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Philanthropy Journal Special Report

Nonprofit Professional Development


In this special report, PJ looks at ways nonprofits can make the most of their limited resources to handle their professional development.

Articles
Philanthropic culture key for fundraising 2 The post-recession executive director 7 Do-it-yourself professional development 12

Philanthropy Journal Special Report: Nonprofit Professional Development

Philanthropic culture key for fundraising


Todd Cohen | July 15, 2011
Stung by the damaged economy and a local United Way compensation scandal, the nonprofit community in Charlotte, N.C., has been working to reinvent itself. Key to that effort have been a handful of local initiatives that aim to change the culture of the local charitable marketplace through a focus on community needs, genuine engagement of donors, and pragmatic strategies to build nonprofit capacity and collaboration. "The major lesson that Charlotte must learn is to nurture the concept of philanthropy," says Karla Williams, a Charlottebased national fundraising consultant and a key player in some of the efforts to rebuild the local nonprofit sector. "It has so little to do with fundraising," she says. "It results in fundraising." Regardless of their mission, fundraising is an ongoing task for nonprofits. In Charlotte, the task of boosting nonprofits' fundraising capacity has emphasized their need to help themselves by identifying the limited resources they have and putting them to productive and innovative use to get their own houses in order - an approach that local nonprofit leaders say could serve as a model for nonprofits in any community.

Culture of philanthropy
Fundraising begins with understanding what philanthropy is all about, says Williams, who is principal of The Williams Group, a key adviser to United Way of Central Carolinas on transforming its organizational culture, and director of the Leadership Gift School at the Institute for Philanthropic Leadership, a local effort to strengthen the work of local nonprofit leaders and fundraisers. "Philanthropy is all about civic engagement, essentially about social reform, community-building," Williams says. "Most development directors and most executive directors are failing to look at the underlying social dynamics of this city, to really understand how they can build a fundraising program that will contribute to the advancement of the greater society." And as is typically the case in other cities, in Charlotte it is Baby Boomers who are driving the "transformation of civic life," Williams says. "The Me Generation' is much more focused on what's in it for me,'" she says. "Therefore, fundraising from Baby Boomers has to be a process that teaches them why the nonprofit sector is so important, why civic engagement and helping your neighbor is so important, why having conversations may be more important than giving money."

History of philanthropy
It is an "absolutely essential necessity" for nonprofits to understand the history of philanthropy in America and the evolution of philanthropy "as a process that ensures democratic freedom and religious freedom," Williams says. They should know, for example, that the fundraising profession in the U.S. had its genesis in the effort by universities to raise money for scholarships for those who otherwise could not afford higher education.
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Philanthropy Journal Special Report: Nonprofit Professional Development

Nonprofits also should understand the various theories of fundraising, and the "methodologies that are designed to be used under certain conditions and situations." Every nonprofit board, Williams says, should have a session once or several times a year that focuses on the history of philanthropy in America and why the nonprofit sector exists. "It's a very sophisticated business-psychology strategy," she says. "It's steeped in psychology but it has a business application. And it's essential that board members and nonprofit staff understand how highly developed that business is." Understanding the origins and evolution of philanthropy, and the strategies of fundraising, she says, also will help nonprofit professionals understand how to apply philanthropy to shaping their own organizations.

Fundraising capacity
Once a nonprofit is grounded in what philanthropy is all about, Williams says, it needs to understand what donors think. That requires being "seriously interested in donors' opinions," and getting to know them through focus groups, surveys, personal interviews and other methods. "Fundraisers have got to learn how to connect with people, to go beyond themselves into the world of their donors in order to create a true culture of philanthropy," Williams says. Carol Hardison, who is executive director of Crisis Assistance Ministry, one of Charlotte's biggest social-services agencies, and a student in the inaugural class of the Leadership Gift School at the Institute for Philanthropic Leadership, says fundraising is all about customer service, "leveraging" relationships, and communications and marketing. A former information-technology executive at Duke Energy whose "customers were internal," Hardison says fundraising "is no different than in the for-profit sector, having a service or a product that you want your customers to know about." Fundraisers also can tap the relationships they have with board members, existing donors and community partners to identify prospective donors, whether individuals or institutions. "We don't have to have money to buy a list of names," Hardison says. "We don't necessarily need a new database, although at times we do. We just have to work within the existing team that we have." Equally fundamental, Hardison says, is the ability "tell the story" about a nonprofit to prospective donors and funders. That includes "understanding your business case" for the needed funds, and the "ability to translate that business case for the need to a person who has an interest or passion in that area."

