Rebecca Davis, PhD, CFRE recently joined us for a webinar in which she gave an overview of the turn-around process for nonprofits, discussing the dual bottom-line for nonprofits, the challenges of re-engaging community stakeholders, and the difficult road to recovery when your organization has been in the red.

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

Full Transcript:

Steven: All right, Rebecca, is it okay if I go ahead and kick things off for us officially here?

Rebecca: Yeah.

Steven: All right. Cool. Well, good afternoon everyone if you are in the East Coast and good morning if you are on the West Coast or somewhere in between. Thanks for being here for today’s Bloomerang webinar, “Nonprofit Turn-Arounds: The Road to Recovery When Your Organization is in the Red.” My name is Steven Shattuck and I’m the VP of Marketing here at Bloomerang and I’ll be moderating today’s discussion.

Before we begin, I just want to let everyone know that we are recording this presentation and I’ll be sending out the recording this afternoon as well as the slides just in case you didn’t get those earlier. So if you have to leave early or perhaps you want to review the content later on, have no fear, you’ll be able to do that. Just look for the recording from me a little later on this afternoon.

As you’re listening today, please feel free to use that chat box right there on your webinar screen. I’ll see those. Our guests will see those and we’re going to save as much time towards the end for Q&A as we can. We’ll try to end right on time at 2:00. But if you have any questions or comments, please don’t be shy, we’d love to answer them here live for you.

And you can follow along on Twitter today if you are a Twitter user. We always like to see some chatter over on that side. You can follow along with our hashtag #Bloomerang and our username is @BloomerangTech. And if you’re listening today through your computer speakers, if you have any issues with the connection or the audio quality, try to switching to a phone if you can switch to a landline or your cellphone. The audio quality is usually a bit better there. Just keep that option in mind in case your audio drops on the computer for any reason.

And if this is your first Bloomerang webinar, we want to say a special welcome to you. We do do these webinars just about every Thursday afternoon. But in addition to that, Bloomerang offers some really great donor management software. If you are in the market for that or interested in learning more about us, you can check us out. Just go to our website, click the demo button there and you can even watch a prerecorded demo of our software. You can get a look at it without even having to talk to a salesperson if you don’t want to. So check us out. I’d love for you to learn more about us if perhaps that’s something you are interested in.

And I want to go ahead and introduce today’s guest. I’m very excited to have Rebecca Davis back. She’s been a previous webinar presenter for us before. And I’m super excited for her to be back. Rebecca, how’s it going?

Rebecca: Great, Steven. Thanks so much for inviting me back.

Steven: Sure. Thanks for being here. Rebecca is joining us from north of Atlanta, Georgia if you heard our behind the scenes chat before. I’m very excited for her to be spending an hour with us. If you guys don’t know Rebecca, I just want to brag on her for a minute here. She is the president and cofounder of Davis Nonprofit Consulting.

She is a graduate of the AFP Faculty Training Academy. She has her Master Trainer certification. She’s also a CFRE. You can see that there. She’s had her CFRE since 2007. She’s done a lot of work with some great organizations, names you’d probably recognize, including the Alzheimer’s Association, the National Down’s Syndrome Congress, the Children’s Center for Hope and Healing, the Center for Development Services and Pendleton Place Children’s Shelter in Greenville, South Carolina.

Definitely follow her online, follow her on Twitter. Check out her blog. She’s got a great blog at DavisNPC.com. We’ll share all that great information with you at the end. For now, I’m going to pass it over to Rebecca to get us started. So Rebecca, take it away, my friend.

Rebecca: Thanks, Steven. It’s great to be with everybody today. The topic that I want to talk about today, turnaround is of special interest to me because I have lived through and worked through one really significant turnaround and then have been involved with a lot of other organizations in various stages of turnaround or various difficult times in which they had to do some things that are a part of the turnaround process.

My own experience with turnaround really started about ten years ago, not quite ten years ago. I went to work for a nonprofit organization that I knew had a deficit budget for several years prior to me being there. The board was aware, of course because they’ve had deficit fiscal years, fiscal years that had ended in the red. So the board was certainly aware of the fact that they were in trouble, but I don’t think anybody really knew how big of trouble they were in until after I got there.

It kind of all started with one day I realized we weren’t going to be able to make payroll. I had to pick the phone shortly after I got there and ask the board chair what’s the plan if we don’t have enough money in the bank to meet payroll. That was one of the most memorable and least favorite phone calls I’ve ever made. It set into motion a whole host of different things that became part of our successful turnaround.

