July 2008 Archives

Need Your Advice Re: Social Media

By Aaron Hurst on July 31, 2008 11:10 AM | Permalink | Comments (17)

Over the course of 100 hours, our thousands of talented volunteers get a powerful opportunity to learn about their community and the nonprofit sector.  We want to figure out how to translate that into increased participation in civic problem solving.  Our volunteers are such a powerful resource for the community.

We are currently investigating different social media/networking approaches to enable our volunteers to be able to share insights gained from their projects, ask questions and find like-minded volunteers in our network.

For those of you who work in the web 2.0 world or are frequent consumers of web 2.0 sites, we would love to get your input on how to realize this opportunity.  What really works?

Here are two ideas I have been tossing around:

1) Knowledge wiki.  Create a wiki that has entries by issue area (e.g. foster care) where volunteers who work on projects for nonprofits working in those issue areas (e.g. First Place Fund for Youth) can share their learning and insights.  Volunteers just starting a project in the issue area can read existing entries to get up to speed and then later add to the collective knowledge.

2) Solutions wiki.  As volunteers identify ways that nonprofits have found solutions to challenges (big and small) they post them to a wiki so they can be shared with our entire nonprofit client community and with their fellow volunteers.

I have also been looking at how other organizations have tried to achieve this end.  Here is an interesting one I found earlier this year: Newt Gingrich created the Solutions Lab to enable citizens to propose and discuss solutions to societal issues.

Please post a comment and share your ideas about how to enable us to engage our volunteers in broader community action and problem solving.  We really need your help.

Customer Service is One Blog Away

By Aaron Hurst on July 28, 2008 9:37 AM | Permalink | Comments (2)

Brian Stelter wrote a piece in the New York Times last week titled "Complaining Bloggers Have a Cable Company's Ear" that described an innovative new form of customer service. Comcast, everyone's favorite company to hate, has a team of ten people who identify disgruntled customers online and proactively reach out to them to help resolve their problems.
It sounds like they have a series of automated key word searches running 24/7 that look for phrases like "comcast sucks," "comcast blows", and "comcast must die".  A Google search reports 29,600 for the former, 2,170 for the middle term and 25,500 for the later. Google Alerts can email you the latest additions to your list daily.

Comcast then identifies the author of the web page and asks if they can help resolve the problem.  It sounds like they have a ton more power than the customer services representatives at 1-800-COMCAST.  They can actually make a technician show up in 30 minutes.

You can pretty quickly follow this train of thinking to identify good commercial lead generation programs using this tool.  The ambulance chasing lawyers can do searches of blogs for "accident" (155 million search results) and find fresh victims complaining about their injuries. Realtors can search for "thinking about moving" (372,000) to find new clients.  Personal trainers can set up Google Alerts to let them know when someone writes "I am fat" (279,000).  Endless possibilities.

Since reading the article I have been trying to think of nonprofit or social benefit uses for this model.  I guess that instead of searching for "comcast sucks," a suicide prevention hotline could search for "I suck" (6,280,000)  The United Way could hunt for donations by searching in January for resolutions posted in blogs that call for "giving back" (4,380,000) or "donating to charity" (77,300).  They might even use the Comcast model and help revive their brand by proactively responding to critics who think the "United Way sucks" (214). They could also reward the seven fans who wrote that "United Way is great" (free tickets from their partner the NFL).

Joking aside, it strikes me that there is an opportunity to identify individuals in need of help through key word searches.  It would need to be much more refined (the term "I suck" turns out to mostly bring up porn).  For example, Exhale, a nonprofit support line for women who recently had abortions, could try to find women openly recovering from the experience (especially young women who would use a blog for such a topic).

There is also a public awareness opportunity for an issue like Lyme disease to find out who is writing about it and to make sure they are painting an accurate picture and connecting people who need help or have questions to resources. Or you could find all the blogs that are writing about climate change and post responses to make sure that readers know that 18% of climate change is due to the cattle industry (if that is your bone to pick).

And, it does create some opportunities to connect with supporters you may not know (the "Red Cross is great" shows 1,340 results) or win over your critics.

Nonprofit Management for America

By Aaron Hurst on July 25, 2008 12:07 PM | Permalink | Comments (7)

Teach for America (TFA) is the 6th largest employer of students upon their graduation from college, followed by Deloitte (to put it in perspective).  Not only do they do quantity - they do quality.  10% or more of the students at most Ivy's apply to TFA.

