Friday, July 17, 2015

The SECOND Most Important Relationship in a Nonprofit

Note: This blog post was originally published in the July/August, 2015 issue of Nonprofit Colorado, a publication of the Colorado Nonprofit Association

I think we all might agree that the most important relationship in the success of a nonprofit organization is that between staff leadership and board leadership: the president or executive director and the chair. Executive directors MUST prioritize this relationship, and realize that its success – or lack thereof, can effectively trump almost everything else they do. Can an ED on their own effectively recruit high-level board prospects? Can they make peer-to-peer asks of major donors? Can they align trustees to support the most effective strategic direction of the organization? Can they effectively motivate and inspire trustees to perform at the highest level as trustees, and to gently but firmly move them off the board when they are not contributing? I would answer to all these questions almost invariably, no – these functions require leadership from the chair, to be done to their maximum effectiveness. Therefore an effective CEO must devote considerable effort to ensuring the right person is in the chair role, and that they develop and maintain a strong, honest working relationship with the chair. There also must always be strategic focus by both on the chair succession plan.

That said, I believe that in most cases the second most important relationship is between the CEO and their director of development (or VP of development, VP of advancement – whatever title is in use – for this article we will use director of development as a generic term for all). This may seem self-evident, but in my experience it is relationship that is not given enough attention. Recently I spoke to a group of current and past participants in the Institute for Leaders in Development and was asked “what more could be done to strengthen the fundraising sector and help retain quality directors of development in the field?” The original motivation behind the ILD program was to professionalize the development sector in Colorado, and to create a peer learning and mentorship network that would address the challenge of low morale and high turnover in the profession. My answer was “train EDs on how to be strong partners to their development leaders and staff.” All the training in the world of development professionals will have minimal impact if they are not working with CEOs who understand their role and can honestly communicate about development.

So what are the issues that tend to get in the way of a successful working relationship?

Unrealistic expectations – this can be a special challenge for a new development director. There can be an expectation that they arrive like a fairy godmother, and can wave their magic wand and make contributions materialize. Of course, there is a reason the profession is called “development” – relationships must be cultivated over time. Even the most seasoned and accomplished professional will not be able to quickly turn a $1,000 donor into a $100,000 donor overnight, or turn someone totally new to the organization into a major donor. Related to this is the assumption that a top development professional is like a salesman with their “book” of customers who can just bring donors from their previous job to their new one. Of course, they will have donor relationships, but that does not necessarily mean that a donor they worked closely with at a museum is going to have any interest in early childhood education. A CEO must be patient, must understand development is a process and a system, and have the skill and experience to be able to know if their development director is implementing the right strategies and building the right relationships. They also must sometimes help “translate” that understanding to the Board and help the development director educate the board about their role in the process.

Too much emphasis on “credit” for gifts – It can be extremely undermining when a CEO fosters a culture that over-emphasizes who gets credited for a gift. I understand metrics are needed and people need to have goals, but effective development is a team effort. It works best when everyone’s goal is resource development in support of the mission. When a development director works hard to cultivate a prospect and set them up for an “ask” by the CEO (or board member), and then is told that since the CEO closed the deal, or the prospect was already on the prospect list, that they will get no credit for the success of the gift, this is demoralizing and deflating, especially so if it happens repeatedly. The ideal CEO eagerly shares credit, realizing a successful team ultimately reflects on them as well. The successful development director applies this same approach within their team – a major gift that is “triggered” by an event should be considered a result of a team effort that put on an inspiring event, and that perhaps cultivated that donor years, making them ready to act on a major gift.

Insulating the development director from the board – sometimes there is a fear that the development director will not work well with the board or might somehow threaten or overshadow the CEO. To be effective, a development head MUST work closely with the board. If they can’t do it, or can’t be trusted to do it, then they should not be in their role. A CEO should be thrilled to have a development director who can work with the board, not just the development committee, but all trustees. Trustees are a critical component of successful resource development and the development lead must build strong working relationships with as many trustees as possible to be successful.

Not including the development director in Nominating Committee/board recruitment efforts - This is especially true as a board transitions from a working board to a board focused on higher level strategy and resource development - the development director must be involved in board prospect evaluation. Will a prospect fill a development gap in the board? Will they really be able to deliver what they are perhaps promising? Not that their opinion should drive decisions, but it should inform them. A CEO – and board – should welcome the input provided to the process by a development director.

