Understanding philanthropic capital: How to invest in social causes and gain financial returns (Part 2)

In my first installment on this topic, I discussed why investors are combining financial and social goals and three social investment tools they could use to accomplish this union of interests: Pay for Success (PFS) or Social Impact Bonds (SIB), Program-Related Investments (PRI), and Mission-Related Investing (MRI)). In this final installment, I’ll explore two more tools: Impact Investing and Social Enterprise.

Millennial influence

The thinking driving the more diverse deployment of philanthropic capital is coming from a range of influences including shifting demographics. The receding idea of separate financial and social returns is largely being driven by the changing attitudes of younger generations.

A recent World Economic Forum report on impact investing cites a “study of 5,000 Millennials across 18 countries where respondents ranked ‘to improve society’ as the number one priority of business. This does not imply that the next generation of investors will not seek market returns … However, the emerging generation of investors is also likely to seek achievement of social objectives in addition to financial returns.”

Impact Investing

So just what is Impact Investing? A clear definition is one of the challenges of this emerging sector and the term can be described in many ways. According to the recently published The Impact Investor: Lessons in Leadership and Strategy for Collaborative Capitalism (2015) by Clark, Emerson and Thornley, “Impact Investing is capital management in pursuit of appropriate levels of financial return with the simultaneous and intentional creation of measurable social and environment impacts.” Many impact investors expect market rate and higher financial returns on their investments, noting that organizations that address social and environmental concerns in their business planning and execution will perform better over time as they reduce risks and create stronger workforces.

Examples of impact investments include a $3 million investment by the Colorado Impact Fund (coloradoimpactfund.com) into Bhakti Chai for expansion. The company sustainably sources fair trade, non-GMO ingredients and practices zero waste environmental standards. The company is growing, adding employment to expand its brand nationwide. Another project example is developing an app to help farmers in developing countries better predict weather patterns. This helps them plant and harvest at optimal times, increasing family income and improved food supplies for their communities. Some families also applied for snap food stamps. The app is easily accessible on cellular platforms, available to millions of customers worldwide.

Social enterprise

Social enterprise is also on the rise in the US and around the world. According to the Social Enterprise Alliance, a social enterprise is a business whose primary purpose is the common good. It uses the methods and discipline of business and the power of the marketplace to advance the social, environmental and human justice causes as well as earning a profit. Support for social enterprise can come in the form of investments, contributions and product purchases, with each form of capital needed at different times of the organization’s development.

The Colorado Nonprofit Social Enterprise Exchange strives to build the field for social enterprise by working with existing nonprofit organizations and engaging philanthropic, traditional and impact investments. Its Social Enterprise Cohort works to develop a business idea that supports both the mission and finances of the organization as well as creating employment opportunities when possible. Businesses in operation as a result of this program include: Art Restart, which supports homeless women through card sales; the Safety Store, which sells supplies and equipment for child safety; and Strong, Smart and Bold Beans, a coffee shop that teaches young women entrepreneurial and business skills as part of its youth development programs.

Complexity

There is a lot of excitement and energy surrounding all these tools to advance social change, and rightly so. These tools can allow for the engagement of more dollars to address big issues, to support organizations that prove their impact and to advance several goals at once.

However, the use of a diverse range of financing tools does not make problems less complex or easily solved. The development of the right deal with the right partners at the right scale takes time and resources.

But I look forward to the day when I can live in a state of optimism, believing both in our ability to make the changes we need as well as our ability to engage the right philanthropic capital to do the work effectively.

See Page to Practice summaries related to this article:

The Impact Investor: Lessons in Leadership and Strategy for Collaborative Capitalism

Zone of Insolvency: How Nonprofits Avoid Hidden Liabilities and Build Financial Strength

The Nonprofit Business Plan: The Leader’s Guide to Creating a Successful Business Model

Cash Flow Strategies: Innovation in Nonprofit Financial Management

Image credits: idpfoundation.org, justmeans.com

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Collaborative Capitalism: Positive social outcomes and competitive financial returns

As Millennials move into new leadership roles, they are demanding the opportunity to align every facet of their lives with making a positive difference in the world. A new capitalism, what the authors of The Impact Investor call Collaborative Capitalism, is focused on more than just financial returns to make an impact on the world’s issues.

One tool of Collaborative Capitalism is impact investing–investing that focuses on delivering positive social and environmental outcomes alongside competitive financial returns–is a response to this changing world.

Two years, 12 outstanding funds, four primary practices

In a two-year study, the most detailed release of information on impact investing to date, the authors of The Impact Investor examined 12 outstanding impact investment funds that met or exceeded the expectations of their investors.

In this book, they uncover the four primary practices that make these funds successful and outline the strategies that all investors, from corporate executives to change agents to philanthropists, can apply to their own organizations to achieve high performance in both social and financial outcomes.

We interviewed coauthor, Jed Emerson, about The Impact Investor and what you should consider if you want to take the first steps toward blending social causes with financial returns. We also asked about the most significant obstacles.