So what I’d like to do today is talk to you about what we did and about turnarounds in general. But I will say that there’s a really well-developed literature on turnarounds in the business world if you were to go for an MBA or go to a business school, but almost all of it is about corporate turnaround and nonprofits are different, as we all know on this webinar.

There are some ways that things don’t work exactly the same way. So there’s not as much guidance written about how to get through the process and what’s involved if you’re working on behalf of a nonprofit organization as there is in in the corporate realm.

So first the bad news. The bad news is that 70% of all corporate turnarounds fail. They don’t happen. You work really, really hard on our turnaround and there is absolutely no guarantee of success. In fact, one scholar notes that the chances of a business that has been in the red, successfully growing or turning in within a three year stretch is less than 35%. So the odds are against you if you’re in a turnaround situation.

So I think one of things you should know upfront if you step into one of those situations or find yourself in one of those situations is that you’re in for a tough time, a bumpy ride and a long haul. You should also prepare your board for it to be a long haul. The typical corporate turnaround takes about two to three years.

Even more bad news . . . I’m just full of it right now. I hope I’m not completely and thoroughly depressing all of you, is that each turnaround is unique. There’s no one magic formula. There’s no silver bullet that’s going to fix things. It’s definitely a situation where if you’re in a turnaround situation where you can take a look at how some others have pulled through and turned things around and you can get guidance from that, at the same time , there’s an extent to which you have to figure things out for yourself. There’s no one formula that will do it.

Yet one other thing that I want to mention is that a lot of organizations, a lot of boards of directors think, “We’ll just fundraiser our way out of the situation. We’ll pour on the gas of the fundraising effort.” This is the time when a lot of organizations reach out and do a search for a development director.

A lot of development directors get hired on to go to work for an organization. The organization thinks it’s going to sprinkle a little magic development effort on the community through their brand new development professional and voila, fundraising will occur and they’ll be able to fundraise their way out of it.

Well, of course, this is one of the many situations and challenges and problems that we all know contribute to the revolving door in the development profession and contributes to a lot of problems that have been much talked about and much written about other places with development professions not being successful because they weren’t setup for success to begin with.

Because what a lot of board members don’t understand at the outset is that fundraising, while it can be the fuel for growth for an organization, it’s also often a symptom. So if fundraising is bad, it’s usually that other things in the organization are challenging. Other processes are broken. There are other problems. The organization, if it wants to grow fundraising, is also going to have to fix some other things.

So there’s no magic fundraising solution, which is not to say that you can’t engaged in new or different kinds of fundraising and expect and different results, better results. But it’s that it’s not all about fundraising. A development professional alone is not going to be able to make it happen.

So just to clarify, when we’re talking about a turnaround situation, we’re not talking about an organization that has one bad year. Anybody can miss their budget once because of some expected happening. I’m working now with the Girl Scouts. We had a tornado come through and take off roofs of one of the camps we own. That kind of thing can be a budget buster one year.

What we’re really talking about when we’re talking about turnaround situations are organizations that are really consistently struggle. Usually they’ve had two or more deficit years. What you see, and this actually speaks to the point I made that organizations that are struggling with fundraising often have other things, other problems going on.

Most of the organizations that are in a turnaround situation are pretty far along the line of what we call the nonprofit lifecycle. Organizations start out with a lot of energy and enthusiasm in their initial phases and they attract a lot of quality board members and volunteers and staff members who are all energized about the community problem that they’re going to solve through the creation of the nonprofit organization.

They grow. Hopefully they develop sort of a sustainable situation where funding is pretty stable and the program is good and solid and there’s a good reputation in the community and all is well. That’s, of course, where nonprofit organizations have reached maturity.

Often what happens in the life of a nonprofit organization is at some point that shift and maybe the organization gets lazy or satisfied with its current results or maybe the community problem begins to diminish, hopefully because of the nonprofit organization. So nonprofit organizations can enter into a stagnant phase or a phase where they actually begin to decline.

If that isn’t interrupted, if that isn’t changed or turned around, the organization will eventually become defunct, but there is an opportunity for nonprofit organizations, there is a turning point at which nonprofit organizations can turn things around and reenergize, renew, adjust problems and processes so that they’re once again committed to the mission in new ways and the organization can begin to grow.

