A Recap of the Sustainability Summit
|  Knowing the increasingly complex environment in which nonprofits are operate, Orr Associates Inc. (OAI) partnered with Raffa PC to organize the Vision 20/20 Sustainability Summit held on November 13 in New York City. More than 150 business, philanthropy, and mission-driven leaders joined together to exchange ideas and best practices that will enable organizations to not just sustain, but to thrive, via creative solutions and collaboration.
Dan Pallotta, best known for his involvement in multi-day charitable events and his iconic TED Talk, began the day with a keynote and he well summed up the Summit's purpose: to come "together to talk about the things we've been taught to think about charity and the nonprofit sector that are actually undermining the causes we love and our fond desire to make a difference in the world."
Following are highlights from the Summit.
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Steve Orr introducing Dan Pallotta
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Dan Pallotta's Keynote Address
Pallotta says "Sustainability is not the problem -- the last thing we need to do is sustain." Using poverty and AIDS as examples, he showed numbers indicating that those impacted by these issues is growing, despite all of the efforts made by nonprofits. To address the challenges of today's nonprofit sector, Pallotta challenged the group to "think radically differently" in order to accelerate the progress of improvement against these important societal challenges.
Pallotta said that nonprofits are "miniature in scale" compared to the issues they face and "we have a belief system that keeps them miniature." He walked through five ways in which society prevents nonprofits from being able to make a real impact.
- Leadership compensation. Pallotta argues that nonprofits should compensate based on the value that people produce -- just like the corporate sector. Without good leadership compensation, nonprofits are prevented from attracting the top talent -- Ivy League business school graduates choose to earn a big salary and make a large donation to a cause versus giving the cause their talents through employment.
- Advertising and marketing. The exponential impact of spending more in these areas would build increased awareness for causes. "How can nonprofits ever take away any market share from corporations when they are not really allowed to market?," Pallotta questions.
- Taking on new revenue ideas. Nonprofits are afraid to take on any new, daring fundraising endeavors because potential failure brings scrutiny, loss of trust, and other negative impacts. Pallotta explains that if "you prohibit failure, you've killed innovation. If you kill innovation of fundraising, you're not going to raise more money, and you can't grow. If you can't grow, you can't possible solve social problems."
- The element of time. "Instead of looking at 12-month increments at what was your overhead and what did you produce, give it time to let things grow," Pallotta says. Amazon and Twitter were both given years to generate scale. Why can't the same business principles apply to a nonprofit?
- Profit is needed to attract risk capital. Corporations monopolize risk capital. Only 144 nonprofits crossed the $50 million revenue threshold from 1970 to 2009, compared to 46,136 for-profits.
Pallotta further explained all that is wrong with the question asked often by donors: "What percentage of my donation goes to overhead versus the cause?" Pallotta declares that it is a nonprofit's job to get donors to understand three things about overhead:
- Overhead "is part of the cause." It is an investment in growth.
- Low overhead "forces organizations to go without the things they need to grow, like fundraising and the people to do it." For example, is a bake sale with only 5 percent overhead raising just $71 better than a nonprofit that has 30 percent overhead but raises $10 million?" The size of the pie is important.
- Overhead "gives donors bad information." Donors should be focused on impact and effectiveness, not overhead.
Pallotta invited participants to join him in the fight for nonprofit rights. He is coordinating a three-day march to raise $1 million to support the first-year operating budget of the Charity Defense Council, which Pallotta created to counter negative media stories, to run ads promoting the nonprofit field, and to act as a legal-defense force. To read more on this march, please click here.
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Kelly Dunphy, Mark Axelowitz, and Gregory Boroff (from left to right)
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Recruiting and Leveraging Corporate Board Members
As a method of increasing access to diverse funding streams, Mark Axelowitz, Managing Director at UBS Private Wealth Management and Board Secretary at Boys & Girls Harbor (the Harbor), and Gregory Boroff, Executive Director at Friends of Hudson River Park (FoHRP), led a conversation on the best ways to recruit board members from the corporate sector and keep them engaged in a nonprofit's mission.
As a current and former OAI fundraising consultant to the Harbor and FoHRP, Kelly Dunphy, Vice President, Fundraising and Development at OAI, led the dialogue. The dialogue focused on what potential board members are thinking, how to approach them, and then, moving into the resources needed to properly recruit them and keep them motivated.
The Harbor finds most of its board candidates through its board members. "As a board, we understand that's part of our role -- to continue to expand the leadership of the board and bring new supporters to the table," says Axelowitz. "Being able to tell the story of the Harbor and make it personal to a potential board member is key. That's one of the reasons I joined the board -- our Founder personally asked me and told a great story of the Harbor's impact on kids."
"To keep our board members engaged, we invite them to the variety of events and activities that the Park hosts so they can see the impact of the Park on their community and neighborhoods," Boroff notes. He also cites board social gatherings, such as a cocktail reception hosted by the board chair and a holiday party for the staff and board together as a way to keep the board excited about their role.
For the presentation materials on this subject, please click here.
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Ron Schiller and Craig Shelley (from left to right)
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Changing Leadership for Today's Sustainability
The "New Normal" for nonprofit leaders is of increased nonprofit complexity -- financially, programmatically, and organizationally. It requires a changing approach. Collaboration among chief executive officers and chief development officers is more important than ever.
This session, led by Craig Shelley, Director at OAI, and Ron Schiller, author of The Chief Development Officer and Founding Partner and Principal Search Consultant at the Aspen Leadership Group, explored this new environment and the individual and collective roles CEOs and CDOs play in leading sustainable nonprofits.