As Avi Zenilman wrote in 2006, TFA "turned national service into a status symbol."

What can we learn from Wendy Kopp that can help us make working in nonprofit management a status symbol and attract the top talent from the top schools?  Why are all these kids flocking to TFA (besides the fact that Wall Street is now in trouble)?

1) Build a Brand
TFA has developed a blue chip brand. It did this by being very selective in its hiring process and by building a presence on the campuses of top schools.

Could we create a umbrella brand for a set of top nonprofits that pool funds to have representation on campuses and collectively recruit and screen students?  Commongood Careers is doing this to some degree now, but it would need a broader coalition behind it to achieve this end.

2) Create a Path
TFA doesn't ask candidates to dedicate their careers to teaching.  In fact, they decline candidates if they say they want to be career teachers.  It is two years and out.

This is a tough one for the nonprofit sector as we need people to stay in the sector, and the career paths in the nonprofit sector are often not attractive.  The latter is a product of having small nonprofits that are not at scale and therefore can't offer entry level hires a clear career path.  This forces talent to leave when they are ready for promotion.  We need role models who are not social entrepreneurs, but nonprofit professionals who have risen in the sector to a place of prominence. Their success is not publicized.

Is it knowledge or data that is power?

By Aaron Hurst on July 23, 2008 2:28 PM | Permalink | Comments (1)

One of the most common criticisms of the nonprofit sector is that it isn't data driven.  Given the lack of data available and the cost to collect data, being data driven is often not a realistic expectation.

Alana Conner Snibbe, senior editor at the Stanford Social Innovation Review, gave a great presentation last year. She demonstrated that the measurements requested of grantees by foundations would typically cost $1 million to produce in a scientifically valid fashion.  That is a big investment to secure a $25,000 grant for nonprofit with a $750,000 annual budget.

Despite this overwhelming case, foundations continue to ask for data, and what they end up getting is faux data that is often unintentionally misleading.  This not only undermines the trust between the foundation and nonprofit community, it also builds a culture that trades on poor data and half truths.

The president of a leading national nonprofit once told me that in the nonprofit sector - "knowledge is power."  The reality is, it is data and not knowledge that is power.  Sadly, most data is garbage and the opposite of knowledge.

Here is the most recent example I have seen of this trend: A recent report by a Boston nonprofit consulting firm showcases this headline as a key finding: "Fifty-eight percent of nonprofits surveyed are allocating 2% or less of  their annual operating budget to support key functions."

Upon my first reading of this headline, I was shocked.  Nearly 60% of nonprofit organizations are spending two percent or less of general operating budget to marketing, program operations, public relations, human resources, financial management, or technology?  Wow.  Nonprofit executives are truly miracle workers to be able to run their organizations with so little money for overhead.

Then I started doing the math.  A basic financial audit (a de facto requirement for all nonprofits with budgets over $250,000) costs between 0.5% and 1% of your budget.  That is just the audit - a nonprofit with a budget north of $1,000,000 will almost always have someone full time doing day-to-day accounting,operations and HR processing.  Fully loaded that is a cost of about $75,000 (or 7.5% of the budget).

It wasn't adding up - there is no way that nonprofits spend that little on those six functions combined. I know their spending is thin, but not that bone thin.

Puzzled, I went back to the report and read the fine print (or at least non-headline print) and found this supporting statement: "The majority of survey respondents spent less than two percent of their operating budget in any one functional area."   After reading this line a few times I realized that their finding was actually that 58% of the respondents reported that they spent less than 2% of their budgets in ONE of the six overhead functions.

Knowing that nonprofits spend very little money on public relations, one could conclude that 58% of nonprofits spend less than 2 percent of their budgets on public relations. Now that is not surprising and not really headline worthy.  In many cases, I would be concerned if nonprofits were spending more money on public relations.

I then looked at their sample - 123 nonprofit respondents.  We all see polls with +/- degrees of accuracy of 2-4% in the paper all the time. With this small a sample and considering they looked at nonprofits with budgets between $500,000 and $5,000,000 (10X) in three cities, the data likely has a +/- of close to 100%.

All that said, I will be the first to admit to spinning research results based on small samples.  The goal here is not to point the finger at one report.  The issue is more systemic.  The desire to create data in the sector has led to far too many reports that would not stand up to scrutiny in any other sector.