How many directors of development have been demoralized – sometimes to the point of leaving the field, or engaging in frequent turnover – by the challenge of working with CEOs who undervalue them, don’t understand the complexity and nuance of the development function, take credit for their accomplishments, don’t provide the necessary support or staffing? Having been one of those CEO’s for a good part of my career, these lessons are personal and were learned the hard way by me. Hopefully I have not been one of the worst offenders in this area.

I am also a big believer in unifying development, marketing, communications and PR within a single department. In today’s world all these functions are so interrelated it is much more efficient and effective to have them combined. It also improves the development/CEO relationship because development is no longer “competing” for CEO attention focus and budget with these other functions, as they are now integrated. This results in a single senior-level staff relationship around resource development (earned and contributed) as well as communications. Of course, universities and health care have for many years had External Relations departments, but this structure is becoming increasingly more common in other nonprofit sectors, I think for good reason.
Another aspect of the CEO/director of development relationship is the tendency for CEOs to sometimes give lots of leeway to a development professional who “brings in the $” even if they are a poor colleague and/or supervisor. This can be damaging as fundraising is a team effort, and even though someone may be a top performer by the narrow standards of, let’s say, shepherding a major seven figure gift, if they are also creating poor morale in the development team, leading to high turnover and perhaps even alienating other donors, their value may in fact be more than offset by their damage.

The same can be true, of course, of a trustee. Years ago I had to deal with a situation where the largest individual donor to the organization, a trustee and vice chair of the board, was also highly polarizing, alienating other donors, fostering conflict and tension among trustees, and terrorizing staff. She demanded the firing of the development director, after what she deemed to be insubordination – it was true, the development director lost their temper at her, though only after being provoked. This was a demand I ultimately gave in to because I did believe the development director’s lack of self-control was a serious concern, and the resulting ongoing battle with a senior trustee would have made her ineffective in her role. Ultimately, this donor/trustee was moved off the board, a very messy and costly loss, but in the long run it was best for the health of the organization.

So as we celebrate the success of Institute for Leaders in Development, and we as a field look at how we cultivate development leaders, let us think about how we also cultivate nonprofit CEOs who can be strong, knowledgeable, respectful partners with their development leaders. The field, and the people and communities we serve, will be the beneficiaries.

Thursday, June 18, 2015

Lessons in Leadership from Reynold Levy, via Tim McClimon

In his blog (CSR Now!, highly recommended) Tim McClimon, President of the American Express Foundation, recently devoted a couple of entries to re-capping an interview he did with Reynold Levy, whose book They Told Me Not to Take That Job: Tumult, Betrayal, Heroics, and the Transformation of Lincoln Center, recently came out. Tim worked at the AT&T Foundation during the time that Levy was president there, before assuming the presidency of Lincoln Center.

Tim recaps some of the 25 leadership lessons that Levy lays out in his book. I thought it would be valuable, given the commitment of the Bonfils-Stanton Foundation to leadership (a focus we have in common with the American Express Foundation), to share some of these by excerpting from Tim’s blog. If you want more visit Tim’s blog, or better yet, buy and read Levy’s book!

I think his advice resonates – perhaps because it mostly mirrors what I have learned in my career. (It's always gratifying, I suppose, to have some of our perspectives externally reinforced.) Ren was not always the easiest person to work with or for (as I think he would readily admit), but he was highly respected, and highly successful, and therefore is worth listening to and learning from. What follows is from Tim's blog, with his permission, excerpted and slightly adapted.

* * *

He begins his chapter on leadership lessons with this one: The Art of Employee Recruitment and Retention -- generally regarded as one of the most important responsibilities of any CEO, but one that is sometimes disregarded in the nonprofit sector. "I am always on the prowl, seeking energetic, intelligent, curious, and ambitious new employees who wish to achieve extraordinary results," states Levy. "I look for both solo actors and team players, recruits brimming with the confidence to go it alone if necessary and able to work with others productively, whenever desirable." But, his confidence comes with a price: quoting David Rubenstein, he observes that he has "never encountered an outstanding performer in his professional life who worked from nine to five."

