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From the President's Office, June 2008

Dear Friend:

New Survey Looks at Tomorrow's Nonprofit Leaders

When the Baby Boomers begin to retire en masse from the nonprofit sector, will the next generation be ready to replace them? And more important, will they be willing? These crucial questions are addressed in a new survey, Ready to Lead, conducted by the Meyer Foundation in cooperation with CompassPoint, the Anne E. Casey Foundation, and Nearly 6,000 individuals took part in the survey, the majority of whom were employed within the nonprofit sector at the time, none of whom had ever served as an executive director.

Undertaken in September 2007, the survey is a follow-up to the 2006 report Daring to Lead, which revealed that three-quarters of current nonprofit executive directors planned to leave their positions within five years. The reasons given included general burnout and insufficient compensation for their efforts. This new survey suggests that the next generation of potential executive directors is well aware of this dissatisfaction and that they are watching it closely as they carefully choose the next steps on their career paths.

Although the results of the latest survey show an encouraging attitude among members of Generations X and Y toward the pursuit of a meaningful career in public service, they also reveal the numerous perceptions and stark realities that could drive potential leaders away from the nonprofit sector. The majority of the survey's participants had doubts about the financial viability of a nonprofit career, most notably worrying about their retirement years. More than two-thirds of the participants reported that they feel they are currently undercompensated.

Additionally, where about a third of those surveyed aspire to the position of executive director, the results show that many feel they are not being properly mentored to step up to leadership positions within their own organizations. This feeling supports—or perhaps feeds off of—the general perception that nonprofits tend to turn to outsiders for top positions rather than hiring from within as private businesses are prone to do. Another notable obstacle revealed is the participants' fear of being held responsible for an organization's fundraising efforts, more specifically the fear of being held responsible for failing to secure enough money.

As the workforce contracts with the departure of the Baby Boomers, competition for future leaders is expected to increase sharply. The nonprofit sector will have to battle with the government and private business sectors for the right to hire the next generation's best and brightest. So will nonprofits be able to compete despite these negative perceptions? Despite generally offering less money and fewer benefits?

The study concludes that the promise of direct involvement in social change continues to draw in potential leaders despite the sector's disadvantages, perceived or otherwise. The report strikes a strong cautionary note, however, as to the urgent need to take steps to make the sector a more attractive employer. The analysis outlines specific suggestions, including replacing dated power structures, paying employees reasonable salaries, and providing sufficient benefits. Current executive directors are urged to be better mentors and engage in serious succession planning.

The complete survey results and detailed analysis are available at both Meyer Foundation and CompassPoint.

Patrick Ferraro, June 2008
© 2008, Philanthropic Research, Inc. (GuideStar)

Patrick Ferraro is a freelance writer in Seoul, Korea, and a former editor of the Newsletter.

Recruiting 2.0: Using On-line Social Networking to Attract Top Talent

In the nonprofit sector, an estimated 60 percent of open positions are filled through referrals and networking. For this reason, nonprofit organizations benefit from building wide professional networks. Thanks to the proliferation of social networking Web sites, nonprofits can go on-line to grow their networks, promote their "employer brand," and connect with prospective employees.

As there are more than 200 social networking Web sites, the following article discusses the most effective options for nonprofit organizations to market to and recruit top talent.

Four Steps to Take Board Members from Fear of Fundraising to Enthusiasm

If you want to get your board members fully active in fundraising, you need to approach them from a new perspective. You have to change their mind-set about fundraising and redefine it from an entirely new point of view.

Board members don't understand how powerful the act of raising money can be—it's an effort to make the world a better place. It is some of the most important work anyone can ever do—on the front lines causing change for the good.

But board members don't think of it that way. They are stuck in the "tin cup" attitude—equating fundraising with begging. Instead of the highest form of human activity—helping their fellow man—they turn it into one of the lowest.

Here are four steps to take board members from fear of fundraising to understanding and to open the door for willingness. These steps give them a whole new perspective about raising money that is far more empowering and inspirational.

Step One: Deal Directly with the Dark Side of Fundraising

Fundraising can bring out nervousness, embarrassment, or anxiety. These feelings arise when the conversation is all about money. We know that many trustees equate fundraising with "asking strangers for money."

We must deal directly with their fears. We should give them the opportunity to get over their mental blocks by having an honest, open discussion about their nervousness or anxiety about fundraising. They also need a special environment, probably a retreat, to encourage them to let go and speak freely.

