For board members and staff who lead nonprofits, you will agree with me that it’s a tough time for nonprofits.  It’s also a thrilling time.  More than ever, we need to think creatively, build innovative solutions to social problems, and grow, grow, grow what’s working.  You may also agree with me that I am not good telling a joke.  As to the Chihuahua, he doesn’t really contribute to the conversation, but I recall the best bar joke I have heard involves a blind Chihuahua.  (I once had a Chihuahua named Stickley I inherited from my parents.  The dog wasn’t blind - nor did he wear a toupee- but he had lots of spunk and attitude!)  Here’s to hoping what I have posted will be of help to you as you navigate the challenges and opportunities with great success – and with spunk and attitude!  Happy New Year!

Now, first out with the disclaimer: I am not a marketing guru. I will leave that for Jeff Buntin and his outstanding team over at The Buntin Group who was quoted in the article. I do, however, focus a good bit of our work at Patmos and MyGamePlan.Org on helping nonprofits survive, adapt and grow.  And, what I do know is that diversification of funding sources is key to the financial sustainability and resiliency of a nonprofit.  And I know that nonprofits need to be more intentional in harnessing corporate giving in helping them address the important issues in their communities.

Recently I heard a presentation by Dr. Patrick Rooney, an economist, and Executive Director of The Center on Philanthropy at Indiana University on “Who Gave, How Much, and To Whom in 2010?” He is one of the funniest economists (“funny economist” is that an oxymoron?!) that I have met; but is also one of the most knowledgeable on the giving habits of Americans. He and his team are responsible for producing the most comprehensive annual report on U.S. charitable giving.  As the Tennessean article looks at corporate giving, here’s what we know from The Center on Philanthropy's at Indiana University's Giving USA 2011: The Annual Report on Philanthropy for the Year 2010:

•  Corporate giving = 5% of total estimated contributions ($15.29 billion) in 2010
• Corporate giving rose 8.8% adjusted for inflation in 2010, which was driven by an increase in total giving by donations of cash and from in-kind support over the turbulent economic  year of 2009. Yet, ...
• Corporate giving has remained at or below 1.0% of corporate profits since 2004 (0.9% in 2010).

Many businesses strive to maintain their giving at a fairly consistent level, but many charitable organizations are experiencing changes in the amount received from corporations due to changing focus. That is: corporations are giving to charities strategically in ways that pairs well with the marketing priorities of the business.  Savvy nonprofits, like Second Harvest Food Bank, that can establish a tie-in are beneficiaries; nonprofits that are not aware of these shifts and be more proactive in reaching out to corporations in the right way will increasingly be left behind and may become more vulnerable.  Lower your expectations of success if your only strategy for corporate dollars is table sponsorships at your upcoming fundraiser.

Eat_Drink_Smile has its finger on the pulse with food pairings

This brings me to what I am calling “brand pairing.” It is not uncommon to visit a restaurant and be greeted with an invitation to attend one of their “food and wine pairings.”  I suspect that behind the pairing idea is for restaurant owner and wine distributor to sell more product by helping the consumer feel a greater sense of control when it comes to the countless choices of wine and bring satisfaction that she is maximizing the value of her hard-earned dollar by guaranteeing the “perfect match.”  

Many Executive Directors are focused upon their end of the year fundraising efforts. Others, at year-end are reflecting on how to raise the profile of their charity.  All would do well to think about this notion of brand pairing and to take stock of what businesses and corporations might “pair” well with their charity. You can be sure that most of the companies with significant giving programs are thinking about this. Corporations increasingly are shifting their dollars to charities who they believe best strategically pair with their brand. 

So over the holidays, when you might be at a restaurant and see their offering to enlighten you on how to match food and drink, think about what businesses your nonprofit’s brand might best match with as you seek to better serve your community..  Next year, corporate giving is not likely to grow over 2011 levels and corporate strategies will continue to trend towards strategic giving and brand pairing.

Paying attention to this and executing on an intentional strategy will have pay-offs. But, don’t forget the value of the individual donor to your charity; after all, collectively individuals by far represent the largest piece of the giving pie as they gave over $211,770 billion last year, representing 73% of total giving as compared to 5% from corporations.

P.S. Hats off to Bob Bernstein of Bongo Java.  Years ago, he recognized the value to his business of aligning his coffee’s brand with the brand and efforts of area non-profits.  A lot of good came out of that thinking!

Read our case study of a nonprofit that is improving its health and resiliency so it can help those living with cancer make better and informed decisions about their health. 