CausePlanet: If someone wants to jump into the field of impact investing, what does he/she need to focus on first?

Emerson: The first thing those interested in impact investing need to focus on is to get up to speed with what is already known about the field, its practices and the variety of ways one can become involved. For example, CASE at Duke has a great web site (http://bit.ly/casei3100) with seminal research and insight every impact investor should read. ImpactAssets has its Issue Brief series which presents a set of concise memos addressing various aspects of the field. Finally, The Blended Value website (www.blendedvalue.org) also has a host of resources worth perusing. Attending a few conferences would also be a good thing to do—SoCap or High Water Women are both good places to start. And Cathy just made a great 12-minute video intro to the field: http://youtu.be/zwGCKhTis5s

CausePlanet: What do you really want nonprofits to take from your book? For example, are you giving them ways to attract impact investors or become more of impact investors themselves?

Emerson: Nonprofits should take away many of the same principles as other types of organizations, namely that there is a shift taking place in both capitalism and the arena of how we address social issues, and this shift represents real opportunities for nonprofits to position themselves as providing a unique value to society that is distinct from traditional business or government. There is a growing universe of funders, investors and procurement officers who want to understand how best to leverage this distinct approach and bring it to scale, including through the provision of operating capital, which has been historically difficult to come by in the nonprofit sector.

Nonprofits also have an important role to play in driving the impact investing field forward considering two key attributes. One is their attention to stakeholders. Nonprofits are built on the premise that constituencies matter and much of the field of impact investing is taking this lesson into the arena of finance. The other attribute is heightened attention to social outcomes. Impact investors need to manage to specific, intentional outcomes and are often drawing on nonprofit practices to do so.

CausePlanet: What do you think is the most significant obstacle to becoming an impact investor?

Emerson: Perhaps the most significant obstacle is simple inertia, the challenge of overcoming analysis paralysis and actually making an investment. Some folks feel impact investing is new or that people must accept below market returns and so are waiting for it to become so mainstream that the actual investment opportunities may pass them by. The best way to explore and learn about the practice is to make smaller investments, to collaborate with other investors or take other initial steps to simply get going and learn by doing. And in fact, one can become an impact investor now with as little as $20 online, through a site called vested.org, where you can choose the places or impacts that are important to you.

Increasingly, financial institutions and corporations around the world are using Collaborative Capitalism as a tool to generate clear, positive social outcomes in addition to profits. This book will help nonprofits learn how capital can be used to drive social and environmental change as well as how to attract potential investors. Financial tools are increasingly being used to support community vehicles, including nonprofits, cooperatives and social enterprises. The Impact Investor gives a comprehensive overview of the approaches successful impact investors have used to increase their probability of success.

See other Page to Practice nonprofit book summaries related to this topic:

The Impact Investor: Lessons in Leadership and Strategy for Collaborative Capitalism

Zone of Insolvency: How Nonprofits Avoid Hidden Liabilities and Build Financial Strength

The Nonprofit Business Plan: The Leader’s Guide to Creating a Successful Business Model

Cash Flow Strategies: Innovation in Nonprofit Financial Management

Image credit: blendedvalue.org

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Balancing urgent and important: How to be more effective

Have you ever wondered why it is that with all the advances in technology and communication in the workplace, we seem to get less done than before? And not only that, we seem to be more and more stressed about the things that we haven’t got round to doing. We get swept away by a torrent of emails and attachments, knocked off course by interruptions and phone calls, and bogged down in the daily scramble to achieve more with less resources.

Most time management gurus have tried to convince us that we can somehow shoehorn more into our day, so enabling us to take on that other project, attend that urgent meeting, digest that important report.

By contrast, management guru Stephen Covey asks us to look at things in a different way. His key work, The Seven Habits of Highly Effective People, first published in 1990, remains a bestseller and was voted the most influential business book of the 20th Century by Chief Executive magazine. Covey suggests that, instead of focusing on getting more done (being efficient), we should focus on getting more important things done (being effective). And therein lies the key to facing the challenges we all face in the not-for-profit sector of “producing champagne results with beer resources,” as the saying goes.

Urgent versus important

We can characterize any activity we do in our day in terms of its importance and urgency.

An important task simply means one whose completion would significantly contribute to an individual’s or organization’s key aims and objectives. An urgent task is defined by Covey as one that “appears to require immediate attention.” Note the word “appears.” Somebody interrupts you at your desk with a question. The phone rings. A little window pops up on your computer announcing the arrival of yet another email. All of these place an immediate demand on your time, but they may not actually require your attention straight away. They are urgent, but are they important?

Covey presents us with a two-by-two matrix showing all the combinations of urgent and important:

Fig 1. Covey’s time management quadrants.

Quadrant 1: The tasks outlined in this quadrant are both important and urgent, and typically this means panic or problems! This is the funding application that needs to be submitted today to meet the deadline, sorting out the server that’s just crashed or dealing with a complaint from a key partner. All these things appear to require immediate attention and really do require immediate attention!