How do we solve this problem?

For better or worse, any solution to an issue in the nonprofit sector needs to follow the money.  Foundations funding a specific area (e.g. nonprofit consulting) should pool their funds and facilitate the creation of uber studies to benchmark the state of the issue and then create a common tool for evaluating success relative to other service providers.

In this case, foundations should fund a well designed survey with an meaningful sample that is based on input from the key players in the nonprofit consulting arena.  This survey would look at the real state of the infrastructure in the sector and the key needs for consulting services.

They should then create a universal online survey tool for all nonprofit consulting clients to complete after projects. The data could then be sliced by the consulting firms and by the foundations.  Ideally, it would also be made public to the nonprofit sector as a kind of "Consumer Reports" for nonprofit consulting services.

Until this happens, be sure to read all nonprofit data and reports with a critical eye - like you would read the results of the famous Pepsi Challenge of the 1980s.

Led by a Blind Man

By Cynthia Lisa Chiarappa on July 22, 2008 12:48 PM | Permalink

I volunteer as an account director for the Taproot Foundation, an organization that is basically a Peace Corps for professionals to benefit non-profit organizations. Right now, I am working with a team to help create a new name and visual identity for the Living Skills Center for the Visually Impaired - you can probably figure out why they need a new name! This organization teaches blind youth how to live independently, despite their disability.

Perfection vs. Multi-tasking

By Aaron Hurst on July 21, 2008 11:26 AM | Permalink | Comments (3)

One of the most common habits that is also one of the hardest to break is perfectionism.  For all but a few roles (e.g. accounting) perfectionism causes a huge hit to productivity.

I read somewhere last year that the best general managers make the right decisions 65 percent of the time, but are constantly monitoring the results of their decisions to enable them to adjust course should they find they erred in their thinking.  Forward motion is almost always rewarded more than perfection.

One of the leading causes of the perfectionism affliction has to be our outdated academic system.  A student graduating from a top college has been trained for 17 years that 93+ percent accuracy (A grade) is the definition for success.

If you ask most students, they will tell you that the effort to get an A versus a B is significant.  It often doubles their work load. This is the same loss in productivity that you find with perfectionists in the workplace.

Perhaps the right target hire is the person with a B average who made the most of college through activities, internships, travel and work.  Multi-tasking is far more valuable than perfection.

The Hedgehog Party

By Aaron Hurst on July 18, 2008 4:37 PM | Permalink | Comments (5)

Given the total lack of consistency, reason or vision behind our two political parties, it is time that we create a strong viable third party.

I propose that we base the platform of the new party on Jim Collins' Hedgehog Concept, and therefore name it the Hedgehog Party. It will be the donkeys, elephants and hedgehogs debating on CNN in four years.

The Hedgehog Concept is a model for defining your core as an organization by looking at the overlap in the answers to these three questions:
- What are you deeply passionate about?
- What drives your economic engine?
- What can you be best in the world at?

The party platform would be based on the answers to these questions as we reflect on our country. Here is my first cut at the platform:

1) What are you deeply passionate about?
Life, liberty and the pursuit of happiness for all.

2) What drives your economic engine?
Innovation.

3) What can you be best in the world at?
A pluralistic society that reflects the diversity of the world.

If you use this as a filter, you can look at key issues being debated in the public square and quickly get to a framework for defining a rational and reasonable policy.

For example, take the issue of health care.  If we are deeply passionate about life we have to have universal health care coverage.  Immigration. That is our differentiator - bring 'em on.  Education.  Increase investment to ensure we retain the innovation curve.

So, next time you are evaluating a candidate or issue, be sure to ask - "what would a hedgehog do?"

Intelligence, Character and Will

By Aaron Hurst on July 11, 2008 3:54 PM | Permalink | Comments (0)

At the Aspen Ideas Festival on Sunday, I had the honor of introducing Howard Gardner, the author of the groundbreaking work on multiple intelligences 25 years ago.

After changing the way people around the globe think about intelligence, he came to the conclusion that intelligence is merely a tool and character is the more important trait.  To illustrate this point he reminded us of some of the most destructive men of the last century who were exceptionally intelligent (e.g. Hitler).

Think of it this way: Intelligence is the car.  Character is the navigation system.  And, will is the fuel that enables forward motion.

As a society we focus our resources on intelligence, but it is increasingly imperative that we come to understand and support the development of character and will power.

Howard Gardner is investigating these traits by looking at how people approach their work and how they frame their personal responsibility in the context of their work and profession (check out Good Work).

I just bought his latest book, Responsibility at Work.  It is a collection of essays by other thought leaders based on the outcomes from Gardner's research. This line of investigation still feels nascent, but I really think Gardner is on to something.

Is Causes.com Really Cost.com?

By Aaron Hurst on July 9, 2008 12:32 PM | Permalink | Comments (4)

Sean Parker, a founder of Facebook, started Causes.com last year.  It is a for profit organization that has developed a fundraising and advocacy application to plug into social networking sites.  In 14 months they have generated 12 million users.

He spoke on a panel on Saturday at the Aspen Ideas Festival.  Sean said that his motivation for Causes.com was largely driven by the inefficiency of nonprofit fundraising, where as much as 30 percent of nonprofit budgets are spent on fundraising.

He also shared two facts about his business:
1) They have generated $3 million in donations in their first year.
2) While their current revenue is generated via commissions on donations, they plan to use ad revenue from the page views on their site.

Sean Parker is a brilliant business man.  He has created a new media company that will grow to gain significant page views and therefore revenue and add to his personal wealth from Facebook stock.

While I hope that I am wrong, I fear that Sean's growing wealth will be made at the expense of the nonprofit sector and the causes he intends to help.

In his pitch, Sean talked about getting a call from a nonprofit thanking them for the unexpected $30,000 donation they got via Causes. The crowd, made up largely of socialites who sit on nonprofit boards, began salivating.  They lined up to ask how they could get the nonprofits listed in the application.  

On Monday they will dash home and begin firing off emails to staff of their nonprofits telling them about the land of unexpected $30,000 checks.  The staff will then invest their time in creating a Causes profile and engaging their volunteers and donors to build a social network around their profile.

How do I know?  This is what I did last fall.  We probably spent $3,000 in staff time to launch our presence on Causes.com.

Last time I checked, we had raised $30 and it was all from existing donors. That is a cost of $100 per $1 raised. Sean shared that their 12 million users gave $3 million dollars.  That is 40 cents per member.

If my experience is the common one, that means that nonprofits spent $300 million dollars in staff time to generate those $3 million in donations.  The Taproot Foundation is not a typical nonprofit and we don't traditionally appeal to individual donors.  So, let's be generous and say that it is only a $10 to $1 ratio.

Sean is brilliant. He got nonprofits to spend $30 million dollars in the last year to drive traffic to his site.  The best part is that he is being heralded as a saint for doing it.

It gets better. All professional fundraisers know that one of the reasons people give to charities is so they can be listed in annual reports or on a museum wall with their friends.

Sean lets millions of people get on the "wall" with no donation. They are free riders. He is giving away one of the few "benefits" nonprofits can offer donors.  This also creates a long term cost for the sector.

If Sean's goal is to decrease nonprofit fundraising costs, I fear he is doing the opposite.

All this said, when I first heard about a start-up called eBay I thought it was a stupid idea destined for failure.

As I have said multiple times here, Sean is really a brilliant guy.  I hope that he has a trick up his sleeve and/or learns as his model evolves and can address these issues to achieve his stated goal.  He is much smarter than I am and has the resources to make a real positive impact on the nonprofit sector.  I will be rooting for him to do so.

Nonprofits' Role in Climate Change

By Aaron Hurst on July 6, 2008 11:20 AM | Permalink | Comments (0)

Several years ago, a member of our management team suggested that we become carbon neutral and buy offsets to cover our travel.  He had looked into it and estimated the cost between $20-40k per year.  My response was that our mission is not to resolve climate change, and we can't invest in areas that don't directly impact our mission.

This was a black and white issue for me at the time.  It would be irresponsible to risk our budget to address something outside our charter.  My response was probably similar to many corporate CEOs who agreed with the issue but said they couldn't risk their organization's fiscal health and jobs.

For most Americans, this corporate response is increasingly unacceptable.  We understand that we can't address the problem without the participation of our largest employers and energy consumers.  What about the smaller businesses and nonprofits?  Do we expect them to make this investment? Would it be okay for a homeless shelter to turn away someone because rather than buying another bed, they spent the money on greening their facility?