Fundraising tools
Based on what they learn about prospective donors, Williams says, nonprofits should "establish a process to work with them going forward." The process she prefers is known as "moves management," or creating a profile in the computer database to track and record any interaction between staff, board and volunteers with prospective donors, as well as anticipated next steps.

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Philanthropy Journal Special Report: Nonprofit Professional Development

That process also aims to create relationships between, on the one hand, the prospective donor, the donor's family and the donor's friends, with the nonprofit's "family" and friends. "You connect them all," Williams says. "You are looking for ways and places to build a sense of community within the context of your organization, but your organization isn't the only thing that benefits." A "meaningful transformative gift," she says, also benefits the donor who fulfills a need to make a difference, as well as the individual, group or community served by the nonprofit that receives the gift. Hardison says it is critical for nonprofits to "maximize your processes and your tools" to generate the greatest benefit from relationships with donors. A prospective donor, for example, might interact with Crisis Assistance Ministry multiple times on separate, seemingly unrelated occasions, possibly communicating each time with a different representative of the organization, she says. "We need to have the tools and the processes aligned so that we know to communicate with this person, not as three disjointed point-in-time events, but as a friend of the agency, and we communicate with them in a cohesive and strategic manner."

Curiosity about donors


During a session of the Leadership Gift School, Williams asked the 25 nonprofit professionals in the class to identify their top 25 prospective donors, and encouraged them to try not to simply choose from among the same pool of the 200 wealthiest individuals most fundraisers in Charlotte know about. "They came back realizing they did not have enough information on their donor base to easily identify who would be their 25 top prospects for a major gift," Williams says. "What they had was the assumption that people would give," she says. "They did not have knowledge they would give or knowledge of why they would give or who else did they know who could make the ask and who else was giving who would give credit to them." Nonprofits give "a lot of lip service to our practice," Williams says. "We go through the routines. We buy the great computer programs in the sky. We have all the tools." Still, she says, nonprofits are missing "the importance of caring about an individual in that database enough to be able to know them, to be able to cause them to be interested in our organization to a greater extent. How do you know somebody if you've never met them? You don't have a relationship." Most fundraisers, Williams says, learn their profession in the sequence "how, what, why" - how to write a letter to a donor, for example; what information is needed about people to get more letters written and answered; and why would people want to give to the organization. That sequence is the inverse of what it should be, she says. "First, you have to know why people give, and have to do research around that," she says. "Two, you need to say, What do we need to do to cause people to want to give here?' And then, how are we going to do fundraising - write a letter, do a phone call, do a special event?"

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Philanthropy Journal Special Report: Nonprofit Professional Development

A fundraiser cannot really know a prospective donor, Williams says, until the fundraiser has developed a relationship of trust and reciprocally-shared information with the individual, so the fundraiser and donor truly know one another. "If you've not had a conversation that says, Tell me what you're most concerned about,'" she says, "you don't have a relationship, you should not be asking that person for a major gift."