Quadrant 2: These tasks are important but not urgent. Completing these tasks would make a significant contribution to your objectives, but you can easily get away with not doing them today (because they’re not urgent). Tomorrow will be fine. Or even next week … So, typically these tasks are about planning ahead, preventing problems before they happen, and building relationships with people (i.e. customers, colleagues, volunteers or partners).

Quadrant 3: These tasks are urgent but not important. To keep the “p” theme going, Covey characterizes them as being proximate or popular. These are all things that aren’t important but which come and get us, even if we’re hiding in an office. Phone calls, emails, interruptions, reports landing in your in-tray — anything which tries to grab your attention. And doing them often makes you popular, since people generally want you to give up your time just when it suits them. Conversely, saying “no” can be hard, and we fear it will make us unpopular.

Quadrant 4: These tasks are neither urgent nor important. In Quadrant 4 we are idly surfing the Web, flicking through magazines, chatting at the water cooler. It’s pleasant in Quadrant 4 … and the chance would be a fine thing!

How does all this help us?

Are we supposed to be spending all our time planning and making sure we never read any magazines? Not quite. Covey is a realistic kind of guy. He doubts whether most of us are spending much time at all in Quadrant 4. But, this is where those other time management gurus would have us focus, filling every bit of downtime with worthy endeavors. “Waiting for a train? Then you’ve got space to digest the strategic plan!” We need to be realistic about the time we spend in Quadrant 1. The world’s a messy place, and the world of nonprofits is no exception. So, with the best will in the world, we can expect to be putting out fires on a fairly regular basis.

What’s the key?

The key to personal effectiveness is cutting back on the time we devote to tasks in Quadrant 3 and shifting that time to Quadrant 2 activities. So, rather than saying “yes” to everything that comes along, challenge yourself to focus on the importance of what’s being asked. In other words, it’s all about “exercising integrity in the moment of choice.” That means taking just a second before you choose to start a task to ask yourself, “Is this the most important thing I can be doing right now? Or is it just the next thing?”

Think ahead

Covey argues that consistently spending even one percent more time in Quadrant 2 will start to have a significant impact on our lives. A bit more time thinking ahead and building relationships should help prevent crises from happening in Quadrant 1 and allow us more valuable time in Quadrant 2. And focusing on the important rather than just the urgent tasks can leave us with the lasting satisfaction that today we have made the biggest difference we could in our role. And isn’t that why we work in this sector?

See also:

Driven to Distraction at Work: How to Focus and Be More Productive

Fired Up or Burned Out: How to Reignite Your Team’s Passion, Creativity and Productivity

Let’s Stop Meeting Like This: Tools to Save Time and Get More Done

Smarter, Faster, Better. Strategies for Effective, Enduring, and Fulfilled Leadership

Image credits: money.usnews.com, celebratingthejourney.com, inspirationboost.com

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Distractions at work: Is your screen in control?

Too often, many of us are saying to ourselves, “I’m working really hard but I’m not getting to where I want to be.” Driven to Distraction at Work author Edward Hallowell, MD, has dedicated his career to studying attention and productivity.

Hallowell has coined the term “attention deficit trait” or ADT to explain the increasingly common problem of distractibility in the modern workplace. An ADT is a response to endless demands and distractions that make someone unable to focus, slow down, be patient, feel fulfilled, commit reasonably, and feel stable instead of overwhelmed. An ADT is caused by the context in which it occurs and can come and go, unlike an attention deficit disorder.

In Driven, Hallowell addresses common challenges like the lack of ability to focus, the feeling of always being in a rush or bouncing from task to task, the attempt to multitask effectively, and the impression that every day ends in frustration and a lack of fulfillment.

Six most common ways we surrender our attention

The first half of Hallowell’s book explains the six most common ways we surrender our attention at work while the second half provides you with a plan for overcoming these distractions. If you can understand the underlying reasons for succumbing to distractions, you can focus and be more productive.

In today’s post, I wanted to highlight one of the six ways we succumb our attention at work.

Screen Sucking (“how to control your electronics so they don’t control you”)

People who feel distressed without their cell phones, waste hours online without even knowing it, and retreat to the Internet when stressed could qualify as screen suckers. The author classifies screen sucking as one of many Attention Deficit Traits (ADT) that can occur at different levels of severity, ranging from conflictive (“usage is annoying to at least one other person”) to addictive (screen activity becomes the most important activity in a person’s life, has a calming influence and can cause withdrawal symptoms).

Because technology today is more interactive than TV or radio in the past, a person can do almost everything online and can crave the “freewheeling state of mind where anything goes and nothing is shut down.” People can then become addicted to the feeling of being online. The problematic aspects of screen use, though, range from constant interruptions to rudeness to too much data without thinking to wasting time continually.