Despite a challenging economic climate, The Minnie Pearl Cancer Foundation made the decision to invest in staff expansion and operations and infrastructure improvements, and is well underway with reaching reach more people and maximize its impact as a result.  Click here to read our case study about how the following core elements of their culture and infrastructure enabled it to achieve this success:

It seems that the Virginia G. Piper Charitable Trust in Phoenix, AZ has also been thinking about how important resiliency is in nonprofit organizations and for the leaders who staff them.  They believe -- and I agree – there’s no going back to what it used to be and that we are looking at a new reality. That new reality is a changed world for nonprofits and focus now needs to be on skills and disciplines that will help them find a way to thrive in this new world.  "We're not economic forecasters," said Judy Jolley Mohraz, Piper Trust president and CEO. "But it is fairly clear that economic restructuring has changed reality for nonprofits as well as other sectors of the economy. This new normal requires each of us to develop the resilience and stamina of a long distance runner."  Betting that nonprofit leaders are ready for personal and organizational boosts, Piper Trust will launch a full year's programming focusing on resilience in leadership and board governance called 2011: A Year of Resilience.  Hats off to their work at strengthening their nonprofits in this way!

Resilience is defined as the capacity of a system to survive, adapt and grow, particularly in the face of unforeseen changes.  Survive that is what most nonprofits have been doing and are continuing to do since the downturn, focusing on what is core to their mission.  Adapt is part of an organization’s resiliency, whether it is how nimble its board of directors is in their decision making or how board and management is diversifying revenue streams and focusing upon liquidity concerns. Grow is another aspect that flows out of an intentional focus upon practices such as the alignment of processes and structures, leading to greater mission effectiveness or taking advantage of opportunities through forming effective partnerships. 

I’ve been listening around the Web for conversation threads on “organizational resiliency” in the nonprofit and foundation sector but am finding little mention of and discussion on the importance of resiliency, especially organizational resiliency. A lot has been written on personal resilience and on the resiliency of ecosystems and in technology.  For instance, I just finished using a nifty social media tool being beta tested called Storify to capture conversations across the web on organizational resiliency.  (Click here to see my storify capture.)  Far more prevalent is the discussion upon sustainability of organizations.  Regardless of the sector, the definition of sustainability tends to be elusive and changes based upon who is using it.  Overall, the United Nations definition is a good one: doing what is required “to meet the needs of the present without compromising the ability of future generations to meet their own needs.” Within such a definition, the scope involves nature, the economy and, society. Sustainability, rather than resiliency, tends to be the preferred word of choice and focus in the nonprofit sector. Here, sustainability’s encompassing and broad definition tends to be reduced down in understanding to an organization’s ability to generate enough money to keep the organization afloat. For most organizations, that becomes an all encompassing focus and an elusive destination, especially for nonprofits who tend to operate in a perpetual state of recession no matter the health of the economy.  No wonder the fatigue among nonprofit leaders. This limiting understanding of sustainability became clear to me earlier this week while sifting through grant applications as part of my serving on our Mayor’s Community Enhancement Grants Review Committee.  As part of the grant application, nonprofits were asked to write about their sustainability plan.  Almost to a one the responses centered upon getting more money.  Absent was mention of addressing ineffective operational practices, program analysis, and strategies for greater board engagement. Thankfully for nonprofits, Jeanne Bell and her colleagues, with their new book, Nonprofit Sustainability: Making Strategic Decisions for Financial Viability has drawn back the limiting understanding of sustainability with their book. The understanding of sustainability Bell advances encompasses programmatic sustainability (develop, mature, and cycle out programs in responsiveness to community needs) and financial sustainability which involves financial management disciplines in addition to raising more money.  Thankfully for the field, the authors advance a notion of sustainability as an orientation and not a destination.

Now it could be said the words are interchangeable and my teasing out the distinction between resiliency and sustainability is splitting hairs.  But I think it is important to look at organizational “resiliency”, as there is often too much focus upon the end goal (sustainability) and too little focus upon the means (resiliency).  Denise Lach, a professor of Sociology at Oregon State University says "sustainability is like love and democracy”, having multiple meanings in the minds of the beholder, not always perfectly realized, but struggled for. We basically agree on what it is; we disagree when we must make specific choices in our lives in how to reach it.  Resiliency’s focus is upon that space where the decisions are made and attention is given to the practices.   If Piper Charitable Trust’s Judy Jolley Mohraz is right that the times we are in requires us to be more like a long distance runner, then the focus needs to be less upon the destination but upon the skills and stamina of the runner and upon the specific choices she or he makes and the running efficient practices honed long before the finish line is reached.  For the nonprofit, these specific choices are played out in our practices and core capacities in: leadership and governance; financial and organizational management; operations and infrastructure; effective programs. This is where practices focused upon resiliency make or break an organization and lead to sustainability.  Resilience is increasingly a essential trait of effective, high-impact nonprofits, and improving an organization’s resilience will help it better achieve its mission.  In our complex and changing environment, the sector would do well to spend more time understanding resiliency and its practices that leads to the end game of greater sustainability.

