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Being Deliberate About Non-profit Organizational Culture

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My wife, an apologist for how non-profits would be lost without development operations, was stressing to me last night the role gift acceptance policies have on influencing organizational culture. Noting the validity of her perspective, I accidentally tweeted a weblog title as a place holder for a future article. Truth is, I had been thinking about organizational culture for a few weeks now.

A recent article in the Wall Street Journal, found through Lifehacker, touches on the importance of considering culture when trying to transition from a temporary job to a full-time position. This led me to consider what elements might impact the culture of a non-profit organization, not in relation to temporary employees, but with regard to maintaining organizational health for existing staff. A side effect of a healthy organizational culture, actions speak louder than words and organizational culture can be very telling externally (which should help in donor attraction and retention).

I began thinking about organizational culture a few weeks ago when the July 2011 edition of the Harvard Business Review arrived in my mail box. I encourage you to purchase this edition or at least check out the articles on collaboration. I was reminded about the impact of organizational culture again this week by a news report regarding an culture of alleged cheating in the Atlanta Public Schools (APS).

Area superintendents, who oversee clusters of schools, enforced a code of silence. One made a whistle-blower alter his reports of cheating and placed a reprimand in his file — and not the cheater’s. Another told a teacher who saw tampering that if she did not “keep her mouth shut,” she would “be gone.”

“In sum, a culture of fear, intimidation and retaliation permeated the APS system from the highest ranks down,” the investigators wrote. “Cheating was allowed to proliferate until, in the words of one former APS principal, ‘it became intertwined in Atlanta Public Schools … a part of what the culture is all about.’ ”

In the case of the APS, it seems that organizational leadership set the tone for the culture. During my time working in the non-profit sector I’ve noticed a few other things that shape organizational culture.

  • Meetings – The time we spend together with coworkers in meetings allows group dynamics play out. Aspects of meetings that contribute to culture… the regularity of meetings, meeting format (don’t get me started on Robert’s Rules). Even the person chosen to lead a meeting speaks volumes about organizational culture. Does the same person chair the meeting month to month and year to year? or is this responsibility shared among the team and in reflection to individual team member strengths?
  • Communication – How people refer to one another, are formal titles used broadly or selectively or are staff on first-name basis with one another? The words and terminology we use can reflect organizational culture (e.g. director of development versus director of philanthropy). How is information shared across the organization? Is it timely? Is it done face-to-face? Is it done over E-mail? Is it hierarchical in how it’s disseminated?
  • Cornerstones – For a lack of a better term I’ll use this term to refer to the policies, procedures, protocols, norms, and mores. Has your organization adopted gift acceptance policies, the Donor Bill of Rights, the Code of Ethical Principles and Standards? Better yet, are these cornerstones referenced and adhered to? How about the intangibles that affect staff morale… Like the example of the Atlanta Public Schools, do you reward bad behavior and promote under-performers? Do you encourage diversity if thought and promote innovation? or does your organization deliberate about minimizing exposure to risk and new ideas?

Ethics Rapid-fire for Your Next Staff Meeting

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I’d like to improve on a quote I often use; “philanthropy, an awkward word that does so much good” by adding “ethics, a simple word that can ruin or fix everything.”

The thing is, ethical lapses don’t have to happen. It’s helpful to be talking about general ethical issues to help your staff how to respond should something crop up. Or, at least make ethics present in your organizational culture. To help keep the discussion of ethics alive in your organization, here are some rapid-fire questions to use at your next staff meeting. Use these general examples to discuss how your organization should handle similar situations.

Ethical scenario rapid-fire – What would you do?

  • A donor, whom you did not invite to your wedding, sends you an expensive wedding present, or gives you a gift when you have a baby.
  • Your organization’s expense policy forbids the purchase/reimbursement of alcohol. You are having dinner with a donor and she orders a glass of wine.
  • You receive a memorial gift made out to your organization praising a staff member who does not work at your agency.
  • When you are running a donor’s credit card, it comes up as “stolen.” What do you do? What if the person is right there, say at your event?
  • A board member wants you to issue her a receipt for all of her gifts to your organization; including $1,200 she spent at your events last year.
  • You receive a matching gift for $50, the price the person paid to attend your black-tie dinner.
  • You have a board member that sits on a Foundation grants selection committee. Is it ethical for them to do both?