Hallowell applies a basic plan to treat ADTs that involves five elements:

Energy
Emotion
Engagement
Structure
Control

The author gives suggestions to restore productive states in each of these areas in order to allow someone to work more efficiently and disable the distractions. For example, screen sucking drains your energy, makes you numb, replaces your social engagement, provides a structure that works against you, and takes over your control. Hallowell offers the following tips, among others, to combat these problems: log how many hours you spend on electronic devices and gauge where you can cut back. Create pockets in your day reserved for screen time and turn it off at all other times. Turn off your devices during social engagements. Do more productive activities when you are bored. Avoid habit-forming websites and games. Measure and monitor your progress.

Everyone struggles with the common problem of distractions in work and life. With the advent of technological devices, distractions present a seemingly constant challenge. One quote from Hallowell’s book, in particular, sheds light on the level of distraction screen sucking induces. “They talk about craving it [technological devices] when they can’t have it and about feeling irritable and jittery on flights that don’t offer Wi-Fi. They admit to losing relationships and jobs due to their inability to control their craving. They describe the feeling of being online as a kind of anesthesia that eases the pain of everyday life.”

Watch for more highlights from Driven to Distraction at Work when we explore more of the six common ways we struggle with distraction and how to overcome them. Visit our summary library for more information about Driven and Page to Practice™ summary.

See also:

Fired Up or Burned Out: How to Reignite Your Team’s Passion, Creativity and Productivity

Let’s Stop Meeting Like This: Tools to Save Time and Get More Done

Smarter, Faster, Better. Strategies for Effective, Enduring, and Fulfilled Leadership

The Happiness Advantage: The Seven Principles of Positive Psychology That Fuel Success and Performance at Work

Image credits: alsc.ala.org, yahoo.com, pinterest.com

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5 simple daily acts will improve your nonprofit success

Last night I relived the enthusiasm I felt after reading a book a few years ago because I stumbled upon the author’s TED Talk. The author is Shawn Achor and his book is The Happiness Advantage: The Seven Principles of Positive Psychology That Fuel Success and Performance at Work. I enjoyed hearing Achor talk about each of the principles so much that I couldn’t help but get up this morning and write about it. The Happiness Advantage is based on a universally helpful topic that is relevant to all of us in work and life.

The premise? The success formula is broken. Achor says we falsely believe if we attain success then we’ll be happy. In reality, the inverse is true. If we’re happy when we set out to achieve our goals, we’ll be wildly more successful.

Happiness becomes a formula for fundraising success

His logic couldn’t have been truer than when I held one of my earliest positions as a nonprofit professional. I was directing a telephone alumni outreach program with an ambitious fundraising goal for one of my university clients. All you need to know about this university is it was located in the Pacific Northwest where there are a lot of overcast, rainy days. This weather makes for a moody staff and moldy office windows.

Every night before the shift started, my student callers would walk in sullenly as I mentally questioned their readiness to motivate others to give on the phone. In my naiveté, I thought I could just inspire this group of callers to reach our fundraising goal by breaking it down for them and showing it was possible.  Then we could all bask in the glory of our hard work and success.

If only Shawn Achor had written his book much earlier. Something told me all my kick-off speeches at the beginning of each shift about reaching the goal weren’t getting us anywhere. That’s when I changed my approach.  I realized I didn’t need to show them the carrot; I needed them to feel like the delighted rabbit that has just eaten many carrots. If I could get my callers in a happy state of mind, then this stretch goal would be in our reach.

Then the fun began. We played games, had contests and read jokes during down times. I even began reading excerpts of The Power of Positive Thinking by Norman Vincent Peale at the beginning of each shift. By the time I was done reading a passage, the room was humming.

The transformation was remarkable. Students were happy. Pledges were rolling in. The client was so surprised when she came onto the calling floor after our transformation that, during her next visit she brought the university president with her. Back then, I didn’t know it was “the happiness advantage” at work, but upon reflection, I think Achor would call this a prime example.

Seven principles and five simple daily acts:

Achor has seven principles that help fuel happiness in work and life, which he explores in-depth within his book. In this TED Talk, he shares a simple daily method–five small changes that ripple outward to create lasting positive change:

Three Gratitudes: “Write down three new things for which you’re grateful over 21 days in a row. Your brain starts to retain a pattern that scans for the positive in your life,” explains Achor.

Journaling: If you journal about one positive experience each day, it allows your brain to relive it, thereby extending the positive emotions from the first time.

Exercise: “Physical exercise teaches your brain that behavior matters,” asserts Achor.

Meditation: “Meditation allows your brain to overcome the cultural ADHD we’ve created by doing multiple tasks at once,” says Achor. Meditation allows our brains to focus on the task at hand.

Random or Conscious Acts of Kindness: Achor suggests opening up your inbox and writing one positive email to another, praising him for something positive or thanking someone in your social support network.

Achor closes his talk by explaining if we simply perform these five tasks, we can train our brains–just like we train our bodies physically—to create ripples of positivity and real, positive change in our work and life.

See also:

Fired Up or Burned Out: How to Reignite Your Team’s Passion, Creativity and Productivity

Nine Minutes on Monday: The Quick and Easy Way to Go from Manager to Leader

Image credit: TED Talks, thejournal.ie

 

 

 

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What makes nonprofit failures useful or useless? FailBetter authors answer.