So there’s an opportunity there if it’s not missed, but there’s also the risk at that point. So most organizations that are in a turnaround state and having consistent deficit budgets are on the back side of this curve. One of the problems, because they’re on the back side of the curve, is that it’s challenging for those who know the organization the best, those who have been involved with the organization the longest period of time and those who love the organization the most often to see that they are in a state of decline.

Often, there’s a lot of denial in that stage. If you’re at all concerned that your organization is on the downward curve and might miss that opportunity to reenergize and recharge, there’s a tool that I want to recommend to you that’s associated with Jim Collins’ book, “Good to Great,” and I’ve listed it here on this slide. It’s an assessment tool that will help you determine the state of development of your organization.

There is one page in particular which also I mentioned on this slide that’s about facing the brutal truth. Jim Collins talks about that, about an organization needing to be able to face the brutal truth in order to be able to grow and change and be energized, be successful because if you’re in denial, if you’re not facing the facts, that isn’t going to help move things along, but not facing the brutal truth occurs in organizations for a lot of different reasons and those reasons actually proliferate in situations where money is scarce and where the economic conditions of the organization are challenged.

So the risk of not facing the brutal truth is actually greater at that juncture where nonprofit organizations most need to be able to face the brutal truth in those turnaround situations. So the quiz that this slide points you to actually outlines some specific behaviors to encourage or some other behaviors to discourage to help your organization develop a culture in which facing the brutal truth may mean, naming them and being realistic about your organization are encouraged. Things like people being able to bring truth to the table without being shot down or penalized socially or penalized in the organization’s hierarchy in some way.

So you’ve got a deficit situation. You need to face the brutal truth. The very first thing that the organization should do is work on disruption. Take the organization and its processes, as many of them as possible, off autopilot. Of course, with economic things like bills being paid, you want to stop them from being paid automatically for lots of different reasons so you can have some time to examine whether the expense is really necessary. Also you want to take them off autopilot because there may be a cash flow issue you need to juggle or finesse. So you want to interrupt all of your processes and take them off autopilot.

But you really need to interrupt particularly if fundraising is your primary revenue and for many nonprofit organizations, that’s the case, I say not all because some, of course, are tied very much to social enterprise or to revenue streams that are fees for service or those sorts of situations. But if fundraising in particular is the thing that drives revenue at the nonprofit organization, you’ve got to interrupt, you’ve got to slow the process down, not in the . . . by slowing it down, I don’t mean you need to slow down the fundraising happening.

You need to slow down the execution just a little bit so that you give your fundraising team time to reflect on the ways that the team executes fundraising has strategic impact and has impact on the results of fundraising. And just to give you an example of what I’m talking about here because I may have not said that well is I’m working with an organization right now that has someone who’s been with the organization a very long time.

So much of the fundraising that the individual is doing is just automatic. They know that step one follows step two follow step three, follows step four. This individual goes about executing the fundraising process without really reflecting on the fact that when you send out, for example, a sponsorship structure you’re making strategic decisions about levels and opportunities for giving and opportunities to partner with organizations. If you simply send out the same sponsorship structure that you’ve sent out year after year after year, you’re not taking advantage of potential opportunities for changing that up and maybe changing up those sponsorship results.

So you’ve got to disrupt. You’ve got to get people to slow down and understand that they’re actually making strategic decisions as they’re executing. Because otherwise, of course, you’re going to end up with this situation where the same old thinking produces the same old results.

Now, of course, in turnaround situations, all turnaround situations, whether it’s corporate or whether it’s nonprofit, there are some things that have to be attended to, things like control in cost, reducing spending, managing the cash flow, increasing revenue. I don’t want to spend a lot of time talking about the things that are common between for profit organization turnarounds and nonprofit organization turnarounds. I want to focus on the things for a few minutes that are unique about nonprofits.

The first thing that I will mention is that if you pick up business books on turnarounds, on corporate turnarounds, they will have a lot of writing about things like mergers and acquisitions, restructuring debt, bankruptcy as a possibility. Most of these things, while not completely out of the realm of consideration for nonprofit organizations, most of them are not appropriate for nonprofit organizations. They’re not going to solve the problem that is resulting in the deficit budget, the deficit situation.

I don’t know about you guys that are on the call today, but I personally can’t imagine being able to successful persuade any board of directors that I’ve ever worked with to declare bankruptcy and try to reorganize. Although, interestingly, nonprofit organizations legally can declare bankruptcy. I think you’re going to find that no board of directors is willing to go down that road.