On the other hand, another lesson is Seek Work-Life Balance. While recognizing the need to achieve a balance across all aspects of one's life, Levy suggests that leaders should think of their lives in phases that "may require you to defer gratification and to sacrifice, at work and at home." In fact, he suggests that "to aspire at any given time for complete harmony between meeting the unpredictable challenges of the workplace and satisfying the often surprising needs of your children, your parents, your spouse and your friends is an open invitation to frustration."

That being said, one of the more important leadership lessons that Levy discusses is Make it Easier for Others to Help. From personal experience, I can say that he was, and is, a master of that. 

Stay Focused, Avoid Distractions. "Intense focus leads to outstanding performance. Superior programming. Balanced and surplus budgets. Audience enthusiasm. And, a positive reception among trustees, donors and critics," states Levy. "Not being aware of all kinds of practical stuff, like the date of Mom's birthday or the capacity of the gas tank of my car, leaves me the space to keep on top of what I need to know at work, as undistracted as possible." So, in other words, don't sweat the small stuff. Leave the details to others. Don't lose the forest for the trees.

Ask Thoughtful Questions, Listen Intently. "How often have you been involved in a conversation in which those participating talk completely past one another, and pauses are not just intervals for absorbing what was said, but simply a waiting period before offering one's own point of view, uninfluenced by other participants," asks Levy. "A key to successful leadership is learning from those closest to problems and challenges." Active listening and engaged questions. This is an important skill for leaders to master, and employees will feel more energized and motivated if leaders are asking them questions rather than simply making statements.

Self Discipline. When I practiced law with former NYC Mayor John Lindsay, he would often tell young associates that one of the most important things we could do as attorneys was answering our phone messages the same day. Echoing that advice, Levy writes: "The respect people accord to those who work hard never ceases to amaze me. Return phone calls, e-mails, and paper correspondence on the day they are received. Be available, as needed, to your fellow employees, trustees, sources of funding, and key influentials. Exhibit energy. Exude optimism." This kind of best practice takes incredible self discipline and intense focus. But, the pay-off can be tremendous - both for organizations and for leaders.

Pick Up the Pace. "I have committed many more errors through inaction or delay than through timely or even premature conduct," asserts Levy. "Mistakes by omission, not commission. Mishaps by neglect, not abuse." I often recommend a similar approach that can be summed up as "Ready, aim, fire, aim, aim" rather than "Ready, aim, aim, aim, fire." I've had to learn that getting things roughly right is often more important than getting them perfect, despite the fact that I'm somewhat of a perfectionist. In our fast-paced work world, the hare beats the turtle almost every time. Finding the right balance between being quick to market and having a perfect product is critical for many leaders today.

Heavy Lies the Head. It's often said that being at the top of any organization or enterprise can be a lonely position. It's hard to know whether the advice you are receiving from employees is really accurate and not sugar-coated. And, motivating people through reward and recognition can sometimes be harder and more time-consuming than simply telling someone what to do. But, sharing in the success of others, and offering credit where credit is due go along ways toward decreasing the isolation. Levy concludes his chapter on leadership lessons learned with this statement: 
  • Running a nonprofit is never to be confused with running for office. It is not a popularity contest. There will be occasions when tough choices are necessary. They will not always be well received. The true leader should aim neither to be feared, nor to be loved, but to be respected.

Thursday, June 4, 2015

Private Foundations and Communications

Recently the Bonfils-Stanton Foundation completed a comprehensive assessment of our programs and operations, and one of the key findings was that we had not adequately told the story - or stories - of our good work and the work of our grantees. The need for more robust and effective communications was made more acute by the relatively recent decision to focus our grantmaking on arts and culture, and nonprofit leadership.

We began working with Launch Advertising - which had done similar work for the Denver Foundation - to assess our existing communications assets, strengths and weaknesses. This led to several months of deep work clarifying to whom we wanted to communicate with, to what end, with what messages, and how.

We have developed a new web site, a refreshed logo, and will be rolling out an e-newsletter, and more aggressive use of social media. (Interestingly, after lots of experimentation, our new logo is exactly the same as the old logo - same typeface, but with a different color palette, and dropping the wreath image.)