“Not all failures are useful. The key is to enable the productive ones. You’ll need to know what makes some failures worthwhile and others useless.”

Authors Anjali Sastry and Kara Penn have recently published a new book to help you make the most of mistakes. They claim that, “Failure is not necessarily bad. Accepting that it’s inevitable, and maybe even desirable, sets the stage for a more nuanced discussion of learning, failure, and success.”

Today we’re building on our recent introductory post and featuring an excerpt of our interview with the coauthors to give you a better sense of how mistakes can be a path to great efficiencies rather than a source of regret or frustration.

More about the book’s premise

But first, let’s review a little bit more about the book’s premise. Sastry and Penn explain that “smart leaders, entrepreneurs and change agents design their innovation projects with a key idea in mind: ensure that every failure is maximally useful.” In Fail Better, the authors show you how to create the conditions, culture and habits to determine what the most effective solutions are by:

1) launching every project with the necessary groundwork,

2) building and refining ideas, products and services through iterative action, and

3) identifying the learning moments and embedding the knowledge.

Launch, iterate, embed

In other words, the book discusses how to address failures and make them beneficial before (launch), during (iteration) and after (embedding) the project’s work. You will learn an invaluable skill you may never have developed before: how to distinguish “preventable, wasteful and uninstructive failures” from helpful ones you can incorporate into your process.

Interview with the authors

CausePlanet: Where do most people “get it wrong” when they’ve failed? Which part of your model tackles it?

Penn and Sastry: There are so many areas to choose from! Fail Better addresses common failure modes at each step—whether at the outset of a project when the seeds of a failure may be sown in failing to identify faulty assumptions that underpin the rest of the project’s actions or a needed skill set or resource is never secured (the Launch Phase of Fail Better aims at addressing this), or at the end of a project when many a manager and team member rushes into the next project without extracting, sharing and translating into changed behavior the lessons learned (the Embed Phase tackles how to do this).

People often “get it wrong” when they miss opportunities to prevent more costly failures in exchange for smaller, more informative, more affordable mistakes. And they get it wrong when they march to the end of a project on the back of a single monolithic approach, without testing and experimenting along the way. Not much can be done to improve an outcome at the end of a project, so if a faulty path is pursued with determination, larger, more public and more costly failures are bound to be the result. Fail Better’s Iterate Phase intervenes here.

On a more individual level, once failure has occurred, two critical pitfalls often await:

First, failure makes each one of us feel so uncomfortable, that often examining the causes of that failure are avoided and written off to circumstantial issues. This is a coping mechanism, but it’s the exact sort of thing that contributes to repeating similar mistakes. Fail Better works hard to help implementers avoid this outcome by creating the space and structure for reflection and behavior change in a safe way.

Second, there is a temptation as a manager to hide failure stories instead of owning them and crafting a narrative that shows why a course of action was selected, what was learned and what will be done differently going forward. A smart failure that drives learning and positive change and a response that demonstrates resilience and action is highly valued. And it is much better to craft our own failure stories than to have others, who may not know the nuances or intentions, do it for us by default.

CausePlanet: What makes a failure useless? What makes it useful?

Penn and Sastry: Our starting point is the idea that the right kind of failure—small-scale, reversible, informative, linked to broader goals, and designed to illuminate key issues—paves the way to success. Such failures are in service of a larger vision or goal, are stepping stones to refined and improved ideas, and create a platform of understanding and learning. In short, a better failure moves you forward. The wrong kind of failure entails waste, leads to discouragement, reflects rigid thinking, “bets the farm,” and contributes to reputational damage.

See also:

Little Bets: How Breakthrough Ideas Emerge from Small Discoveries

Made to Stick: Why Some Ideas Survive and Others Die

Repeatability: Build Enduring Businesses for a World of Constant Change

Image credits: firstamerica.com, moneycloud.com, mixcloud.com

 

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Fail Better: Learn how to make nonprofit failures maximally useful

Let’s face it: Failure is universal. It is universally associated with avoidance, denial, frustration and shame. Yet smart individuals, teams, and even some organizations have discovered failure, if anticipated, evaluated, and corrected, can be the answer to succeeding sooner.

Fail Better authors Anjali Sastry and Kara Penn personally have experienced and observed these interactions with failing better and have assembled a systematic approach for improving how you fail. If we know failure is inevitable, why not get better at it?

Our latest recommended book is about just that—how to fail better. Sastry and Penn have designed a purposeful way to experiment and innovate that will transform your failures into opportunities to learn, modify and improve.

If you’ve ever asked any of the following questions, then Fail Better is for you:

“How do I deliver on my work—get my ‘real job’ done—and at the same time innovate and improve?”

“How do I improve my own personal practices and habits to enable even better impact?”

“How can I learn from previous experience, within our organization or more broadly?”