Community and collaboration


A "new" city that was built in large part by big banks and powered in recent decades by an influx of new residents that fueled a local housing boom, Charlotte was hit hard by the economic and financial crisis. The city also is fragmented geographically, demographically and by the "context within which you work," Williams says. Yet many nonprofit fundraisers do not see or understand the schisms that define the city and lie at the root of many of its problems, she says. It would be beneficial for development directors and executive directors to look more closely "at the underlying social dynamics of this city, to really understand how they can build a fundraising program that will contribute to the advancement of the greater society," she says. The city's problems have hurt the local nonprofit sector, which also was damaged two-and-a-half years ago by public outrage over the high compensation paid to the now-ousted CEO of United Way of Central Carolinas. To help the local nonprofit sector cope with the financial crisis and the erosion of trust triggered by the United Way scandal, a number of groups have stepped up to help build the capacity of the community's nonprofit sector. Foundation for the Carolinas, for example, raised $3.5 million for a new Community Catalyst Fund that has distributed roughly $2 million in grants to spur efficiency, effectiveness and innovation at local nonprofits. Michael Marsicano, the foundation's president and CEO, says the challenging times have provided an incentive to help local nonprofits better understand the growing expectation among donors for "return on investment" from their donations. "We've known that donors want a return on investment," he says. "I don't think we knew what that meant was we had to collaborate with them from the outset." Fundraising is "all about donor engagement," he says. "The fundraising approaches that are not the personal approach will be less and less effective." A focus on collaboration with donors has driven a series of big initiatives such as the Community Catalyst Fund that the foundation has undertaken since the economy collapsed two-and-a-half years ago, Marsicano says. Nonprofits, he says, increasingly are "trying to find the nexus between what we think should happen in the community and what donors strategically are prioritizing in the community, rather than what most fundraising operations do, which is to make the appeal for what they need in isolation from what the donor believes is needed."

Self-directed training
Another common ingredient in the emerging new culture of philanthropy in Charlotte is self-directed professional development that emphasizes self-help.
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Philanthropy Journal Special Report: Nonprofit Professional Development

"We have boards of directors, we have current existing donors, we have community resources," says Hardison of Crisis Assistance Ministry. "And we have access to donated expertise." Marsicano says professional development for fundraisers "doesn't have to be expensive or elaborate but a vehicle for getting into the mindset of donors." Many donors, he says, are "willing to give time to talk through what their expectations are in giving, how they want to be approached, what they're looking for, and the initiatives they might be willing to support." So nonprofits looking to boost their fundraising should consider inviting donors to have a conversation about their interests and their approach to giving, he says. "It's not a skill set here," he says. "It's a mindset."

Philanthropy and community


Williams says many fundraisers, because they are "working off of all the techniques they have been taught but not going deep into a commitment to be really interested in people," seem to be "functioning at a level that's mechanical." Many professional fundraisers, she says, "strive to be interesting rather than interested." And she is concerned about the charitable marketplace in Charlotte. Nonprofits are too dependent on corporate support, and weak on major-gift support and repeat gifts, while donors have a "very shallow understanding of accountability and measurable results," she says. "They want it but don't understand what it is when they get it," she says. "We are all crying and calling for outcomes but I doubt that we know what we're talking about." Because Charlotte is a "new" city, she says, "it is imperative that we understand how much work it takes to be deliberate in our creating a sense of philanthropy and social change in order for it to lead to the creation of the community." Nonprofits have a "huge responsibility going forward, not just in Charlotte but everywhere, to teach the kind of philanthropy that will sustain itself through the Baby Boom generation and ultimately transfer to the next generation," Williams says. That begins with fundraising that is "based on an appreciation of what the donor wants to give to, not because I need the money," she says. "And if the donor does not know anything about the problems of the community and they are making their first gift," she says, "then it is imperative that nonprofits help that donor understand the problems of the community, not just the one they deal with."

