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Talent? Leadership? Really, it is all about Culture

January 26th, 2015

Richard Marker

Did you know that in the philanthropy and non-profit world we have no followers, only leaders? How else can one explain that every community, every organization, every affinity group, and who knows how many others recruit actively for their leadership training/development programs?

Given all of these leadership programs, it makes one wonder whom they are leading? And how many of these leaders were actually elected as leaders by the very people they are supposed to lead? Or, perhaps, how many have been designated as “leaders” because a program or organization would like them to become leaders and successors to current leaders – some day? How many of those volunteers were designated for these programs, not because of their demonstrated leadership assets but because they have the financial assets to make them desirable future board members? And how many of the professional directed programs always seem to select the very same people who were already selected and trained and funded by other organizations and programs?

The most striking evidence that too many of these programs are either flawed, or at least mislabeled, is the hue and cry about the current and future leadership vacuum in the entire philanthropy and non-profit sector.

But can it be true that there is a paucity of capable leaders in an entire sector? Can it really be that all of these well funded programs, national and local, are inadequate? And is it credible that, for all the many thousands of highly motivated, intelligent, capable employees, only a tiny few have demonstrated the talent for “leadership”? Isn’t it possible, indeed quite likely, that something else is going on. Let’s see….

1. Traditionally, the non-profit sector has trained its professionals for careers in the sector, on the assumption that one will spend ones professional time in the sector and work ones way up a career ladder. However, that bears scant relationship to the way talented people’s work life works these days. Once upon a time, people entered a field and stayed. Today people go in and out of sectors – a non-profit professional one year, a private sector one the next, a volunteer leader along the way. Any program built on old assumptions of sector boundaries is bound to come up short. Frankly, I think this inter-sector commuting is to be encouraged and is likely to strengthen both the for- and not-for-profit sectors.

2. For that matter, any organization which treats its staff as if they owe long term fealty 24/7 and assumes that those very staff people intend to remain for 10, 15, 20 years, is delusional. [Ok, maybe not delusional, just out of date.] Most workers – and their supervisors – are always contemplating their next stop, and they will be thinking that way even if an employer mandates loyalty. Indeed such overt expectations of loyalty probably hasten turnover, and most assuredly will guarantee that employees will try to keep their career ambitions secret and under wraps. I firmly believe that supervisors and executives who openly acknowledge transiency will find their staff more likely to remain longer, will be more open about how to frame job descriptions in a more productive way, and are likely to lead to greater professional collaborations. [When I was an executive/supervisor/ceo, I would offer to help everyone who reported to me to update his or her resume every year. Everyone knew that I wasn’t trying to give a subversive message to leave, so colleagues were always very straight. Amazing what I learned, and how easy it was to adjust job assignments to meet emerging and evolving professional interests!]

3. Sadly, one still hears old-fashioned canards that those in the non-profit world don’t work as hard as those in the for-profit sector, or that if they were really talented, they would be in more financially remunerative fields. Worse, there are still those who assume that a non-profit career should be the equivalent of a vow of poverty. “Why are you asking for a more competitive salary, or fringes? You chose to work in the sector; you shouldn’t expect more.” It is simply counterproductive and wrong. So let’s be clear: Only boards and funders of non-profits can make sure that these destructive myths are laid to rest and that staff are properly recognized and compensated.

4. The flip side is another canard, just as pernicious – that too many in this sector are getting rich, with bloated overhead and nothing to show for it. They cite the periodic “revelations” of $million non-profit salaries implying that non-profit leaders are abusing charitable dollars if they receive such munificence. Why, some ask, support a sector which is so frivolous with hard earned contributions? As I have previously written and lectured in numerous places, I feel that this is a fake issue, reinforced by the information gathered by 990’s [he American tax return for non-profits] that only asks for info on the 5 highest paid employees. Frankly, I care more about the lowest paid than the highest paid. If a non-profit is underpaying its employees or denying them appropriate benefits, that is much worse than overpaying a few senior executives. As suggested in #3 above, only funders and boards can insist that this change.

5. Another area which has garnered a good deal of attention lately is investing in talent. [e.g., Talent Philanthropy] Advocates argue, correctly, that the non-profit world is shortsighted in seeing training and professional development as a luxury, or a special benefit only for the highest achievers. These advocates demonstrate that underinvesting in staff abbreviates tenure, leads to greater dissatisfaction, and incrementally lowers performance. However, there has been a missing ingredient in the arguments of most of these advocates Most have not addressed the structural underpinning of why this is so hard to implement consistently over time and throughout the sector: if staff training, conference attendance, etc. are viewed as an independent expense line, those lines are the most vulnerable at budget times. I have always argued [and, I am proud to say, implemented when I was still a senior executive in the field] that staff training should be a non-negotiable part of the benefits package of every employee, in much the same way as health, retirement, vacation, etc. should be. Unless such a commitment is built into the way in which professional employees are paid, and the budget is structured accordingly, this will constantly be an uphill battle at budget time and will require constant advocacy with all too sporadic successes.

6. Which brings me to “Ageism”. Typically, “ageism” that refers to prejudice against those more senior. There isn’t much new I can add to this part of the equation [although I can personally attest that it exists.] But, less addressed, and more complicated, is the more subtle ageism toward younger folks.

NextGen – How, you ask, can that be true when there is a surfeit of programs targeting “NextGen’s”? Aren’t they the most favored and fought over cohort? Perhaps, but I don’t buy it. How? I have said many times over the past few years that I really don’t like the phrase NextGen. One only hears it in the non-profit sphere. Imagine the NYSE telling Mark Zuckerberg that he is a NextGen and will simply have to wait until he is old enough to have an IPO for Facebook. Of course they will provide a mentor and a 6-month training program of seminars and peer learning experiences in preparation, after which the established c-suite leaders would pass judgment on his eventual suitability to join them.

Yes, this takes this to absurdity, but in fact I once spoke to the annual meeting of the top leadership of a major non-profit at which their outstanding “young leader” was honored. That “young leader” was a 50-year-old dot-com multimillionaire retiree!

All of this underscores an irony. If we are being honest, it should more accurately be ThisGen. Most of the ways in which we communicate, a great deal of the vocabulary we use to describe our daily activities, the technology we use every moment of the day, are all informed by a younger generation. The for-profit sector does everything possible to empower and include them. In the non-profit sphere they are only NEXT-gen. It is time to stop the self-defeating patronizing of this talent and make sure that there are fully empowered voting spaces at the grown-up tables.

In the workplace and on volunteer boards, there is an emergent problematic dynamic and confrontation. On the one hand, healthy and energetic people with experience and unfinished ambition are often discounted for no other reason than their age. Younger people, impatiently, don’t want to wait around for them to leave, so they leave. The challenge for all sectors, especially the volunteer driven one, is how to synergize the attribute of “judgment” which often does accrue with time, and the attribute of “knowledge”, increasingly the purview of those who are younger Those few organizations and foundations that have figured this out are setting admirable standards for all.

7. I believe that everyone who works at the professional level in the non-profit world should sit on the board of an organization other than the one that pays his or her salary. It doesn’t matter how big, what its mission is, or how large the board. Of course, it is highly unlikely that the Metropolitan Museum is going to be interested in a second year non-profit program professional, but there might be a small community based group which would be thrilled to take advantage of the energy, knowledge, and enthusiasm of such a person. And it is of mutual benefit: the professional becomes a much better professional, with much more perspective, after wearing a volunteer hat and an outstanding volunteer when he or she commutes out of the non-profit sector. Want to influence a board? Think like one and model that you understand what it means. Now, I know that many community foundations and junior leagues have observer-ship mentored programs. That is fine, but that isn’t what I am talking about: I mean actually being on a board, making decisions on budget, policy, strategy, and even personnel. Talk about real leadership development…

Underlying all of this is “organizational culture”. All of the suggestions in 1-7 above are unlikely to be very effective if the organizational culture does not endorse or support them. An organization which talks better than it walks, an organization which espouses empowerment but doesn’t empower, an organization that bemoans a dearth of leadership but in fact belittles and patronizes its professionals by regularly hiring outsiders for leadership positions, an organization that still thinks in hierarchical terms when flat organizations are the norm, an organization that wonders why creativity is always somewhere else but squelches any new idea with endless sign offs and consensus processes, an organization that “demands” 24/7 but guarantees nothing in return, an organization which treats staff as in-service to volunteer leadership as opposed to being their professional partners… Do you recognize any of these? All of the talk about talent and leadership is for naught if an organization doesn’t have a culture that allows for growth, risk, reach, and ambition. None of this is new. All of these ideas have been talked about and written about, and implemented…in some places. Evidence of how elusive these goals and how rare their achievement are, though, are the continuing emergence of “new” leadership and talent training programs.

Pogo’s old bon mot still applies: “we have met the enemy and it is us.” Organizational transition and leadership development needn’t be elusive aspirations. The methods of cultivating and training are within the reach of most organizations, often with only small but meaningful cultural adaptations.

On their own, very few non-profit organizations can make these changes – and make them stick. Only boards and funders can ensure that they do.

Interest in Conflict of Interest: Why now? Why it matters? What are Best Practices?

January 8th, 2015

Richard Marker

For some reason, topics of interest to philanthropy folk seem to arise in bunches. How else to explain the surge of discussions about COI on social networks, at conferences, on boards on which I sit, and among clients?

To remind readers: there is a difference between the legal category called “self-dealing” and “conflict of interest”. Since I am not an attorney, I won’t address matters of “self – dealing” which are quite clearly proscribed by the law and are never allowed. A “conflict of interest” in the non-profit sphere is usually not a matter of law but rather arises when there is some overlapping or intersecting roles that a trustee or staff member has which may call into question that person’s decision making allegiance. Of course, every private sector and non-profit organization should have such a statement, require periodic [at least annual] sign-off by boards and staff, and minute the determinations of which conflicts matter.

One would hope that these definitions and recommended actions are not new or news. Indeed, I would even argue that one should never sit on the board of an organization that does not have a COI procedure. But if this is such an established ground rule, why the surge of interest among grantmaking foundations at this time?

1. Increased accountability and transparency. A shout-out to colleagues at NCRP and GEO, inter alia, for raising the expectations that foundations behave well. If there is a question of the integrity of a foundation, even if unintended, it can make a grantee, potential or actual, quite reticent to share information or feedback. This really matters: When I have met with funders in Eastern Europe or in developing countries, they report that the absence of a concept or culture of “conflict of interest” or transparency has limited their influence and made the larger society dubious about their genuine commitment to using philanthropy to build a civil society. Even in the United States, a country with highly developed practices, there is an unfortunate cynicism about the intentions and self-interests of funders.
2. The laws have changed. A number of states have updated their laws related to charity and to align them more closely to those applicable to the for profit sector. One of those changes has been some tightening of the “COI” rules. For example, in New York State, there is a distinction between COI where there might be financial interest, and COI where there might be a role conflict. Any non-profit or private foundation in New York State should have updated its written policies by now. Those in other states may or may not be legally obligated to do so, but best practices would suggest the wisdom in updating theirs as well.
3. Second generation family funders and business school trained philanthropists look at things with a demand for more clarity and professionalism. They know, either intuitively or by training, that foundation money may be theirs to control and allocate, but it isn’t theirs. The multiple roles of funder, investor, heir [in some cases], and change agent make many of them sensitive to the competing nature of these roles.

There are many sample COI statements available for download and modeling. I urge you you to check them out; many may be immediately applicable in your situation. Most of them focus on matters of financial conflicts which don’t rise to the level of self dealing. Or they answer the question of related business and family members. Most of the statements are pretty clear but if you are a funder with a particular [non-legal] question in your situation, I would be happy to help think it through with you.

In my experience, though, the area that gives funders the greatest pause, and is often the most controversial, is the question of interlocking directorates. Is it ever acceptable to be a trustee of a grantmaking entity and at the same time to be a trustee of a current or potential grantee? If yes, what parameters should apply? Do different situations call for different responses? Here are the variety of approaches I have seen:

Option 1: No trustee of a foundation/grantmaking entity may sit on the board of a current grantee organization.
Option 2.: No trustee of a foundation/grantmaking organization may sit on the board of a grantee organization unless that organization has already been receiving funding for x years.
Option 3: Any trustee must make clear that he or she sits in an interlocking directorate role and excuse/recuse him/herself from any decision-making role. The foundation/grantmaking organization should minute their acknowledgement of this COI.
Option 4: Trustees of grantmaking entities are encouraged to sit on the boards of long-term grantee organizations and to play an active role in making sure that the grantmaking entity is fully aware of the developments in those grantee organizations.

What, you legitimately ask? How can all of these be legitimate options; aren’t they self-contradictory?

Indeed they might be. But circumstances may dictate different legitimate foundation solutions.

Consider a few situations, a non-exhaustive list:

Foundation A has an open rfp process with guidelines permitting applications from anywhere. They typically end up giving grants to only 10% of eligible applicants.
Foundation B only does place-based funding in the small community where it is located and is known for supporting all local cultural organizations on an annual basis.
Foundation C only uses outside reader/consultants and the board simply approves the grants in toto.
Foundation D has a competitive rfp process but its guidelines are quite specific about eligibility.
Foundation E is a major funder in a particular field of service, and funds extensively with no geographic limitations. Its board includes other Funders in this field. This foundation does not issue an rfp, and only invites proposals.

Best practice would call for very different COI practices. It is my recommendation that the COI guidelines should reflect differing grantmaking policies:

I. For any Foundation which does competitive grantmaking, it is important that there be as much distance as possible between grantees and decision makers.

In a situation like A, best practice would suggest that there be no interlocking directorates since the grants are competitive and it would be quite hard to show the world that the board has acted without prejudice if a grantee and the foundation were to share a trustee.
If it is a situation like D and E, those on the board are probably on the board because of their interest in the field of service. It would be a shame and counterproductive to preclude their board involvement because of their interest, and there is no pretense of an objective competitive process, so a formalized recusal policy should suffice. However, in this case, recusal should include not only final decision-making but any participation in the processes involving grantees leading up to decisions as well. These two often comprise the most nuanced challenges for foundation practice.

For C, assuming that the decision making process is made clear to all stakeholders, simple recusal should suffice for the board and staff, but it is important there also be a formal record of acknowledgement of any possible conflicts among the readers/consultants.

II. In a situation where there is a minimal or no ongoing competitive process, the appearance of conflict is largely removed and the policy can be more open.

The situation of Foundation B is not at all unusual. Many argue that Option 4 above should apply – for several reasons: in a small community, it would be quite counterproductive to require the top communal leadership to choose between roles. Since the Foundation’s annual funding of recipient groups is not really a competitive concern, the interlocking roles typically raise no ostensible issues of favoritism. Similarly, if a foundation often serves as a key convener for a field or communal planning, informed trustees play an important non-fiscal role. To preclude their involvement would not serve the larger mission of the foundation or indeed of the fields/communities to which they are committed.

There are many emerging challenges to quality grantmaking and exercising responsible communal citizenship. Most elemental among them is a thoughtful COI policy and practice. Hopefully these brief guidelines will help the growing number of foundations committed to develop your own best practice.

Hey, Oklahoma. I Wore a Hoodie Today

January 5th, 2015

Richard Marker

And yesterday, and the day before that. And I plan to wear one tomorrow.

Those who know me are probably surprised to hear that. I am better known as the “bow tie guy” and for my bespoke attire. That is because most of you don’t see me walk the single block to the gym every morning. For almost all of the year, the sun isn’t even close to rising when I make that short walk.

My choice of exercise attire is strictly utilitarian. When it is raining or snowing or cold, a hoodie is the most efficient thing to wear – especially for someone like me whose hairline has receded into infinity. I doubt that any of the fellow early arrivals at the gym pay one bit of attention to my hoodie, or anything else I wear. Those who exercise at the first moments after the gym opens are either insomniacs or Triple A-Type personalities or both. There isn’t a lot of conversation in the pre-opening waiting-line, and very little socializing that I observe once the gym opens. [I am no different.] It seems that hoodies are pretty typical, but I would be shocked if anyone paid the slightest heed.

Once, though, I had an experience that gave me pause – but only after it was over. As I was hoofing it down the same block I walk every morning, a police car sped toward where I was and stopped suddenly. They turned on a bright light for a few seconds. I actually paid no attention and kept walking. The patrol car turned its light off and drove away.

It was only when I got to the gym that I realized what had just happened. I was a male walking quickly down the street in a pre-dawn hour – wearing a hoodie – in a very upscale neighborhood of Manhattan. I retrospectively suspect that had I been Black or Hispanic, they might not have been so quick to drive away. They might have asked what that cylindrical object in my hand was [a rolled up magazine]. They might have challenged why I was in such haste. [It was a bit chilly.] They might have asked what I was doing there in the first place. [You already know the answer to that.]

They didn’t. I got the benefit of the doubt. Was it because I am a not-so-young Caucasian? I’ll never know. But I have little doubt, now, that wearing a hoodie by itself was perceived to be a suspicious sign.

What is significant, I realize, is that when the police came speeding up, it didn’t even occur to me that they might be looking at me. I didn’t even think it necessary to stop and look. Given everything we have learned about the streets of small towns in Missouri or of the borough of Staten Island, I very much doubt that one of a different race would have been so oblivious, in much the same way that I very much doubt that the police would simply have driven off had I been of a different race.

Twenty-some years ago, when still living in Chicago, the organization I headed did some collaborative work with a division of the Chicago Community Trust to build understanding and to reduce inter-group and inter-racial tension among college students. Our approach was that there was nothing to be gained by the typical competition to prove who suffered the most. Was slavery worse than the Holocaust? Did the Armenian genocide trump Native American suffering? Was there even a metric which could declare a winner?!!! Our alternative approach was to help articulate vulnerabilities – not in a competitive way but in a way that allowed others to empathize.

One group of participants, university students from all over Chicago-land consistently brought us up short in every group discussion. Every single Black male shared a similar story. They said, that whenever they walk down the street, anywhere and at anytime, people cross the street or walk very quickly or physically reflect nervousness. Just by being a young black male you instill suspicion and fear. What a way to live and to grow up! When I tested this with non-participants of every age, they all related. It rang true. Sadly, there is ample evidence, no matter how one responded to recent grand jury hearings, that 25 years later, the reality described by these young African American males is still true throughout the USA. [The unconscionable response of some of the NYC police to our Mayor reflects either racism or inexcusable blindness to this reality. In either case, the mayor is quite correct to advocate re-training.]

It would be easy to dismiss the attempt by some in Oklahoma to outlaw the wearing of hoodies as a silly overreach by a misguided few. But it is precisely at such moments when we need to draw the line. Institutionalizing what is essentially a bizarre and barely disguised racism needs to be repudiated. Emphatically. For when the small things get accepted, it makes the next steps – voter restrictions, educational discrimination, etc. that much easier to accept.

As the cold weather approaches, I had been thinking about getting a warmer down type jacket to wear to the gym in the winter. Until this weekend, I had been undecided on the style of which there are many. After this weekend, there is no longer any uncertainty. I will buy a hoodie.

New Year’s Resolutions – Theories of change and a surprising philanthropy lesson

December 30th, 2014

Richard Marker

You would think I would have figured this out before now. After all, social change through philanthropy is the underpinning of all that I speak about all over the world, and consult on to foundations and philanthropists of all sorts. Social change – you know, the kind of change we can and should make. And, yet, truth be told, I don’t have a very enviable record regarding my own New Year’s Resolutions. [I suspect that my record is not below average, but that, as we know, is no excuse.] Amazing how one can learn from my own field if one only pays attention. So consider this post an applied learning of a key concept in philanthropic practice.

Let’s take a couple of personal examples – I am pretty sure that lots of folks can relate to the first, the other is more career specific with a lot of implications for foundations and non profit organizations.

Example #1: I need to lose 10-15 pounds. It isn’t only vanity, but my specifics are incidental to this post. [NB: This is not a plea for dieticians, trainers, or others to contact me with hints, suggestions, offers to help, etc. Please heed.]

I have been aware of my excess poundage for a few years and I have done all sorts of things to redress this: I go to the gym almost every day, had a trainer twice a week for a few years, am pretty careful with my diet, etc. In the current lingo of accountability, my metrics of outputs are quite respectable, some might even say impressive. There is only one problem: for all of these active interventions, my weight has not gone down. I haven’t achieved the desired impact. In other words, the one key metric that really counts has been a failure.

Aha! I now see that I have been missing a key component of how to address my challenge. I haven’t had a theory of change. I have transgressed a classic organizational myopia: Lots of constructive activities that never accomplished the impact they were supposed to. To accomplish what I need to accomplish vis a vis my weight in 2015 will require a new systemic approach. It will require a ‘deep dive’ [jargon!]. It may turn out that much of what I have been doing is ineffective, or of only marginal benefit, or that I am missing the one thing which makes all of these activities work or I am doing them at the wrong times…. Trying to accomplish my valid goal without being able to demonstrate that the activities actually will get me there is exactly what we advise fellow funders to discourage, and their grantees to avoid.

This first example was easy to articulate since there is a clear and definable desired impact. And there is plenty of evidence-based data to apply to a theory of change to achieve the bottom line. Check with me next summer to see how well I have done with this theory of change approach to this resolution.

Example # 2 is trickier:

There is another New Year’s Resolution of personal significance. But in this case there is ambiguity about the ultimate desired impact, so a theory of change to get there is proving elusive. To wit:

A wonderful esteemed colleague intuited that the two of us were at similar points in our careers. Both of us have widely recognized expertise which we apply with 2 competencies: public speaking and consulting. [Our expertise is not the same: in my case, it is philanthropy strategy for funders, in his, c-suite issues for senior executives]. Both of us have had the additional honor of serving in very public volunteer elected international leadership roles. And both of us are at the point of our careers where we are contemplating what is the most appropriate emphasis for our remaining productive professional years. It has left each of us with a degree of angst and has led to some interesting personal challenges.

In using each other as sounding boards, we identified several options to focus on now. These are the choices:

[Before reading: Forgive my simplifying these complex choices, each of which is filled with emotional baggage and personal implications for us and involve other people as well. The purpose of this post, of course, is not to ask for your assistance in thinking through a personal agenda but to provide a real life metaphor of the challenges many grantees and foundations struggle with. As with example #1, please heed.]

a. Make as much money over the next few years as possible so that our retirements will be financially stress free. To do so, assertively seek and take as many contracts as possible even if we know ahead of time that they won’t all be gratifying, and perhaps not necessarily be in our sweet spot of proven expertise.
The counterpoint: If one goes this route, are we temperamentally suited to learn the new skills and expend the necessary energies to focus on moneymaking as the primary life goal? Is the goal of long-term financial security sufficient impact to bypass short-term expenditures of hard earned unique competencies and satisfaction?
b. Utilize our very rare privilege as thought leaders to help shape and transform our respective fields, knowing that doing so probably won’t be as financially beneficial but may have a longer-term impact on more people.
Counterpoint: Surely this has great appeal, especially when one is at the stage of one’s professional life when a regular predictable income is no longer required to pay bills. However, at the end of the day, one cannot simply self-anoint as a “thought leader.” The world, or at least a part of it, views you as someone to listen to and take seriously, or they don’t. Moreover, even if one is a “thought leader” today, there is nothing that guarantees that one will be tomorrow’s opinion shaper.
c. Only do those talks and contracts we know will be satisfying, and begin to cultivate other involvements, paid or volunteer, which will grow in personal import over time as we wind down our respective careers and move into long and inspired retirement.
Counterpoint: This is the choice requiring the least up-front investment of time, energy, and money but, pulling back from pro-active professional involvement may prove self-fulfilling and hasten the post employment years.

The problem: It is hard to develop an effective a theory of change if one cannot decide on what the desired impact should be. For me and my friend, New Year’s Resolutions without clear impact measures will surely lead to a year of scattershot and serendipity. It could turn out great, but might leave us at the same juncture one year hence. I know for me, and I think for my colleague as well, it really matters. I know that I love all of the things I do professionally and, if it were up to me, would prefer to do more, not less. [Hint: option “c” isn’t my favorite.] The reality, though, is that there are competing inclinations at play, each of which is logical, demonstrable, and persuasive, and in none of the cases do we fully control our own destiny. The challenge is how to develop that effective theory of change New Year’s resolution if these competing inclinations are still in play.

It matters. Once one recognizes that something is ready for attention, that implies change – even if the ultimate decision is to do things in much the same way as before. And once one is committed to change, one cannot not be passive. In the past, my approach might simply have been to write a few more blog posts, or send more professional updates, or attend a couple more conferences. Now that I really understand what these annual Resolutions should be about, I realize that those have only been outputs – it is the impact that matters, and that will require a systemic approach.

In my case, when my Resolution is figuratively endorsed two days hence, it will be imbued with a consciousness of my underlying theory of change. It should be an interesting year.

I hope your personal theories of change, and their creative implementations, help make this an especially gratifying year for you in all of your personal and professional aspirations. All the best in the New Year.

Giving and Gifting – An Annual Seasonal Greeting

December 19th, 2014

Richard Marker

Several years ago, I wrote this brief commentary on Giving. Each year, some of you remind me to re-post it. Here it is:

Gifting focuses on the object; giving is about the subject.

Gifting answers the question how much we give; giving shows how much we care.

Gifting satisfies our lists; giving satisfies our life.

Gifting fulfils our responsibility; giving expands our sensibilities;

Charitable gifting rewards our bottom line; philanthropic giving celebrates our highest values.

Gifting changes the mood; giving changes the world.

Gifting expresses our generosity; giving expresses our love.

May the holiday season teach us that the best gift of all is truly giving of oneself. It is the gift that gives back, and brings joy to both the giver and the recipient.

May the New Year be one of blessings, good health, and prosperity… and may the world become a better place by our example and our generosity of spirit.

Mandatory Annuity Distributions and Corporate Social Responsibility

October 19th, 2014

Richard Marker

How did that happen? It sort of sneaked up on me but a manager of some of our retirement funds was unequivocal that I am not very far away from having to take distributions from those funds. One may try to deny the inevitability of getting older, but the IRS only looks at your birthdate.

What I learned was that I have done a respectable job of planning and saving for the post-work years – which I hope are still many years away, but I haven’t done such a good job at doing so in the most tax advantaged way. [Before I continue – if you are a financial planner, wealth advisor, or fund raiser, please do not contact me. The point of this post, to be made below, is about something else altogether.] I confess that I hadn’t given much thought to the way in which annuities and other accumulation vehicles are taxed – or why.

Indeed, in looking at the way different vehicles are taxed, it became pretty clear that there is no inherent public policy benefit which accompanies the various instruments yet there are real tax differences. The only logical explanation is that certain approaches are beneficiaries of effective lobbying efforts; they may or may not be in the best interests of either retirees or of the society writ large.

As long time readers of these posts know, I am a believer in taxes. Frankly I think that most of those who can afford to pay taxes pay too little, and are willing to pay more. We should expect more and pay for more from our government. Health, education, retirement, etc. shouldn’t be dependent on the vagaries of one’s employment but rather built into the fabric of a functioning society. These are communal values which should be made manifest by our support for the systems that sustain them, i.e., taxes.

Yet, it is not surprising that faced with the option of additional income into our pocket, it is tempting and probably prudent to make significant changes in our investment allocations. In doing so, I and we would only be following the law, and not doing so would make us seem like saps, squandering what can be rightfully ours. As one who has, in principle, done our own taxes every year, that is no different than what I have done each year – utilizing all legal and available legal deductions and reductions. [I am proud to say that IRS auditors have agreed.]

What upset me, though, in contemplating the choices before us now, is that our current choices would be based exclusively on taxes. That hasn’t been the case in the past. We didn’t buy our co-op primarily because of tax advantages; we don’t make charitable gifts because of tax deductions; we don’t go to doctors because of health care deductions. Those tax implications are benefits of other more primary and essential decisions we have made and are consistent with some clear public policy benefit. But if we change our investment approaches now it wouldn’t be because of any value in our lives other than our tax bill. Something to think about.

Which brings me to what this post is really about: Corporate taxes and corporate social responsibility.

It is no secret that many corporate entities make major strategic decisions based on taxes. One would have to have had one’s head deep in the sand for months to have missed some highly visible and flagrant recent examples. Some companies have “merged” in order to move their corporate headquarters to a more tax friendly country. Some have incorporated in states or cities or countries with more favorable tax rates. Some have negotiated with states or local government for tax relief – only to move elsewhere when those exemptions expired.

If one listens to their arguments, they suggest that US taxes are too high. That would be credible if they actually paid those taxes. But every study of what many corporations actually pay shows that there is very little correlation between what the tax rate is and what is actually paid.

Of course, they argue, they are only following the laws, only taking deductions they are permitted to take. That may be true but it is, at best, disingenuous. After all, these corporations pay very, very, very, big bucks to lobby for favorable tax laws. Is it any surprise that some have a balance sheet showing profits of $billions, sufficient to pay dividends and huge salaries, but, miraculously, they have no taxable income? That doesn’t just happen, and it certainly isn’t good public policy. Why, I wonder, should I, through my taxes, be subsidizing these $multi-billion companies?

Many of these same companies pride themselves on their generosity. They have employee engagement programs, corporate matching of charitable gifts, sponsorships, have a corporate foundation, and many other worthy and well meaning efforts. All of this is called “corporate social responsibility.” These efforts add up to an average of about 1% of their profits.

I have a proposal to corporations. Do you want to be known for your corporate citizenship? Pay your taxes at the same rate as your employees. My guess is that would far exceed the amount now allocated for CSR.

Just imagine how much would be available to solve social problems: SNAP funding and unemployment benefits for the long-time unemployed could be restored. Pell Grants could be readjusted. Social welfare organizations could get paid in a timely manner. Bridges and railroad tracks could be repaired. Who knows what else?

Sure, the voluntary efforts currently known as corporate social responsibility are very welcome. Keep it up. But they pale in comparison to what social good could be accomplished if these same companies paid their fair share – as all of us are expected to do.

No one likes paying taxes, including me. But all of us take advantage of what our taxes provide, including corporations. None of us should be exempt from our communal social responsibilities. None.

I Can’t Get No Satisfaction. Maybe It’s the Implementation.

September 19th, 2014

Richard Marker

You’ve tried and you’ve tried and you’ve tried and you’ve tried but you can’t get no… OK – enough Stones. The dilemma remains, though. The organizational changes so carefully and artfully prescribed in a tome by an outside consultant, or developed after months of meetings by a board/staff leadership task force sit gathering dust on shelves? Or perhaps they are in long ignored PowerPoint files?

How is it that the brilliantly conceived Venn diagram, identifying the ideal sweet spot for your organization or foundation, seems to leave you more in the margins than in the center? How is it that the staff/board/clients/stakeholders don’t get it? Why is it that people mouth the words, but their actions belie them?

Of course, there are many possible explanations [see post of 30 January 2014; consider this an addendum]. The odds are pretty high, though, that the missing ingredient in your strategy plan is “implementation.” What changes will make it work, make it stick, make it believable, make it convincing?

About a quarter of a century ago, I was approached to join one of the major consulting firms. We came close, but our discussions fell apart on the issue of implementation. My position, having been honed by having experience as both a strategy consultant and an organizational executive, was that there is nothing magical about a strategy plan – even the most insightful and brilliant one is meaningless if no one uses it. Their response- “We do strategy; it is up to the client to figure out how to implement it.” [I have no idea if that firm would say the same thing today; I can only report that over the years we have had numerous clients who have complained about the dusty unused reports from some of those same well-known firms.]

Why are strategy plans so hard to implement? Here are a few suggestions that might help get to that “satisfaction”.

1. Short-term wins.

Sometimes the goals seem too elusive or distant. A good implementation plan has some short-term wins built in. If stakeholders can see some positive and responsive changes quickly, they are more likely to take the harder and more long-term ones seriously.

We once had an organizational client in need of a major programmatic overhaul on all levels of their operations. In the midst of our interviews and focus groups, we discovered that, of all things, there were some bathrooms only opened on special occasions. It was a source of irritation, but most people had been reluctant to raise it publicly because they thought it would come across as too trivial. The CEO had his own executive bathroom and was totally unaware of the issue. When we pointed it out, it was corrected over-night. The next time we visited that site, the CEO proudly showed us the open bathrooms and many of the stakeholders pointed to it as evidence that they would be listened to. It created the necessary opening for folks to be willing to put the harder questions on the table. Small win – larger opportunity.

2. Early and consistent involvement by all relevant stakeholders.

In the non-profit/volunteer governed world, there are lots of stakeholders who can make or break a strategy plan. Contrary to what many may think, it typically isn’t the number of informants who need to be consulted but the inclusion of the right ones.

Any of us who have gone through this process is accustomed to skeptics arguing that we didn’t talk to enough people. Unless it is a small group such as a family or foundation board, any organization will have much too large a stakeholder population to talk to everyone. Regrettably, sometimes leaders hope to limit turmoil by precluding certain groups, individuals, or stakeholders. Or sometimes the process takes so long that those initially committed to the process have moved on to other committees or commitments.

Not long ago, I got a call from the chief professional grantmaker of a large public charity. Her concern was that, despite the fact that there was a very carefully developed strategic plan, the volunteer grants committee never seemed to feel bound by it when making grant decisions. The professional asked me how they could persuade the committee to follow the ground rules. When I asked if any of the committee members had actually participated in establishing those priorities, the answer was “no – all of the current committee folks came on board after these priorities were established.”

Is it any wonder that they didn’t feel any sense of ownership of those priorities? By not continuing to invest in the buy-in process, even these insiders felt no sense of commitment. Just imagine how disoriented the grantees or applicants felt.

Similarly, many organizations are concerned that there are swaths of the population they want to serve who don’t attend, join, use their services, take them seriously. Yet instead of finding ways to actually hear those people, they do top down planning – often based on what they heard at the most recent conference. In the process, they may overlook crucial undercurrents of the reputation of their organization which transcend their programmatic initiatives. Planning for and not with is not a formula for successful implementation. Which brings us to

3. Aligning the culture with the strategy – and vice versa.

Any who have used my philanthropy strategy method know that I am a big believer that the starting point of successful strategy planning is not “mission/vision”” but is an understanding of organizational culture, and the diversity of cultures/styles among decision makers and relevant stakeholders.

Some of this should be fairly obvious. An organization that supports or works with innovators is probably going to do better with a lean decision making process. An entity which has facilities for older folks is likely to have, and emphasize that they have, easily accessible facilities. A large community based organization which funds lots of subsidiaries and raises money from the broader community is most likely going to have a consensus and risk averse decision-making process. One would be surprised to learn otherwise.

In each case, it also defines who are not likely to see themselves as primary stakeholders. Start up entrepreneurs are not likely to look at “stodgy” consensus type organization as being a productive address. Millenials are unlikely to assume that an organization which emphasizes its physical accessibility for seniors has core competencies in attracting their peer group. Those who believe that we are living through a transformational and revolutionary time in history are not likely to assume that the large long-established multi-service address is going to be the most gratifying fit for them.

Culture is NOT the surface affect. Many organizations seem to forget: style is not a facebook page and culture is not a twitter handle. And a brand, no matter how much one invests in shaping it, is only what others think it is.

This is not to argue against the possibility of change. There are many examples of companies and organizations that have done so successfully. But successful change only can happen when there is no pretense that cosmetic changes alone are credible to new audiences and disaffected stakeholders.

4. Internal organizational culture matters at least as much – the role of leadership.

Some years ago, a manufacturing company contracted with me to try to understand why there was so much resistance to the organizational changes proposed by a previously utilized strategy company. That plan recommended moving operational decision-making to work groups throughout the company including the factory floor. It was a very reasonable plan. The CEO couldn’t understand why the work force was so reticent to make these changes. When asked, the foremen reported that the groups didn’t feel that they had real decision-making authority despite what the CEO claimed. It turned out that the CEO would choose to overrule the groups, which he himself acknowledged, but, he said, he didn’t do it more than 10% of the time. No one knew when he would intervene so no one felt that they really did have the authority he claimed they had. That cultural divide was proving very counterproductive between top management and those who needed to implement the plans. As the independent outsider, I was able to help implement a change which enhanced operational effectiveness almost immediately.

Another example, this time in the non-profit realm: the CEO espoused a culture of creativity. It turns out that not all “creatives” were created equal. The CEO’s own ideas always were the ones considered creative. Those of others were almost always belittled. How creative do you think that culture proved to be?

What these two examples underscore is the central role of leadership in implementation. If the top leadership isn’t walking the talk, it is very unlikely others will choose to implement very many strategic realignments.

5. Alignment of resources with the desired changes.

Especially in the non-profit world, people are the resource. Sometimes an organization may have developed great competencies in a field no longer demographically appropriate. Early childhood staff are not trained to be teen workers or to run film series. If there is not re-training of existing staff or investments in new staff, it is going to be quite a challenge to implement a strategic change from one field to another.

Similarly, facilities are not always easily adaptable. Early childhood spaces are not likely to serve adult lecture series. If all the “millennials” are living downtown, a suburban location isn’t likely to be appealing.

An example from my own teaching experience: because of space limitations, NYU regularly rents high school facilities for its evening courses. To put it kindly, not all of those spaces are consistent with a message of serving the population I teach: philanthropists and foundation professionals. To be credible to this target market, and to implement the purposes of the NYU Academy for Grantmaking and Funder Education required that the courses be offered in more professionally suitable settings. [I am happy to say that this did happen.]

Needless to say, implementation requires as much sensitivity, flexibility, and more long-term commitment than the initial development of a strategic plan. – and recognition that conditions sometimes require agility in adapting/modifying those plans as well. But with attention to these five components, there is a much greater likelihood that your own carefully wrought planning can be implemented successfully. And maybe you’ll be among those who will try and you’ll try and you’ll actually get some of that hard earned “satisfaction.”

There is NO Moral Ambiguity

September 10th, 2014

Richard Marker

This blog is usually dedicated to issues of phllanthropy. This brief piece is not. I hope you will indulge some thoughts on a different topic.

In my volunteer roles, as many of you know, over the course of my adult life I have been deeply committed to intergroup and inter-relgious amity. In recent years,that has taken me to leadership roles in the international inter-religious realm. I recently suggested to the board of an inter-religous group I used to chair that it was importnat to address what I perceive to be absolutely frightening and deteriorating conditions in much of the world. These next paragraphs are a proposed statement I submitted to them. Since it represents only myself at this point, I am posting it as an individual point of view. I hope and suspect, though, that the views are not mine alone.

The Board…. notes with shock and dismay the deterioration in civil and humane behavior in the name of religion in recent months. We categorically reject and repudiate any and all impositions of ideological religious practice or fealty which takes a life, involves torture, or dehumanizes others. In addition we consider it to be morally repugnant and religiously indefensible to ever intimidate or attack members of any defined group – racial, religious, or ethnic. There are no justifiable exceptions. We unequivocally condemn any who would advocate such behavior, even those who may share our own religious traditions.

As leaders, we surely recognize that there are matters of moral ambiguity in the political sphere which have led to sad and often counterproductive taking of lives and property. In our pastoral capacities, we offer hands of support to all who are victims of such hostilities and indeed we too may find ourselves more in line with one side than another. But recent history has witnessed offenses to human life and dignity about which there can be no moral ambiguity and must cease and be rejected by all. Our unified voice is clarion clear: this must stop.

We also recognize that those who act out of blind hatred or misguided destructive beliefs will not readily heed our call. But let our interlocked arms and unwavering commitment demonstrate that the world rejects their idolatries. We invite political, social, and religious leaders who share our convictions to join us in this fundamental commitment to humanity, and our plea, soon in our day, for peace for all.

Speaking Truth to Power

September 8th, 2014

Richard Marker

I am of the generation that protested the Vietnam War and marched for civil rights. Many of us were arrested or observed arrests of fellow protesters. Martin Luther King, and many others known and not so known, spoke “Truth to Power”. For many, especially at the early stages of those movements, there was genuine risk to life and liberty to do so. Many paid the price.

Some years later, millions of us wept tears of joy as Nelson Mandela was released from his long imprisonment. He, at risk to his own life, and manifestly to his own liberty, truly spoke truth to power. He certainly paid the price.

The list of those courageous souls who stood up to powerful forces as advocates for justice, equality, equity, freedoms is long. They can be found in every society, in every age, of every religious and ethnic group. They deserve our praise and encomia for having the inner strength to speak truth to power.

I thought of these examples recently when I saw an article praising a professional in the foundation world for speaking truth to power. It got me to thinking – what could that mean?

Those of us who sit on the giving side of the philanthropy table are the “power.” Ask any of those who petition us for grants, or have received them. Watch what happens when we do a “site visit.” Observe what happens at social gatherings.

Of course not every one of us has equal power, authority, clout, or influence. Some have more money. Some have more recognition. Some have more leadership skills. But where we sit represents power by definition – the power of money, decision making, access and therefore all of us have or are agents of power.

I recognize that those who are staff of foundations, and those who provide consulting and advisory services to funders have somewhat less direct power. Theirs/ours is more derivative. And there is no doubt, having sat in those chairs I can attest, that not everyone for whom we work always wants to hear our “truth.” It would be wrong to belittle the risks to reputation, or even income, that accrues to those who may feel that an outside of the box grant – or conversely – rejecting a favored one, may incur. For many it is easiest to say, “Well, after all, it isn’t my money” and go along. Indeed, I know of one long-time and successful consultant who has simply never given a client an answer he or she didn’t want to hear. [I am sure that you have already intuited that I am not comfortable with that approach, but, hey, he sure gets a lot of contracts!]

The challenge of making appropriate and constructive recommendations to decision makers, from the inside, is hardly the same level of risk as an outsider challenging the very values, structures, and even legitimacy of those very same decision makers. Sure, on the inside, it may require a deep breath, acceptance of uncertainty, and the risk of being shot down. In most cases, though, even those with the power to give us palpitations accept that it is our job to ask the hard questions.

Shot down is not the same as being shot at. Those who are really telling truth to power are those who have a lot to lose, a whole lot, and on whom many rely.

Those of us on the inside of the power structure should never forget where we sit. With very rare exceptions the risks we take are minimal compared to those on the outside looking in. So about that colleague whose plaudits led to this post: there are lots of praise-worthy and well-earned things to say about those of us on the giving side of philanthropy. But speaking truth to power is a compliment which should be reserved for those who are much more at risk than we.

What is Foundation Work Anyway? – A follow up to “Do You Want to Work in a Foundation?”

August 5th, 2014

Richard Marker

Amazing what one learns if one actually looks at “Google analytics”. After all this time, I finally did look. What I learned was that the post “Do you want to work in Foundation?” [31 May 2011] is among the most searched articles on this blog.

I wrote that post because so many who wanted “informational interviews” with me asked exactly the same questions, and had many of the same misconceptions about sitting on the funder side of the table. Even after encouraging people to read that, the number of requests for meetings continues unabated. [Now, a word to those of you who are new to this: I have more than enough sustenance already so your very kind offer to buy me coffee, breakfast, or lunch isn’t necessary. If it is appropriate for us to meet, we will find an appropriate time and place. I suspect that the same applies to others in the field.]

Back to our subject: what I now realize is that original piece was very useful at addressing misconceptions about work as a funder, but not very informative about what funders actually do all day. I trust I have already disabused you of the idea that all we do is sit around, think great thoughts about how great it would be to give you some money if you only asked us the right way, and spend the rest of the time spreading good cheer and dollars around, or, perhaps, sit around and think of ways to stress potential grantees out. At least, that isn’t what most do.

A. Program Officers. Actually the work of “traditional grantmaking” does often require a lot of sitting. To be sure, as I said in the earlier piece, one says “no” much more than one says “yes” but either way that determination can be a bear. Reading proposals, analyzing them, verifying background information, assessing the potential quality of this organization or proposal against the backdrop of their field or locale or discipline, weighing where this proposal might fit in the scope of our grants, and much more goes into every internal recommendation to whomever makes the decisions. Depending on the grantmaking entity, there may be detailed or summary write-ups, abbreviated or comprehensive dossiers, follow-up meetings or documentation with those seeking funds, communicating expectations and decisions, and, usually, managing those relationships, especially with those grantees which actually make it through the gauntlet.

Program officers or foundation executives may have differing styles, but it would be rare indeed to find one who is exempt from spending a good deal of time not actually dealing with the wonderful folks who will be implementing all the great ideas out there – you know, the ones that got you excited about being on this side of the table in the first place.

Don’t misunderstand – learning how to balance what many call the art and science of grantmaking can make a tremendous difference in the quality of the grants which you or your foundation make. But it is often hard work to get there, and, as I have written so many times before, one does not know the success of the project or the wisdom of your decisions until quite a way in the future. If one has one’s ego in check and a willingness to have a longer-term perspective, this can be a very gratifying role.

B. Project Manager. A newer paradigm is that of “project manager.” Many funders today have pulled back from open or competitive rfp’s. The funder/foundation already has done homework, identified those best able to implement a vision or aspiration or new idea. And most funders have developed trusting relationships with certain grantees. The nfp or ngo may be perfectly suited to implement a funder’s ideas so the work involved isn’t an assessment of a proposal or the organization but developing an understanding of and plan for how a collaboration or contract will be implemented. Foundations which follow this approach typically do their due diligence before the nfp is even aware that they are being talked about. Sometimes, the nfp may be brought into the discussion at a project-development stage. In any case, much of the assessment process described in “A” above regarding “traditional grantmaking” is obviated. Different skills and competencies are called upon here. Project management requires more interactive and interpersonal competencies, but it also calls for greater self-awareness and restraint. In a traditional grantmaking role, the power imbalance is clear but implicit. In the project manager role, the power imbalance is right out there.

C. Convener: As funders have become more committed to problem-solving than institution-building, many have assumed another role – that of “convener. “ This role can take many forms and there is a growing literature about emerging best practices.

Put most simply, a funder utilizes the credibility and influence which accrues to that role beyond that of “funder” by…

• Convening fellow funders can allow a coordinated approach to a place-based challenge or to a broader issue that has eluded simple solutions. The purposes can vary: formal collaborations, structured information sharing, identifying gaps or duplications in service.
• Convening grantees can inform funders about how coherent their funding practices are, where there are opportunities for mutual support and efficiencies, and how to address changing demographics.
• Convening experts can provide an opportunity for field building and expanding on best practices and emerging understandings in an area of interest to the funder.

The skills involved here are more in the realm of community building than the other two. It requires diplomacy, tact, diminution of institutional self-interest, and genuine empowerment. Analytical acumen and project management are always useful but hardly the most applicable when playing the Convener role.

D. Grants Manager. Once upon a time, this was a back office type – who kept things moving strictly behind the scenes. However, as more and more grantmaking is being done on-line, and as the process of systematic integration from proposal to grant to reporting to filing has become more prevalent, grants managers are increasingly a part of the team defining how a foundation presents itself to the world, what it looks for, how it assesses, monitors, and evaluates, etc. These skills often start with technology and can expand to grantee relations and priority setting.
E. General management, supervision, board relations, planning, budgeting, etc. are, of course, requisite attributes in a foundation setting. However, they are not that different than they would be in any organizational setting so there is no need to expand upon them here. I am also not expanding upon “impact investment” related skills, newer approaches which deserve a post all their own.

The work we do as funders can be great work and, especially at this time in history, the opportunities to be players in “making a difference” abound. Hopefully this post, combined with the previous one, will help you decide if it is for you.