Thoughts on Leadership

Leadership, leadership, leadership…

QUT’s Australian Centre for Philanthropy and Non-Profit Studies recently published an excellent report on leadership in fundraising which identifies the importance of the CEO in fundraising and highlights that “most board members lack a clearly communicated expectation that fundraising is part of the role.”

Here’s our take on the topic.

One of my early mentors, a McKinsey consultant back in the Campaign for Oxford days, used to say that around the non-profit board table on the subject of fundraising “the vehemence with which opinion is expressed is in inverse proportion to the level of experience.”  Think about it!  Another way of putting it is the “how hard can it be?” syndrome.   Surely, goes the logic, if it’s that hard you wouldn’t have fundraisers doing it!

Underlying values shape an institution’s structure which, in turn, drives behaviour. If you can accept this, then you’ll see how a visceral attitude to money – who has it, what we think they should do with it and how to get them to part with it – shapes the way we set out to raise it.   In Australia today we still have a tendency to believe that philanthropists are born and not made, and we set up our stall accordingly:  strategies are written and goals set without reference to the market expected to pay or the function expected to deliver; chronic under-investment in data, and a heavy emphasis on dollars over relationships that keeps the process in a short-term loop.

Instead, we need to see the whole process from the donor’s perspective.   When presenting to boards on development strategy I often start by asking for a show of hands:  How many of you are married?  How many of you asked your spouse to marry you by letter?  After the first date?  How many of you asked your spouse to marry you by sending someone else along to ask?

I could go on.

“Expectation is the root of all heartache”, as Shakespeare is reputed to have said.   Over the years I’ve worked hard to manage client expectations by encouraging them to make development an integral part of their strategic thinking and not just a downstream sales activity.  Sometimes it works, sometimes it doesn’t.  But one thing I’ve learned is that if those in leadership positions fail to acknowledge their role in fostering an organisational culture that is welcoming to donors, then there is little that I can do except advise the fundraiser to get out.

The board sets the tone

Ten years ago anyone suggesting the “give, get or get off” notion to a non-profit board would have been marched off the premises.  Today most boards accept they have a part to play in raising funds but, without first setting the context, activity can be undirected, wasted energy.

There are two things we need boards to do:  understand the principles of successful fundraising and participate in the process.

“Helping a company achieve its highest objectives calls for far more than passing discussion.”  So says the CEO of JMW Consultants of the board’s role in developing high-performance teams.  It requires a joint commitment between board and executive to; ”real inquiry, constructive debate, true collaboration to create and capitalise on opportunity.”

For a non-profit board this means taking time to consider the impact philanthropy could have on their organisation. They need to stop thinking of it as an easy means of plugging the operational funding gap.  That’s a recipe for disappointment.  Instead, take a long-term view and imagine how it could enable the organisation to be all that it could be.

Only when a compelling narrative has been found for philanthropy will board members have a clear context for their personal involvement in raising funds.

With regard to giving, I don’t advocate a minimum price to join a board – that would mean the exclusion of a great deal of experience and expertise.  But I do think boards overlook the fact that everyone, internally and externally, looks to their example.  And indeed why should others “stretch” their giving (at whatever level) when the head of the family has not done so?  Each giving according to his means is highly symbolic.

The CEO as CFO (Chief Fundraising Officer)

Valerie Wilder’s tenure at The Australian Ballet clearly demonstrated that major donors want to meet the person responsible for spending the money, the one who controls the balance sheet.  Donors seldom give because they like the fundraiser.  When the ask is carried out by the CEO, the impact is far greater and the scale of giving likely to be higher.

The CEO must drive whatever organisational change is necessary.   If we are to overcome deeply held suspicions about fundraising, we shouldn’t leave it to the Development Office to win over hearts and minds.  The leadership must ensure that development gets the cooperation it needs from other departments – finance, IT, marketing and, of course, program staff – in the face of changing priorities.  Many fundraising programs fail to achieve their targets because of passive resistance from the internal community.

On the Philanthropy Squared website there’s a case study about re-aligning the giving program at The Arts Centre in Melbourne.  We had recommended a dramatic shift in focus for the program away from memberships and towards philanthropic partnerships in order to grow income.  However, we held that in making this shift the organisation should prepare itself for a J-curve – a drop in income before it starts to rise again.  The CEO, Tim Jacobs, backed this view against resistance from the trust, executives and staff.  He carefully managed The Arts Centre through the fallow period until, after 3 years, they were raising more money than ever before.   Keeping his eye firmly on the horizon, he shielded the Development team from the daily excoriation that would have been their fate, and gave them the space to prove their worth.

In closing, then…  We have long looked to the US example for a culture of giving, and I’m often amused at the things we choose to remark and the things we choose to ignore.  Americans are more generous, we cry (“philanthropists are born and not made”), but we are shocked at seeing development offices with 5 – 10 times the number of staff we have here (“it can’t be that hard”).

In March 2012 a delegation of 18 chairs and chief executives from 10 of Australia’s top performing arts companies visited New York to examine how its culture of giving works.  They returned inspired, invigorated and above all amazed at the sheer scale of commitment of time, money and connections by board members and CEOs.  Louise Herron, then Chair of the Major Performing Arts Board, led the delegation.  Her verdict: “we used to think we had bad fundraisers, but now we know we just weren’t supporting them.”