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Philanthropy Journal Special Report: Nonprofit Professional Development

The post-recession executive director


Ret Boney | July 15, 2011
Being the executive director of a nonprofit always has been a challenging job, but leading a charitable organization through and beyond the greatest economic upheaval in decades can be brutal, experts say. And for those nonprofit chiefs whose organizations survived the market downturns of 2008 and 2009, nationwide drop in charitable giving that has yet to rebound, and sharp spike in demand for services, the latest round of government budget cuts is yet another blow. "Nonprofit leadership has never been an easy role," says Sylvia Oberle, executive director of Habitat for Humanity of Forsyth County in Winston-Salem, N.C. "But now with extreme funding difficulties and uncertainties, even if you're not directly affected by state budget cuts, you're affected by the trickle-down." Just as the economy is starting to improve, and charitable giving attempts a turnaround, battered and weary nonprofits must stay in the ring for another grueling round. "In a sense, we see this new major curveball coming that is bringing back some of the crisis mentality that we thought we were moving beyond," says Kim McGuire, director of Western North Carolina Nonprofit Pathways, an Asheville-based group that provides capacity-building services for local nonprofits. "Executive directors are at the core of all of this," she says. "And by design, they take the brunt of the stress because they are the boss." Some leaders were better prepared than others going into the recession and made necessary changes in 2009 and 2010 to engage their boards and look for new ways to operate, says McGuire. Others, however, were caught unprepared. "There's a second group of organizations that continue to be threatened and haven't gotten their heads above water," she says. "Either because they haven't been realistic about what's happening or they don't know how to adapt." If they haven't already, now is the time for executive directors to identify and strengthen the skills they need to survive multiple bouts with the Great Recession.

Financial management
Given that the downturn caused financial stress on both sides of the equation, with revenues falling while demand for services rose, leaders unfamiliar with deciphering and managing cash flow struggled. "Executive directors need more financial know-how than they have in the past," says Oberle. "Now more than ever, we need to dip back in and understand the situation, not just get reports from our financial staff or finance committee." Rick Moyers, vice president for programs and communications at the Meyer Foundation in Washington, D.C., and a major funder of capacity-building efforts, agrees. "It continues to surprise me how executive directors say they are not comfortable with financial management, get confused by their organization's financial statements and don't understand basic terms," he says.

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Philanthropy Journal Special Report: Nonprofit Professional Development

The organizations that have come through the best are those that demonstrated what Moyers calls "financial conservatism." Rather than waiting to see how 2009 would turn out, for example, they implemented austerity measures, including painful cuts, early in the meltdown. "They did it at the first sign that things were going wrong," says Moyers. "And in some cases that bought them six months to a year of savings that others didn't have." Being good financial stewards of their organizations, a few executive directors had built up sufficient operating reserves in advance of the recession, thereby providing a cushion that allowed them to make thoughtful, well-planned adjustments. "It's well documented how little margin nonprofits have in terms of operating reserves," says Moyers. "One of the reasons you have operating reserves is for times like these, so every decision doesn't need to be made right now because the organization is balanced on the head of a pin." And while charitable giving was down a cumulative 13 percent during the recession, according to Giving USA's 2011 report, individuals continued to drive the vast majority of giving. And individuals donors, when there are enough of them, are more reliable than foundations and corporations, says Moyers. "Individual donors don't desert you en-masse like one large funder can," he says. "And many can increase their support if you can make a good case." Given the importance of fundraising as the primary source of support for most nonprofits, leaders need to understand, accept and embrace that fundraising is an important, unavoidable part of their job, says Moyers. "It's not something they have to do because they don't have a development director," he says. "It's a core, inherent part of the job. If you're not comfortable with fundraising, maybe you shouldn't be an executive director."

Creative leadership
Unlike other recent downturns, the Great Recession has penetrated deeper and lasted longer than most organizations expected or were prepared for. In that volatile and uncertain environment, creativity, flexibility and adaptability are critical, says McGuire. "The most important skill is a willingness to see what's before you and make changes," she says. "You have to understand the need to do things differently or you might not be around to see the future." The more thoughtful executive directors were able to gather data about their financial situation and the external environment, tweak their approach and make some hard decisions. "There's not an easy fix," says McGuire. "It's about knowing what you don't know, knowing when you need help, and being assertive about getting it." And those softer skills, that can't be taught in the classroom, are best honed through long and varied experience, says Oberle, who herself came to the sector after careers in journalism and public-affairs consulting.
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Philanthropy Journal Special Report: Nonprofit Professional Development