For further consideration

  • Does your organization have policies in place to guide ethical decisions?
  • At what point should you release staff or donors engaged in unethical behavior?
  • You know of ethical breaches in your organization, how should you respond?

For more information on fundraising ethics visit the AFP International web site.

Fundraising Ethics and Corporate Scholarships

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I entered my current professional fundraising position after it had been vacant for nine months. Knowing the importance of building relationships with those that had invested their philanthropy in the organization, I spent my first several months meeting all donors who were active at a leadership level. Included in this group were all of our scholarship donors. I noted that over fifteen new corporate scholarship funds were established just prior to my predecessor’s departure and nearly all included a specific sentence in the gift agreement terms and conditions.

Each scholarship recipient selected by the University may be given an opportunity to intern at XYZ Corp, depending on mutual need and consent.

Having worked in higher education my entire career I appreciated the way in which this statement was worded. It indicated to students that the company would like to consider scholarship recipients for an internship, but the company understood that the scholarship award was not contingent on the students’ acceptance of an internship and the University was ultimately responsible for selecting the recipient.

In theory this arrangement would be ideal. However, as I began to make my visits, I soon discovered that they had a understanding of how the scholarship selection process would function which was contrary to the gift agreement. As I made my visits I discovered that these donor companies expected an opportunity to review scholarship applications and resumes prior to the University selection process and the company would be given an opportunity to directly select the recipient. Fortunately, since my position sat vacant for so long I was able intervene before this scheme could be enacted.

I spent considerable time those first several months reestablishing the proper boundaries between benefactor and beneficiary by educating the new corporate scholarship donors on the Code of Ethical Principles and Standards (Standards 13 and 15). The majority of these donors were receptive to this news. However, there was one company in particular that, despite countless personal visits and phone calls, refused to accept the ethical standards I proposed so I would be in compliance with Standards 1, 2, 4, and 5.

The only resolution was for me release this donor from their gift commitment. Provided below are letters sent to the donor in question. Details have been changed or removed to protect donor confidentiality.

Follow-up letter sent after initial face-to-face visit

I am writing to follow-up to our discussion earlier today regarding the XYZ Corp Scholarship at the University.

Please accept my apologies for any miscommunication that might have taken place during the transition of our development office. I do not want this miscommunication to overshadow how much we appreciate the scholarship support and student encouragement created as a result of the investment of XYZ Corp at the University.

Several years ago we did have a scholarship selection committee that helped narrow the pool of potential scholarship recipients. It is on this committee that a select group including representatives from industry were invited to serve and have an opportunity to provide feedback on scholarship candidates. Your interest in establishing a presence on a future scholarship selection committee here at the University has been expressed with our scholarship office.  If we resume this method I will notify you of the opportunity.

Moving forward I would like to conduct this scholarship in strict compliance with the summary of gift terms as agreed upon when the gift was created. To clarify any miscommunication, we do not currently have a scholarship selection committee with external representatives and are unable to offer this opportunity for specific scholarships. The point at which a donor gives specific direction on the selection of a student candidate is the point at which the charitable intent of a gift is lost.

Your investment is greatly appreciated, both in the lives of our students and in the life of the University. Please let me know if I can be of any further assistance.

Final letter sent to release donor from remaining pledge and to terminate the scholarship

Thank you for your recent call regarding the outstanding scholarship gift pledge of $$$ that the XYZ Corp made to the University. I understand your interest in using the XYZ Corp Scholarship, established in 2007 as a tool in recruiting future graduates to work for XYZ Corp.

Since its inception, the XYZ Corp Scholarship has been administered in accordance with the terms outlined and agreed upon at the outset of the fund. Unfortunately, XYZ Corp has pressed the University to administer this scholarship with terms that fall well outside the original terms. Namely XYZ Corp feels entitled to select student recipients of the XYZ Corp Scholarship.