Sastry and Penn explain that “smart leaders, entrepreneurs and change agents design their innovation projects with a key idea in mind: ensure that every failure is maximally useful.” In Fail Better, the authors show you how to create the conditions, culture and habits to determine what the most
effective solutions are by:

1) launching every project with the necessary groundwork,

2) building and refining ideas, products and services through iterative action, and

3) identifying the learning moments and embedding the knowledge.

Launch, iterate, embed

In other words, the book discusses how to address failures and make them beneficial before (launch), during (iteration) and after (embedding) the project’s work. You will learn an invaluable skill you may never have developed before: how to distinguish “preventable, wasteful and uninstructive failures” from helpful ones you can incorporate into your process.

Martin Luther King Jr., civil rights and failing better

The Civil Rights Movement is an example of iterating and embedding your learning. Initially, when the movement did not accomplish enough change working through the legal system, it began to look at lessons from India’s independence and worked with the NAACP to share assets and capabilities. The leaders had to consider the time horizon by acknowledging that their movements in the short run could possibly only pay off in the long run.

They practiced civil disobedience in many settings and shared their field-tested advice with other groups. They were constantly telling their stories through speeches. They continuously embedded their learning when they met to discuss and debate perspectives and tactics. The ultimate embedding occurred with the civil rights legislation. They, especially Martin Luther King, Jr., documented (embedded) their thoughts as well.

If nonprofits are willing to accept that failure is inevitable and part of progress, then they can enjoy the benefits turning mistakes into productive experiences. Both large and small organizations can implement the launch-iterate-embed practices Sastry and Penn recommend in the book. Watch for future installments about the Fail Better method and how you can embrace failure for what it can teach you.

See also:

Little Bets: How Breakthrough Ideas Emerge from Small Discoveries

Made to Stick: Why Some Ideas Survive and Others Die

Repeatability: Build Enduring Businesses for a World of Constant Change

Image credits: rrfit-com, thoughthouse.org, morethansound.net, gradstudentway.com

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CausePlanet’s Choice Awards–Top Books for nonprofits from 2014

Here they are — our favorites from 2014. We read so many compelling, insightful books last year on a variety of essential topics, but the final choices came down to originality and applicability.

Each of our Choice Book Awards had either a fresh perspective on an imperative competency or broadened our thinking by tackling new territory. Additionally, all the authors brought their content to life through helpful case stories, exhibits, tools and evidence. These favorites are sure to help you work smarter; we hope you delve into them soon.

CausePlanet’s Top Five Choice Awards from 2014:

1) Fundraising the Smart Way: Predictable, Consistent Income Growth for Your Charity + Website by Ellen Bristol


Bristol gives you an innovative, concrete way to track and monitor your donors’ progress toward making donations. No more guessing about a prospect’s ability and desire to give means you can confidently meet and surpass your fundraising goals. Learn more about the author, book and Page to Practice summary.

2) The Money-Raising Nonprofit Brand: Motivating Donors to Give, Give Happily, and Keep on Giving by Jeff Brooks


Brooks shares an unvarnished, refreshing look at how to captivate more donors with accessible ideas that specifically work for nonprofits. He delivers new ways to connect your brand with your donors in a manner they won’t forget. Learn more about the author, book and Page to Practice summary.

3) The Nonprofit Leadership Transition and Development Guide by Tom Adams


Adams establishes an irrefutable link between effective leadership and organizational impact. What’s more, he comprehensively illustrates numerous advantages and opportunities bestowed upon nonprofits that engage in proactive training, succession planning and transition management. Learn more about the author, book and Page to Practice summary.

4) Fundraising with Businesses: 40 New and Improved Strategies for Nonprofits by Joe Waters


The organization of this book is what really caught our attention. Waters gives you specific cause (pronounced “khaz” by Waters) marketing strategies, how to implement them, ideas you’re encouraged to steal and success stories at every turn. His approachable format is chock-full of applicability. Learn more about the author, book and Page to Practice summary.

5) The Abundant Not-for-Profit: How Talent (Not Money) Will Transform Your Organization by Colleen Kelly and Lynda Gerty


Kelly and Gerty reveal a transformational method for utilizing your community’s expertise. At the center of this transformation is a new breed of volunteer—a “knowledge philanthropist.” The abundance model will revolutionize your use of talent, cultivate a renewable resource and be a welcome relief on the budget. Learn more about the author, book and Page to Practice summary.

Thank you to all our authors who give us reading pleasure and professional inspiration every day. It’s a pleasure to promote your smart advice at CausePlanet.

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A “people lens” is your answer to budget relief

Volunteerism has returned to its former prominence in the nonprofit sector, except the dynamics have changed, according to the coauthors of The Abundant Not-for-Profit.

Colleen Kelly and Lynda Gerty say our traditional assessment of volunteers’ capacity to add value no longer applies. They’ve coined the term “knowledge philanthropists” to define a new breed of volunteers. These are people who bring a vast set of skills and with those skills come higher expectations of the nonprofit.

