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Three Questions Leaders Must Answer

Pearls of Wisdom

Recently I found some “pearls of wisdom” online under the heading of leadership:  “When in danger or in doubt, run in circles, scream and shout.” It reminded me of a boss or two that I’ve had during my career, but it didn’t really speak to leadership.

Another pearl said, “When in charge, ponder. When in trouble, delegate. When in doubt, mumble.” The mumbling part reminded me of a few Congressmen. However, this too said little about leadership. When people evaluate a leader they are generally trying to answer three questions.

3 Important Questions

First, is the leader credible? Credibility comes from honesty, consistently keeping your promises and acting with integrity. Consider that the stated core values of ENRON were respect, integrity, communication and excellence. Certainly those are admirable, but problems came from their practices not being aligned with their values. That’s what leaders do. They align their own practices with the core values and hold everyone else accountable for doing the same.

But credibility also comes from demonstrating that leaders care about others. My son-in-law was a pilot in the Marines, deployed to Okinawa. My daughter set their wedding date for a month after he was to return. Unfortunately, some issues escalated there, so his deployment was extended. His Colonel knew Brian planned to be married, so he told him to go on with his wedding plans. The Colonel then made special arrangements to get him home. He didn’t have to do that, but when he did, it certainly elevated his credibility with the men in his command.

Second, is the leader competent? Followers need confidence that leaders know what they’re talking about, that they’re experienced and have put in the time. This is true in nonprofit fundraising organizations as well as multinational corporations. One of the best pure shooters I ever coached took about 400 shots daily. A study of 20-year old violinists showed that the very top performers averaged 10,000 hours of practice, while the next best performers averaged 7500 hours. Warren Buffet is reported to spend weeks of long hours studying the financial statements of potential investments. All of these people have achieved competence by putting in the hours. Followers expect that from leaders.

Third, is the leader committed? Greatness and excellence require commitment to a worthy cause beyond one’s self, something with meaning that serves others and transcends circumstances. However, commitment is proven, not just by saying that you serve a worthy cause, but by demonstrating it through your actions. Police officers and firemen consistently say that they are committed to protecting the people of their communities. However, the NYPD and NYFD teams proved their commitment through their actions on 9/11, as many gave their lives to save others.

People want to know that leaders are committed to sacrificing their own self-interest in favor of a greater purpose. In the 3rd century a terrible plague devastated Rome with about 5,000 people dying daily. While many people fled Rome, Christians went towards the city to minister to the sick and dying. This clearly demonstrated their commitment to a higher calling.

Level 5 Leaders

In Good to Great, Jim Collins discussed level 5 leaders as ones who have a combination of personal humility and fierce resolve to achieve the goals. Translated that means it’s not just about the leader; it’s about the company, the goals and the people involved.  These truths apply to fundraising, church growth and corporate sustainability.

When leaders demonstrate that they are credible, competent and committed, success is not far away!

by Len Moisan

How Can I Implement a Program That Sustains and Increases Giving?

A Quick Review

Last week we addressed a strategy used to help you improve your donor retention rates and increase your giving. By name this program is called sustained or monthly giving. It results in increasing donations by stimulating multiple gifts over a longer period of time in ways that tend to enhance both donor generosity and retention. In the last article I discussed sustained giving as a concept.

Helpful Recommendations

Now assuming that a non-profit organization wants to enhance their giving through a sustained giving program, the following are four recommendations to help you achieve that:

1. Use a widespread approach to communication of your sustained giving program. As fundraising consultants, we recommend that our clients put it in and on everything. For example, if you have a newsletter, I recommend that you have a story about sustained giving. I would also use social media like Twitter and Facebook. Of course, I would also include it on your website and as a lead option on any pledge cards you use. Finally, I would also include it in direct mail pieces.
2. Brand your sustained giving program by giving it a name. For example, donors to the program can be called sustainers. In addition, the program can be named after a long-time friend to the nonprofit organization who has been a consistent donor. This helps establish an identity for your program and therefore helps build awareness.
3. Develop a creative perquisite program for sustained giving donors. In just about every area of Philanthropy, development officers develop creative packages for giving at certain levels or giving in certain ways. Not that people give primarily to receive perquisites, but providing a nice package of benefits is yet another reason for people to give. You have to treat your donors well and sustained givers should receive special attention. You must decide to what will they be invited? What premiums will you offer? These are just some of the benefits. For example, my son is a graduate of Notre Dame. For a gift at certain levels, I become eligible for athletic events and other activities. However, it’s not just the events that attracts donors like me, it is also the various things they do to keep me informed and engaged.
4. Begin measuring the results of your sustained giving program. Some have said that nothing changes in an organization until it is measured. It is one thing to initiate a sustained giving program; it is quite another thing to make it worth your time, effort and expense. Setting goals and tracking results will no doubt help you to improve your fundraising results.