John Hilley is the Founder and President of Patmos LLC (www.patmosconsulting.com).   With their MyGamePlan.Org (www.mygameplan.org) suite of services to the nonprofit and foundation sector, they strengthen the organizational capacity of nonprofits.  Patmos has created the Organizational Resiliency Gameplan Assessment software which measures resiliency levels that can be used in the evaluative process for effective grantmaking and can facilitate dialogue between grantors and grantees.  The software and report provides nonprofits with important feedback mechanisms in order to help them take decisive action to resolve challenges and drive innovative thinking.  Our approach facilitates conversations within organizations and between grantor and grantee, offering important data, effective strategic direction, and tangible steps to help increase a nonprofit’s organizational capacity leading to greater sustainability.

A nonprofit leader plays a key role in an organization’s ability to serve its community and is a critical puzzle piece in an organization’s sustainability.  What happens when the organization loses a key leader?  Lack of a succession plan can cause havoc in the organization, as an organization cannot function without a leader.  For example, one nonprofit organization hired, in a rush, an executive who could not establish positive relationships with the existing staff members.  Shortly after hiring this new executive, the organization lost five of its seven key program managers.  Likewise, another nonprofit corporation went through three executives in a year before finding the right person for the job.  This mishap led to the corporation losing a quarter of its funding, laying off multiple staff members, and reducing its services.  Making quick, poorly planned leadership decisions in times of emergency often create more problems for an organization than they solve.  A succession plan is key for organizations who want to survive the unexpected loss of a leader.  Yet, according to the Federal Reserve Bank of Kansas City, only 68% of nonprofits have a succession plan in place.         

On his Donor Power Blog, Jeff Brooks, creative director at marketing consulting firm Merkle|Domain, writes, “The retirement of an effective leader can be hard on any organization. It can also be a time of renewal and positive change. But there won’t be much good if there’s no plan for succession…This problem is basically invisible. Until it hits, and nonprofits are reeling from a loss of leadership.”  Thus, in order to avoid such disasters as the aforementioned organizations experienced and to take advantage of the situation, a nonprofit must have a leadership succession plan in place. 

Succession planning is a key planning need for non-profits in any climate, but it is particularly important in challenging economic times. Planning steps such as board approved procedures for filling the director's position, cross-training staff and/or board members, and having a clear understanding of roles and responsibilities are all important planning steps to take BEFORE there is a leadership change.  Consider these best practices in the creation of your succession plan: 

Check out the link below to the Federal Reserve Bank of Kansas City’s outstanding – and fairly exhaustive – toolkit on succession planning.  We believe that it is so important that an organization have – no matter its age or size – a succession plan for key leaders that it is one of our assessment questions in our Organizational Resiliency Gameplan Assessment software.  Click here to find out more.

Sources:

 “Charities Falling Short on Succession Planning”, Peter Panepento, http://philanthropy.com/blogs/giveandtake/charities-falling-short-on-succession-planning/9337

Executive Transitions: Nonprofit and Grantmaker Opportunities , Don Crocker, http://www.supportcenteronline.org/images/executive_transitions.pdf

Nonprofit Executive Succession-Planning Toolkit, the Federal Reserve Bank of Kansas City, http://kcfed.org/publicat/community/Nonprofit-Executive-Succession-Planning-Toolkit.pdf

Turns out an individual’s resiliency level is also very important and it is getting increasing attention among corporate leaders and now the US Army.  General George Casey, the army chief of staff and former commander of the multinational force in Iraq, approached Dr. Martin Seligman, University of Penn professor, and the father of positive psychology, to help him build the resilience level of his soldiers.  General Casey, faced with the increasing levels of soldier suicides, depression and PTSD was wondering what positive psychology had to say about that.  Dr. Seligman’s article on his work with drill sergeants appears in the current issue of the Harvard Business Review and is worth your reading. 