That prior life experience provides a level of seasoning and confidence that breeds creativity, she says. "Creativity frees you up," says Oberle. "When we've done something different and new, and aren't so scared, that's good for the organization." Armed with that kind of agility, nonprofits need not be simply a victim of the economy. "I'd hate to think that's the face that nonprofits are putting on now, because there are so many people who find ways to thrive even in the most difficult circumstances," Oberle says of the people and communities nonprofits ultimately serve. "We as nonprofits need to build our own story of thriving and not just surviving in the midst of these tough times," she says. "The human spirit certainly does that, and organizations can embody that spirit organizationally." But the job is hard even for the most flexible and creative executive director. Nonprofit leaders are pulled in multiple directions on a daily basis, says Moyers, and there is always a vast universe of things he or she could be doing at any given time. That means executive directors must manage their time carefully and make strategic decisions about what they can do themselves and what can and should be delegated. "The job can eat you alive unless you're really clear and focused on how you need to spend your time, what's important and what path you're on," says Moyers. It is possible for executive directors to spend the vast majority of their time putting out fires, he says, but operating in that mode for any length of time places in jeopardy the organization's long-term goals and priorities. "I really think we'll see some organizations go by the wayside, unfortunately," says McGuire. "Leadership has everything to do with who will come out of this and who won't."

Collaboration
Given the toll the recession has taken on nonprofits, with many working with fewer staff and struggling to plug budget holes, organizations are learning to collaborate. Whether out of desperation or a desire to serve their communities more efficiently, partnerships -- whether mergers or simply space-sharing -- generally are positive. "For most leaders, these things are all on the table," says McGuire. "They know that the dollars aren't out there to fund everything, so they have to find other options." In her role as head of a Habitat for Humanity affiliate, Sylvia Oberle has learned to find potential partnerships by looking for the natural places where one organization's mission intersects with that of another. "It points you to potential partners and together you can look at additional funding sources," she says. The Habitat Deluxe program was born of that type of process.

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Philanthropy Journal Special Report: Nonprofit Professional Development

The program, a joint effort with Goodwill Industries of Northwest North Carolina, developed out of a conversation at a Rotary lunch, she says. Goodwill was offering job-placement and job-training services and needed potential clients, while Habitat's would-be homeowners needed better-paying jobs and steadier sources of income. "That was an excellent example of what's at the nexus of housing needs and income enhancement," says Oberle. That said, collaboration in any form, particularly in the form of a merger, can be difficult for many organizations to consider, she says. "The Achilles heel might be being so concerned about your own organization and its survival that you forget about the people you serve and are not open to collaboration with someone else," says Oberle. The truth may be that not all organizations should survive in their current form, she says, a realization that for many people is a "very scary path to go down." "It's creativity and networking like never before," says Oberle of collaboration. "And it's freeing yourself up from the rigid thinking that, This is my organization and my mission.'"

Networking, mentoring and coaching


With dollars scarce and skills-building at a premium, formal avenues of professional development may not be possible for every executive director. But less formal avenues for learning may be opening up, particularly since the recession has touched everyone, making nonprofit leaders more willing to discuss their problems in the open, says McGuire. "People are much more willing to say, We're all going through these difficult times, so let's see how we can learn from each other,'" she says. "Successful executive directors are finding small groups of confidantes and getting support and ideas, realizing they're not alone going through this." And for those executive directors who feel they should be beyond the need for a mentor, Oberle says, it's never too late. "You're never too old or too experienced to seek out a mentor," she says. When she joined Habitat, Oberle sought out someone she admired and met with him regularly, asking advice about timemanagement skills and running an organization. More than five years into her leadership role, she still meets with him occasionally. Moyers agrees that mentoring relationships can be beneficial, particularly when executive directors seek out role models with solid skills and several years of experience. That longer tenure gives leaders realistic expectations about fundraising, board management, and what does and doesn't work.

