If the recent decision by Susan G. Komen Foundation to defund Planned Parenthood’s cancer screening services to low-income women tells us anything, it’s that donors drive how nonprofits deliver on their missions.

When will the sector finally understand that a more sustainable path is open to them? Rather than begging for funds, changing policies based on political whims or creating programs to access new donations, let’s get focused on the business at hand.

Earned income strategies and social enterprise solutions are not only possible for nonprofits, they are essential for survival. An entire world of opportunity awaits the organizations that are willing to set aside the traditional donor-focused fundraising universe and focus on business metrics and strategies for sustainability.

I've made my last apology for saying that nonprofits need to be more "business-like" (It's been a fine line to walk as I was being careful not to offend those who weren't quite ready to accept this message…)  But, let's call this what it is - time to break free from political pressures and demands of donors who do not understand the sector or the mission-focused work - and get down to business.

“What do you do if you work for a nonprofit with a visionary, innovative, entrepreneurial executive director who doesn’t believe that we need to ask our stakeholders for their opinions?”

Good question, eh?

What do you think?

Are there times when you don’t need to engage stakeholders? Times when you do?

And, does it have anything to do with whether your organization’s leadership thinks they have it covered?

I know that this board member made the rodeo statement with the most positive of intentions. He was simply shining a light on our expertise and using a humor to make light of their tough circumstances. And it worked.

But, it also got me thinking about two ends of the consulting continuum:

1.  Making sure the client feels comfortable and confident in your ability to help them through this (often) common issue, problem or situation they are not sure how to face. You can help because you’ve seen this thing many times, you are an expert and will fix this.

2. Giving your client(s) the space to own their situation as theirs alone; something that is unique to their organization. You can sympathize with this very tough spot they are in and help them to create a customized, thoughtful solution. You will do this because you are a wise consultant, not because this is old hat for you.

Over the years, I’ve witnessed many consultants take the former approach to the extreme—making light of the client’s situation or telling them, “it’s no big deal, everyone goes through this.” In this case, the client’s circumstance is made to seem trivial or so simplistic that the board or staff end up feeling downright stupid for not knowing how to tackle it.

I’ve also seen consultants over-compensate to make the client feel special in their problem. “Bravo to you, board of directors, for rolling up your sleeves and tackling that which no other organization has ever tackled before. Let’s work from your own organizational strengths to develop some options for solving this problem.”

As consultants, Rick and I try to blend the two extremes by confidently sharing how we can leverage our experience help our clients through this particular challenge in the way that fits best for this new-to-them situation.

Yet, I’m not sure we always strike this balance. I’m also not sure we should be trying to.

So, I’m curious –what do you think is the best approach? When working with a consultant, do you want smart, experienced people who aren’t afraid to tell you how to fix things? Or do you want to feel special in your issues and co-create solutions with your consultants?

Perhaps we’re right to put so much effort into trying to balance. But, if not, we’d love to learn from you—after all when it comes to working with consultants, one might say “this ain’t your first rodeo…”

How should you treat your best customers?

[Source: Seth Godin’s Blog]

Here's what most businesses do with their best customers: They take the money.

The biggest fan of that Broadway show, the one who comes a lot and sits up front? She's paying three times what the person just three rows back paid.

That loyal Verizon customer, the one who hasn't traded in his phone and has a contract for six years running? He's generating far more profit than the guy who switches every time a contract expires and a better offer comes along.

Or consider the loyal customer of a local business. The business chooses to offer new customers a coupon for half off—but makes him pay full price...

If you define "best customer" as the customer who pays you the most, then I guess it's not surprising that the reflex instinct is to charge them more. After all, they're happy to pay.

But what if you define "best customer" as the person who brings you new customers through frequent referrals, and who sticks with you through thick and thin? That customer, I think, is worth far more than what she might pay you in any one transaction. In fact, if you think of that customer as your best marketer instead, it might change everything.

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Now, let’s ask this question: How should you treat your best donors/supporters?

Here’s what most nonprofits do with their best donors/supporters: They take the money. They take their time.

** The biggest donor/supporter of the nonprofit – she donates three or five or twenty times what the smallest donor donates because she “really” believes in the organization’s mission or is close to the organization in some way. She shows up and volunteers a lot or just occasionally. She most likely gets treated the same as the person who donates just what they can. Be it money or be it time.

This summer will be my 20^th year donating at the very bare minimum a weekend of my time – which over 20 years will include more than 3,200 miles on a bike seat, and an absolutely obscene number of hours training and fundraising. What will be my lifetime value as a donor to and supporter of the National MS Society? Over 20 years it’ll be more than $32,000 in money raised. And I get treated no differently than the person the National MS Society spends all kinds of money on every spring to try and convince them to ride the 150 mile Bike MS ride…for the very first time!

**The loyal donor/supporter, the one who sees ads for all kinds of new and great events to support other causes but continues with one event each year because he feverishly believes in the cause. Because he knows it’ll be difficult to hit his network of friends, family and co-workers up for donations for multiple events every year. He is generating more “profitable” contributions than the newbie event participant that pays the entry fee and then proceeds to raise the minimum amount and not a penny more. The newbie who might ride next year or…might not.