Measurements That Matter

To begin, we suggest measuring the following:

• Total number of sustainers
• Average annual gift of sustainers
• Monthly income from sustainers
• Categories of giving among sustainers, (# of gifts at various levels both monthly and annually)
• Average length of sustainer giving (# of months they stay)
• Annual attrition rate of sustainers
• Number of sustainers added each month and each year
• Number and frequency of communication with sustainers

Of course, there are many other strategies to help you refine your program, but these will get you going. To learn more about these and other strategies, please visit us at covenantgrouponline.com

by Len Moisan

Help! My Donors are Leaving! What Do I Do?

Through our work as fundraising consultants, we tend to hear some common themes. Lately one of those recurring themes is fear. This anxiety comes from wondering what the organization will do when some of their long-term sustaining supporters pass away.

Donor Retention is a Big Concern

Simply stated, based on the latest research in philanthropy, that fear is not unfounded. According to a November, 2016 Non Profit Times article, more than half (54 percent) of fundraising organizations have not been able to increase the overall percentage of fundraising revenue during the past three years. Yet demand for services at most nonprofits has continued to rise. At the same time, donor retention rates have averaged only about 41%.

That means that each year in a typical non-profit organization, nearly 60% of the donors leave and have to be replaced. It’s not surprising that the majority of non-profits have seen no increase in fundraising revenue. They are too busy finding donors to replace the ones who have left.

Further, about 63% of those organizations believe that their donations will decline as “baby boomers” retire, and there are not enough younger donors to replace them. This does not bode well for nonprofit organizations, since a 2013 Blackbaud study also revealed that 69% of all donations came from “baby boomers.”

Strategy for Sustained Success

So how do forward looking, avant-garde organizations deal with this? What strategies can counter this trend?

One strategy in particular has found great success in increasing donations. It’s called sustained giving, which is also referred to as “monthly” or “recurring” giving. Essentially the non-profit organization is asking donors to make a fixed monthly gift that recurs without a predetermined end date.

Instead of a one-time gift that may or may not be repeated during the course of a year, sustained giving comes in every month and often continues well beyond a year. People usually make this type of gift either by credit card or EFT (electronic funds transfer), so they are not writing a check every month.

One study found that over the life of their giving, sustained gifts are worth up to four times more than the amounts received from traditional donors. That makes sense, since sustained givers, give more often and give for a longer period of time. In addition, sustained giving also helps improve both donor retention and lifetime giving. When donors commit to give in this manner, they also tend to become more involved in the organization.

Work at Keeping Donors Engaged

Of course, whether or not donors stay involved in the organization depends on how well the non-profit works to keep them involved. That happens as we provide recognition, involve them in special events, and engage in two-way communication and not simply information sharing. Sure that takes time and effort. However, sustainer givers also give more frequently and for more years than traditional donors, so the effort to keep them engaged is well worth it!

by Len Moisan

7 Reasons Leaders Fail

The Trouble Begins

A pastor gets laid off after a church conflict because church growth failed and “things just didn’t work out.” Employees go out on strike and the CEO gets fired. A nonprofit executive loses the confidence of his board, fundraising decreases and they end his tenure. Why? Well, there are lots of reasons why leaders fail, but often included are one or more of the following:

1. They don’t build trust by keeping promises – Keeping promises implies commitment. When leaders make promises and keep them, it builds credibility with followers. But credibility goes beyond promises. There is an assumption with leaders that they are both competent and visionary in ways that can expand the capacity of both individuals and organizations.
2. They make it more about them than about advancing the organization – In Good to Great Jim Collins identified the most successful leaders as level 5 leaders. These are people with a combination of personal humility, strategic planning and ferocious resolve to achieve the mission and goals. Humility is important because the leader is demonstrating that the work is about the mission and not about his or her ego.
3. They fix blame and not problems – President Kennedy once noted that we should, “not seek the Republican answer or the Democratic answer, but the right answer. Let us not seek to fix the blame for the past. Let us accept our own responsibility for the future.” Fixing blame never solves problems. Instead, it spends negative energy and extends the time it takes to fix problems.
4. They don’t realize that leadership is relational rather than positional – In his masterful work entitled Leadership, James MacGregor Burns noted that leadership is not a position; it’s relational. Burns broke down leadership into a relationship between leaders and followers that includes transactional, transformational and moral components. Inherent in that relationship is power, and how people use power determines whether they are leading or power wielding.
5. They don’t align their behavior with the core values of the organization – Core values define the ethos of an organization. They describe how the organization will operate both internally and externally. It is a leader’s job to ensure that behavior is aligned with the core values, and that begins with the leader. You can’t have double standards and expect people to take the values seriously.
6. They don’t thank others or acknowledge their contributions – At least part of the leader’s job is to create an environment where people feel important and appreciated. That comes first by acknowledging their contributions. There are lots of ways to recognize others, but the important thing here is to make the effort and do it.
7. They don’t communicate effectively – Communication is a two-way process that includes both speaking and listening. The former is easy for most people. However, the latter is a bit more difficult. Leaders actually are good listeners and that benefits them greatly. First, listening helps leaders gain a better perspective on the organization and its people. Second, if you listen to others you are likely to get some good ideas. Third, listening to others tells them that you are interested in and value what they have to say, which is an extension of who they are.

by Len Moisan

Leaders Maximize Potential by Forgiving Mistakes

Leadership Failures

It’s interesting when leaders fail. Commentary seems to come from all corners. In fact, a Google search on leadership failure yielded 1,170,000 results. Much of the commentary boils down to relational failures like a toxic culture, a lack of teamwork, no flexibility and too much control.

What’s interesting is that leadership failure does not discriminate by industry. There are as many failed pastors as there are corporate CEOs. In fact, hundreds of pastors are terminated each month. At least part of that failure is due to conflicts, disappointment and even bitterness towards people who have failed them in some way.

A Lesson from Les Miserables

It reminds me of Victor Hugo’s classic, Les Miserables, a moving story about the healing power of forgiveness and destructive nature of vengeance. Valjean is released after a 19-year sentence for stealing bread. He’s homeless and bitter until a kindly bishop provides food and lodging. But Valjean hasn’t changed, so he steals his silverware and flees. Caught by the police, the Bishop covers for him and tells them it was a gift.

The Bishop’s grace transformed this hardened criminal. Valjean gives up his bitterness, moves away and begins to lead a transformed life. Unfortunately, a police oversight alleges that he violated parole, and vengeful inspector Javert pursues and finds him. To escape, Valjean flees to Paris. To his dismay, Javert follows. The story takes an interesting twist as Valjean helps Javert escape from some revolutionaries.

Contrast Between Grace and Vengeance

The story shows the stark contrast between a man transformed by grace and one controlled by vengeance. Eventually Valjean’s kindness overcomes the inspector’s lack of forgiveness and Javert commits suicide rather than respond in kind. In this sense, forgiveness is as much about leaders giving up their right to vengeance as it is about forgiveness. Javert could not forgive, and it eventually destroyed him.

Today when mistakes are made inside organizations, CEOs, Pastors or key managers sometimes act like Javert. They refuse to give up their right to vengeance. Instead of forgiving, they get angry, demand justice and make the offenders pay. Of course, payment can be extracted in many ways including hurting careers, assaulting character or even excluding people in a spiteful way. But that’s not leading.

Forgiving Leaders Help Maximize Success

Leadership success demands that leaders recognize that people have flaws and sooner or later they will make mistakes. Modern day Javerts who fix blame and not problems are incapable of inspiring others to greatness. They may wield power and control, but how long can fear and intimidation incentivize employees or motivate church members?