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Philanthropy Journal Special Report: Nonprofit Professional Development

"By the time you've been through 12 budget cycles, including a downturn or two, and the board chair who was out to get you, followed by the board chair that was totally checked out, there's a lot of wisdom there that's not necessarily what you get from a half-day training class," says Moyers. And during this difficult economic environment, when professional-development dollars are scarce, Moyers recommends professional coaching over group trainings or academic classes. "That type of training has its limitations because it takes the leader out of context and presents info out of context," he says of classroom-based options. "In this climate, it's difficult for executive directors to sit through hours and hours or training or class work to get two or three things they can use." Coaching and mentoring, on the other hand, have a just-in-time element and a customized quality that, if done well, creates a richer learning experience for executive directors, says Moyers. And while that type of one-on-one, customized training from a professional coach does cost money, Moyers believes the investment is worthwhile. Coming up with the cash right now for professional development may be difficult, but considering the entire universe of what an organization might spend money on, investing in the capacity and very survival of an organization is important, he says. "One of my concerns is the mindset we have in the nonprofit world that certain types of expenses can't be incurred unless someone else pays for them," says Moyers. "Professional development ought to be a core part of every organization's operating budget, just like the phone system and health insurance."

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Philanthropy Journal Special Report: Nonprofit Professional Development

Do-it-yourself professional development


Sally Migliore | July 15, 2011
Familiar with the expression, "No one person can fulfill all your needs?" In the nonprofit world, it would be appropriate to change that slightly to: "No one employer can fulfill all your professionaldevelopment needs." For nonprofits, particularly in this economy, it's not likely that money is available for professional development or, if it is, it's very limited. Yet we know it's essential to invest in staff members who are the cornerstone of effective programs in our communities. The responsibility for professional development is a shared one. The role of an executive director is to promote a culture that supports employees' growth, while the responsibility of the employee is to take initiative in creating a plan for how he or she can acquire new knowledge and skills. Professional development isn't an add-on; it's a core part of doing one's job well and with energy and enthusiasm for continued learning and performance. So, I'd like to propose how nonprofit staff might go about creating a do-it-yourself professional-development plan. Depending upon how you get your energy, and how you learn best, you will naturally gravitate to different ways to enhance your professional development. So, your do-it-yourself plan might be different from that of other staff where you work, or even colleagues at other nonprofits who have similar jobs. Find or create a "learning community" or professional-development network.

When I was an executive director, I participated in a monthly support group of other directors. We engaged a consultant to facilitate our dialogues, which included reading pertinent articles or books about leadership and management. Establish "colleague conversations."

You can meet with one or two colleagues - someone in the same or similar field of work as yours, or in a similar position in their organization. Decide on what you'd like to read and discuss how it applies to your work. Find someone who can be a sounding board or co-strategist for your ideas about your professional development or about issues you may be dealing with. Find a mentor who perhaps has "walked in your shoes" and can be a guide and resource for your learning. Become a mentor.

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Philanthropy Journal Special Report: Nonprofit Professional Development

At first this may sound odd but, in my experience, being a mentor has enhanced my own professional development. I've found myself reflecting on things I've learned or done in a more intentional way that's helped me continue to grow. Don't forget that solitary time for reading and reflection is also a core part of your ongoing professional development.

In our hectic daily lives, we are so accustomed to doing the urgent that we neglect making time to refresh our brains with "bigger picture" thinking. Make the time to read "think pieces" on cutting-edge issues and topics in your field or the nonprofit sector. You don't need to apologize of feel guilty about this. Professional development is an essential part of your work. Finally, take time to stop the flow of new information.

Our brains can get so overloaded with information that we're at risk of overloading our circuits. We need time and space to allow ourselves unstructured openings for new ideas and creativity.

Sally Migliore is director of community leadership at the North Carolina Community Foundation.

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