I am now at the Aspen Ideas Festival where 25 percent of the content is related to climate change.  After my fifth session on the topic, it is the clear consensus that we have about ten years to change course.

That is a VERY short window.

Do we need to sacrifice serving that homeless person today to ensure we don't have millions of additional homeless people in 20-50 years as the coasts are flooded and we have extreme weather destroying coastal housing?

It is an easy answer if it were that simple a trade off.  The challenge is that greening nonprofits would have a negligible impact in the face of the growing energy consumption in China alone. But if US nonprofits don't live our values, what message are we sending about the urgency?

So, what does it mean for a nonprofit to become really green and set the bar for the rest of the world?

From what I am learning in Aspen, there are only two major strategies for major change in the organization's footprint.
 
1) Avoid unnecessary travel by limiting air travel and enabling both telecommuting and virtual teaming.

2) Don't support the consumption of beef (one of the biggest problems, as 18% of human-created greenhouse gases come from cattle). Adopt a policy of not allowing any organizational funds to be used to purchase beef for events, staff lunches, etc. Read more about beef and climate change here.

There are other smaller wins around paper use, recycling and HVAC management.  These matter and should be addressed as well.

If the goal is for nonprofits to adopt these policies to lead the world, then it is also critical to be transparent and public about our behavior.

We can do this in two ways:

1) Make it a standard practice to include social responsibility reporting on annual reports.

2) Educate foundations to require all grant applicants to submit their environmental policy and impact statement as part of their proposal.  They already do this for diversity so there is a precedent and infrastructure to do it.

Our management team is meeting on Monday to set our goals for the next year. I will use the opportunity to propose we adopt these policies and use our nonprofit and foundation network to encourage others to follow.

 

When We Disagree

By Aaron Hurst on July 3, 2008 5:36 PM | Permalink | Comments (0)

Jill Blair, one of the leading thinkers in the field of philanthropy, commented on the blog "Canary in the Coal Mine" that one of the critical roles of the nonprofit is to address "a misalignment or fundamental disagreement about the nature and content of the social contract between citizens and government."  While most of us agree that society needs to provide some basic safety net for our citizens, there remain areas where a minority of Americans see a need in society but the majority does not care to intervene.

This was apparent in the early days of HIV/AIDS before the government and broader society came to accept the epidemic.  In that case, it was more of an issue of early service in a politically charged issue.  Nonprofits are the first steps on the march of progress.

In other examples, they may serve as an ongoing community institution for a community that is out of step with the majority of society.  For example:
- Hunters Helping Kids is a nonprofit that helps preserve the tradition of arming children with guns to kills animals.
- Farm Sanctuary helps to rescue animals from farms to prevent their slaughter.

In all these cases, members of society banded together with like minded people and were willing to give their time and resources to meet a need that they felt critical to their community.  They understood that they couldn't count on their government to take action.  They showed their patriotism by investing of themselves.

The Role of the Nonprofit Sector

This is the fourth in a series of posts about the critical roles that nonprofits play in our society.  Previous posts were on the roles of nonprofits as canaries signaling problems in public policy, as a safety net for basic needs and as an enabler for Americans to become engaged in their community.

Loan Executives to Companies?

By Aaron Hurst on July 1, 2008 9:14 PM | Permalink | Comments (0)

In the 1980s, there was a movement to create loaned executive programs at companies, which would send their leaders for a period of time to a local nonprofit. The United Way, from what I have read, was one of the leaders of this movement.  It seems to have died down in the last ten years. I rarely come across a company with a loaned executive program or a nonprofit hosting one.

It occurred to me recently that we should resurrect these programs, but with a twist.  The nonprofit sector should loan their executives to companies, not vice versa.

Based on my short tenure in both sectors, nonprofits clearly have the edge on management.  Effective nonprofit managers must:
- Manage to a mission and bottom line
- Motivate and retain employees on below market salaries
- Often hire at risk employees as part of their mission
- Deal with utopic employee expectations
- Innovate with no funds

When our pro bono volunteers visit clients, they often write to us and tell us how amazed they are with the ability and dedication of their client's management.  It blows them away.

Imagine the innovation we could spark at companies if they had a taste of nonprofit management.  They would also likely find ways to boost their margins by identifying scores of cost cutting opportunities.

The companies, of course, would need to cover the opportunity costs of borrowing these executives - but the ROI would be clearly in their favor.