So there are some strategies that are just inappropriate for nonprofit organizations that corporations rely on very regularly in the turnaround process. So that makes things more challenging for a nonprofit organization. One of the reasons that some of those strategies won’t fix the problem and one of the ways that a nonprofit organization is different, of course, is that nonprofit organizations, as many have talked about, have dual bottom lines.

There are some financial bottom line that every organization has. Are we operating in the red? Are we operating in the black? Do we have cash at the end of the year? Those kinds of money questions. The nonprofit organizations also have to be very concerned about their mission bottom line. After all, that’s the reason that they have the special IRS status of nonprofit organization. They have to take care of the mission.

The two bottom lines are not distinct. They interact with each other in many different ways. The results of one will affect the results of the other. Two wonderful books that talk about these issues very, very well are the “Nonprofit Sustainability: Making Strategic Decisions for Financial Viability” and a sequel book called “The Sustainability Mindset.” That is more of a workbook that actually helps you implement the strategic methodology that’s outlined in the nonprofit sustainability book.

I mention these because these are excellent ways when you’re in a difficult financial position, to examine your organization and to make strategic decisions for your organization when you are not succeeding financially.

The nonprofit sustainability book, the dual bottom line that it talks about, here you can see it on the two axes, the mission impact on one axis, the financial sustainability on the other. The book discusses organizations as largely following into one of the four quadrants that are formed by the intersection of those two axes, mission and money, so that you have in the quadrant that is high mission impact and high sustainability, the stars. Those are the parts of the organization that are extremely successful on both axes there, having a profound impact on your mission as well as they’re financial sustainable.

When I say part of the organization, you can certainly place the organization as a whole on this matrix on these two axes, but what the book really encourages organizations to do is to take a hard look at different business lines within the organization. And a business line is any programmatic initiative or other operating program of an organization. I don’t mean that it necessarily has to be programmatic. It can be financial.

For example, a fundraising event is a business line. It’s a specific strategy of the organization and you can rate the fundraising event on these two dimensions, place them on these two axes, whether or not the fundraising initiative has a high mission impact and whether or not it has a high financial sustainability quota, whether or not it’s an event that consistently makes money.

So if you place things on those two axes in the four quadrants, in the upper right hand, you have your most successful business lines, your most successful programs, your most successful fundraisers, the ones that succeed on both dimensions.

To the left of that, also in the top, you have those programs and strategies that have a high mission impact but don’t have a high financial impact. So those are the kinds of things that are actually, if you measure the complete cost of the initiative, they’re actually money losers, but they are things that are important to the mission of the organization.

Below that, you have things are low on mission impact and low on sustainability because they are not really succeeding by either measure. They’re symbolized by the stop sign because one of the things that you can and should consider doing with the stop sign programs and strategies is stopping, not doing them anymore.

Then of course the last one, low mission impact, high sustainability, the money making initiatives of the organization that don’t necessarily have a high mission impact. A lot of times fundraising events fall in that category.

If you use the matrix map tools that I’ve pointed to in these slides to evaluate your different programs and strategies of your nonprofit organization, what you’ll end up getting is a graph or a plot that looks kind of like this and the size of the dots is affected by how many dollars go into the initiative. So the relative size of the effort in addition to the different placement on the two axes is reflected in that scatterplot.

Then the book further argues that you can take your strategic imperative from where programs and efforts fall on these two axes, but the stars there, they’re doing great. Unfortunately, one of the challenges with the stars is because they’re doing great, we sometimes neglect them. We go fix the problems and we don’t take care of the stars. So we want to make sure that the stars continue to be stars. We want to nurture them to make sure the board is involved in them and if at all possible, we want to grow them.

The hearts. These are usually the things that are so well-loved in the organization. The strategic imperative there is to keep them if at all possible, but contain the cost. Make them look less of a money loser, try to move them to the profitability so that they become stars, but if not that at least control the amount of money that you’re losing on them.

With the money trees down on the bottom right-hand corner, they’re financially doing great, they just don’t have a lot of mission impact. So the strategic imperative there is to try to improve their mission impact and you might, with a fundraising event, for example, try to find ways to strengthen your mission and your mission message during the event.

Stop signs. They are programs that are not succeeding financially and also have very little mission impact and the strategic imperative there, if at all possible, is to give them away. Maybe the program is not a bad idea, but maybe you’re not the right person to do it or you can’t afford to do it. So why not give it to somebody else so that it continues to be done but not by you.

And of course, if you feel like there’s really very little mission value as a program and it’s financially losing money, then the strategic imperative might be and certainly you might want to talk about considering just closing down that effort, that program all together.