Dr. Seligman says you can measure and build resilience that is as psychologically fit as physically fit.  Optimism is fundamental.  Then comes what Seligman calls Master Resilience Training which can be seen as management training – teaching leaders how to embrace resilience and then pass on the knowledge.  At the core of this training is: 1) Building mental toughness; 2) Building signature strengths; and, 3) Building new social skills in leadership.   Maintaining a sense of optimism, knowing how we respond to difficult circumstances, and building the skills involved in responding from our signature strengths, will boost our resiliency.

What is your resiliency level? I am asking this question of organizations, developing the only tool of its kind that measures the resiliency of an organization, using a resiliency index score much like a financial credit score.  The findings from the software affirm an organization’s strengths, identify vulnerabilities, and provide recommendations for improving resiliency levels.  I assert that the resiliency level of an organization provides an understanding of the organization’s overall health and that an organization’s resiliency level can even be a measure of an organization’s level of success.  Our belief is that there are several core elements key to an organizational resiliency just as Seligman finds in an individual’s resiliency level.  Through our research we believe the following are core to an organization’s resiliency:

1)      Mission Impact and Effectiveness:  An organization that is resilient is one that knows its mission, lives its mission, delivers on its mission, measures its mission, and can tell the narrative of its impact upon addressing community issues.

2)      Financial sustainability:  Strong financial management practices are critical to boosting a nonprofit’s resiliency level.

3)      Governance: Board engagement, involvement, and practices and policies shapes a nonprofit’s resiliency level.

4)      Alignment and Linkages:  The alignment and linkages of organizational structures and practices boosts resiliency level by increasing impact and decreasing inefficiency.

When I ran a nonprofit, and said that the organization needed more money – a constant refrain - my former board chair replied:  “nonprofits always need more money.  Nonprofits tend to operate in a constant state of recession even in the best of times.”  With the ongoing challenges nonprofits continue to face in our sluggish economy, nonprofit leaders and board members feel the constant pressure of the need to raise more money.  The constant state of recession can lead to feelings of depression, even failure among leadership.  In the current funding landscape, I’m not confident that nonprofits can solve their issues by just fundraising their way into a better state of being.  Ramping up fundraising efforts remain central, but it is also critically important to move the distribution of our attention towards resilience and examine how difficult experiences nonprofits are facing can become catalysts for improved performance.  That is one of the opportunities the Risk Navigation Tool presents.

Whether we are a soldier in charge of a platoon, a business manager in a company competing in a very competitive market, or a nonprofit leader trying to deliver a needed program in the face of decreasing revenues and increasing demand for services, we would do well to shift the distribution of our attention to that which boosts resilience. While you go about the day, trying to eat less and exercise more, don’t forget to pay attention to your resiliency level.  And don’t forget to take time to breathe…deeply.  

(To find out more about the Risk Navigation Tool to assess organizational resiliency, click here.)

It is not the first time Sam has been known to climb.  When barely 3 years old, he climbed the stairs to the second story of our house from the outside of the staircase, holding on to the banister and the spindles as he made his way across the catwalk of our upstairs.  At the summit, he cackled loud enough to make sure he got his mom’s attention who was in another room.  As an adolescent he caught the attention of climbing jocks at local gyms as he “spidered” up the climbing and bouldering walls.

Now, his climbing is on stage.  Who knows what he will climb tomorrow and where it will take him.  Lots of opportunity for son #2…as with son #1.  Over the last two nights I have had the privilege of watching him take us up into the sky on his “thrilling adventure.” He, along with the cast, took an auditorium of terra firma loving, often plodding, adults to another place.  In the transporting, the young actors gave us a wonderful sense of perspective and of possibility.   I needed that perspective and of possibility because my head has been looking down and focused way too much into my computer screen with pressing work. Such a limited focus can be a breeding ground for worry.

The next to last song has Jack and the Baker perched on a book high above stage with the Baker trying to tell Jack about morality.  It's a beautiful song about fathers and sons and mothers and daughters in “No One is Alone.”  Then all return to remind us to “Be careful what you pass on to your children” in  ("Children Will Listen"). 

Thanks to my climbing son and to the cast for transporting us to another place and reminding us adults of our own roles on the stage of  life when it comes to our children and all children. 

Keep climbing!

Margaret Carlson, in this morning's Daily Beast, wrote:  "Elizabeth Edwards lived the hand she was dealt with unimaginable grace and humor. She did what was best for her and her family, now gathered around her. In what may have been her final words, she said she had been sustained through difficult times “by three saving graces—my family, my friends, and a faith in the power of resilience and hope."

Back when John Edwards was running for President, I had the opportunity to hear both of them speak in Nashville when each was stumping on separate campaign trips.  John had spoken his populist message of his father's work and drive to a largely manufacturing crowd. He was well spoken.  He was groomed in his campaign suit. He stirred the crowd with his populist message.  On a hot August day, Elizabeth spoke eloquently to a packed gathering in the upstairs meeting room of a local restaurant of the "Two Americas."  She spoke convincingly of the issues at hand facing the American people. We were moved.  I left that gathering feeling like the wrong partner of the married pair was running. 

I write frequently about the subject of resilience, often referring to resilience as the ability to "bounce back" or for an organization, the ability to continue operating in the "new normal" when crises and unplanned interruptions happen.  Elizabeth Edwards modeled resilience as she faced hardships that would completely overwhelm most people.  Yesterday, with her passing, she didn't overcome terminal cancer because no one bounces back from terminal cancer.  But, along the way, and even up to the end, she modeled for her children, and to the American people who are so in need of heroes and models, a life well lived.  As we go through the days we have been given, we would do well to take to heart and incorporate into the fiber of our being her witness to "the three saving graces of our family, our friends, and a faith in the power of resilience and hope."

The concept of resilience comes from ecology and central to the concept is the question of how much can something change before it looks different.  For example, how much can water temps rise in the Arctic before polar ice caps melt and polar bears and penguins are swimming 24/7.  The reality of diminishing ice masses is but one example of a feedback loop and the question is whether we will change our inputs which we really need to do (i.e. reducing our carbon footprint).  The challenge is this issue feels distant to many and the loop seems too long and removed from our daily life.

Those that think about resilience a lot more than I do say there are three key factors: diversity; modularity, and short feedback loops.  At its simplest, a feedback loop is a dialogue.  As we study disasters and their affect upon business and communities, in order to create resilience you need more – and shorter - feedback loops between a community and all government levels, to enable citizens, businesses and communities to bounce back faster.  When we saw the effects of the flood, we responded and many got involved.  We were a responsive city.  What stands to make us a resilient city, is for us to keep talking and working together on ideas and strategies that can make us a more thriving city.  One example of a more resilient city involves government and organizations listening to and cooperating with residents.

I congratulate my city in creating yet another feedback loop with this tool.  Today, I encourage you to increase your feedback loops in your personal and business relationships (positive ones tend to work best!).  And to help our city be more resilient, I encourage you to weigh in on one of the identified issues:  http://townhall.nashvillerecovery.com.

For those interested in matters of sustainability and resiliency  of  communities, I encourage you to take a look at the current issue of Ode Magazine and Mark Van Baal’s article "Beyond Sustainability".

Like children closing their eyes during a scary coaster ride was the conventional explanation for how three enormously successful enterprises managed to prolong and deepen their public relations agony. They broke the cardinal rule of crisis management as they didn’t seem to have a crisis plan in hand. They sought to minimize the extent of their problems, were not forthright with the public, and never seemed to display an understanding for the situation they were in.  It is an interesting read in how executive teams and celebrities (i.e. Tiger Woods; Mel Gibson) and their professional handlers assess a situation and respond.  Two takeaways for me include: the importance of having a plan and how you communicate when things don’t go according to plan (so true as disasters never follow a script). Communicating internally within the company and externally to stakeholders and media presents big-time challenges when disaster strikes, especially when the   situation is unclear.  When you are in the mix of these really obtuse situations where nobody really knows the facts, in some sense the facts become less important than the posture of the organization towards the facts.  How leaders lead changes.   Focus upon corporate profits becomes secondary to making the situation right and being able to move forward with reputation intact. Stakeholders will allow for mistakes to be made, but people have little patience and will not forgive a dishonest cover-up.

The importance and challenges of internal and external communications will be touched upon the Nashville Area Chamber of Commerce’s Informed and Inspired Speaker series this Wednesday.  The event will focus on disaster preparedness to better position your business ahead of disasters and other emergencies. Questions such as communicating with employees and stakeholders, accessing critical data, replacing assets and practicing your plan will be addressed.  I am pleased to be sharing the presentation with Chip Smith, President of Marshall Bruce Printing here in Nashville who faced these issues first hand as his business was severely flooded during the May floods.  I have been so impressed by the company’s action steps in the days immediately following the disaster.  I will also be sharing the presentation with James Carothers an IT Systems Manager at InfoWorks who will be providing incredibly helpful information to businesses for whom having access to their data is as important as oxygen is to our bodies.  The Chamber event this Wednesday is free and you can register by clicking on this link (View event details and register).  What will be offered may help you keep your eyes open if/when you find yourself on an unanticipated roller coaster ride.