In our church leadership consulting, we convey to pastors that leadership is about maximizing the potential of followers. That requires leaders to give those followers freedom to take risks and make mistakes. They shouldn’t have to pay every time they try something that fails. Like the Bishop, leaders transform followers and maximize their potential, by forgiving and having at least some tolerance for mistakes. It is only when they do so, that people feel safe enough to trust them and take risks in ways that advance the organization. Forgiving and empowering leadership styles are key church growth tools.

Forgiveness Distinguishes True Leadership

Forgiveness builds trust and cohesion because it draws people together. Leaders who understand this can move past mistakes and focus on using the combined talents of their people. And after all, that’s really what advances organizations and distinguishes leaders from power wielders.

by Len Moisan

A Non-profit Model of Fundraising Success

A Great Cause

I’m sure some of you have had great experiences with capital campaigns . I write today to tell you about one of my favorites. Recently, our company had the privilege of participating in a 5-year, $121 million campaign for 21^st Century Parks. The Parklands Project was one of the largest of its kind in America. It included the acquisition of 4,000 acres adjacent to a local tributary in Louisville.

The goal was to create a complete park system along an 11-mile stretch of Floyd’s Fork. Of course, Louisville is one of the few complete Olmsted Park systems in the country, so this project was very much in that tradition.

Participating as capital campaign consultants in a project that size was exciting enough, but the campaign was also for a virtual start up organization. Established in 2004, 21^st Century Parks was just getting started. In addition, the campaign kicked off in 2008, one of the worst fundraising periods in modern history. So what was so unique about this effort? Simply stated, everything! However, a few things stand out:

Success Begins with Leadership

First, success started with the founder and CEO, Dan Jones. He took his life in an entirely different direction to achieve this vision. A PhD in history, Dan had been a well-regarded member of the University of Louisville faculty. However, he went back to Yale, his alma mater, and he pursued anther degree in forest science. Shortly after graduation, he founded 21^st Century Parks.

While Dan had little experience in fundraising, by the time the campaign concluded he was a fundraising veteran. He was a committed student of fundraising and quite teachable, but he also had great instincts and was willing to go anywhere at any time to share the vision. He literally made hundreds of presentations to just about anyone who would listen.

Success Requires Personal Involvement

Second, the volunteer leadership was superb. The campaign was chaired by David Jones Sr.,the retired founder of the Humana Corporation. Not only did he make a significant financial commitment himself, he also wasn’t the least bit reluctant to make major gift solicitation visits. In addition, he personally recruited 5 co-chairs and was also involved in recruiting the additional 40 volunteers who served on the steering committee.

Success Requires a Great Team

Third, the makeup of volunteers also contributed to campaign success. Certainly we had quite a few CEOs and business owners on the committee, but we also had people who represented diverse neighborhoods in the city. Some volunteers hosted receptions for friends and peers, while others made solicitation calls both to individuals and businesses. In fact, they hosted some 50 separate receptions, and the CEO spoke at every one of them. It was truly a community effort and when it was over nearly 1,000 donors had responded.

Finally, during the early planning phase of the campaign we did a search and found a top-notch development officer, and she kept things moving and on task. In fact, she had to take maternity leave in the middle of the campaign, but by then it was so well organized, that her temporary replacement easily picked up where the development director left off and supported the campaign without missing a beat. The success of the 21^st Century Parks campaign shows what can happen when a team of passionate, engaged people commit to a cause and vow to keep working until the goal has been exceeded.

by Len Moisan

Are Campaign Consultants Really Worth the Price You Pay?

Avoiding the Pitfalls

Do you want success in your church capital campaign? It’s a key question that virtually every pastor wants to answer affirmatively. Yet pastors often relate horror stories about not achieving their goals. In many cases the failed campaign was poorly conceived and that created divisions in the church that were difficult to overcome. So how can a pastor avoid this?

First, it’s important for pastors to realize that they may need help. It never ceases to amaze me how some churches are willing to spend sizeable sums on architectural fees. Yet, they don’t think they need assistance in fundraising. Consider that if your campaign fails to achieve its goal the construction costs and architectural fees don’t change.

We had a church come to us for help, but at the last minute the deacons thought they could save money by implementing the campaign themselves. The project goal was $12 million, but they raised less than $2 million. Architectural fees alone on this project were over $1,000,000. Yet, they were reluctant to pay our fee, which was $70,000 total for the planning (feasibility) study and campaign counsel.