Please note that I am not saying that you should talk to them—I am saying that you need to allow them to talk about how they feel.

Ask them: "How do you feel about soliciting and asking for money?" In my Easy Fundraising for Board Members retreats, I pair board members off and ask them to share with each other how they really feel about fundraising and soliciting.

I encourage them to get all their bad energy about fundraising out on the table. I encourage them to throw up if they want to. They will say they feel nervous, fear rejection, don't like prevailing on people, and think it's demeaning. They lay it on the table.

But I don't let them linger in the "yuck" of asking. I counter it immediately with a discussion of how they feel when they give.

Step Two: Tell Them Fundraising Is Not about Money

It's about changing the world.

Ask them: "How do you feel when you write a check to your favorite organization?"

Here's what they will say: I feel proud ... joyous ... glad I could do it ... wish I could do more ... happy ... giving back ... part of something important ... powerful.

Then remind them that these are the emotions other donors feel when they give money. When a donor makes a gift, he or she becomes a partner in a cause that is bigger than just one person's life. That donor's life and legacy are enhanced. To work for important purposes, to take part in solving problems of great magnitude gives deeper meaning even to daily routines. People want to be involved in something with meaning.

So instead of being embarrassed about fundraising, board members can shift their perspective and realize that donors are happy and joyful when they are giving. Here's the disconnect: they can be stuck in fear—all focused on themselves—or they can be all about the donor and their shared experience of wanting to change the world.

Board members can stand high on the mountain making the world a better place. I tell them that they need to be fired up with their passion to change the world. They can be like Martin Luther King.

I suggest that they should be going all over town saying, "I have a dream ... ," and infecting everyone they meet with their joy, passion, and urgency to help others in need.

Board members like this point of view. You can see them shift right before your eyes. Putting fundraising on this high a plane is a new idea to them. It puts them at ease and gives them fresh inspiration and energy to take action.

They are relieved when I tell them that good fundraising is never about money. It is all about the desire to improve your community or world for the better.

Americans come from a barn-raising tradition, one of neighbors working together to solve problems, rather than relying on government to solve most of them. This tradition creates deep, fertile ground for our fundraisers today.

Step Three: Seek Friends, Not Donors

Board members are stunned when I tell them that after 22 years on the front lines of fundraising, I would rather have a friend for my organization than a donor.

What will your friends do for you? They will be interested in what you are up to, they will stick with you, they will help you out, they will spread the word, and, when the going gets tough, they will be there with you.

Donors want to be drawn into the real work of the organization, anyway. They want to be treated like real people and not wallets. What better job for board members—to make current and potential donors into true friends of the organization?

The more friends our board members can make for our cause, the stronger and more successful our work will be. The larger the number of people who have been personally introduced to the work we do, the better we fare.

It is easy to assume that the real work is the direct solicitation of funds, but "the talking up" part of the job is equally important. If a nonprofit is a bright spot on its community's radar screen, so to speak, then that visibility will make the fundraising so much easier and more successful.

Community buzz is so important. As fundraisers, we really need our board members to be active in the community on behalf of our organization. Active can mean lots of things: talking up the organization; introducing new people to its work; bringing in friends and volunteers to help in different ways; and, yes, helping to acquire money and resources.

Friend raising is something all board members like to do and are proud to do—and it is a most valuable and needed fundraising function. If you set up a committee and call it the Friend Raising Committee, board members will probably be enthusiastic, and the effect of the group's efforts will be powerful and lasting.

Step Four: Tell Them They Don't Have to Solicit

Let us focus our board members on friend raising and many other jobs in the fundraising process. I say we take soliciting out of the picture and get our board members hard at work developing friendly relationships for our organization all over the community, state, region, world—wherever our mission takes us.

There are so many activities related to fundraising (outside of soliciting) in which we need their help. For those on a board who are not ready to take on solicitation, we can ask them to do everything else in the fundraising cycle: help create new friends and supporters, help thank and involve current donors.

Our fundraising cycle starts with identifying potential donors, then cultivating, engaging, and involving them. When they are ready, we ask for their support, and finally we thank, thank, and thank them again so they will join our bandwagon and be our friends for the long run.

Smart staff members can show board members all the other ways they can contribute in fundraising without "asking." They will begin to see just how little time is spent in the "asking" phase of the cycle, compared with all the many other activities we undertake with our donors.

