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The Three Legs of the Non-Profit Stool

Jul 17, 2015 06:30 am | Richard Perry and Jeff Schreifels

three-legged-stool 2015-July

I could tell he was very frustrated. And he felt misunderstood. To put it plainly, he could not get management to understand that without program information he would not be successful.

The person I was talking to was a very talented MGO who had a long track record of success previous to his current assignment. That success is what had attracted the attention of the CEO who had hired him. But now that it was time to produce, the MGO was blocked by the CEO. He wasn’t blocked on purpose or with malicious intentions. No, he was blocked because of the ignorance of the CEO.

Jeff and I see this kind of thing all the time – where there is a lack of understanding about how a non-profit actually works. Not a week goes by that I don’t hear a story about good, well-educated, smart and professional managers actually blocking the success of fundraising through their behavior. They allow situations like these:

  1. Finance calls the shots without regard for fundraising. In this situation the bean counters are the ones who decide what the donors want and need, and what the price (ask) will be. There is one situation I remember vividly where finance actually came up with the projects for the MGOs and set guidelines as to what they could or couldn’t say to the donor. This is unbelievable, and (surprise) it’s not working!
  2. No one leads or decides. This is the classic management by consensus approach, which never works. I have been in meetings where the leader, although physically present, is nowhere to be seen in the conversation. The troops must duke it out to arrive at mostly bad conclusions. MGOs caught in this situation are encouraged to “do the best you can,” and they try.
  3. Program folks rule. This is not too bad of an idea if the program people are donor-centered. Some are, but many aren’t. And the ones that aren’t make it their life’s goal to protect program from fundraising! This is so interesting to me. They want to control the very hand that feeds them!
  4. A self-appointed “editor” makes decisions about what works and what doesn’t in major gifts, what can be said and what shouldn’t be said, etc. Usually, this person is attached somehow to an authority figure and, essentially, edits the life out of all communication, written and visual. I dealt with a situation like this just a few weeks ago where the “person calling the shots” was a fourth tier manager with more opinions than Rush Limbaugh. It was amazing to sit on the sidelines and watch this circus. I don’t know if I was more fascinated by all the opinions emanating from this man’s mouth or the passive behavior of his manager and his manager’s manager sitting in the room. It was all a joke. And suffering through all of it were three MGOs who had to put up with it.

I could go on with other examples. But my main purpose for writing about this is to make the following point. A well-run nonprofit has a leader who clearly understands that there are three critical legs to the nonprofit stool – functions that must be balanced carefully for the organization to be effective:

  1. Product or program – This is the nonprofit’s reason for being – it is what they DO. It is what the MGO presents to donors for support. Without program, the nonprofit does not exist.
  2. Marketing/sales or fundraising – Every successful commercial company has a successful and effective sales and marketing function. Every successful nonprofit has an effective fundraising function. It is this function that marries the donor to the cause. Without fundraising, the nonprofit does not exist, and the MGO falls into ruin.
  3. Administration – I am shocked at how many people in and outside of a nonprofit believe that the admin function in a nonprofit should be considered the least valuable and the lowest priority in the nonprofit. Jeff and I see so many situations where folks in HR, IT, Operations, Finance and general Administration are considered second-class citizens in the enterprise. Because they are, they are not properly resourced, and it is no wonder the thing does not work. It is so sad.

Each of these “legs” of the stool must function well in order for the organization to be efficient and effective. One cannot dominate the other.

I started by telling you about the MGO who lacked CEO support. In this situation, the CEO allowed program to rule, and program decided they didn’t want to deliver program information to the MGO. The MGO is now on a path toward failure.

Jeff and I have seen situations where fundraising dominates, and program information in their hands is mishandled or fundraising expenses are so high that the organization can’t meet even their own standards for overhead.

And then there’s the situation where administration is calling the shots, and nothing of value comes from either program or fundraising.

If you are a leader or manager reading this and you currently live in an unbalanced organization where one of these functions dominates the other, take steps to do something about it. Do it for the cause. Do it for the donors. Do it for the MGOs, so they can be successful.

If you are an MGO working in an unbalanced organization as has been described here, try to influence change. And if you fail at doing that, run like your life depended on it.


This post was originally published in April 2013.

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