I am sure you can appreciate our disappointment in not being able to administer this scholarship award in strict compliance with the original summary of gift terms as agreed upon when the gift was created. The University is unable to accept future gifts earmarked for specific students as requested. The point at which a donor gives specific direction on the selection of a student candidate is the point at which the charitable intent of the gift is lost. Because of this, I have instructed the University to write off the remaining pledge balance outstanding for the XYZ Corp Scholarship.

Please accept my apologies for any miscommunication that might have occurred in the establishment of the scholarship. I do not want this miscommunication to overshadow how much we appreciate the scholarship investments XYZ Corp made in 2007 and 2008. The student support provided during these two years was an encouragement in the lives of our students.

Please let me know if I can be of any further assistance.

Millennial fundraising epic FAIL

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Typically, this time of year I see fundraising appeals from educational organizations, faith-based groups preparing for summer mission trips, and health-related (education/advocacy/research) groups that sponsor an athletic event (e.g. The Leukemia & Lymphoma Society Team In Training). Over the past four months I’ve received about eight fundraising appeals representing five different organizations. Of these, five have been through social media or in electronic format and stand out in my mind, but not as best practice examples.

Social media and the viral fundraising campaign is highly lauded among large national organizations with high name recognition and stellar reputations. However, a major shortcoming of peer-based appeals is that the responsibility for relationship building is transferred from professional fundraisers to an inexperienced volunteer. A trend I’m seeing among the disappointing appeals is a lack of volunteer fundraising training by these well-respected organizations (or perhaps volunteers are ignoring their training).

The downside of this is that even if a person I know sends me an e-mail or Facebook message asking for my support for their upcoming mission trip or walk-a-thon, I’m unlikely to be receptive to the request if it’s the first time I’ve heard from that person in five years.

As Millennials seek to make a difference, it should be the responsibility of non-profits to engage their volunteers in training to make clear the importance of genuine cultivation and stewardship as a preface to effective asking and engagement. Volunteer training should not focus just on building endurance for the upcoming marathon, but should also spend some time educating on the strengths and weaknesses of permission marketing and their responsibilities as volunteer fundraisers.

Where should these volunteer training programs to start? I recommend the Donor Bill of Rights and the Code of Ethical Principles and Standards.

How Long Will it Take You to Raise the Money?

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All too often well intentioned staff or board members will come to you, the seasoned fundraising professional asking for help securing funds for a need not originally in the strategic plan and more specifically, the integrated development plan.

These requests are usually for last minute programs, non-budgeted expenses, “silver bullet” fundraising events, and my personal favorite consultant fees… upfront payment for somebody promising to write grant requests.

When these requests come across my desk I’ll typically ask these questions:

Is the (insert urgent need here) worth alienating the donor most likely to fund the request? Not usually. If you have been properly cultivating and stewarding your donors you might have somebody interested in helping with urgent needs. If this is true, be sure to link the funding need to your mission and provide a clear case for support that resonates with your donor’s personal interests.

Why wasn’t this in our original budget? Usually last minute financial needs are not considered in the original budget because they are not essential to your ability to satisfy the organizational mission. If the emerging need is critical for organizational success, ask yourself (and the board) “what can we cut from the planned budget to fund this unplanned item?”

If we pay upfront for somebody to write grant requests, how do we keep them accountable for meeting performance benchmarks? You can’t. Staff performance should be built into the strategic plan and should be reviewed by the board at least quarterly. Adding staff or consultants to the payroll without clear performance expectations, and which are paid irrespective of performance sends a terrible message to the remainder of the organizational staff being held accountable by the strategic plan and proper board governance.

So when I’m asked “how long will it take you to raise the money?” I typically respond that it will take anywhere between four months and a year. This range varies depending on how the specific item relates to organizational mission, strategic plan, integrated development plan, budget priorities, board oversight, and donor linkage, ability and interest.