Regards,
Bill

Open Letter to Colorado Spring’s Nonprofit Summit
July 2009

Dear Attendees at the Colorado Springs Non-profit Summit:

The conveners have asked for input, so here are my top seven issues for your consideration, discussion and action:

1. Non-profits have done a spectacularly lousy job of explaining themselves to the American public.

Modern societies need three components to function: government, businesses, and non-profits. Non-profits are the glue that holds society together, and while in the USA we have a market economy, our society is bigger than the economy. Non-profits are inherently different than businesses. Governments are inherently different than businesses. Here is a diagram showing the fundamental difference between businesses and non-profits. It is astounding how many non-profit leaders (and political leaders) don’t do a better job of communicating to the American public about the value of all three components of society, all of which are critical.

Business Organization Non-profit Organization

The fundamental difference is that in the business example, the provider of the funds is also the direct recipient of the benefits of goods and/or services provided, e.g. customers. On its face, the diagram on the right is more complex than the one on the left, and this is what non-profit leaders have done a poor job of communicating to the American public.

Warren Buffet’s Gift to the Entire Non-profit Sector

When Warren Buffet pledged his $30 billion gift to the Gates Foundation, he also gave a gift to every non-profit in America, if they are smart enough to recognize it. Here is the world’s best known financial genius of the market based economy, saying that the non-profit sector is too complex for him to figure out the best use of his money – so he’s going to give it to his good friends Bill & Melinda Gates, so that they and the Gates Foundation professional staff can make sure the money does the most good! This is terrific, both for the Gates Foundation and for the entire non-profit sector, because it makes the case in way that no one else could, that the non-profit world is not simple, and it’s not easy to make sure that any donor’s money is used in the best way possible. I have yet to see any non-profit leader use this stunning example as an illustration of the fact that the non-profit world is complex, and it takes, brains, talent, dedication and plain hard work to for a non-profit to be successful.

2. The question: “Are there too many non-profits?” is a weak question, and answering it only produces thousands of pages of reports and no real change.

A better question is: “Have we solved all the problems that need solving?”

Until the answer to that question is yes, then the answer to “Are there too many profits” is: “ No, we don’t have enough of the right non-profits!”

This is similar to the question: Are there enough restaurants?

The answer to that depends where you live, and what you want to eat. In some places the answer is yes, some places no.

Even if you decide the answer is “Yes, there are too many non-profits” there is no mechanism to force a change, and just like the restaurant example, if a particular non-profit does not get enough traffic (e.g. donors and patrons), it will fail, regardless of how good the chef was.

3. Scalabity is a false idol.

Recognize the fact that we live in a complex world, and some non-profits need to be big in order to accomplish their mission. Other non-profits do not need to be big in order to be successful, and in fact, would fail if they were a different size.

Here’s one example, in Annandale, Virginia there is an award winning non-profit pre-school, which has been part of the community for 40 years. It is located in a church where it uses the Sunday school classrooms during the week (it is a secular school, completely separate from the church). This pre-school has an enrollment of about fifty 2-5 year olds, which with a little fluctuation is the size it will always be – the church is not going to build and additional wing, and after 3 years, the current students graduate. This school, as long as it is in existence, will have between 40 and 60 students, and it provides a great, award winning benefit to the community. The leaders there don’t spend one minute thinking “How can we scale up?” nor should they.

4. Stop the whining! There are way too many non-profit leaders and professionals saying ‘We don’t have a seat at the government table – why not, don’t they know we’re crucial?”

More than 150 years ago, Frederick Douglass got it right when he said:

“The struggle may be a moral one, or it may be a physical one, and it may be both moral and physical, but it must be a struggle. Power concedes nothing without a demand. It never did and it never will.”

In terms of gaining a rightful place at the governmental table, Robert Egger’s V3 campaign is one that tackles this issue head on. (www.V3campaign.org – Voice, Value, Votes). He realizes that the only thing that political leaders understand is power, and until the non-profit sector learns how to work together and exercise its collective influence (which is considerable) it will never get a place at the table. So stop whining, and start acting – see the V3 website on how to do this.

5. Don’t forget the power of ordinary individuals achieving extraordinary results.

The non-profit sector suffers from the same “star CEO mentality” that has captured the business world, and the articles that get promoted are about the star CEOs, or the Top 50 Donors, etc. As many of you know, my expertise is workplace giving, especially the Combined Federal Campaign (CFC). While the big donors are getting the attention, more than 1 million Federal public servants collectively donate millions of dollars each year, ($1 billion over the past five) and this money is unrestricted, reliable and predictable. Of this, more than half are never thanked for their contribution and the volunteers that do the actual solicitations for thousands of non-profits are almost never thanked.

One non-profit that does thank both their anonymous donors and the CFC campaign volunteers is Martha’s Table in Washington, D.C. If you want to see how to do this right, take a look at the workplace giving section of their website.

Ordinary people working together achieving extraordinary results is what America has always been about, and it’s time to realize that the myth of the “rugged individualist” is just that – a myth. Celebrate the actions of people working together to make a difference, even if they don’t get the headlines.

6. Trends in the non-profit sector – Baby Boomers aren’t going to go away.

The baby boom generation cohort has redefined our society at every age, from elementary school to Woodstock to today. They may change jobs, change careers, go to some mixture of independent consulting and “regular job” but they are not going to retire at 65 to go sit on a rocking chair and do nothing. Get used to having a very diverse workforce, including age diversity.

Whether for career changers or emerging leaders, workplace giving can provide ideal “practice fields” for developing one’s leadership skills, which is just one of its benefits beyond just raising money.

7. The Philanthropist TV show should be supported.

This is an incredible opportunity and benefit to the entire non-profit sector. THERE IS A PRIME TIME TV SHOW DEALING WITH NON-PROFIT ISSUES! This is great! Don’t miss the forest for the trees, and I don’t care whether or not you think “it’s not an accurate portrayal of the difficulties that non-profit professionals face.” It is entertainment and it will generate interest and conversation about non-profits! Believe me; you don’t want to be hosting the panel 3 years from now “What could non-profits have done better to have kept The Philanthropist from being canceled.”

Here’s what you can do now, and have your supporters do the same:
Contact Angela Bromstad, President of NBC Primetime Entertainment, and tell her that you’re a fan and want the show picked up for next season. Then e-mail Tom Fontana, co-creator and writer at TomFontana@gmail.com and tell him that you’ve sent the message of support to NBC.

Regards,

Bill Huddleston

Huddleston Consulting Group
BillHuddleston@verizon.net
http://www.cfcfundraising.com
703-560-1825
Blog: http://www.cfctreasures.wordpress.com