What has also changed is the abundant nonprofit’s approach to talent management. If properly recruited, trained and managed under the abundance philosophy, skilled volunteers demonstrate an incredible return on investment. Nonprofits have much more to gain by looking at all positions within their operations as potential volunteer placements (what they call a “people lens”) versus always turning to budget machinations to fulfill the mission.

What does the abundant nonprofit approach look like? Abundant nonprofits:

dispel common myths about volunteers’ potential to contribute meaningfully.

begin with the CEO and board to embrace the abundance philosophy.

focus on human capital to deliver their missions.

transform the way they do business by applying a “people lens” to their leadership.

train salaried employees to lead and communicate with knowledge philanthropists in varying roles such as planners, advisors and facilitators.

enlist and support knowledge philanthropists with training, policies, expectations and key performance indicators.

lead salaried and volunteer talent alongside one another as one collective team.

Characteristics of leaders and organizations pursuing the abundance model

Organizations benefiting from this abundance leadership method are characterized by sound management practices, adaptive capacity and effective communications. Equally important, their leaders are confident people who exhibit an entrepreneurial spirit and are good delegators. We asked the authors Kelly and Gerty to describe organizations that may be poised for adopting this approach:

CausePlanet: In addition to the characteristics of CEOs and board members described in the book, what traits do organizations that are ready to successfully embrace this model all share (e.g., level of maturity, financial stability, size, tradition of innovation)?

Kelly and Gerty: As you’ve stated, the characteristics of the CEO remain a critical element. Those characteristics significantly affect the vision and culture of the organization and largely determine whether or not transformation can happen. An orientation toward abundance, learning, excellence and innovation is tremendously important. Beyond that, there are very few hard and fast rules. We’ve sometimes seen executive transitions catalyze the adoption of this model, as new CEOs are often interested in new approaches and motivated to do things differently. In some ways, small organizations that are going through a growth phase have an advantage, as they are often nimble and able to make change happen relatively quickly. It also can be easier in organizations with a certain cachet, as many talented individuals want to be associated with those organizations. However, we’ve seen many exceptions to those trends and look forward to seeing abundant not-for-profits spring up in all sub-sectors, stages and sizes.

The abundance rationale

The authors emphasize that instead of nonprofits looking through a budgetary lens, which highlights the need to raise more money, they need to look through a people lens, which encourages them to evaluate their talent needs in order to complete their missions. After a history of professionalizing the nonprofit sector, in which paid employees performed strategic tasks and volunteers completed repetitive tasks with their hands, a new day is dawning. The altruistic volunteer, who gave without expecting any return, is waning. Volunteers now expect meaningful experiences that use their skills.

Nonprofits, succumbing to budgetary concerns, have traditionally hired fewer people or people who are less qualified without considering other options. Many salaried nonprofit employees are overworked and underpaid as a result. The authors encourage nonprofits to discard this paradigm and move toward a completely new culture, one that listens to what volunteers want and what organizations need and matches them for a win-win situation. The authors dub this new type of volunteer a knowledge philanthropist because s/he brings knowledge in addition to hands.

The people lens method

An organization with a people lens first tries to develop a strong, well-functioning organization to draw talent. In order to create this strength, an organization needs to begin with the why (vision and mission), move to the what (three to five goals) and then focus on the how (define the time and skills already given by salaried employees and the talents needed and integrate volunteers across all functions in an organizational chart). Subsequently, an abundant nonprofit can create a culture that equalizes salaried and volunteer employees, a plan that includes knowledge philanthropists, a governance model that sees talent as a strategic imperative, processes to hire and develop knowledge philanthropists who will work under salaried managers, and leadership that supports this system.

The authors define a people lens culture in the following manner:

In a people lens culture, it is difficult to discern who is paid with money and who is paid with meaning. This fully integrated talent team challenges the traditional notion that some roles are for salaried employees and other roles are for volunteers. In a people lens culture, salaried employees no longer determine which roles are ‘okay’ for volunteers. Volunteer roles are fully integrated into each level, function and activity of the organization.

Join us next week when we’ll talk about why this management approach is a win-win as well as introduce a case study that dramatically impacted a health services organization.

See also:

Switch: How to Change Things When Change Is Hard

The Six Secrets of Change

Image credits: dramafever.com, hwproductions.com, commons-wikimedia.org, philanthropy.com

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Five staff responses to change you can’t afford to overlook

As a nonprofit leader, chances are at some point you’ve been involved in either instituting or supporting change in your organization. The question is, if the need for change is so obvious to you, why isn’t the rest of the organization jumping up and down with excitement?

Over the years, The Management Centre has carried out a significant body of research on, and change work with, a wide range of nonprofit organizations. And we’ve found that there are five core reactions to change that we call the 5 Cs. To be an effective change manager, you need to understand these five reactions in your colleagues so you can anticipate them and adopt appropriate strategies to deal with them.

