visit prospective board members, and I would go and sort of outline what was required, what was necessary, what was going on in their lives. It was very low-key. And then, if it looked like it was going well, I would say, “Well, you know, the next step is that you’ll be getting a visit from the president and chairman of the board to formally ask you. What would be your answer if they say so?” And then, yeah, so when the president walked in, it was all done. It’s done.

Steven: I see. I love it.

Larry: And that took all the angst out of it.

Steven: What about when it’s the board president or maybe the board chair that isn’t performing? I mean, the peer to peer idea is great, but when it’s sort of the head honcho — this is a question and a comment from Rina listening in today — her board president is the one not performing, and she says, “Everyone seems afraid of him.” So how can you overcome maybe that fear to maybe stand up to a person or ask a person to maybe change?

Larry: Reminds me of the . . . what is the Henry Fonda movie “12 Serious Men,” or whatever that is? It’s the story about the . . .

Steven: “Twelve Angry Men”?

Larry: About the . . . yeah, “12 Angry Men.” That’s the one. Where you have one holdout and 12 people want a certain outcome, the jury.

Steven: Right.

Larry: I still think it has to be a peer approach.

Steven: Okay.

Larry: There has to be people who are willing to approach this person. Because remember, the executive is in a very awkward position because the board chair is his employer, and that’s not a peer relationship.

Steven: Right.

Larry: So it is a difficult setting. It’s a difficult thing. Sometimes you may be able to triangulate depending on the situation, and what I mean by that is maybe there’s someone that the board member, the board chair really respects, but who’s not on the board, who’d be willing to make this visit for you. I’ve seen that work. It’s sort of like the same philosophy ideas when people ask me who should do the asking, and my response is, “The person most likely to get a yes.”

Steven: Yeah.

Larry: And that may not be the positional person.

Steven: Yeah.

Larry: It may be somebody else because of the relationship. Fundraising is about relationships. It’s not about money. Money is really not the focus. At least it shouldn’t be. And it’s when you make it the focus that things go haywire. Money’s the result.

Steven: I love it. Well, why don’t we brighten the mood? Let’s say you’ve got some really engaged board members, and they want to be more educated in maybe nonprofit management. Maybe they come from another industry that, they’re not from the nonprofit world, but they are hungry and willing to learn. What advice would you have there? What kinds of things would you plug them into? Would you recommend that they listen to webinars like this, read certain books? What are some good ways to kind of plug them in? Maybe shadow the employees at a nonprofit? Any ideas there?

Larry: Well, certainly learning from what others are doing is important. There’s a drawback, though, to that, though, and that is when you use that exclusively, you’re getting all the conventional wisdom, and so you don’t know exactly who they’re really . . . and there is a dearth of knowledge in the nonprofit vertical. You know, I can be self-serving and tell you that The Oracle League is used as board training in a number of different settings. That’s the digital platform. We use it with museums. We’re using it with health systems. And it’s actually being used in a university to train major gift fundraisers that come from non-fundraising backgrounds like marketing or banking and that kind of thing, because it is very user-friendly.

And what they do is they, when they use it for boards, they will get it for a year for the whole board, and then they meet monthly or whatever, and it’s sort of like a self-paced learning. And that way it isn’t the staff that’s trying to teach the board anything. It’s a third party. And it’s a lot less costly than bringing a live person in every week.

Steven: Yeah.

Larry: And then since it requires board members to actually do exercises in advance, so, I mean, that’s the self-serving answer. But I believe in my product, or I wouldn’t be promoting it, so there you go.

Steven: That’s okay. Yeah, do check out that website if you haven’t already, because it’s totally free and there’s lots of cool resources there, for sure.

Maybe I might end it on a comment, and I’m curious to hear your thoughts, Larry. We have an upcoming board chair listening today. Diane says that she’s going to be taking over as board chair soon, and she’s facing the fact that some of her other board members, they don’t feel like they should have to provide or give financially to the organization because they’re already volunteering their time and expertise as board members. She wants to change that, she says, and any advice for her, Larry, for maybe people that already feel like they’re giving something, why should I also have to give financially?

Larry: My response to that is, and I’m just using a simple name. Mary, that’s wonderful that you give your time, and you [inaudible 00:54:27], but you need to understand that if you’re going to be effective as a board member, if you’re going to be respected as a board member in the community, and you’re going to be seen as the leader, you’re going to have to contribute financially to a level that’s appropriate for you. Otherwise you simply won’t be believable to other people. And that’s true. You will not be believable. And that doesn’t mean you have to have deep pockets or write huge checks, but it needs to show that you’re invested.

I don’t know how many poker players we have out there, but in the game of poker, if you’re going to sit at the table, whatever the stake level is, whether it’s a friendly game or a game for great money, you have to contribute to what’s called the blind. You have to put money into the game in order to be able to sit at that table, because that says you’re vested.

Steven: Yeah.

Larry: That’s what that is. It’s the same thing. It’s, people won’t, they won’t believe you.

Steven: Right.

Larry: And you might think, “Oh, well, they won’t know I didn’t give.” Yes they will. Yes they will. You don’t ever have to say it, you know? And people will pick up on it. They will.

Steven: Yeah.

Larry: Especially when you consider that one of the responsibilities of board members is to ensure resources. And if you’ve not done, quote, “your part” to ensure resources, how are you even going to begin to be believable with other people?

Steven: Right.

Larry: On the recruitment piece, one of — and this addresses this, also — one of the things I ask, that I tell people to ask is I say, “Well, tell me your top three philanthropies.” And if the organization you’re trying to enlist them for doesn’t appear in that list, they’re really not for you, because they don’t have the passion or the commitment to do what needs to be done.

Steven: That’s it.

Larry: So Diane, I would encourage you to stand up and just to be very frank about it. Be polite, but be very frank. It’s wonderful that they give their time. You know, that’s not to demean their time. But to be believable, this other piece has to be in place.

Steven: I love it. I love the credibility issue. Great advice. This was awesome, Larry. We’re about out of time, but I just want to say a final thank you to you for hanging out with us, sharing your expertise, and then just be willing to have kind of a town hall with us today. This was fun.

Larry: I enjoy it every time, Steve. I really do.

Steven: Yeah.

Larry: And those of you who hear this in the recording, oraclebasic.com is active all the time. It is the limited edition of The Oracle League. It gives you a chance to see the platform without charge. And you can always email me directly for information, larry@theeightprinciples.com. I’d love to hear from you. Maybe we’ll go riding on a motorcycle.

Steven: Yeah, if you . . .

Larry: Oh, I hear someone saying that this is badass info. Should I tell them the little story I told you?

Steven: Yes.

Larry: That picture of me on the motorcycle, my youngest daughter, when she first saw that, said, “You know, daddy really looks badass.” And then she paused and she said, “But then Yale comes out.” So there you go.

Steven: Aw, poor Larry.

Larry: I don’t have a tree house picture. I’ll have to get a tree house picture. I don’t have a tree house picture. To the west side of my lawn is a huge century-old willow tree that overlooks the creek, and this tree house, it’s sort of like a big adult deck is what it is, and it overlooks the creek, and you can hear the water running all day, and it’s in shade all day. And I tell people cocktails are at 5, so maybe come out and visit me in Boise.

Steven: Yeah. If you’re in Boise, look him up, send him an email. I’m going to share Larry’s email with the chat there just so you have it. Check out his website. This is awesome. This was really fun for me to listen in on, and I hope it was at least cathartic for you listening in to all these other people that are going through the same problems that you’re having. So this was really fun. Thanks, Larry.

Larry: Thank you. My pleasure.

Steven: And thanks to all of you for took an hour out of your day to listen in. I always really appreciate that. So look for an email from me later on this afternoon. I’ll send out the recording. The slides, just in case you didn’t already get those, I’ll get that all in your hands.

There’s other free resources on our website, as well, and we’ve got some great webinars coming up. We’re here one week from today, as always, every Thursday. We’ve got Terry Axelrod joining us. She’s going to talk about how to kind of identify those run of the mill donors that maybe you overlook who could become very vocal and public champions for your cause. It seems like we always kind of look to board members to do that, but donors can do that, as well. So if you struggle with that, or maybe that’s a new concept to you, join us one week from today. We’re going to dive into that topic specifically. It’ll be a lot of fun.

We’ve got some other webinars scheduled throughout the rest of the summer, as well, even into the fall already. It’s hard to believe. So check out our webinar page and you may see some topics there to interest you. But for now we’ll call it a day. So look for an email from me. Hopefully we’ll see you again next week. So have a good rest of your Thursday. Have a good and safe weekend, and hopefully we’ll see you next week.

Kristen Hay

Kristen Hay

Marketing Manager at Bloomerang
Kristen Hay is the Marketing Manager at Bloomerang. She also serves as the Director of Communications for PRSA’s Hoosier chapter.
Kristen Hay
By |2017-06-18T20:58:59-04:00June 19th, 2017|Webinars|

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