They need to understand that fundraising is very much more than simply soliciting. Developing a relationship with a donor, particularly for a major gift, is a lengthy process with many delicate steps.

Board members can help in the other myriad activities of the process, when we are simply making friends and building relationships, which of course leads to giving, and long-term giving, at that. Board members can host tours, throw parties for their friends, create community buzz, ask everyone they know for help, and personally thank donors.

As experienced fundraisers, we know that the more emphasis we put on cultivating, thanking, and informing donors, the easier, and more natural, the "asking" will be.

Of course we know that if board members are actually involved in helping to cultivate a donor, then they will be much more willing to help with a solicitation. There are many vital tasks that they can perform, without having to solicit. They can serve at all levels and get as close to or as far away from the actual moment of solicitation as they want—and still make a huge difference.

This is really an eye-opener for many board members. When I present these suggestions in retreats and trainings, I see amazed and interested expressions, as if an entirely new idea is dawning upon them. This is the way to take your reluctant board members and fire them up with new energy and enthusiasm for the cause—and put them to work.

Read the other articles in this series: Gail Perry, June 2008
© 2008, Gail Perry. Based on Fired Up Fundraising: Turn Board Passion into Action; printed with permission of John Wiley & Sons, Inc.

This article is the fourth in a series on helping board members embrace fundraising. Gail Perry is the author of Fired Up Fundraising: Turn Board Passion into Action and founder of Gail Perry Associates, a Raleigh, North Carolina-based consulting and training firm. During the past 22 years, she has helped organizations raise more than $200 million—and counting.

Using Your Web Site to Support Strategic Goals

Every nonprofit organization has goals, and these goals can change over time. Some organizations set out to raise money for research and then begin to provide education. Some set out simply to educate but then move toward advocacy. And still others serve to meet the ever-changing needs of their members. As new goals get added and old ones go by the wayside, nonprofits need to adjust their communications and fundraising efforts accordingly.

For most organizations, Web sites are at the top of the list of things to update, especially when goals change. Typically during the update process, the overall design and content of the Web site gets re-evaluated, and the navigation is usually modified to reflect changes in positioning. Sometimes organizations can get so carried away with the structure and design of the Web site that they forget that it can be used for more than just conveying information. The Web site can be an effective tool to support and advance many of the organization's strategic goals.

When reevaluating or updating your organization's Web site, list all of your strategic goals. If you have three primary goals, such as increase membership, increase on-line donations, and increase advocacy, use them to guide the design of the Web site. If there are secondary goals, list them as well. Simply enumerating each goal will help the Web team focus on creating pages or an entirely new site that support your strategic initiatives.

Here are some practical tips to help ensure that your organization's Web site supports your strategic goals:

Keep Out of Politics: The IRS Political Activities Compliance Initiative

With the 2008 presidential campaign season officially upon us, some nonprofits and their employees could soon find themselves faced with gray areas regarding the types of political activities they may or may not be permitted to become involved with.

The issue is a serious one: engaging in prohibited political activity can result in excise taxes or even loss of tax-exempt status. In 1992, the Landmark Church in Binghamton, New York, took out newspaper ads opposing Bill Clinton's candidacy for president. Three years later, the IRS revoked the church's tax exemption. A federal judge and then a federal court of appeals upheld the IRS's decision.

On the surface, the rules are pretty simple. The Internal Revenue Code states that
501(c)(3) tax-exempt organizations may not "participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office." Within set limitations, however, these same organizations are permitted to advocate for or against specific issues or ballot initiatives.

To ease the burden of ambiguity, the IRS has announced that its Political Activities Compliance Initiative (PACI) is once again in effect. Education is one of the two main themes of this program, as the IRS seeks to ensure that charitable organizations have easy access to the information they need to make the proper decisions regarding political activities.

"We take very seriously our obligation to ensure that tax-exempt organizations have the information they need to make the right decisions about political campaign activities," said Steven T. Miller, commissioner of the Tax Exempt and Government Entities Division at the IRS. "The vast majority of organizations want to do the right thing, and, as in past years, we will continue our efforts to make sure they have the information they need."

Enforcement is the second theme of the program, with the IRS Exempt Organizations Division making it clear that it intends to impose these restrictions—as well as the punishments that stem from their transgression—both firmly and fairly.

In the interest of education, the IRS has: