Investing funds for the future – What is the responsibility of nonprofit boards?
Three years ago, a nonprofit we know and love received a generous, six-figure gift to its endowment fund. This created a happy dilemma for the board of directors: what to do with all that money? But everyone was still rattled from the recession, and the market remained volatile. Patting themselves on the back for managing risk, the board deposited 100 percent of the funds into short-term CDs. The thinking was, “We’ll wait to invest this money until the market begins to turn around.”
Well, the market did turn around. So what did the board do? Nothing. No loss, it’s true, but also no gain or improvement in the organization’s position. The failure to act is still an act: it’s a decision that has consequences. Perhaps more importantly, it has opportunity costs.
Managing a permanently invested fund, or endowment, always pushes the question of risk tolerance. At every extreme, the issue is easy – neither the shoe box nor the lottery ticket is appropriate.
All nonprofit boards hold fiduciary responsibility for the organizations they lead. That entails a lot of things, including the ability to assess and manage risk. There are many tools available to help, including financial policies and procedures and financial plans that include an honest analysis of time horizons and current and future uses of funds.
Here are some things to keep in mind:
- Smart nonprofit leaders think about managing their finances just as strategically as they think about managing their staff, systems, and office space. You can make your financial assets work for your organization.
- Investing is a long-term business decision. The choices you make today are critical to the sustainability of your organization over time. Successful groups develop a team comprising employees, board members, and trusted financial professionals to make investment decisions on behalf of the organization.
- Groups need to be deliberate about adding people to the board who know something about assessing and managing risk, and investing.
- It helps to have an up-front conversation about your appetite for risk and your short- and long-term investment goals, so that your investment strategy fits your organizational culture.
The bottom line? When it comes to managing their financial resources, nonprofits have to strike a balance between being too cautious and too aggressive. The payoff is that smart investing has the potential to make scarce resources go a heck of a lot further.
- Bill Long, Helena, MT
Singin’ Sagebrush Sister
Consultants get up in front of groups all the time, but we don’t often stand behind a microphone with a guitar in hand — wearing our fanciest cowboy boots and party dress — open our mouths, and yodel.
This consultant who moonlights as a Texas swing guitar player hasn’t had quite so much fun in a long time.
On Saturday night, April 5, the Sagebrush Sisters took the stage at The Vue in downtown Corvallis, Oregon. We entertained a couple hundred (ish) friends and supporters of four fantastic mid-Valley conservation nonprofits at Roots to Rivers, a new joint fundraising event. Sharing the benefit of the event were:
- Calapooia Watershed Council, a community organization working to promote and sustain the health of the Calapooia Watershed in the southern Willamette Valley. A fun tidbit about this group is its location in Brownsville, Oregon, which is the setting for the fictional town of Castle Rock in the film Stand by Me.
- Greenbelt Land Trust, a local land conservation nonprofit focused on protecting ecologically, agriculturally, and historically significant lands in the mid-Willamette Valley.
- Marys River Watershed Council, cultivating strong neighborhood ownership of the watershed’s health and voluntary land stewardship and restoration from Marys Peak to the Willamette River, from forests to farms, prairies to ponds, and backyards to school yards.
- Ten Rivers Food Web, working to ensure that the Ten Rivers food shed will be robust in the face of ecological and economic pressures. This means that at least 30% of the food consumed in Linn, Benton, and Lincoln counties will be locally grown, processed, and distributed.
The two watershed councils and the land trust are all Solid Ground clients. We’re so proud of their amazing work and happy to partner with them as they succeed and grow. Thanks to all the wonderful people who came out to support the difference these groups are making in the Willamette Valley!
- Allison Handler, Portland, OR
Leadership: Throw out the hierarchy and look within
Who are the leaders within your organization? Are they so named simply because they “manage” people, or do they have other qualities that have nothing to do with title and rank? More importantly, can leadership be learned?
It sure can.
My colleague Jim Morris and I see this all the time in the leadership institutes we facilitate for clients like the City of Portland. Like many organizations today, the City understands that formal authority is not the only model of leadership. People at all levels are leading task forces, advisory groups, or multi-bureau work groups whose members may be located in different places and where formal line authority is diffuse, distributed, or absent altogether. What we’ve found is that leadership is the ability to influence others and affect change – regardless of one’s position on the organizational chart.
The Institute is modeled on the research of James Kouzes and Barry Posner, who found that effective leaders across the globe employ very similar practices—all of which can be taught and learned. They are:
- Inspire a shared vision. From shared goals to a shared vision, effective leaders are able to help others see the end point – what everyone is working together to build.
- Model the way. Effective leaders walk their talk, even when the going is tough. They earn trust because they consistently demonstrate their values and principles.
- Challenge the process. Leaders are bold. They ask tough questions and aren’t afraid to point out the “elephant in the room.”
- Enable others to act. Rather than go it alone, leaders invite participation and encourage others to develop new skills and knowledge.
- Encourage the heart. Perhaps most importantly, leaders understand that leadership is all about relationships. So they work on a personal level, recognizing others for their contributions.
The Institute is a bonding experience for participants. One recent cohort had sweatshirts made that displayed their group’s name – High Impact Leadership Team (HILT) – next to the hilt of a sword. But its primary impact may be in how it shifts people’s self-perception. One emerging leader who had been puzzled by her nomination to the Institute had this to say about her experience:
“Now I see that what I’ve been doing is a form of leadership. I have the power to help others be more effective as we work together. It [the Institute] was an awesome experience to work with everyone and see how differently we approach our leadership possibilities.”
Jim and I learn more about leadership with each Institute we lead. Each one confirms our belief that leadership is a form of performance art, and the instrument is self.
- Arty Trost, Portland, OR
Four steps to becoming a strategic storyteller
Research tells us humans are hard-wired to be storytellers. It’s our default method for giving meaning to the otherwise random events of life. And hearing stories is one way we simulate situations and learn before actually experiencing them. Similarly, stories invite others to participate and emotionally engage with the messages or morals they convey.
This more recent understanding of the dominant role stories play in human interactions is why so many communications advisers are urging organizations to embrace storytelling in their marketing, outreach, and fundraising.
From where I sit, this is sound advice. But it begs the question: Out of the dozens of stories potentially at our disposal, how do we decide which ones to develop and share? In other words, how can we be strategic about the stories we tell, rather than simply grasping for any good-sounding tale that comes along?
Here are four suggestions:
1. To be a strategic storyteller, be a strategic organization.
Many organizations fail to pause from the daily grind to take a long look at their mission, identity, goals, and measurable impact. Want to decide which stories to tell? Start by making sure your strategic plan is up to date. The first step in strategic storytelling is knowing where your organization is headed and why, and whose support you’ll need to reach your destination. The stories you choose should be those that move you closer to your most important goals by moving others to lend their support. And remember, during the planning process, stories are bound to surface. Don’t lose them.
2. It’s not about you.
That’s another way of saying, choose stories about “them” — constituents, donors, volunteers, partners. One of the ways people decide what to do in a given situation is to ask what would individuals “like me” do? Research tells us we are not purely self-interested actors. We often want to know not just what’s in it for me, but what’s in it for my group. (See the terrific book, “Made to Stick,” by Chip Heath and Dan Heath.) Select and tell stories that feature members of the groups you want to engage. Help your audience connect to what their peers believe or do relative to your organization.
3. It’s all about you.
That’s right, it’s not about you, except when it is! That means knowing “who” you are as an organization — your identity or brand. What makes you distinct among organizations similar to you and what makes you relevant to the people who matter to your success? Strategic storytelling means selecting stories that are consistent with who you are and how you want others to experience your organization. What do you stand for or promise to your stakeholders? Be clear about this, deliver on your promise, and tell the stories of people who’ve benefited from their experience of you.
4. Be real.
No organization is perfect. Making mistakes comes with the territory. More important is how you have responded to your mistakes. What are the stories that don’t have happy endings in your organization? Don’t be afraid to tell them from time to time. It will build trust and help others learn from your mistakes. And who knows how many happy endings will follow from there?
- Rich Bruer, Portland, OR
Sharing the Love
“Donor”? “Member”? How about “BFF”?
Many nonprofits struggle with how to describe their supporters: Members? Donors? Something else? In the strictest sense, “members” can only be part of a “membership” organization, which is defined by that group’s bylaws. And as they say on those AmEx commercials, “Membership has its privileges.” In other words, if someone is going to commmit to becoming a “member,” they have the right to expect benefits, like a members-only web page, a members-only event or newsletter, the right to vote for the board. That sort of thing.
But that’s just the legal and official definition of “member” and the meaning of “membership” as applied to organizations. The real world has at least fifty shades of nuance, particularly when it comes to fundraising. So when you’re trying to think expensively, why not think expansively? The idea of “membership” gives many donors a greater sense of connection to and ownership of a nonprofit organization, in a way that “donor” or “supporter” does not. “I’m a member” means “I belong,” “I’m part of the Cool Kids Club,” and “I own this.” Those are important sentiments to nurture – particularly because deeper connection increases the likelihood of deeper financial support.
But there’s a hitch: some groups have noticed that fewer people these days seem to be motivated by “paying dues.” The renewal letter that says “it’s time to renew your dues” may be very, um, yesterday. So what’s today’s version?
If a fundraising program is aimed at connecting as many people as possible to your work, and building community ownership in your success, then words that create connection are important. Some organizations are concluding that anyone who gives any amount of money (even a business that donates a boat trip to the silent auction) will be a considered a “member.” Some types of members – major donors, for example – require extra effort beyond the methods used to bring in and renew other members.
Box of chocolates, anyone?
- Allison Handler, Portland, OR
Guidebook helps land trusts navigate problem easements
Like many other land trusts, the New Jersey Conservation Foundation (NJCF) has its share of problem easements. One of six land trusts that participated in the Easement Revitalization Initiative, NJCF allowed Solid Ground’s national conservation team to rummage around through the details of several troubled easements that the organization held, in order to better understand the issues and possible solutions.
Sponsored by Open Space Institute (OSI), the Easement Revitalization Initiative brought together legal analysis and practical perspectives from land trust practitioners to understand the types of easement problems that groups encounter, and potential ways to resolve or manage them. The fourteen-month process resulted in the Easement Revitalization Guidebook, which provides a pathway for land trusts to work through problem easements.
The Guidebook provides a way for groups to categorize troubled easements. For example, is the problem vague or conflicting language? Is it missing documentation in the file? Is it compromised conservation value? The nature of the problem suggests different solutions.
NJCF executive director Michele Byers admits that the process can be overwhelming. But, she says, it’s also clarifying: “After going through the easement revitalization process, we realized that extinguishment is off the table. Even if it looks like common sense it would have such a large negative impact to the state.”
The bottom line, according to Michele, is that she’s “relieved that we were not the only ones without answers to everything about our problem easements. We know we can be creative with solutions.”
Indeed! The Guidebook encourages land trusts to align clear, disciplined conservation with creative, engaging landowner relationships to make problems easements better – and the conservation community just a little bit stronger.
- Bill Long, Helena, MT
We are adding to our team!
We are looking for candidates who will bring diversity to our team…
along with solid professional skills, passion, and a positive outlook.
Consultant – The Consultant plays a key role on the Solid Ground Consulting team, providing organizational development and strategic counsel to clients in all service areas. In addition, the Consultant plays a role in the marketing and business development activities of the firm.
- At least five years background in organizational development and strategy
- Strong preference for direct professional experience with nonprofit and public agencies, especially in positions of leadership
- Consulting experience preferred
- Demonstrated excellence in communication and writing
Senior Consultant – The senior consultant needs deep experience in organizational development consulting. We are looking for a seasoned consultant with an established client base.
- Bachelor’s degree in Organizational Development, or related field; Master’s degree preferred
- Advanced proficiency in organizational development and/or strategic planning
- Consulting experience
Contact us at Contact for more information.
Lowcountry: Vision without Hallucination
There is a difference between vision and hallucination.
Many groups talk about vision and consider what they’d like to influence in the future. But few groups really make their vision the centerpiece of their work today.
Perhaps you need to meet one of our favorite clients: the Lowcountry Open Land Trust. This group has been working to protect the beauty of the Lowcountry of South Carolina for several decades. And Solid Ground worked with them over the last year as the group took that commitment to a new level.
As part of their strategic planning process, the group engaged community members in an authentic conversation about what they want to see for their Lowcountry home. To do this, the land trust:
- Held listening sessions with key supporters and community leaders to get their suggestions.
- Hosted a dedicated Business Leader Breakfast to specifically engage those focused on key business and economic development issues.
- Converted their annual meeting from a passive program to an active conversation, with more than 100 supporters describing what they want for the future of their community.
- Invited the community to an open forum at the local library that attracted more than 120 community members who care about the special places of the region but who had not yet had a voice in what should happen. The meeting was distinctive because it brought in a mix of ages and interests, and wasn’t limited to hearing from or speaking to “the choir.”
In addition, the land trust sat down with people throughout the community to hear the voices that care about the places the trust is working to protect. A wide variety of caring people – old and young, school children and farmers and business leaders and parents – all shared their vision of the Lowcountry. On tape.
The results of this investment, made over most of a year, are extraordinary. The land trust invested in capturing this vision in both a brochure and a video called the “Soul of the Lowcountry”. These results are wonderful examples of taking an idea and making the most of it.
The land trust used this information to shape their strategic plan, and now have a plan that is both aspirational and realistic. It conveys what the community wants and what the land trust believes it can do. This is planning at its finest.
Some of the great lessons that emerged from this project:
- Make your engagement authentic. If you want people’s opinion, ask them. And then listen. Don’t spend most of your time talking to them.
- Use the conversations you already have to make the most of them. Annual meetings are notoriously boring. Think about what else you’re already doing that can become opportunities to listen. If we take the time to engage those who show up – whenever or wherever that may be – everybody gets more out of it. Our supporters deserve to have input and to be heard. And our organizations are the richer for it.
- Reach beyond your base. Every group needs to prove their relevance to the broader community. Take the time to reach out to those who could care if you engage them in a true exchange of ideas and opinions. Don’t be afraid to hear difficult things. Clearer levels of disagreement may appear – and so will greater degrees of respect, even support.
Share your results. Hearing what people have to say is the first step. Sharing what you’ve heard is the next. People want to know that you’ve heard what they’ve said. They also want to know what others have said. And by the way, this can be extremely useful information to support your fundraising efforts.
New name, offices and website – oh my!
Decisions Decisions is now Solid Ground Consulting
Solid Ground Consulting has been the name we’ve long used for our national conservation team and land trust practice area. We’ve always received great response to it. As we started to rethink our firm’s identity, it just felt right to call the whole of our business “Solid Ground.” So we bid a warm farewell to our business name of many years, Decisions Decisions, and embrace our new identity: Solid Ground Consulting.
We’ve retooled, redesigned and reconfigured. With our new identity comes a deepened commitment to organizations that operate with a triple bottom line – people and profit and planet. And you may notice our new logo and website (yes, you’re on it now!).
If that weren’t enough, after Oct. 6, 2012 we’ll be in new offices. We outgrew our old space, so you’ll find us now on the Fourth Floor of the historic Weatherly Building at 516 SE Morrison, Portland, Ore. Stop by and check out our great downtown views. And yes, Shayna, the Office Dog, will still be there to greet you. Some things you just don’t change.
Solid Ground team active at Rally 2012
Big topics: easement revitalization and mergers
Solid Ground team members are presenting several interactive sessions at Rally 2012, the National Land Conservation Conference in Salt Lake City Sept. 29-Oct. 2. Attendees will learn the latest on how to deal with problem easements during our 90-minute workshop, “Why Wait for a Problem to Show Up? Easement Revitalization 101.” We go deeper into the issues during our half-day seminar on the Easement Revitalization Initiative. And we’ll be providing resources on collaborations and mergers in the session, “The M-word: Merger.”
Conference goers will also find us hanging at Table 19 in the Exhibitor Hall or wandering around with a banjo looking for a jam session. (Well, one of us will have a banjo.)