Now, it looks like it would be really, really simple, but there’s some subjectivity involved in assessing the mission impact and it’s difficult to estimate the total cost involved in any one of your programs. So you’ll find that there’s some debate in your organization if you work on this about where different strategies and programs actually fall. That’s part of what’s interesting about the process. It’s good and healthy to have that conversation, even if you don’t all immediately agree or even ultimately agree, there is value in discussing the worth of the initiative.

So making some strategic decisions when you’re in a bad financial situation and using the nonprofit sustainability matrix map as a tool are really great things to do with your nonprofit organization because unlike so many for profit business tools, it is mindful. It does keep in mind the dual bottom line of nonprofit organizations.

Another tool that I also highly recommend is just the process of benchmarking. If your organization is not already doing this, and I’m always surprised by how many are not, identify peer organizations for your organization. I think national nonprofits tend to do this pretty regularly, but I think a lot of local nonprofit organizations don’t think to.

Benchmarking. Decide who is like you in other communities or who in your community is most like you. Take a look at their cost, their mission impact, their strategies and take a look at what’s possible in other similar organizations. Just the process of choosing some organizations to benchmark against and evaluating those organizations can help you see possibilities when your organization is in trouble. You can identify best practices that way and you can also identify what I call runways and by that I mean simply areas where there is fundraising potential that your organization is not already involved in.

Just as nonprofit organizations have dual bottom lines, they also have two customers, two clients and it’s hard for nonprofit organizations sometimes to get clear about who the client is and actually it’s okay to have more than one client. With most nonprofit organizations, they have the client they serve as well as the donor, the client who pays. Often, the client who is served is not the same person who pays. So there is usually more than one market, more than one constituent, more than one client in nonprofit organizations.

In turnaround situations, a lot of people preach that if you take good care of your client, the finances will follow and your organization will succeed. So nonprofit organizations have very different types of clients, clients that have different purposes in the whole revenue process of the organization. This, of course, makes turnaround and financial viability more challenging in nonprofit organizations than in for profit organizations.

One of the clients that organizations have to do a good job with taking care of is, of course, the donors and often in turnaround situations, part of what has happened, part of what has broken down and gone wrong is that the donors haven’t been well-taken care of. So a good thing to assess and to figure out and work on is how are you not taking care of the client that is the donor?

Nonprofit organizations are built to serve clients. They’re built to accomplish some mission, to serve some people, some animals, to serve the community, to take care of the environment, whatever, that’s their client. They’re built to take care of that client. Nonprofit organizations often aren’t built to take care of the donor. Yet, they need to be.

It’s absolutely essential that there be good donor stewardship and there are many dimensions to stewardship that include appreciation, how do you say think you, how quickly do you say thank you, etc., recognition of the donors, taking care of donations, being good and faithful stewards of what is donated. And then of course, reporting back to the donors.

Sorry. This is not advancing on my screen. Hold on one second. There we go. The other way that you need to really think about the donor client is through your fundraising plans. Someone a long time ago said and I’m sorry that I can’t remember who this is, said, “Money doesn’t just walk in and surrender itself.”

I like to remind people of that periodically because people think that you can possibly sit idly by and money will show up. Well, sometimes that happens but that’s almost never the case. You have to develop a plan, a strategy for receiving donations, for helping them to come in for fundraising.

It’s really, really important just to develop the plan, leaving aside for a moment the issue of what’s on the plan because as Third Space Studio in North Carolina found in a research project that they conduct every year, the single most determinate factor of whether or not an organization succeeds in growing its fundraising program is whether or not it has a plan.

They took a look at a lot of different types of organizations last year and their fundraising results and they controlled in their research, in their study for whether or not the organization did face to face fundraising, whether or not it had professional fundraising staff on staff with the organization, it controlled for what type of issues the organization addressed. None of those things mattered.

What mattered and what made a difference in the size of the results was whether or not the organization had a development plan. So when you’re in trouble, in addition to taking a look at strategy and what programs need to go forward, benchmarks, you also need to create a development plan.

I will add real quickly about this study that once they controlled for whether or not an organization had plans, some of these other things that dropped out of their initial analysis did become important. So in other words, for those organizations that had a development plan, among them, some of those factors, like whether or not there was professional fundraising staff on board made a difference. Similarly among those organizations that didn’t have a fundraising plan, some of those factors made a difference.

But overall, when you compare all of them, the differentiating factor was whether or not there was a fundraising plan in the creation of your plan, you want your strategies to be very, very specific. This is something that’s a challenge for a lot of organizations, I won’t go into that in much detail.

One of the things will say is that I often hear organizations say, “Oh, we just need to raise awareness.” So I throw this slide out here to say to you beware of the awareness trap or the thinking that awareness is going to make a difference for you. Awareness is great. If you don’t have it, sure, I think you should work on it. But awareness alone is not enough. So those boards that think we can just awareness and the money will come trickling in, it just doesn’t work that way.

Organizations also have to engage. And this is true for both nonprofit and for profit organizations but the way they go about this is a little but different in nonprofits and for profits. Organizations have to engage in restoring confidence. An article I cite here on this slide by Rosabeth Moss Kanter, who’s a Harvard professor, talks about the psychology of turnaround and some of the things that tend to happen, the downward spiral of secrecy and denial and blame and avoidance, etc.

Basically she says, and I’m at risk here of oversimplifying, but basically she says when things start to go wrong, it’s no fun to be at work. When it’s no fun to be at work, it’s no fun to interact with your coworkers. So communication starts to break down, paranoia and collaboration. Paranoia increases and collaboration decreases. Eventually a learned helplessness develops.

So she says the first thing that you have to do is you have to restore the internal confidence and restoring internal confidence is key. It’s the first step, she argues, to restoring external confidence. Restoring external confidence, again, it’s something that for profits and nonprofits both have to do, but the way that it’s done and the reasons for doing it are different with for profit and nonprofit organizations.

With nonprofit organizations, because they are looking for individuals and companies and civic organizations, etc. in the community to fund the organization, they need to restore confidence so that people are willing to invest. People like to invest in winners. There is a bandwagon effect that develops in communities. If they perceive that the organization is failing or it’s not well-managed, they are less likely to donate and to give.

I have a couple of slides here over the next few slides I’m just going to click through really, really quickly to show you a little of how this organization in Northeast Georgia that provided counseling, mental health counselling for children who were the victims of abuse, went about restoring external confidence. One of the things it did is it rebranded. You can see the new logo. You can see that executed in the newsletter, in the website, of course on the left is the before. On the right is the after.

But also, the office itself did not look the organization was well-run and the office itself was depressing and contributed to low morale. You can’t always go out and buy all new furniture. But the organization was smart and savvy and not only got some donated furniture, but also went to thrift stores and shopped thrift stores to improve the lobby.

This was the lobby before. You can see there are carpet stains. Someone said to me at this juncture, someone said, “You know, it looks like grandma’s attic furniture.” Here your organization is an organization that serves children. There’s no energy there. The furniture itself was yucky. Look at that love seat, disgusting. Who wants to sit on that?

It was also dangerous. These file cabinets are stacked too high. I actually posed that lady there and asked her to allow me to take her picture because I wanted to demonstrate that the situation was actually dangerous, open a file drawer and watch a cabinet tip off.

Eventually the organization was able to actually physically relocate. A board member who was a realtor was very helpful with that. You can actually see me up front on the right in that picture. This was the new building, inside the new building. Look at the contrast with the old organization and the horrible furniture. All of those things helped to restore internal confidence but also helped to restore external confidence.

Some of the other things that the organization did besides changing the physical space and rebranding, because a rebrand is not always an option for organizations and it’s not always desirable. You may have a beautiful, strong brand already and may not need to rebrand. Your brand may be well-known.

But some other things the organization did, of course lots of face to face meetings with the community members, community leaders to tell them about what the organization was doing, but the organization also had a number of breakfast briefings where it invited leaders in the community to come to free breakfast and updated them about what was going on inside the organization. So it reintroduced the community to the organization. The results were phenomenal. The organization made the turnaround.

So the other thing that I have not talked about that I want to touch on really quickly–I know we’re coming to the end of our time but we’re also coming to the end of what I want to say before taking a few questions–that is that the other way, of course, to strengthen your revenue stream, not only make a plan and work on confidence internal and external, but you also want to work on strengthening the culture of philanthropy within the organization.

You have to, among other things, make sure that fundraising is everybody’s job. In this particular organization that had such a dramatic turnaround that I worked with for several years, I literally wrote fundraising responsibilities into every staff member’s job description. This was really critical because the organization was full of a lot of people who had very rigid boundaries’ who were definitely coming from, “It’s not my job. This is my job. That’s not my job.” So that had to change.

But some other things you can do to work on culture of philanthropy is make sure that people have talking points, they know what to talk to the community about and help them understand how fundraising is mission aligned. At this particular counselling center, the therapists who worked for the organization were phenomenal about going into the community and asking about some really hard subjects. They talked about sexual abuse, which was not a comfortable subject for anybody and would use very graphic language sometimes in talking about it.

But then I would ask them about speaking about fundraising and they’d be like, “Oh no, I can’t talk about money.” I finally said to them, “You’re talking about sexual abuse. You make people uncomfortable every time you open your mouth. Really money is a whole lot easier to talk about than some of the other things you talk about.”

I helped them to understand that the reason that uncomfortable topic like abuse were okay for them to talk about and easy for them to talk about was because they saw those as mission-aligned, whereas they didn’t see money and fundraising as mission aligned. So we had to work on helping them understand it was mission-aligned so they’re be as comfortable talking about money and fundraising as they were about other things that weren’t especially pleasant or comfortable topics.

Real quickly, sometimes it doesn’t work out. To go back to some of the bad news, in the beginning of the presentation, turnarounds are often not successful. So some things to think about if your organization is not going to be able to turnaround, not going to be able to pull out of its fiscally challenging situation, nonprofit organizations can go through mergers.

You can also work to collaborate in a whole host of different ways. You can do collaborative fundraising if that holds costs down and it allows you to enjoy better results. You can cohabit. You can co-locate in a space to share costs. Finally, you can give away the mission. If the organization can’t succeed, there may be another organization that might take on the program so that the work of the organization survives even if the organization itself doesn’t survive.

This slide is a summary of the things we’ve talked about. Face the brutal truth, disrupt existing processes, fiscal management, evaluating your business lines with attention to the dual bottom line benchmarking, taking care of both clients, including donor stewardship, creating a development plan, restoring internal and external confidence and developing a culture of philanthropy.

Hopefully the application of those steps will help you to achieve desired results. It is possible. Again, it doesn’t happen overnight. It isn’t easy. It isn’t formulaic but it can happen.

So some insights gleaned from my work with some organizations that were struggling or that are struggling that I’m working with now, I’m happy, Steven, to take any questions that might have popped up in the queue or that people might have.

Steven: Absolutely. That was awesome, Rebecca. Thanks so much for the presentation. I was scribbling some notes myself because I just founded my own nonprofit a few months ago. So hopefully I won’t need to put some of these things into practice, but what I really liked about this is you don’t have to wait until you’re in trouble to do some of these things.

Rebecca: Right.

Steven: This was awesome. Yeah. We’ve got probably I’d say five or six minutes for questions. So don’t be shy. Send them our way. I’ve got one here from Alice, Rebecca. Alice is asking, “Have you had a turnaround with small churches who maybe were suffering declining membership and donations, tithes, things like that besides regular fundraising?” Any experiences with churches or know any stories or know any advice for a church dealing with some of these issues?

Rebecca: Yeah. A couple of things. First, I personally have not worked with a church. I have worked with some church ministries, some ministries of a denomination of Protestant organizations. Those ministries were in trouble, are in trouble, I’m still in touch with them still helping to coach them. So I’m aware of the fact that declining membership is a challenge, in probably almost all Protestant denominations right now.

But I’ll say a couple of things. One is it’s not just churches and Protestant denominations which have declining membership. I’m working with the Girl Scouts now. The Girl Scouts are working very hard to turnaround their membership numbers. They may have actually succeeded in that. We may be witnessing the beginning of a turnaround in membership numbers, but for many years, the membership numbers for Girl Scouts have been on the decline.

That affects membership fees, it affects cookie sales for the Girl Scots. In churches, of course, that affects the size of your donor pool and the number of donor prospects that you have. So my first words to you would be you’re not alone. There are many organizations, not just churches but others as well that struggle with the kinds of things you’re talking about.

Because I’ve worked with some ministries, I would say that these things all apply. There’s no one formula for everybody, but these things that I’ve outlined today that have worked for the organizations I’ve worked with in the past are things that are replicable and I think are pretty fundamental to the nonprofit organizations, whether it’s a church or a different type of nonprofit organization and should help. We often don’t attend to all of these things or we don’t think of these things in these terms.

We don’t think about our dual mission or our dual bottom line or our dual client. Yet, it’s helpful to separate out the ways we think about those things because that helps us to brainstorm and identify new strategies and new ideas to resolve the issues.