The 5 Cs: Responses to change and how to handle them

We tend to sell organizational benefits when planning change. But not everyone judges the impact of things through organizational perspectives. To be successful, it’s essential to reflect on how individuals in the organization will react or respond to your change announcement. Be prepared, and plan an approach for each of the 5 Cs:

Champions

Champions – perhaps 5 to 10 percent of the total – are those who are prepared to stick their necks out, run with an idea and own what happens. After announcing the change you propose, these are the people who’ll crowd around you smiling and shaking your hand.

Tempting as it is to embrace their enthusiasm, you need to treat champions cautiously. The advantage of their unstinting support for the change is balanced by some serious disadvantages. For one thing, champions generally champion everything – even painting the office in stripes. Their enthusiasm could give you a false impression of how everyone else is feeling. And champions won’t question you closely on the merits of your proposal. You need some challenge to ensure your idea has rigor.

Give champions something practical to do which absorbs their energy. Be careful about using them as advocates; they’re likely to be treated with skepticism by others.

Chasers

Chasers – 15 to 20 percent of the total – don’t immediately respond positively to your proposal for change. At the end of a briefing, they look around to see who’s signed up. They want to discuss your idea with others before forming a judgment, and will generally look to a key opinion maker or “trigger” person for guidance.

The great advantage of chasers is they give you a more accurate view of how your proposal is going down. When they join, you’re making progress and, once committed, they’ll stay. And the disadvantages? Well, you’ll have to convince the right trigger person to convince the chasers. And that trigger person may well be someone who has social rather than organizational power in your organization. So, you can’t tell them to back your idea. And still, chasers won’t come on board immediately – they may have their own very specific concerns; for example, if you’re going to restructure, what will be the impact on their team?

Identify the trigger person at different levels in your organization and brief them in advance, so that they encourage the chasers to sign up to your project.

Converts

At 30 to 40 percent of the total, converts are the biggest single group in your change audience. They listen in silence to the proposed change and don’t ask questions. But don’t confuse their silence with negativity. Converts want solid evidence in favor of the change in order to come on board. They’ll also need reassurance about what impact the changes will have on them. Their passivity means you often have to ask questions on their behalf and then answer your own question – FAQs. They want the answer, but they’re not happy to ask the question.

Converts have two advantages: First, bringing them on board tips a sizable majority of people into the “mostly positive” camp and ensures your change proposal will be adopted. Second, although they can be slow to adopt a change, they are equally slow to let it go. Once they’re convinced, you have momentum.

The main disadvantage with converts is that they may take so long to come round that your initiative loses momentum.

Think about and try to address converts’ concerns before launching a change process. That way you’ll be able to bring them on board more quickly. Try producing a list of FAQs in advance – it shows you’re thinking about the individual as well as the organization.

Challengers

Challengers – 15 to 20 percent of the total – ask difficult questions initially and then … continue to do so. Their approach is to confront and be awkward, because they have a strong stake in the outcome.

It’s a personality trait not a personal attack, so don’t treat it as an attack. Because challenging is a personality trait, it’s unlikely you can convince challengers that the change will be a good thing. What’s more important is that others will be watching how well you handle the challenger’s interventions.

Despite appearances, there are advantages to challengers: Their questions force you to be rigorous in your thinking. And, because they ask the questions others merely think, addressing their issues may enable you indirectly to reassure others.

The disadvantages are twofold: Challengers can carry on asking difficult questions beyond usefulness. They may also ask questions on areas not up for discussion.

Handle challengers’ queries fairly, however irritated you feel; others are watching. Be firm with them about what’s “off the agenda”; provide ground rules and stick to them.

Changephobics

Changephobics – 5 to 10 percent of the total – will not ever be convinced. They can slow down or even derail change. They cause dissent and are essentially immovable. Changephobics are tough. However, if you’re seen dealing with them honestly and fairly, you’ll gain brownie points from others for being evenhanded. And, however hard it is, keep in mind changephobics don’t oppose because they’re bad people, but because they feel you’re destroying something they hold dear.

Changephobic disadvantages are legion – doing their best to stop your initiative, providing unstinting opposition, significantly lowering morale.

The harsh reality is that you have to get rid of changephobics as quickly and effectively as you can, whether it’s to another department or out of the organization.

When you lead your change process, you will need to consider how you might deal with the 5 Cs. Think about all the different stakeholders in your organization – staff, volunteer, boards and even users. Which of the 5Cs would they fit into? What can you get the champions to do so they feel positive, but stay out of your way? Who do you need to convince to get the chasers on board? What questions do you need to answer for the converts? Who are the challengers? What flaws might they spot? Who are the changephobics? How can you get them to leave or help them go?

As we all know, implementing change is no walk in the park. Preparing for the individual responses to change will certainly help you leap ahead of some of the inevitable stress – if not all of it.

See also:

Switch: How to Change Things When Change Is Hard

Accelerate: Building Strategic Agility for a Faster Moving World

Buy-In: Saving Your Good Ideas from Getting Shot Down

A Sense of Urgency (How to Overcome Complacency In Your Organization)

The Six Secrets of Change

Image credits: hypnosisdownloads.com, globalfit.com, goal.blogs.nytimes.com, innerself.com, tippingpoint.com

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