Increase the Likelihood of Success

Of course, using counsel doesn’t guarantee success. However, if you follow the plan and the advice the consultant gives you, the likelihood of success is much higher. It stands to reason that if the person helping you organize and implement your church financial stewardship campaign does this every day, you’ll avoid some common mistakes and increase the likelihood of success.

Even the most competent church member, will not have the time to organize and implement the campaign the way they should. When our church was getting ready to launch a capital campaign, our pastor recruited me to chair the $26 million effort. That made sense, since at the time I was the chief development officer at a well-known university. Also, we had also just completed a successful capital campaign ourselves.

I agreed, but I also realized that ours was a mega-church. I simply lacked the time to set up the systems and do all of the campaign organization and training necessary for success. Besides, the model for a church campaign is entirely different than that of a university campaign. Accordingly, I recommended that we hire a consulting firm to partner with us. We did, and it resulted in raising over $30 million.

Follow Wise Counsel

An equally important principle to consider is that if you hire a campaign consultant, you need to follow his or her advice. In our 20-year history of doing church campaigns, we’ve only had one church fail to achieve its goal. I believe they failed because there were four major strategies we recommended, but the pastor and leadership team decided not to implement them.

Simply stated, if you pay someone who is experienced, it’s important to follow his or her recommendations. It is in the consultant’s best interest to help you achieve success, and he or she will no doubt bring you best practices. You need to trust them. If you do that, you will also realize that the advice you received was well worth the price!

by Len Moisan

Walking the Talk-Aligning Core Values with Practices

Posted or Practiced?

I have frequently walked into organizations and seen corporate values posted on the walls. In churches, nonprofits and businesses, they are displayed prominently for public viewing. Unfortunately, many of those same organizations are also rife with mistrust, backbiting and ethical breeches, which cause them to operate in a legalistic, contractual manner.

This doesn’t mean that we can or even should eliminate the use of contracts. Our modern world sometimes demands that contracts be used as a standard part of doing business. But this still doesn’t justify operating in a strict contractual manner.

Purpose of the Contract

For a contract to work well it requires an assumption of good faith and trust among the people involved. That good faith is based on some underlying values such as integrity, cooperation, a sense of common purpose and respect; values that are shared and therefore central to relationships. We stress the importance of these virtues in nonprofit and church leadership consulting alike.

Walking the Talk

Of course, it will not do simply for organizations to have stated values.  There must be alignment between those values and the daily practices within the organization. That alignment is the responsibility of leaders.  In fact, misalignment between values and practices often is where the seeds of an ethical breach take root and the covenant begins to be broken. That’s why leaders must assume responsibility for ensuring that relationships are respected and core values are aligned with practices daily. As strategic planning consultants we frequently counsel clients on the importance of this alignment.

Lessons From Enron

Consider the case of the Enron Corporation.  Boldly stated in their company literature were their core values of Respect, Integrity, Communication and Excellence. No doubt, when these values were developed they were intended to guide their company’s operations. However, at some point something caused the company decision makers to operate quite contrary to the stated values.

Even as the company was deteriorating, the founder and corporate chairman, Kenneth Lay, continued to tout those values and encourage people to buy Enron stock.  In fact, at the same time he was telling employees that the stock was an “incredible bargain,” he and about two dozen senior executives were cashing in more than $1 billion worth of that same stock.  Two days before filing bankruptcy, Enron gave $55 million in retention bonuses to “key managers,” yet they refused to provide severance pay to the 4,500 employees they laid off of work.

The Cost of Values Not Upheld

In total, the company’s indiscretions caused 15,000 employees to lose $1.2 billion, and the CFO alone to be charged with 109 counts of fraud, money laundering, conspiracy and obstruction of justice.  Eventually, in May of 2006 the late Ken Lay was convicted on all six counts brought against him including conspiracy to commit securities fraud.  Likewise, CEO Jeff Skilling was convicted on 19 counts of conspiracy and fraud.

Clearly, the courts determined that the misalignment of Enron’s values with its practices was a leadership responsibility. They had failed and eventually violated the law and they were held accountable. Had the Enron executives taken their stated values more seriously and aligned their practices with those values, there would not have been an ethical breach of the covenant that was implied in the values they publicly stated.

by Len Moisan