And with all of this deep thinking on our own communications needs, it got me exploring the very concept of why a private foundation should even be thinking about this stuff, and devoting any but minimal resources to it. Certainly this was the model of the past - a foundation often did not have a web site, even in the era when websites were common. We don't have to raise money, we don't have to "sell" anything, so why think about communication? I remember years ago when serving on a communications committee for Independent Sector it was a major topic of discussion that foundations were not communicating what they did, and that made the public - and Congress - uninformed of their work and value. At one of those meetings the Ford Foundation presented their then-new web site, and it was a transformative shift. The site was no longer about how to get a grant, or who got a grant (though that information was still there), but about the issues Ford cared about, and how programs and organizations (supported by Ford) were making a difference in communities.

A recent series of articles in the Stanford Social Innovation Review, (in partnership with the Communications Network) called "Making Ideas Move" is a tremendous resource on this topic. Yes, private foundations do not raise money, and don't need to "put butts in the seats," but we do care about issues that are core to our mission, and we can be storytellers. Embedded in our grantmaking are remarkable stories of people and organizations making a difference in the world, and we should be communicating those stories - to other funders, civic leaders, the nonprofit sector, and maybe even the general public. This can significantly amplify the power of our grantmaking. As the Communications Network puts it: "the power and potential of strategic communications to improve lives and spark change."

We are not alone in this shift in thinking. As we look at examples nationally, foundations like Irvine, Rockefeller, Knight, and Bloomberg, have web sites that go far beyond the traditional basic grantmaking information. Locally, Colorado foundations like Gill, Colorado Health, and Piton use their sites to address issues they care about, tell compelling stories of their grantees, and transparently share what they are learning. (I am excluding Community Foundations from this discussion, as they must solicit and communicate with individual patrons, and therefore their communications have always been somewhat more sophisticated.)

BSF Staff, L-R, Gary Steuer, Monique Loseke, Ann Hovland, Gina Ferrari
More attention to communication can also humanize and make more transparent the work of the foundation and improve relationships with grantees, which also improves the effectiveness of what we do. Our previous site, for example, had no bio information or images of staff.

This is clearly is a topic of growing interest as I was recently asked to facilitate a conversation on the topic among Colorado Foundation CEOs for the Colorado Association of Funders (CAF), as well as a similar conversation for the Aspen Institute's Seminar for Mid-America Foundation CEOs. As the initiator of the National Arts Marketing Project when I was CEO of the Arts & Business Council, and the creator of the communications efforts of the City of Philadelphia Office of Arts, Culture and the Creative Economy, thinking about communications clearly has become something of a pattern or thread in my work, in very different contexts. Interestingly, at the CAF conversation some funders still expressed skepticism at why they want more robust communications if it would only lead to more grant inquiries, which they could not handle with limited staff. And clearly, being a smaller foundation, we have also had to be cognizant of the need to be able to staff our communications work appropriately.

So, visit our new web site, and let us know what you think. After all, real communication is a two-way conversation! The URL is:

Friday, April 17, 2015

Adventures in Cultural Planning

New York City has recently been engaged in a debate around cultural planning. The New York City Council is developing legislation that would mandate that a cultural plan be created and then updates every few years. Details are still in development, such as whether a plan might be required every ten years, twenty years, etc., and how much detail should be in the legislation in terms of mandating specific components be included in the plan.

Because of the enormous scale of New York City and its cultural sector, this effort has provoked considerable conversation and even contention. Tom Finkelpearl, Commissioner of the New York City Department of Cultural Affairs, is working to ensure that this plan does not end up creating a complex and expensive "unfunded mandate," and also wants to avoid Council specifying in too much detail the structure or process the plan must use. And a local coalition of funders, led by New York Community Trust, has been working to support the concept of a plan, creating the New York City Cultural Agenda Fund, and organizing a recent public panel conversation that I participated in. A great summary of the session can be found here.

Above is the video of the panel discussion, which in addition to myself, featured Roberto Bedoya of the Tucson Pima Arts Council, Julie Burros, the new Chief of Arts and Culture for the City of  Boston, and San San Wong of the Barr Foundation, also in Boston. Michelle Coffey of the Lambent Foundation and NYC CulturalAgenda Fund moderated. City Council member Jimmy Van Bramer made welcoming remarks - he chairs the Council's art and culture committee which is drafting the cultural plan legislation. The session was held at BRIC - my first time there since leaving New York in 2008, so it was a great opportunity to see a wonderful community arts organization and facility in action. Also was great to get a tour of Urban Glass. When I was running the New York State Council on the Arts's Capital Funding Initiative back on  the late 80's early 90's, I was involved in funding the creation of their Brooklyn home. Beyond the great panel discussion itself, it was such a treat to reconnect with so many old friends from the New York City arts world.