The presenters drew on their own careers leading complex organization as both CEOs and CDOs and they made the case for the CEO being the "Chief Collaborator" in sustainable models and for the CDO being the thought partner for the CEO well beyond fundraising. CDOs must be involved in overall strategy and operations to ensure synergy just as CEOs must understand and be central participants in fundraising.
For the presentation materials on this subject, please click here.
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Geoffrey W. Levin, Partner at Cadwalader, Wickersham & Taft LLP and Board Secretary of Youth, I.N.C., Stephen K. Orr, Managing Partner at OAI and Executive Director at Youth, I.N.C. (from left to right)
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Fundraising with Wall Street in Mind
Stephen Orr and Geoffrey Levine, leaders at Youth, I.N.C., and 20-year veterans in the financial sector, gave sound advice on where to find Wall Street donors, how to develop relationships with them, and how to engage them in your mission.
The most important thing to understand is that much of the wealth in finance is earned through hard work, earned young, and typically uncommitted. "Bringing those in their late 30s and early 40s into your organization now will pay off big," says Orr. "These donors are entering a life cycle stage where they want to -- and can -- give back and create a lasting impact and legacy."
Fundraising from financial professionals is very different from fundraising for other industries because they look for impact and results, because the time of day you hit them is significant (ask yourself how did the market fare today?), and because you must understand if they are on the buy side versus the sell side (Hint: the sell side make great donors).
For the presentation materials on this subject, please click here.
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Kathleen Loehr, Asha Curran, Michael Bzdak, Lizette Corro, and Nell Debevoise (from left to right)
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Restructuring the Business of Giving
Nonprofit donors want more information on impact, on partnering beyond just giving dollars, and on using technology to inform them. This panel brought together very different voices speaking to one common theme: how nonprofits must adapt to the needs of its donors and tell them the truth about changes needed to meet their desires for partnership and impact.
Kathleen Loehr, Managing Director at OAI, who moderated the panel, explained that one thing that is not changing about philanthropy is that it is still all about relationships. Relationship building is taking new forms today, however. Some relationships are built with new modes of technology (social media and online in general), some through strong and multi-level corporate partnerships (which today require strong impact metrics and reporting), others begin with the creation of unique funding opportunities based on business principles, and some are connecting arising from specific demographic groups.
Panelist Asha Curran, Director, Center for Innovation & Social Impact at the 92nd Street Y (a recent OAI client), discussed how #GivingTuesday (now in its third year) is becoming a game changer for online giving. While the donor size is still small, the collaboration and creativity of nonprofits using this tool are reaping some large contributions collectively. The 2013 numbers showed an increase of online giving by 90% for 3,800 nonprofits compared to 2012. Blackbaud processed more than $19.2 million in online donations with an average online gift of $142.05. Curran is confident these numbers will grow again in 2014 -- bringing even more donors into charitable giving at the end of the year. Curran encouraged the audience to get on board and use this tool as a means of telling your nonprofit's story.
Michael Bzdak, Director of Corporate Contributions at Johnson & Johnson, discussed the new pressures on nonprofits coming from corporate partners. This pressure comes from corporations measuring their philanthropic impact in multiple ways -- not just dollars spent. He noted that corporations are searching for useful metrics, and asked that nonprofits join in the conversation rather than waiting to be told. This is a new day for partnership interactions, requiring hard, honest conversations about what corporations seek to accomplish, and the impact that nonprofits can provide and monitor in new ways.
Nell Debevoise, Founder and CEO of Inspiring Capital, discussed how her company recruits top talent from our nation's top business schools and places them in fellowship positions at nonprofits to help assess investment opportunities for partners and other revenue generation needs. They are creating long-lasting impacts for both the nonprofits and the business experts. This creative approach gives nonprofits input from top talent in considering alternative funding models. "If we're just tinkering, there are insuperable barriers to innovation, but if we build new models, real change is possible," says Debevoise.
Lizette Corro, President & CEO at Corro Nobil Associates, rounded out the panel addressing a growing demographic group -- the rise of Hispanic wealth. She discussed how Hispanics make philanthropic decisions and what nonprofits need to keep in mind when working with them. Hispanic philanthropy is a few years behind traditional philanthropy, but, with mega gifts such as the $10 million gift to Georgetown University for a new center aimed at fostering innovation among students and organizations to solve society's problems, attention to how Hispanics make their giving choices is increasingly important to nonprofits seeking new donors.
Common themes across the panel included many important "C" words as we adapt to meet donor expectations: Community, Collaboration, Co-Creation with our partners, Creativity (versus one size fits all), and Clear, Consistent Communication. Reconstructing how we work with donors and grow their commitment to our missions continues to be grounded in relationship-building, albeit in new ways for this era of philanthropy.
To view the panel in its entirety, please click here.
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What's Next
The nonprofit sector's opportunity to impact societal change is greater than ever, as is needed more than ever. Throughout the Summit, it was clear that there is a need for collaboration among organizations on all sides of the equation and that each of us has a role to play in scaling the quantity and quality of the impact from our sector.
In June 2014, OAI and Raffa hosted a similar summit in Washington, DC focused on empowering nonprofits and furthering collaboration within and across the sectors. There are plans to continue the Sustainability Summit in other cities, as well to expand the conversation in New York City and Washington, DC.
At OAI, we see our role as partnering with nonprofits in transformative ways that unleash their full potential and allow them to achieve their missions. Our teams of experienced professionals are available to seamlessly embed themselves with nonprofits to fundraise, to recruit and improve board leadership, to build consensus and direction through new strategies, and to provide executive, fundraising, and financial leadership.
To learn more about any of the topics discussed or our upcoming events, please email us at [email protected].
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