Steven: I love it. Rebecca, we’ve got a couple of questions about the board. Anne here specifically says, “How do you convince the board that they have to get involved with all of this rather than just kind of them thinking it’s a fundraising issue and the fundraisers have to deal with them themselves?” What role should the board play and how do you engage them in it?

Rebecca: Well, that’s a million-dollar question. No matter what is going on with our nonprofit organization, we’re always struggling with how to engage the board, how to engage them in ways that would want them to engage because sometimes there’s a lot of energy and passion from board members that get misapplied or misdirected. In turnaround situations, one of the risks is not only that boards won’t engage and won’t help but one of the risks is that boards will over-engage and cross the line into management because there’s a crisis going on.

So I know for example with the children’s center I worked with, I had some board members kind of stepping into my business a little bit, but they did it with a good heart. They were respectful about it. They were just trying to help and when things settled down, they backed out. They were appropriate. That’s something to remember in the heat of it. If you have some well-intentioned board members who were crossing some lines during that process, they may back down.

But the question that was raised was about not how to deal with boards that overly involved, but how to deal with boards that aren’t involved. Lots of different things I can say, one of which is I would encourage people who aren’t familiar with Gail Perry to visit her website, subscribe to her e-news and to read her book, “Fired Up Fundraising.” The subtitle is, “Engaging Board Passion” or something like that. I learned a lot from Gail about how to successful engage board members. I think she’s awesome. I can’t say enough good things there.

So I would point you to that resource. I would also just say that my experience has been that oftentimes board members don’t engage because they simply don’t know how. So as specific as you can be with them and as many tools as you can provide them, the better results you’ll have. They need talking points. They need brochures. They need specific names of people to call. They need to be told what to say or offered suggestions of what to say when they call.

So write out scripts for them. They don’t have to follow them, literally, but it gives them . . . what I’ve found it does most is it makes them feel more comfortable because it validates for them that there isn’t some mystery that they don’t know. When they see the script I wrote for them, what happens usually is that they’re like, “Oh yeah . . . “

Steven: I can do this.

Rebecca: So it helps them learn to trust themselves, which is great.

Steven: I love it.

Rebecca: There’s also a great book I can point people to called “Train Your Board and Everyone Else.” It has great exercises to take into your board to help them understand fundraising and how to much better.

Steven: Well, Rebecca, we’re running up against 2:00 and I don’t want to keep people from the rest of their day, especially if they haven’t eaten lunch yet. I know we didn’t get to nearly all the questions, so I apologize for that. Rebecca would you be willing to take questions via email or Twitter or something like that?

Rebecca: Absolutely. My email address . . . I know somebody asked about something that was at the bottom of the slides. The slide will be sent to you, as Steven mentioned earlier. So you’ll have those. This last slide here about me, there’s my email address way down at the bottom of the slide, RDavis@GSHG.org. Feel free to email me and I’m happy to continue the conversation with anybody who is in need of help or has a question who might not have gotten their question answered today.

Steven: Awesome. Well, Rebecca, this was really great. Thanks for spending an hour with us. I really enjoyed it and I know everyone else did that has commented in here. So thanks so much and thanks to everyone for taking an hour out of your day to listen along with us. I know it’s a busy time of year. Maybe you’ve got the fiscal year coming to a close here quickly. But yeah, I will be sending out the slides and the recording, for sure. Just look for an email from me later on this afternoon. If you joined late, you’ll be able to catch the whole session.

So thanks, everyone. Rebecca, a final thanks to you. I hope you had as much as I did.

Rebecca: Thanks. Thanks, Steven. Bye everyone.

Steven: I just want to tease the next session. We’re going to be back one week from today, June 2nd, Thursday June 2nd, a special 2:00 Eastern start time, a little bit later than what we normally do. But Larry Johnson is going to be our guest and he’s going to talk about major gift fundraising. Check that one out. It’s definitely going to be a great presentation. Larry is super smart, super great guy. Check it out. There are lots of other webinars there that you can register for. They’re all free, totally educational. We’d love to see you again sometime soon. Hopefully next week.

So have a great weekend. Have a safe holiday weekend for you Americans celebrating Memorial Day. We’ll talk to you hopefully next Thursday. Bye now.

Nonprofit Sustainability

Kristen Hay

Kristen Hay

Marketing Manager at Bloomerang
Kristen Hay is the Marketing Manager at Bloomerang. From 2018 - 2020, she served as the Director of Communications for the Public Relations Society of America's local Hoosier chapter. Prior to that she served on several different committees and in committee chair roles.