I found it to be a great conversation, thoughtful and wide ranging. So many issues to explore, among them:

  • What are the different forms a cultural plan might take?
  • Is an outside consultant really necessary?
  • How do you engage the community, the citizens, so you are not just serving arts organizations with the plan?
  • How do you integrate individual artists into a plan?
  • Should the plan also address the for-profit creative sector?
  • How do you address issues of equity, and growing diversity of the population that may not be matched by cultural philanthropic resource allocation?
  • How do you tackle cultural planning in a city the scale and complexity of New York City?
  • How often should a plan be re-done? Especially in a world that is changing so rapidly
I did my best to share both my experiences in Philadelphia, and in Denver, informed by my long and deep immersion for the early part of my career in New York. Denver's Imagine 2020 plan is available here. Philadelphia's Creative Philadelphia Vision Plan can be seen here. And Boston's new plan is well underway - here is a great article in the Globe.

For all of the challenges, I think it is very exciting that New York is embarking on this process - the Mount Everest of cultural planning!

[Update: This week, the New York City Council voted 49-0 to support a bill mandating the creation of cultural plan for the City of New York, supported by Tom Finkelpearl, Commissioner of the Department of Cultural Affairs. Here is a link to the New York Times article.] 

Wednesday, April 8, 2015

Is it a problem when an arts group is too dependent on a single donor?

Dancer Jin Young Woon of Cedar Lake Contemporary Ballet
source: Cedar Lake Facebook page, photographer not credited
The recent case of Cedar Lake Contemporary Ballet in New York City shuttering as a result of the withdrawal of support from their major benefactor, Nancy Laurie, an heiress to the Wal-Mart fortune, has sparked a dialogue around the pitfalls of over-reliance on a single donor. The New York Times wrote about the dance company's closure here, and Michael Kaiser addressed the larger issue in a blog post here.

Clearly, significant dependence on a single donor by an arts group poses serious challenges, and adds to institutional risk. On the other hand there has been a significant growth of arts institutions, largely in the visual arts, that are the creation of single donors/collectors. Would the excellent Neue Galerie in New York be able to survive without the support of Ronald Lauder and his family wealth? Unlikely.

And many of our now-great institutions with diverse funding began as the creature of a major benefactor. Carnegie Hall, of course, was the creation of Andrew Carnegie and his wife, and after his death came very close to disappearing.

It seems to me over-dependence on a single donor has been a phenomenon within the arts since the dawn of "the arts" as we know it, going back to court patronage. In many instances we need to look at largely single donor entities as creatures of their donor, that depending on the donor's desire, or lack thereof, for the entity having sustainability beyond their support, will either disappear based on the choices of that donor, or survive, based either on the careful work of the donor to wean the group off their support, or the efforts of other donors and leaders to sustain the organization.

Thirty years ago, when I became the first Managing Director of the Vineyard Theatre in New York, it was heavily dependent on the support of founder Barbara Zinn Krieger and her family. She, however, clearly understood the necessity of the organization building a diverse base of support, and during my four years there we steadily reduced her share of our philanthropic support from about 75% to 25% (if my recollection of budget numbers from so long ago is accurate). Now the theatre is thriving and fully independent of its founder's support.

But success in weaning an arts group of an unhealthy reliance on a single donor, is often dependent on that donor being committed to the effort, and sometimes needing to force the issue by establishing a predictable schedule for the steady reduction of their support. When an organization is known for being largely dependent on a single donor, this can lead to other donors being reluctant to provide significant support because of the perception that the major patron will always "pick up the tab" as well as the sense that the major patron will also not (intentionally or not)  "share the limelight" with other supporters interested in donor recognition. And development staff can get complacent as well, further exacerbating the situation.

I think the lesson is that if you are the major patron, and you want the organization to survive beyond your support, you need to "own the problem" and be willing to engage in some planning and, if needed, tough love. Or the major patron (and the staff) need to accept that the organization is the creature of that donor, and will exist only as long as they desire it to, and there is nothing wrong with that.