**Remember back when AOL was taking over the planet? They’d send out trillions of CDs every month trying to sign up new subscribers including…folks that had been their customers for YEARS. I know because I was one of them! Oh yeah, and they’d offer the new subscriber all the great deals and make me pay full price. Me, the loyal, profitable subscriber/customer. For years and years…

**If you define "best donor/supporter" as the donor who raises the most money or supporter who volunteers the greatest number of hours, then I guess it's not surprising that the reflex instinct is to just assume that they’ll keep on donating and raising money and volunteering. After all, they just keep coming back year after year, event after event. No need to worry about them. Right?

**But what if you define “best donor/supporter" as the person who brings you new donors and supporters through frequent referrals, and who sticks with you through thick and thin? That donor/supporter, I think, is worth far more than what she might raise for you in any one transaction or one event. In fact, if you think of that donor/supporter as your best marketer instead, it might just change everything.

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This summer, my 20^th and last Bike MS ride will be a very special one.

A small group of my close friends have all decided to do the Bike MS 150 mile bike ride for the very first time! We could be riding in an event to raise money to save the world’s population of pygmy fleas. It was THEIR idea, they’re doing it to honor and support ME! The fact that we’re raising money to fight MS is a really nice bonus.

We’re all riding on a team that last year had 87 riders and raised just a little shy of $70,000. This year there will be 100+ riders on the team and the fundraising goal is $100,000. It’s a great team and the whole weekend will be a blast!

So, now that you know that and hopefully have a warm and fuzzy – think for a minute about deciding to make the commitment to do what my friends are doing.

My friends have never pedaled 150 miles over two days before so between now and June 25^th there’s going to be some MAJOR training going on. There will be hours and hours and miles and miles and hundreds of miles on a bike seat. Inside and outside. There will be elevated heart rates….for l-o-n-g periods of time. There will be LOTS of sweat and probably a few tears along the way. There will probably be a few reservations and helpings of doubt sprinkled on the whole experience.

Some of my friends have bought new bikes, shoes, clothes, gloves, helmets, cyclometers and trainers so they can ride their bike in their living room when it’s snowing and 5 below zero outside.

Between now and June 25^th these amazing, committed and soon to be very “in shape” friends are also going to be talking with everyone they know to raise money to help those that live with MS every single day. Some because they know people suffering from MS. Some because they know that’s what they have to do to ride the ride – and support me during my last ride!

And then come June 27, 2011…it’ll all be over.

We’ll all have amazing memories we’ll relive forever. And a 20 year donor/supporter to the National MS Society will retire and a small group of his good friends will have completed their first and very possibly last 150 mile bike ride to raise money and awareness for our friends and family and the tens of thousands that suffer from MS.

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SO HERE'S THE QUESTION: If I and my friends were doing all this, making this level of commitment to support YOUR organization – what would you do differently?

In particular, a small group of influential Colorado voices are rehashing old arguments about why the L3C is flawed and doesn't live up to its promises. Although I'm not going to debate the pros and cons of tranched investing and access to program related investments (for expertise in the intricacies of the L3C, contact my partner, Rick Zwetsch) I have several bigger picture thoughts to share.

In March of 2008, I first learned of the L3C. By early May, I offered Colorado’s first training on this topic to Social Venture Partners Boulder County based on the incredible promise I saw in the model. That promise as outlined below continues to ring true today for me and for thousands of entrepreneurs across the county.

* The nonprofit sector isn't solving all of our social problems. Corporate America is just starting to think (in a meaningful way) about how it can engage in social change work through product design, partnerships and triple bottom line initiatives. Government cannot take care of us all. A cross-sector approach to fixing what ails us is not only desirable, it's required to move the needle on social change.The L3C is a step in that direction.

* This shift is about building a movement. Movements need structure and focus - if nothing else, the L3C structure has given a focal point to this conversation.

* The founders of the L3C model got creative and innovated on existing business structures. Some folks appreciate and support innovation and creativity and especially like it in simple, digestible packages. L3Cers are among that bunch.

* Social purpose businesses have been around for years, but until recently with L3Cs and B Corps and Benefit Corporations, there hasn't been a way to identify a social purpose business unless their marketing materials tell you they are here to do good. The L3C “tag” helps consumers to identify legally-designated mission-driven businesses.

* The L3C has the potential to attract different kinds of investments; from foundations, from impact investors, from other businesses. Is an L3C necessary for this to occur? No, of course not. But, the L3C has the potential, again, to offer a structure for having these discussions, for pushing the envelope and for asking foundations and individual investors to think differently about how they contribute to social change.

* Some of us simply want a way to express our intentions to the world. The motivations are many: We are in business; we are not a nonprofit. We believe it's fair to make a profit and feed our families and have a sustainable business model. We want the world to know there's another way—maybe a better way, but at least another way—to tackle social change; it doesn't have to be about begging or suffering. There is plenty for all.

At the end of the day, I believe that even the most vocal L3C proponents don't see the model as the be- all-end-all of social purpose business structures. Many more models will come. Some are here now, and others are in development. The L3C may shift and change over time as variations on legislation impact the model. The L3C is one step on a long path toward true social change through business.

Cheers to everyone who is on board for continuing down this path. I may never understand what certain academics and attorneys stand to gain by criticizing the L3C, but the entrepreneurs and social change agents of the world will continue to step around the critics and keep moving...after all, our communities need us and we have work to do

Yet I am continually reminded of the incredible power of translating our words into images that can make our point clearly, simply and easily. Here’s the wordy version of my epiphany:

We all know that donor motivations are changing. This is our work, our field. We know that they want more data. We know that they have been schooled in the importance of evaluation and outcomes. We’re aware that more and more opportunities are available to our donors each and every day – to give to other organizations, but most of all to invest in causes they truly care about.

Much has been written and shared at conferences about this phenomenon, yet when I talk with boards of directors I sometimes hear: “Yes, this is what our staff has been telling us, but I believe that our donors will always support us because they believe in our mission!”

Let’s try sharing this phenomenon in pictures and see if we can make it hit home:

1. Visit Sean Stannard-Stockton’s Web site: www.tacticalphilanthropy.com.  While you’re there, poke around—it’s a fantastic site full of useful info—but along the way, find this: http://www.tacticalphilanthropy.com/2010/10/markets-for-good

2. Look at the pictures. Read the accompanying, but limited, text.

3. Share this link with your board members and ask them to come prepared to discuss what they see (note: you are not handing them a big reading assignment and they should be very happy!)

4. Talk about the concepts depicted in these Markets for Good images that tell the story of the changing face of philanthropy far better than any 12-page written document could ever do

After the meeting – or even during, this is a great time to engage your board:

1. Think about how your organization can use images and simple text to share your stories and update donors on trends within your nonprofit. Then commit to using images in place of one wordy document in the next three months.

2. Do it (i.e. produce a written document or page on your Web site or write a blog post using primarily images)

3. Ask for feedback. At the very least, you’ve introduced an opportunity to engage with your donors without asking them for money. At the best, you may hear something like, “Wow, I always knew you were doing great work, but you made it so easy for me to see (and share) your successes.”

Demonstrating strength

Apologize

Defer to others

Avoid shortcuts

Tell the truth

Offer kindness

Seek alliances

Volunteer to take the short straw

Choose the long-term, sacrificing the short

Demonstrate respect to all, not just the obviously strong

Share credit and be public in your gratitude

Risking the appearance of weakness takes strength. And the market knows it.

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I’m going to add a few more…

Do what you say you’re going to do. Then do it again.

And again.

Set expectations. Manage expectations. Exceed expectations.

Under promise

Be willing to make mistakes. Then own them.

Play no games unless it’s on a field, court, rink, board or table

• To recognize that being 5 minutes behind schedule doesn’t matter

• To remember what it’s like to not know and be expected to make a decision—every single one of us has been there

• To appreciate the person who is willing to ask the question that everyone else may already know the answer to (but more than likely does not!)

• To respect the person enough to trust that they are operating from their very best intentions

I promise to support board members in upholding their duties, not just train them on what they are. And, I hope that you will join me by sharing this post with your fellow board members.

[Originally published on InsideGood.com]

It was a hot day.  It was July—notorious for low attendance due to vacations and the various commitments that summer brings. It was free which sometimes results in high RSVPs and low turnout. And, because it was the first offering of this event, people didn’t know what to expect.

Yet, they came—75 of them (did I say that already?!). They listened. They asked great questions of the trainers and panelists. They learned (according to their evaluations!). They met with nearly 30 nonprofits at the Board Match table fair and made initial contacts that might lead to board seats.

So, who are these people? As a nonprofit, how can you find them?  Well, during the training, I asked a few questions to get a sense of who was in the room. Their answers might be helpful to narrowing your search:

• Almost everyone who attended said they have volunteered in some capacity with a nonprofit
• About one quarter said they’d served on a board
• A handful had served on more than one board, and
• A few had received training in what it means to serve on a board

Boulder County nonprofits: As you go about your board member recruitment over the next few months,

keep in mind that a bunch of folks are now armed with information about board service and are looking for just the right fit for them and their skills.  Remember that people who give, give and people who volunteer, volunteer. You are not asking too much. You are giving them the opportunity to do what they have already demonstrated they love to do.

Nonprofits elsewhere:  Think about whether a community training might make sense. Rather than making recruitment for the ever-elusive board member a competition, why not come together and create pool of prepared candidates who then seek you out. You’ll know you’re finding someone who wants to be there, who cares about your work and who has initial training in what it means to be a board member!

Appreciation

Thanks to Social Venture Partners Boulder County for inviting me to be a part of the training team for this event. Thanks, too, to panelists Dennis Berry, Rich Hoops and Dianne Ladd, for their insights into the challenges, benefits and even joys of serving on a board of directors and for making the training much, much richer through their stories.